And anything else on your mind...
Keep it clean, use tinyurl, don't post full articles, and let me know what I missed
May 11, 2007
BUBBLETALK - New thread to talk about the epic historic housing crash firmly underway
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355 comments:
«Oldest ‹Older 201 – 355 of 355According to greenspan MEW added 187B per year to spending ~5years.
Same size as Medicade spending.
Even if housing just flattens additional cuts to spending will result from interest payments
At 7% interested this will now subtract 79B per year for 30 years.
The delta to overall spending would be same as cutting social security payments to individual by 1/2 going forward.
That is bad.
Phil - AKA captain choas
Ha, look at this fucked builder in Northbrook: http://tinyurl.com/2ue8f7
Only 2.8 mil, or 3.8 mil if they finish it.
Honda Motor Co. Ltd. and Toyota Motor Corp. gained on expectations they will exceed their latest earnings forecasts due to the weaker yen.
A weaker yen increases the value of Japanese exporters' dollar-denominated sales when converted back into local currency (Yen), while Japanese products become more competitive abroad.
The Yen weakened today as the market awaits the CPI data that is likely to strengthen the view that BoJ will wait longer before raising rates.
http://yahoo.reuters.com/news/
articlehybrid.aspx?storyID=
urn:newsml:reuters.com:
20070427:MTFH17997_2007-04-
27_01-34-26_T182154&type=
comktNews&rpc=44
Standard & Poor's said it may lower ratings on bonds from 11 different securitizations of home loans made last year, more than doubling the number of its warnings on bonds of so-called Alt A mortgages. S&P said it's considering the move amid higher-than-anticipated delinquencies.
Early delinquencies in the bonds may be high because of ``aggressive residential mortgage loan underwriting, first-time home-buyer programs, piggyback second-lien mortgages, speculative borrowing for investor properties, and a higher concentration of `affordability' loans,'' S&P said, referring to loans allowing borrowers to initially pay only interest or less.
Late payments of at least 60 days, foreclosures and seized property among Alt-A mortgages in bonds have about doubled since mid-2005 to 2.4 percent, matching the rise for subprime mortgages.
A subset of Alt-A loans to borrowers with low credit scores and low equity and documentation is performing about as badly as subprime.
http://www.bloomberg.com/apps/
news?pid=20601087&sid=
aygOoDr2GA0k&refer=home
To the stupid f@ck who bought in '03 and is congratulating himself for being lucky on his big RE return (sold and now RENTING) and berating everybody who didn't buy along with him in '03 and then sell in '05/06:
You freaking jerk. I was 18 in '03. Was I supposed to go out and get a liar loan in high school so that I wouldn't be "priced out forever"?
Get a life. RE's coming down - a LOT- just so the new generation can AFFORD to buy. Idiot.
I have nothing but bad wishes for people like you.
The DOW is being juiced thanks to the LBO boom. 45-60% of the LBO debt is being securtized by the CDO market, the same which backed sub-prime until it didn't, and we know what happened there...
See the article "Climbing the Cliff of Doom-in dollars" written by Eric Janzen on www.ITulip.com for the full story.
Two good threads from a message board for San Diego investors.
The first one opens in Sept 06
http://www.websitetoolbox.com/tool/post/sdcia/vpost?id=1396147&trail=30
Here's the first comment:
"Yawn. How many times must we read threads that start out like this? Those of you that feel compelled to repeat this story ad nausem feel free to post such tales below in this thread -only. Elsewhere such threads will be deleted unless it's really something new, special, and worthy of discussion. Your own special thread for bubble talk! Enjoy."
Over the next 8 pages the attitude gradually changes, until everyone is a bubble head.
The second thread is a case study in an overstretched investor going throught the downward spiral to despair:
http://www.websitetoolbox.com/tool/post/sdcia/vpost?id=1854186
Apparently, he started out as a flaming bull, and has turned into a gibbering wreck.
Bank of Japan keeps interest rates unchanged - the carry trade continues.
jbwegas
we gonna take central america down with us all the way to the chinese ports in panama and mine basic materials to take 3 billion people out of less than 10 dollar a day poverty, and come out even???
Inman News Excerpt:
The national homeowner vacancy rate reached 2.8 percent in the first quarter -- the highest level on record, the U.S. Census Bureau reported today, while the home-ownership rate dipped slightly to 68.4 percent.
The homeowner vacancy rate, a gauge of the number of unoccupied units for sale vs. the total homeowner inventory, was 2.1 percent in first-quarter 2006 and has risen for seven consecutive quarters. A high vacancy rate can indicate an oversupply of housing units while a low vacancy rate can indicate a shortage in supply of housing units.
This rate was about 4 percent in principal cities, 2.9 percent inside metropolitan statistical areas, 2.4 percent in the suburbs and 2.2 percent outside of metropolitan areas in the first quarter. That compares to a rate of 2.5 percent in principal cities, 2 percent inside metropolitan areas, 1.8 percent in suburbs and 2.2 percent outside of metropolitan statistical areas in first-quarter 2006.
Regionally, the homeowner vacancy rate rose from 2.3 percent in first-quarter 2006 to 3.2 percent in first-quarter 2007 in the South, from 2.4 percent to 2.9 percent in the Midwest, from 1.7 percent to 2.6 percent in the West, and from 1.5 percent to 1.9 percent in the Northeast.
Very good series in the Denver Post:
www.denverpost.com/foreclosures
Nice to see someone in the media doing their job.
Small Hat
FEATURE-The dollar's decline tracks U.S. fall from grace
Fri Apr 27, 2007 11:17 AM ET
By Steven C. Johnson
NEW YORK, April 27 (Reuters) - The United States may have no military equals, but the challenges to its financial power have become impossible to ignore.
A stark reminder came on Friday when the weakening dollar slumped to a record low against its main rival, the euro, after the U.S. economy recorded its fourth consecutive quarter of below-trend growth.
The strength of the dollar is more than just a matter of bragging rights. Experts say the consequences of its long-term decline could have deep significance -- for average Americans and for the country's position as an unrivaled global power.
Over time, the forces behind its decline could further marginalize the United States on the world stage, lower its standard of living and tie its hands in responding to crucial security issues or financial crises.
"We can no longer view ourselves as king of the hill," said Leo Melamed, chairman emeritus of the Chicago Mercantile Exchange and founder of the world's first market for financial futures. "There are a lot of other potential kings now vying to take our place.
For most of the 20th century, things were different.
The United States was the only country that was stronger at the end of World War II than at start. Since the end of the Cold War, however, foreign rivals have knocked it off its pedestal in a host of economic rankings.
Today, China is growing more rapidly than the United States, and many investors and historians alike see the European Union as its economic equal.
Wall Street seems to be losing its edge, too, even though the Dow Jones industrial average of 30 major U.S. stocks closed at a record high this week. Companies that would once have turned to New York to raise money now increasingly go public on exchanges in London and Hong Kong.
To students of history, the situation looks like a rerun of Britain's decline 60 years ago, when massive postwar debt and a sharp slide in the pound forced the dissolution of the empire and marked the end of Britain's days as a major world power.
"The United States is a power, but it's hardly the only power, and it's certainly not a superpower anymore," said Jim Rogers, who co-founded the Quantum hedge fund with billionaire investor George Soros in the 1970s.
DEBTOR NATION
The dollar is perhaps the biggest problem. As a net debtor, the United States must attract some $3 billion every working day to finance a gaping current account deficit that in 2006 amounted to 6.5 percent of gross domestic product.
Economic rivals such as China and Japan, on the other hand, boast massive surpluses.
Since Americans also spend more than they save, the money to cover the U.S. deficit must come from foreign lenders such as central banks. China, which holds more than $1 trillion in foreign currency reserves, is one of the biggest creditors.
As the dollar has steadily weakened over the last year, the the value of the dollar-denominated assets held by central banks has also declined. The trend may motivate foreigners to start holding more euros instead, exacerbating pressure on the dollar and leading to faster U.S. inflation and a declining standard of living.
That's increasingly possible because euro-denominated debt today accounts for a bigger share of the international bond market than do dollar-based securities. That means oil exporters could find it easier to start pricing crude in euros, Rogers said, adding to the financial burden on the United States, the world's biggest consumer of oil.
While a weaker dollar may boost U.S. exports and the profits of U.S. companies with overseas operations, weaker foreign demand for U.S. Treasury bonds would push up long-term interest rates, raising mortgage payments for U.S. homeowners and borrowing costs for an indebted government.
"I don't see that it's possible to avoid a weakening of a country's power projection if it doesn't have the fiscal muscle to sustain that power," said Paul Kennedy, history professor at Yale University and author of "The Rise and Fall of the Great Powers."
SHIFTING BALANCE
There is a potential upside to the dollar's fall. For one thing, its decline would help shrink the massive U.S. trade deficit.
Also, some economists argue that competition between countries is part of globalization's rising tide that will eventually lift all boats.
"If China does well, it doesn't put the United States out of business but creates opportunities to sell to richer Chinese consumers," said Sebastian Mallaby, senior fellow for International Economics at the Council on Foreign Relations in Washington.
Others worry about America's global reach, especially as the war in Iraq strains both U.S. finances and credibility.
"We are doing terrible damage to ourselves (in Iraq), and the Chinese, who are more patient and much shrewder than we are, are simply sitting back and acting in many parts of the world with increasing influence," said Zbigniew Brzezinski, a former national security adviser under President Jimmy Carter.
Indeed, the economic leverage China holds over the United States may one day allow it to absorb Taiwan without a fight, said H.W. Brands, a University of Texas history professor and author of "The Money Men: Capitalism, Democracy, and the Hundred Years' War Over the American Dollar."
A similar scenario, he said, played out during the U.S. Civil War in the 1860s, when London opted against intervening on behalf of the breakaway Confederate states because Britain depended on American grain to feed its populace.
Of course, the ebb and flow of global power is a slow process. Kennedy noted that "it took the Ottoman Empire 450 years to decline, and the Hapsburgs 300."
However, the sweep of history can be difficult to avoid.
"Historically, no country that has gotten itself into this situation has ever come out without a crisis," Rogers said. "We're in a great amount of trouble." (Additional reporting by Kevin Plumberg)
I'm still amazed to see comments from those that succeeded during the housing bubble that label the rest of us as sore losers.
Don't worry the same decision making that had them succeed during the boom will guarentee they fail during the crash.
I see the same approach when I play poker and those players never make it to the final table.
Phil
GDP indicate stagflation, Inflation during a recession.
On Wall Street, economists had forecast a slide in growth, but not one this sharp. The value of the dollar against the euro immediately plummeted to a record low after the Commerce Department issued its report.
The slow growth was not enough to brake inflation, which jumped in part because of rising energy costs. The G.D.P. price index, a measure of price fluctuations, jumped 4 percent in the first quarter — the biggest increase in 16 years. Another gauge of inflation, which strips out volatile food and energy costs and is closely watched by the Federal Reserve, rose 2.2 percent compared with 1.8 percent in the fourth quarter.
The G.D.P. report is likely to send mixed signals to the Federal Reserve. In recent policy statements, the central bank has signaled that it is concerned about how much the economy is slowing. But it has been unequivocal in stating that inflation is its primary concern.
http://www.nytimes.com/2007/04/
28/business/28econ.web.html?em&
ex=1177905600&en=1ee75282f908
ac12&ei=5087%0A
Opteum Sells Certain Mortgage Servicing Rights
Opteum Inc.(“Opteum” or the “Company”), a real estate investment trust (“REIT”) that operates an integrated mortgage-related investment portfolio and mortgage origination platform, today announced that its subsidiary, Opteum Financial Services, LLC (“OFS”), has entered into a definitive agreement to sell a majority of its private-label and agency mortgage servicing portfolio, the performing loans of which had an aggregate unpaid principal balance of approximately $5.67 billion as of March 31, 2007. The aggregate sales proceeds will be used to repay debt that is currently secured by OFS’s mortgage servicing portfolio. The transaction, which is subject to various closing conditions, is expected to be completed by June 15, 2007. Terms were not disclosed.
About Opteum
Opteum Inc. is a REIT, which operates an integrated mortgage-related investment portfolio and mortgage origination platform. The REIT invests primarily in, but is not limited to, residential mortgage-related securities issued by the Federal National Mortgage Association (Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac) and the Government National Mortgage Association (Ginnie Mae). It attempts to earn returns on the spread between the yield on its assets and its costs, including the interest expense on the funds it borrows. Opteum's mortgage origination platform, Opteum Financial Services, LLC, originates, buys, sells, and services residential mortgages from offices throughout the United States and operates as a taxable REIT subsidiary.
http://home.businesswire.com/
portal/site/google/index.jsp?
ndmViewId=news_view&newsId=
20070426006391&newsLang=en
If you missed the US real estate run up you could go to Japan and start buying real estate.
Japan Real Estate Bubble In Making, Could Speed Up BoJ] Tokyo, Apr 27. The well-read "Position" column in today"s Nikkei Financial suggests a possible in-the-making in Japan"s real estate market. Commercial properties in the Tokyo central district were up some 9.4% over the previous year as of January 1. Money continues to flood into Japanese real estate from both domestic and international investors, some via REITs and via private funds.
According to the report, BoJ officials including the Governor are eyeing the situation closely. Although core inflation remains very low, the contention is that a bubble in real estate could speed up tightening moves by the central bank.
On an interesting note, so-called "love hotels" are among the hottest properties. A fund is reported to be offering equity in these properties to retail investors for Y500,000/share with dividends ranging from 8.4-12%.
http://www.tradingmarkets.com/
.site/news/forex/537416/
Uh, Keith you might want to fix that date. As of this minute it says it was posted 2008.
Should you be concerned as a Investor of Mortgage Back Securities when loans get modified
As more subprime borrowers fall behind on their mortgages, banks are trying to stave off foreclosures by rewriting loans to make monthly payments lower. This process is called Loan Modification.
In theory this should be good news for investors of Mortgage Back Securities in the subprime mortgage bond market, as it can potentially spare investors large losses that is currently resulting in many foreclosures; however, will loan modifications work with this unprecedented large amount of loans that currently need to be rewritten.
Even under the best of circumstances, modifications may only be postponing the inevitable losses that will eventually occur, but with this unprecedented amount of loan modifications the chances get more slim.
But still loan modifications are worth a try considering that the alternative is foreclosure.
If nothing else, cutting interest payments reduces the built-in safety net that bond investors expect when they invest in subprime mortgage-backed bonds.
Bonds backed by subprime loans generally have a safety feature called excess interest - meaning the loan rates that borrowers pay are typically somewhere around 2.5 percentage points above what is owed to bondholders. The extra interest that's generated creates a cash cushion that is available to absorb losses from foreclosures that may occur.
When loans are modified, it reduces the excess interest available to absorb losses. And bonds then become more vulnerable to credit troubles.
Left with little choices Hedge Funds are currently putting more inflow of Yen Carry Trade money thanks to BOJ back into loan modifications.
Foreign central banks were forced to help Hedge Funds by selling U.S. Treasuries last week and purchasing U.S. Mortgage Back Securities to cover the portion of the unprecedented large amount of loan modifications that Hedge Funds are no longer willing picking up by themselves.
No wonder why Japan's finance minister proposed that the International Monetary Fund's policy-steering body to sell its gold reserves to push down gold price to keep the Yen from collapsing as the Japan finance minister forces the Bank of Japan to hold Interest rate at 0.5% to keep US housing from collapsing.
http://today.reuters.com/news/
articleinvesting.aspx?type=
bondsNews&storyID=2007-04-
26T203028Z_01_NAT002636_
RTRIDST_0_USA-FED-FOREIGNERS-
URGENT.XML
Guest Commentary, by Bernard Ber
April 25, 2007
The following commentary will describe the final sequence of events that will lead to the implosion of the global economy.
Too much like 1929
Bernard Ber is an investment representative with CIBC in Toronto and is currently working towards the CMA management accounting designation.
As US real estate prices fall and depress US economic growth, private foreign investors begin to withdraw their capital from the US financial markets. This capital flow would by itself act to elevate the currency value of the country that it is returning to. However, the governments of developing foreign countries have policies in place to fix the exchange rate of their currencies. In order to maintain this fixed exchange rate, foreign central banks will print their own currency and exchange it for US dollars (which are then invested into US government debt). The amount of money printed and exchanged into US dollars by the foreign central bank will necessarily equate to the amount of private capital returning to the country. These central bank policies will act to artificially keep the value of the US dollar elevated and artificially keep US interest rates low.
Another Snippet:
Back in 1966, the most esteemed Alan Greenspan himself wrote the following in an essay entitled “Gold and Economic Freedom”:
“When business in the United States underwent a mild contraction in 1927, the Federal Reserve created more paper reserves in the hope of forestalling any possible bank reserve shortage. More disastrous, however, was the Federal Reserve's attempt to assist Great Britain who had been losing gold to us because the Bank of England refused to allow interest rates to rise when market forces dictated (it was politically unpalatable). The reasoning of the authorities involved was as follows: if the Federal Reserve pumped excessive paper reserves into American banks, interest rates in the United States would fall to a level comparable with those in Great Britain; this would act to stop Britain's gold loss and avoid the political embarrassment of having to raise interest rates.
The "Fed" succeeded; it stopped the gold loss, but it nearly destroyed the economies of the world, in the process. The excess credit which the Fed pumped into the economy spilled over into the stock market-triggering a fantastic speculative boom. Belatedly, Federal Reserve officials attempted to sop up the excess reserves and finally succeeded in braking the boom. But it was too late: by 1929 the speculative imbalances had become so overwhelming that the attempt precipitated a sharp retrenching and a consequent demoralizing of business confidence. As a result, the American economy collapsed. Great Britain fared even worse, and rather than absorb the full consequences of her previous folly, she abandoned the gold standard completely in 1931, tearing asunder what remained of the fabric of confidence and inducing a world-wide series of bank failures. The world economies plunged into the Great Depression of the 1930's.” (end)
Do we see any parallels here?
The two major players in the world financial system at that time were the United States and Great Britain. The United States was the emerging industrial power, whereas Great Britain was the mature and stagnating industrial power. The central bank of the emerging industrial power (the US) printed money in an effort to prop up the economy of the mature industrial power (Great Britain). The inflation of the money supply resulted in the overheating of the economy and the stock market of the emerging industrial power. It was the crash in the stock market of the emerging industrial power (the US) that brought about the crash in all the world’s stock markets and the Great Depression followed later.
Now fast forward to today, and what you see is China as the emerging industrial power and the United States as the mature and stagnating industrial power. China is printing money in an effort to prop up the economy of the mature industrial power (the US). The inflation of the money supply is resulting in the overheating of the Chinese economy and stock market. Very interestingly, on February 27, 2007, it was the sharp 9% one-day drop in the Chinese stock market that led to the sharp drop in stock markets worldwide, including the US. People may be conditioned to think that economic events in developing countries pale in significance to economic events in the US, and may fail to see how what happens “way over there” in China would have any significant impact on their economic well-being. But how different the truth really is. I think most people even now after the February 27th turn of events, fail to grasp why the US stock market sold off so sharply after the Chinese stock market sell off occurred first. The idea that a foreign stock market could dictate what happens in the US stock market almost offends the American sense of national pride (so the event is casually dismissed as “market irrationality”). A word of advice: you better get used to it, as there is much more of that to come. The crash is coming.
I recommend this animated 47 minute video, "Money as Debt",
http://video.google.com/videoplay?docid=-9050474362583451279
It's quite possible that housing prices don't fall in NOMINAL TERMS, but that the BUYING POWER OF CAPITAL parked in real estate crashes, due to skyrocketing costs of all other goods and services needed for survival (hyperinflation). This is my guess as to what happens the next few years. Your 500K house may still be worth 500K in 2010, but 500K won't buy anything close to what it buys today. This could effectively mask the RE crash we face... & the MSM will be able to slap lipstick on that pig.
Maybe Japan Finance Minister and BOJ want Americans’ young kids to live in their cars also.
Daijiro Inada, 54, the executive director of a company that puts out a line of racing and tuning magazines, says with Japan's high cost of living, many kids put their savings into their vehicles, which become like "their own apartments."
"If there were nice places to live, people wouldn't spend so much on their cars, but maybe make their homes nicer inside and things like that," says Inada.
"But there's no such system in Japan and that's why everyone is spending money on their cars. And if you spend money on your cars, then there's got to be some place to run."
http://www.jingai.com/omoshiroi/
hotrod.html
Your 500K house may still be worth 500K in 2010, but 500K won't buy anything close to what it buys today.
********
Thank you for reminding me why I bought my HOME from a FB who took a 30% haircut.
How are your NDE shorts dumb ass?
The 1980 was not Japan first bubble economy, but what have the BOJ learned of it history.
Now in 2007, BOJ so fearful of political pressure will allow history to repeat itself.
WW1 would bring a huge bonanza to the Japanese economy, at least in the short run, because of the sudden increase in global demand for Japanese products.
An enormous export-led boom was generated because global demand shifted from Europe to Japan and also because the US economy was expanding.
Japanese manufactured products were still of inferior quality but could substitute for European products which now became unavailable.
The Japanese macroeconomy, which previously faced a mounting trade deficit and gold reserve loss, was greatly stimulated by this sharp rise in foreign demand.
In 1918, when WW1 ended, a small business setback occurred. But the Japanese economy continued to do well in 1919. Then came the big crash of 1920.
When the bubble ended, the lack of competitiveness and overcapacity of the Japanese economy, previously hidden under unsubstantiated exuberance, was exposed.
Most new rich businessmen were bankrupted. Their happy days were short.
After this and throughout the 1920s, Japan went through a series of recessions and banking crises. The most serious bank runs occurred in 1927.
Showa Financial Crisis of 1927.
Consider a situation in which a famous family in a certain local district wants to start a business. The family establishes a company but wants to keep it under its full control, without going public or borrowing from someone else. To finance its activities, a bank is set up by the same family.
Since the family has a good name locally, many people deposit their savings with this bank, believing it is safe and without knowing its financial situation.
In this fashion, many kikan ginko (businesses establish by people with famous family name) were established throughout the country. There were over 2,000 banks in Japan in the 1900s and 1910s—this was a bit too many. When the economy boomed, even dubious banks prospered. But when it slowed down after WW1, kikan ginko started to have a mounting bad debt problem.
Since their balance sheets were not open, outsiders could not judge the size of the problem. As noted earlier, during the 1920s, the government and the Bank of Japan (BOJ) supported weak banks and firms with emergency loans, rather than closing them immediately. Overcapacity and bad debt continued.
If you have a small debt to your bank and your business fails, you are in trouble. If you have a huge debt that goes bad, the bank is in trouble.
www.vdf.org.vn/EcoDevJpnPDF/
4Chapter07-09.pdf
The similarities between the dot.com bubble and the housing bubble are astounding. When you have a situation where:
a) Everyone is talking about stocks/real estate
b) Friends, coworkers and family are all suddenly experts on stocks/real estate,
c) People are quitting their jobs to become day traders in stocks/real estate,
d) People are paying premiums for stocks/real estate that are out of this world
Guess what? It's a bubble and a crash will inevitably follow.
I am old enough to be a victim of the Savings & Loan collapse, the dot-com collapse, and of course witness to the events of 9/11.
The real estate debacle is just another example of our government being asleep at the wheel. Nobody wanted the dot.com boom to end because everyone was making paper profits. Twenty-four year-olds were becoming dot.com millionaires overnight. Nobody worried about what Al-Qaeda was doing despite repeated warnings. Our govt was too busy trying to further embarrass a president for getting a bj in the oval office. No-one wanted the Real Estate boom to end because it kept the economy going during a difficult time, and it made everyone feel wealthy. As with all great parties there is a typically a massive hangover to be suffered.
I am appalled at the number of comments I see on this site from people still in denial of what has taken place. We have a real estate market that still has a long way before it hits bottom, an economy that will be impacted significantly, if not catastrophically. More disconcerting is that our Government has lost its ability to protect, govern and properly regulate its own citizens, and lost the confidence and trust of the world in general.
Anon,
You are right, the only thing about housing is that everyone knew this was a bubble as soon as it began. Somewhere in their minds, they knew this was a reaction to the dot.com implosion almost from day one. How sad.
Housing down to Y2K prices + 20% by year 2012 (when the most of the ARMs will have reset). Still my prediction.
Check out this PDF (800K)
http://tinyurl.com/39ws2e
Here's the reset chart I am looking to for my 2012 prediction.
http://tinyurl.com/2wz9mp
To the delusional FBers out there, the resets/ market capitulation to long trend losses has just begun.
My NDE shorts are excellent. More downside to come. Have you seen the recent media reports about all of the mortgage fraud in SoCal? Mortgage fraud was highly profitable and distorted the sales statistics the last two years. That just ensured the fall coming is all the more certain. So am I a dumb*ss for having them? No. And I'll be all the more rich soon.
The U.K. is the biggest bubble! When it explodes it will make the U.S. implosion look like a wimp. What does the U.K. make anyway? I remember my grandmother use to make toast with that English jam with the bitter oranges, and when I tried to buy some in the store it was made in the U.S.
The U.K. is like the U.S. but worse off. All they have is the capital markets, and investment houses. At least the U.S. has the military! When the U.K.'s sailors were take, the sailors had to make "nice" just to be cut loose! They new the Royal Navy couldn't do a thing!
http://tinyurl.com/29opwg
link from mortgageimplode.com
where in hell do these people get the idea that they can do this stuff? house flipping.? only in america. fast money, quick money, road to riches.......what does it mean to be rich? what does it really mean?
China's central bank Sunday took another measure to soak up strong capital inflows into its red-hot economy, ratcheting up banks' reserve requirements for the seventh time in the past year.
The move, which takes effect May 15, will bring the ratio up 0.5 percentage point to 11% for most banks and comes on the heels of an acceleration of economic growth to 11.1% in the first quarter.
Economists widely expected a tightening move ahead of the upcoming May holiday and are now looking for the People's Bank of China to deploy more tightening measures, such as an interest rate rise, in the coming weeks to contain rising inflationary pressures and slow growth from the first quarter's blistering pace.
The reserve ratio increase, because it signals more measures ahead, could cause traders to push domestic shares lower in trading Monday -- the last day China's markets are open before a weeklong holiday.
"The People's Bank tightened at this juncture to give the markets a little time to digest this increase," said Jing Ulrich, chairwoman of China equities at JP Morgan & Co. "This one hike alone won't trigger a major sell-off."
http://online.wsj.com/article/
SB117783255254786134.html?mod=
googlenews_wsj
Oakland freeway fire/collapse
http://www.youtube.com/
watch?v=8tjs5ILNkJc&e
California Governor Arnold Schwarzenegger is expected to hold a news conference at 10:00 p.m. tonight in Oakland with Caltrans and California Highway Patrol officials on this morning’s collapse of a section of freeway in Oakland’s Macarthur Maze.
“Gov. Schwarzenegger directed the state to use every available resource to reduce the incident’s impact on the Bay Area,”
The interchanges from eastbound Interstate Highway 80 to eastbound Interstate Highway 580, and from westbound Interstate Highway 80 to southbound Interstate Highway 880, remain closed indefinitely.
http://www.sanfranciscosentinel.
com/?p=1602
http://www.app.com/apps/pbcs.dll/article?AID=/20070405/BUSINESS/704050410/1003&ref=patrick.net
Keith - did you see this?
http://www.car-insurence-quote.com/wp/?cat=204
Looks like it was ripped from your site.
One thing that always makes me laugh is trolls talking about how everyone in THEIR city is rich and can afford sky-high prices.
Living around DC - this folklore is apparently being infused into the drinking water. Folks, look at census numbers - for your city or better yet your county. Sure the DC area has many places ranking towards the top of the list.
So let's look closer. Average 2003 holdhold incomes in Maryland burbs are 88.5K, 76K, 70K, 60K per close-in county. Hmmm. Does that qualify folks to pay 500K for their starter home? My household income around 140K is almost double the average in my county. With almost 100K down, I can still barely afford these sh*tboxes.
Good luck, talk up your area, say how different things are where you live, say how underpriced things were 10 years back (as if no saavy RE investors existed in '97 and markets didn't work back then). Folks if prices don't go down 50%, you will see smart buyers looking to other places. You will be left with preexisting owners (many on the verge of retirement), dumb FBers with no disposable income, forclosures on every corner, and immigrants living by the gaggle. Sound like an awesome neighborhood to me!
Economist Lereah to leave NAR, join Move Inc. next month
By Robert Schroeder
Last Update: 11:18 AM ET Apr 30, 2007
WASHINGTON (MarketWatch) -- David Lereah, chief economist of the National Association of Realtors, is leaving NAR to join Move Inc. (MOVE : move inc com com
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MOVE4.75, +0.01, +0.2%) as chairman and partner of a new business entity next month, NAR said Monday. Move Inc. provides homebuyers and renters with information about real estate and communities before, during and after a move, according to its web site. Lereah directed NAR's research division, regulatory and industry relations division and other activities
Here is a nice post with some interesting charts on credit card debt write-offs, and mortgage equity loans in the UK. The banks over there are getting out of credit cards (losses are too high) and moving into home equity loans.
http://ukhousebubble.blogspot.com
It would be interesting to see similar data for the US.
Lereah has left the NAR to join Move Inc.
NAR bails on TCDL
TCDL goes to to some POS real estate dot com "new business entity"
http://www.marketwatch.com/news/story/economist-lereah-leave-nar-join/story.aspx?guid=%7B72027104%2D9CCD%2D458F%2D907B%2DBDF80DA9BE9E%7D
This deserves some kind of big HP celebration!
No comment moderation for TCDL EXIT DAY
Neither NAR nor Move Inc. offered details about the new entity. A Move Inc. news release said it will launch in the third quarter and is "expected to be transformational for both consumers and real estate professionals."
Smells like HousingPANIC to me!
You are spot-on with this one.
The housing bubble - alone - will severly cripple the entire world economy.
People are in denial because the truth that they will be impacted by this catastrophe is too fearful
a thought to accept.
Anonymous said...
The similarities between the dot.com bubble and the housing bubble are astounding. When you have a situation where:
a) Everyone is talking about stocks/real estate
b) Friends, coworkers and family are all suddenly experts on stocks/real estate,
c) People are quitting their jobs to become day traders in stocks/real estate,
d) People are paying premiums for stocks/real estate that are out of this world
Guess what? It's a bubble and a crash will inevitably follow.
I am old enough to be a victim of the Savings & Loan collapse, the dot-com collapse, and of course witness to the events of 9/11.
The real estate debacle is just another example of our government being asleep at the wheel. Nobody wanted the dot.com boom to end because everyone was making paper profits. Twenty-four year-olds were becoming dot.com millionaires overnight. Nobody worried about what Al-Qaeda was doing despite repeated warnings. Our govt was too busy trying to further embarrass a president for getting a bj in the oval office. No-one wanted the Real Estate boom to end because it kept the economy going during a difficult time, and it made everyone feel wealthy. As with all great parties there is a typically a massive hangover to be suffered.
I am appalled at the number of comments I see on this site from people still in denial of what has taken place. We have a real estate market that still has a long way before it hits bottom, an economy that will be impacted significantly, if not catastrophically. More disconcerting is that our Government has lost its ability to protect, govern and properly regulate its own citizens, and lost the confidence and trust of the world in general.
This latest data seems to have slipped under the radar. Can't imagine why.
American GDP Figures Hinting at Slower Growth in 2007
ECONOMIC WATCHDOG, April 27
GROWTH STOCK SWING OPTION: April 27, 2007
By Jeff Neal, Optionetics.com
Published: April 30, 2007 1:45 PM EST
The latest Gross Domestic Product [GDP] data released revealed that a bit of a slowing in the economy is taking place. The data showed economic growth of only 1.3 percent in the first quarter of 2007, representing the worst figure in the past four years. Most attributed this GDP slump to the nations housing market decline, which is now starting to make businesses much more cautious in their spending behavior. Consumer confidence fell to 104 in April versus 108.2 in March. That was also slightly below economists'' consensus estimates; they expected 105, but it was due predominately to higher gas prices. This is important to watch because currently GDP growth is coming from consumers.
The weak GDP figure is important because most economists consider it the leading measuring stick when it comes to Americas economic health. GDP gauges the value of all goods and services produced within the United States and is a closely followed indicator. Despite the weak figure Federal Reserve chairman Ben Bernanke does not anticipate the economy to descend into a recession in 2007.
One of the clouding factors making the next move by the Federal Reserve hard to predict is that even though the economy slowed in the first quarter, inflation actually increased. One of the inflation measurements related to the GDP report and looked at closely by the Federal Reserve indicated that core prices increases by 2.2 percent in the first quarter, which is up from 1.8 percent in the fourth quarter. The Fed currently considers inflation as the biggest and most looming threat to the nations economy.
Keep in mind the Federal Reserve hasnt moved a key interest rate since August. Before that it had steadily lifted rates to ward off inflation. Many economists predict the Fed will continue to leave rates alone when it meets next month. The goal is to slow the economy enough to hold inflation in check, but not so much as to generate a recession. The Labor Department indicated that wages and salaries increased 1.1 percent this past quarter, which represents the fastest growth since 2001. In addition, many politicians, particularly from the Democratic camp, are pushing to increase the federal minimum wage and policies to help unions.
As mentioned earlier the biggest contributor to first quarter GDP slowdown was deteriorating housing market. For instance, home building was reduced by 17 percent, on a yearly basis. Also, business investment by businesses in inventories was very weak as well. In addition, the large trade deficit weighed on the GDP. The hope going forward is that consumer spending will continue to be resilient and eventually spill over into capital spending. If so, look for earnings to be bright which would absolutely bode well for the stock market.
Jeff Neal
Senior Writer, Options Strategist & Profit Strategies Radio Show Market Correspondent
Visit Jeffs Forum
Listen to Jeff at www.ProfitStrategiesRadio.com
Isn't this highway collapse going to have a big impact on prices sales in the Bay Area? With a bad commute already, made 10 times worse, who would pay for homes in those areas. Who can drive to the Open Houses?
You HPers are missing out on the latest boom!
Japanese REIT CD promises 100% returns with ZERO downside risk!
What are you waiting for?
http://tinyurl.com/27ussd
Comparisons are odious ... but here's the attitude of a Spanish economist 400 years ago, when Spain was sucking in silver from the Potosi mines of South America:
"A further quote, from the arbitrista Alfonso Núñez de Castro, illustrates the Spanish attitude accurately:
'Let London manufacture those fine fabrics of hers... Holland her chambrays ... the Indies their beaver and vicuña ... so long as our capital can enjoy them; the only thing it proves is that all nations train journeymen for Madrid, and that Madrid is the queen of Parliaments, for all the world serves her and she serves nobody.'
"In other words, it was thought that Spain could enjoy the products of other countries without producing anything itself. This was increasingly the reality, since Spanish industry declined in the early seventeenth century. However, as we have seen, Spain became a dependent country."
Within 50 years, Spain was broken, a second tier player in Europe. It couldn't be the same for the US in our globalised world.
"Nobody worried about what Al-Qaeda was doing despite repeated warnings"
there is no such thing as al-qaeda....your government invented that term for the never seen and never found boogymen who we are supposedly feverously searching for but will never find....and so the war that never ends goes on. it matters not who is president. they all dance to the tune that is played for them by the banking establishment in order to make the rich richer and the poor, poorer......this too is a bubble that will break one day with bloody revolution and that day is coming soon....
I wonder how illegal immigration has influenced this housing market bubble...surely this cheap labor has enabled these housing companies to get bigger and bigger and to live the lie that only cheating can produce. they cheated the american way of life by using cheap, illegal labor to produce these tract homes, that no one really wants....if they had used american labor to build these homes, and paid decent wages to lower middle class working men, the costs would have been at least doubled and more.......then this would have made them slow down on their expansion and their building programs. this slow rate would have affected their bottom lines and would have made these companies smaller , and more reality based in their incomes and their economic outlooks. right now, they are large, over inflated in size, and are built upon lies, the lies that are part of this world economy now. but as in physics, there are certain laws, in finance as well. no matter how long you lie and hide the truth, sooner or later, the real levels will be achieved and money and outputs attain these real levels no matter what anyone else does or thinks...this is going on now. since after ww2, it has been part of the american dream to own your own home.....but for too long, we have cheated in our acquistion of these homes, by lying on applications and fake low interest rates that improve liquidity. now the chickens are coming home to roost...
i was reading on morgageimplode.com how lennar is trying to get out of land deal they are involved in, in palm beach county.....i am sure this will go against them legally.
God, I feel bad. My landlord buddy almost took his own life. Ah, massive vacancies sure do bite into the bottom line of his recent empire.
Really, I do feel bad. I wonder though if any of the RE rich have ever thought to feel bad for future generations of American buyers? I've really only read one post on here with someone on the inside track of this price boom expressing sympathy for their fellow renters/FBers.
Folks this is gonna be ugly. At least I know I am still human enough to feel sorrow. Are you? When the chips fall, we will see the pain this caused for America across the board. I wonder how many children will not be born because young couples are "waiting" until they buy something or till the market shakes out. Oh, I guess we need to import more workers now.
Bubbles are not good folks. Bush was an ignoramus to claim this jump in household wealth as one his greatest achievements. Then again, what else has he achieved?
"there is no such thing as al-qaeda....your government invented that term for the never seen and never found boogymen who we are supposedly feverously searching for but will never find."
I will give you $5000 (when you return) if you will travel to the afghan / Pakistan border towns and walk around with a sign that says "Bin Laden eats eats pork, sucks c**k, and attends sunday mass"
I noticed a couple years ago that real estate was all anybody could talk about. My friend back then was telling me that at his family reunion everybody was chatting about their 2nd houses for 'investment' purposes. Can't wait to see how those properties are doing now, and how much of the mortgage the rent covers. I actually talked to a frien of a friend about *his* Texas investment property that only costs him $800 a month out of pocket when it's fully rented. What crack was he smoking?!?
Kieth:
There are a couple good housing related things on cnn- shiller, the Quams- the newlywed couple in Arlington, Va who had to take on a roommate to afford their condo after refinacing to an option ARM- good stuff entering the mainstream news
oh and a piece on mortgage brokers and appraisers
Just now on City Confidential the show was highlighting a murder in O.C.It was a muderous tangled web in the family.At the end of the show it was pointed out that people in O C put on a life style which good from the outside eyes but on the inside these people are in deep debt with many mortgages and bills just to get by and put on an act.Even a local cop was interviewed to back up the claims.The strangely hilarious/bizarre part was at the very end they said with the way real estate is priced we will see more episodes based off this similar case of financial striff.Amazing really.Simply amazing.
Houses in So FLA are definitely breaking down.Even the braggards who sold at the top to only buy a bigger money pit are now regretful.It is gonna get very nasty and it is starting.
The investors: How to get rich trading "idiot" loans
Investors have made a fortune trading bonds backed by mortgages.
By Stephen Gandel, Money Magazine senior writer
May 2 2007: 1:21 PM EDT
(Money Magazine) -- The housing boom was good to John Devaney. Really good. He owns a Rolls-Royce, a Gulfstream Jet, a 12,000-square-foot mansion in Key Biscayne and a 143-foot yacht, as well as a few Renoirs and a valuable 1823 reproduction of the Declaration of Independence.
Devaney's not a developer, and he's certainly not a flipper. The 36-year-old CEO of United Capital Markets is a bond trader. And one of his specialties is buying and selling bonds that are backed by the mortgage payments of ordinary homeowners.
Option ARMs? Devaney loves 'em. "The consumer has to be an idiot to take on those loans," he says. "But it has been one of our best-performing investments."
Devaney's not out to get people into bad loans - or into good ones. He just makes bets on how many people will repay and when. Still, the $5.7 trillion mortgage-backed-securities market had a key role in today's housing mess.
"The broker and the lender and everybody else in between is part of a factory that's producing bond securities for Wall Street," said attorney and consumer advocate Irv Acklesberg in testimony before a Senate committee recently.
On the other hand, the fact that Devaney and other investors are willing to own mortgages may also be one of the reasons you could afford your house.
Banks have been selling off their mortgages to the bond market since the 1970s. Bond investors get the borrowers' monthly payments and the promise that they will be paid back, while banks get immediate cash and the chance to unload some risk. All this makes it easier for them to make new loans - good news for most borrowers.
The trouble is, Wall Street's rocket scientists keep finding more sophisticated ways to repackage and resell mortgages. As a result, lenders stopped worrying so much about credit standards and learned to love risky loans.
Look, for example, at the financial Frankenstein's monster known as the collateralized debt obligation, or CDO. Brought to life in the 1990s, the CDO helped solve a knotty problem for lenders. They were often left holding a small amount of loans that were too dodgy to sell to investors at an attractive price.
But what if you grouped the payments from all those risky mortgages together, along with some other investments, and you sold some investors the right to be the first ones to get paid?
This would look like a relatively safe investment, and so - voilà ! - you've transformed a risky loan into a triple-A rated security. Other investors would be farther back in line and might not get paid if things went badly. But you could offer those investors very high yields, so that hedge funds and pension funds would roll the dice.
This set the whole mortgage-bond sector on fire. Banks rushed to make mortgages - any kind of mortgages. Lousy credit? No problem. Can't prove your income? No problem. Can't pay more than 1 percent now? No problem.
Now a lot of that lending looks foolish. Mortgage delinquencies among so-called subprime borrowers have risen to 13 percent, the highest in at least 10 years. The market for the lowest-credit-quality mortgage bonds has tanked. And investors in CDOs may be in for a rude shock.
"Some of the investors who bought CDOs certainly took on more risk than they thought," says John Weicher, a former assistant secretary of housing now at the Hudson Institute. But Devaney, who told a crowd of investors that the riskiest mortgage bonds looked "awful" before the crash, says he thinks he'll be buying. "I don't believe the carnage and fallout will be as bad as people think," he says.
Whether or not big investors come out okay, the damage is done for many homeowners. "The system allowed banks to create unsustainable loans that are going to haunt borrowers for years to come," says Allen Fishbein, director of credit and housing policy at the Consumer Federation of America. "Unlike the bank, the borrower has no way to lay off the risk."
What comes next? The pullback. Investors will be more selective about where they put their money, and banks will be more cautious in their lending. That's basically healthy.
But the risk is that this will happen so fast that we'll see a vicious circle develop: Falling home prices mean less credit, and less credit means fewer buyers and, hence, falling home prices. That could make a housing recovery that much harder to come by.
The Second Great Depression: Interview With Author Warren Brussee
May 01, 2007 -- Warren Brussee is the author of several different books. His most recent, The Second Great Depression, examines the current state, as well as the future of our economy. Warren recently sat down with us to share his thoughts on the housing market crash.
What factors led to the housing market crash?
Starting in 2001, in response to the stock market's sudden drop and to make sure the US did not go into a deep recession, the Fed lowered its federal funds rate from 5.5% all the way down to 1%. This enabled lower mortgage rates. At the same time, lending institutions started using creative mortgage loans, including negative amortization, interest only, low initial teaser rates, zero down, and adjustable rate mortgages. This dramatically increased the potential number of home buyers and the ability of buyers to buy more expensive homes. This increased demand caused bidding for available homes and drove up prices: the old demand versus supply thing! As prices rose, people began to look at homes as investments, bringing even more people into the market. Between 2000 and 2005, the median price of homes went up 49% over the historical expected price rise.
Then, in 2005, in response to inflation fears, the Fed started to raise interest rates back up to 5.25%. Also, as it became obvious that many of the sub prime loans were defaulting, lenders started tightening up standards, which reduced the number of people eligible for mortgages and made it more difficult for people to refinance their adjustable rate loans, which were beginning to reset. Both through foreclosures and the plain inability of people to make their payments, more homes went on the market. Also, those who had purchased homes for investment saw that prices were no longer rising, so they also began to sell. So the above scenario was now reversed: there were now more sellers than buyers, and sellers were forced to lower prices to have any chance of selling. As home prices drop, many people are finding that they owe more on their homes than what they can sell them for, and some of those people are just walking away from their mortgages. Thus the crash begins!
What sort of impact will the general slowdown in housing have on our economy?
Many people have been using their homes as ATMs, taking out equity as home prices rose. Those funds will no longer be available to fuel the economy. And those people with adjustable rate mortgages ($1.5 trillion dollars worth of mortgages will be reset this year alone) will have to restrict their other spending so they can make the higher payments. Even those people who did not refinance looked at the equity in their homes as a form of savings. They will feel poorer and have to start saving in other ways, again, restricting their spending.
In addition to the above, all the people related to home building, both directly and indirectly (material manufacture and supply, loan agencies, etc.) will be affected. Unemployment will go up and the GDP will go down. This will then have a domino affect on other businesses.
If people had been saving, some cushion could have been found through reducing the savings amount. But people have had a negative savings rate for the last 24 months. People have been living on the edge, and there is no cushion. The economy has been carried by the money that housing put into the economy. With that source gone, and with people now beginning to have to repay their loans, we are going to be driven into a deep recession, followed by a probable depression. Our country has never had debt like we do now, both individually and as a country.
Will the U.S. troubles spill over and cause problems in the global economy?
We are the world's customer. If our economy slows such that we can no longer buy from other countries, their economies will also slow dramatically. Also, other countries will no longer want to invest in the US or buy our Treasuries, which will make it difficult for us to get the funding that enables our country to run deficits. The US will be forced to print money, which will lead to inflation. Other countries will lose faith in the dollar, and there will be turmoil in the world financial markets.
There has been a great deal of press given to the fall of subprime lending lately. Some people, like the Fed's Ben Bernanke, do not expect the fallout to spread to the rest of the economy. What's your view?
First, we don't know what Bernanke thinks. Even if he thought that we were heading into a recession, he couldn't say it because that would make it happen. Also, the problem is not just with the $600 billion of sub prime loans made last year alone. There were also $400 billion of Alt-A mortgages made last year, which also have a high risk. And, as I noted above, there are $1.5 billion worth of adjustable rate mortgages that will be reset this year. Every one of those mortgage resets will cause a disruption in the economy, the least of which will be a reduction in disposable income for those people with the resultant higher payments.
Could the Fed help the housing market by lowering interest rates?
The Fed only influences mortgage rates, they don't control them. Much of our mortgage money comes from other countries, and they are unlikely to want to throw additional money at bad mortgage loans. And with inflation just being held at bay, the Fed is unlikely to lower interest rates unless the economy really goes in the dumper.
It is also worthwhile to look at what happened to Japan in 1990. They also had a housing bubble and high consumer debt. The Japanese consumers suddenly reached a point that they wanted no more debt, and even though the Japanese government lowered interest rates to essentially zero, the consumers refused to spend. At that time the Japanese consumer had debt equal to 130% of their disposable income. The US consumer reached that same level this year.
Do you think housing will bottom out anytime soon?
Between 1940 and 2000, the median price of homes increased an average of 2.3% above inflation every year (probably mainly due to homes getting larger). Between 2000 and 2005, home prices went up in excess of 8.4% per year in addition to the 2.3% historical increase, for a total of 49% over the expected historical increase. Now, in 2006, homes went down almost 6% (including inflation). Homes would have to drop an additional 25% to be back at the expected value of homes based on their historical 2.3% yearly increase.
And, since homes were being built to satisfy the increased demand of the last few years, there are too many homes for the reduced number of qualified buyers that will be standing after the crash. This makes it likely that homes will fall even MORE than 25%.
In other words, we have only seen the tip of the housing crash iceberg!
To learn more about Warren Brussee and his views on housing and the economy, you can check out his blog on Amazon.com or pick up a copy of his book, The Second Great Depression
Responding to the post about illegal immigration effects on housing boom:
What are you smoking? If cheap labor resulted in more houses being built and for less money, it would have reduced the price of housing. There are other ways that illegal immigration could have contributed to the bubble (more buyers), but that is not one of them.
The latest from CA: 1/3rd loss in home values. Foreclosures are WWDs = Weapons of Wealth Destruction
“It is a tidy, sharp looking home. The Mossdale neighborhood west of Interstate 5 is clean and desirable. It has more than 2,200 square feet of bright living space and is less than two years old. If you had bought it 15 months ago you would have paid in excess of $600,000.”
“Now that home bought with 100 percent financing is in foreclosure. The lender is willing to take $379,900.”
“The go-go days of new home sales in Mossdale Landing 18 months to two years ago makes it susceptible to the sub-prime loan failures. Realtors said an inordinate number of new homes had unconventional financing often at 100 percent.”
“There were 586 notices of default sent to homeowners in the first three months of 2006 throughout San Joaquin County. That amount jumped by 193.7% in the first quarter of this year to 1,721 such notices.”
“‘People going into foreclosure today aren’t losing their jobs nor did they have income reduced,’ noted Steve Roland of the Real Estate Group. ‘They were simply living beyond their means.’”
“Carol Bragan, another Realtor with extensive knowledge of the Manteca market, doesn’t mince words. ‘It’s scary,’ she said.”
“The top of the market, $500,000 plus, has been hit the hardest. Among the foreclosures in Manteca is a large custom home in the Mt. Vernon neighborhood near Shasta Park that two years ago would have sold for $780,000. It’s available now for $560,000.”
“Bragan noted that Del Webb and new-home builders are going to keep building because they have to recoup their investment in improvements that are put in place at the front-end of projects.”
“And those new home buyers aren’t messing around. One model in Kennsington Place at Louise Avenue and Cottage Way was slashed almost $100,000 to jump-start sales. Builders also are tossing in incentives in upgrades and such that approach $$60,000 in some cases. That is also creating stiff competition for existing home sales.”
“Sales activity in Lathrop has dropped almost 70 percent in the fist four months of this year compared to the same period last year. Sales in Manteca are just a bit better being off about 60 percent.”
“‘It’s a black hole,’ said Realtor Tom Wilson in reference to foreclosures in the Mossdale area of Lathrop. Wilson noted those on the sidelines shouldn’t panic at all about dropping prices.”
“‘You can’t lose what you never had,’ (he said) of equity losses.” ‘It only counts when you go to sell.’”
Morning wingnuts. How's that great depression treating you today?
WASHINGTON (Reuters) -- The number of U.S. workers filing new claims for jobless benefits fell unexpectedly by 21,000 to the lowest level of claims since January, a Labor Department report showed on Thursday.
Initial filings for state unemployment insurance claims slid to 305,000 in the week ending April 28 from an upwardly revised 326,000 the previous week.
Oh I know I know the wingnuts will chime in with some bullshit about all the jobs being $7 an hour jobs. Well sure maybe in your rental complexes that's the case...rest of the country not so much.
Ha ha ha. I love how all you renters make $140K a year and can't afford a home.
Excerpts from the essay "What Record High?" by Peter Schiff of Euro
Pacific Capital.
---
"As the Dow burst through the 13,000 milestone, few understood the hollowness of the achievement. Measured against the rising dollar-denominated prices of just about everything else on the planet, the Dow has actually lost value over the past seven years."
...
"Measured against the truest benchmark, the price of gold, the record high for the Dow was set back in January of 2000 when its price equaled approximately 43 ounces of gold. Today it is only worth about 19 ounces."
...
"To better appreciate just how much of stock gains can be attributed to inflation, consider that the record high for the Dow in 1929 of approximately 380 also equated to 19 ounces of gold. So despite all of the hoopla and a thirty-fold increase in stock prices, the Dow has actually gained no real value during the past eighty years."
...
"Despite its recent eclipse of 13,000, the Dow now buys 30% fewer euros than it did then back in 2000 when it was priced at approximately 11,500. It also buys 35% fewer gallons of milk, 40% fewer bushels of corn or wheat, 65% fewer ounces of silver, 70% fewer barrels of oil, 80% fewer pounds of copper, and 90% fewer pounds of uranium."
...
"Try figuring what the Dow will buy in terms of other necessities, such as housing, insurance, college tuition or hospitalization. Any way you measure it, the Dow is worth far less today then it was in January of 2000."
Morning wingnuts. How's that great depression treating you today?
___
Hey you clueless wanker. Read the cold hard facts from Peter Schiff's article, posted above.
Anonymous said...
God, I feel bad. My landlord buddy almost took his own life. Ah, massive vacancies sure do bite into the bottom line of his recent empire.
=====
This is why it's critical that people educate themselves about economic matters and how to invest/trade successfully.
Logic is your best friend, NOT getting caught up in the next craze where people are camping outside the doors of wherever the latest liquidity-induced mania has led them.
For a start, I recommend people follow the writings of the zany but wise Mogambo Guru. His latest article can be found here:
http://tinyurl.com/yowv3y
Dismiss him as a fool at your own risk. You've been given fair warning.
New Century to Lay Off 2,000 Workers
By ALEX VEIGA 05.03.07, 2:30 PM ET
Financially strapped subprime mortgage lender New Century Financial Corp., failed to receive any bids for its mortgage loan origination business, forcing it to shut down the unit and lay off around 2,000 employees, the company told employees Thursday.
The Irvine-based company, which has been preparing to sell off its assets under Chapter 11 bankruptcy protection since last month, notified employees during a conference call that they would be laid off effective Friday.
Speaking on the call, New Century President and Chief Executive Brad A. Morrice said despite a number of potential buyers for its wholesale and consumer-direct operations, "none of those potential deals have come to pass."
The deadline for bids for the business unit was Wednesday. New Century's request to extend the deadline was not supported by its creditors committee, Morrice said, adding that efforts to sell the unit had stopped.
New Century will retain only service personnel and about 250 members of its corporate team as the company continues efforts to liquidation, Morrice said.
"I realize that today's announcement was not the news that any of us hoped to hear," Morrice said, his voice quivering at times. "I would be remiss if I did not say how sorry I am for any grief or hardship that any of you may experience as a result of this situation."
New Century had been the second-largest provider of home loans to high-risk borrowers, but it collapsed after a spike in mortgage defaults led its lenders to pull funding and demand that it buy back bad loans.
The company stopped trying to make new home loans in March due to lack of funds.
As part of its bankruptcy process, New Century was able to find a buyer for its loan servicing business.
Morrice said the sales process for the servicing unit remains on track.
The deadline for additional bids is May 10.
Anyone who didn't see this coming is lying. There is no way these massive appreciations could keep up with stagnet wages in certain pockets. Ended up being paper money anyhow. Those who cashed out 2 years ago and bought something more reasonably priced were wise. Those that traded up out of greed are basically stuck.
"Morning wingnuts. How's that great depression treating you today?
WASHINGTON (Reuters) -- The number of U.S. workers filing new claims for jobless benefits fell unexpectedly by 21,000 to the lowest level of claims since January, a Labor Department report showed on Thursday.
Initial filings for state unemployment insurance claims slid to 305,000 in the week ending April 28 from an upwardly revised 326,000 the previous week.
Oh I know I know the wingnuts will chime in with some bullshit about all the jobs being $7 an hour jobs. Well sure maybe in your rental complexes that's the case...rest of the country not so much."
You are actually admitting publicly that you BELIEVE government statistics, what kind of spastic retard are you?
"Morning wingnuts. How's that great depression treating you today?"
i resemble that remark......
Oh yeah, these guys are SO smart:
"The Swiss bank UBS has thrown in the towel on a high-profile attempt to run an in-house Wall Street hedge fund after suffering big losses betting on America's controversial sub-prime mortgage industry."
"In an embarrassing admission of defeat, UBS announced today that it was shutting down Dillon Read Capital Management - a fund established two years ago by the bank's former head of investment banking, John Costas, with an investment of between $3bn (£1.5bn) and $3.5bn."
HA HA HA HA HA HA !!!!!!!!!
Fuckin' Dimwits !
morning wingnuts,
How's that record DOW and record S&P500 treating everyone today? How ae all your shorts doing today?
I especially want to hear from you geniuses who shorted Countrywide at $35. How's that CFC at $38 working out for you?
Oh and as an added bonus Orange County median home price is up 0.8%. How's that housing crash going for everyone in SoCal these days?
Keep renting that basement apartment and stuffing your money under the mattress losers.
Hey, my NDE short, now IMB, is doing just peachy. But go ahead and take the trade opposite me and buy long. I welcome the challenge.
It's easy to be a message board stud, dude. Put yo money where your mouth is!
"morning wingnuts,"
Do you even know what a wingnut is, you ignorant asshole?
I urge everyone to get on Larry Kudlow's blog and call him to account!
___________
http://www.kudlowsmoneypolitics.blogspot.com/
___________
Here are his opening comments on one of his blog threads:
So let me get this straight – earnings are up, ISM-manufacturing is up, ISM-services is up, productivity is up, factory orders are up, media stocks are up, the overall stock market is breaking records, household net worth is up, financial assets of individuals and corporations have increased vastly more than their liabilities, and jobless claims are way down. These are just a few snippets of continued economic prosperity.
There is no bubble. There is no recession. And with core inflation a mere 2.1 percent over the past twelve months, the Fed can declare victory and go home.
"So let me get this straight – earnings are up, ISM-manufacturing is up, ISM-services is up, productivity is up, factory orders are up, media stocks are up, the overall stock market is breaking records, household net worth is up, financial assets of individuals and corporations have increased vastly more than their liabilities, and jobless claims are way down. These are just a few snippets of continued economic prosperity.
There is no bubble. There is no recession. And with core inflation a mere 2.1 percent over the past twelve months, the Fed can declare victory and go home."
Uh, CREDIT is WAY UP! And to not put that in with everything else is akin to putting fresh paint over an eyesore.
Larry Kudlow sounds like General Custer at The Little Bighorn. Things looked easy as he eyed only 1/5th of the camp's size. Not long thereafter Custer was wiped out.
By the way, for those hyping the DOW, the size of the private equity bubble (think of all the LBOs which have shorts scared out of the market) is bigger than the housing bubble.
Larry Kudlow sounds like General Custer at The Little Bighorn. Things looked easy as he eyed only 1/5th of the camp's size. Not long thereafter Custer was wiped out.
====
Kudlow is a smart guy, but he is a shill for the Bush administration. He's got to say this crap.
Larry Kudlow is correct it is almost a sure thing the Fed won't cut rates on Wednesday - or any time soon.
So as investors, economists and the Federal Reserve mull the latest reading on the U.S. labor market, the question on many minds on Wall Street is how weak does the job market have to get for the central bank policy-makers to start thinking about cutting rates?
The answer is probably quite a bit weaker.
http://money.cnn.com/2007/05/04/
news/economy/fed_jobs/
Real estate BS is starting to sound like Las Vegas gambling BS. People come back and only talk about how much they won, they never say what they lost (and they always lose more than they win, that is why Las Vegas still exists). They do this to feed their egos, they need to sound like players and winners, and never mind the reality. And the reality is that this whole swindle has screwed a lot of good people. People who couldn't or didn't want to treat their homes and financial futures like a gamble, a way to get ahead at everyone else's expense. This "screw everyone else, I've got mine" attitude will come back to bite you in the ass, and your complete lack of compassion or respect for anyone will be the cause of your own suffering. This country will be a lot less pleasant place to live for everyone because you just don't give a shit about anything of real value. If you have kids, they will know to blame you, and if you don't you can enjoy what you've created through your greed all alone.
I think Larry Kudlow knows what's up. His hope is that if he keeps pumping hard enough things will work out.
The problem is the amount of debt out there has exceeded business, and the public's ability to pay it off. The public has already started to default en masse on their share. Businesses are still riding a private equity bubble which is bigger, and has been longer lasting, than the housing bubble. Soon that will turn down and fall will be huge. Then both bubble bursts will feed off each other and we'll have one hellacious meltdown. The Fox saturday morning business block will be fun to watch then.
Bubble Update from Ventura, CA (everyone wants to live by the beach, they're not making anymore land, etc...)
Duplex Across the Street: 10350 Alexandria St. #1, Ventura
-Sold May 2006 for 550,000 (which was pretty much in line with what things were going for then per sq.ft.) to a hardworking young Hispanic fellow with wife and two children. Moves in and immediately spends 100's of hours on landscaping, re-roofing, painting, etc... (does most of the work himself with the help of a few friends and his wife). For sale sign goes up in August 2006 so I check it out and it is listed with some discount agent (on MLS) at 540,000-short sale subject to lender approval (he must have been financed close to 100%). So, I am thinking, what happened, did this guy lose his job or something that would change his circumstances that quickly. For the next few months, I still see him leaving for work at about the same time I leave for work everyday so I think he still must have a job. Meanwhile the price is dropped by a few thousand every week, and by November 06 the house is listed for 505,000. Then in December the for sale sign comes down, and the listing is pulled from the MLS. I think, OK the guy must be back on his feet and keeping up with payments.
Well, in the end of February the guy moves out, and I haven't seen anybody there for two months. So I'm thinking forecloure, the house now belongs to the bank. Well I was just checking the MLS yesterday and I see the house back on the market with REMAX. Price = $439,000. (no mention of short sale, REO or any such thing). So I check Zillow (which I know isn't always accurate) and I find that the house did indeed sell for 550K back in May 06, then it sold again in February 07 for 470K. So I am really baffled. Who would buy this house for 470K in February, close escrow, then turn around and list for 439K (taking a 30K loss plus transaction costs). I don't think that the Hispanic guy was a straw buyer, because he wouldn't have spent the time and money to fix the place up. He might have been duped into buying a house he couldn't afford, but if there was any fraud on this transaction, I don't think he was in on it. Is it possible that the February 07 sale being reported by Zillow is actually a foreclosure amount recorded by the first mortgage holder? Or could there be a straw buyer here? Would anyone trash their credit for 30K minus transaction costs?
Anyway, this house is representative of what is going on here in Ventura. I picked it because it is so easy to demonstrate the dramatic drop in value using tha same house over a few years. But believe me this is not isolated. Condos and houses that were in the mid-high 500K's last year are now in the low-mid 400K's. This is getting good. I almost called the agent about this house, because the guy fixed it up really nice and I started thinking if I could low-ball at 415K then it would be a really good deal. But then I came back to my senses. This house was only worth 169K back in 2001. Lets wait and see how close it gets to that after another couple of years.
Condos and houses that were in the mid-high 500K's last year are now in the low-mid 400K's. This is getting good.
I say wait.........wait until the bottom hits........there has been much discussion about hard landings and soft landings......but all of this discussion has not taken into account the intrinsic nature of federal reserve notes....they are paper dollars without any gold backing......who really knows what that house is really worth....who really knows where all of this is going........my guess we are heading toward the greatest depression and financial disaster in history.......the only question is when it will happen.......for me, i would be very nervous buying a place like that right now....all you are doing is buying someone else's problem........the problem with so much of the discussion about all of this , is that so many people think that the things that are happening are just business as usual and that this is merely a shaking out and financial adjustment.......to me it is not......for you see, it is my opinion that this is the start of the plunge into the third world status by the united states and this is all by plan and that we are never coming back....this must be stated........this is not a usual event.......this is a one time event.........this is the final curtain on a once and great nation and we have ourselves to blame....some say, well how can this be? if they destroy this country won't they take down a lot of their buds with them? perhaps....but there is no honor among thieves......there will be those who in the know and those who are not.......and it will be every man for themselves.....but the trillionaires......oh they will know and maybe some of the billionaires, but the millionaires will be left holding the bag.....and so it goes......
i wish i could be more pleasant about this wonderful home you are thinking about buying but i can't.....sorry......
As long as BOJ keep interest rate low and fund from carry trade keep on pouring into economies around the world then Larry Kudlow is correct.
Flow of funds has to go somewhere and since it can not go into real estate it is going into corporate bonds.
The days when corporations can no longer service their debt like subprime borrowers then this bubble will complete its last leg of the bubble.
Sounds much like 1926 when the stock markets around the world have no other place to go but up.
As long as stock price goes up then corporations can borrow from their equity on their stock price to pay off corporate debt.
Sounds allot like the subprime mess that just took place.
The point of saturation is when stock market participants say earning does not matter it is the potential growth that counts. Then central bankers from around the world will step in and pressure BOJ to raise rate.
This tells it like it is.
The housing bubble is *only* one of several elements which will set off a domino effect withtin the economy, leading to the next great depression.
Those of you continually posting here that this is just "doom and gloom" talk need to look at the macro economy - not the perceived wealth effects within your own communities.
- K.W. - Southern Californoa
http://www.amazon.com/Americas-Financial-Apocalypse-Profit-Depression/dp/0975577654/ref=pd_bbs_sr_1/103-8328338-7647821?ie=UTF8&s=books&qid=1178398283&sr=1-1
Never appologize for telling it like it is.
If the news business was really based on facts - and not what generates ratings or what people want to hear - we would not be in the financial catastrophy we are in now - or at least would have been better prepared for it.
Keith, I applaud your efforts in keeping this blog going. There are some very good postings here, which have helped open my eyes wider as to what is really going on in this country.
There is no turning back now, the US is on the brink of insolvency.
I don't know about the rest of the bloggers here, but I'm very afraid for the future of this country.
Yet it seems inevitable, since too many still believe this is "someone else's problem, and not mine."
Anonymous said...
Condos and houses that were in the mid-high 500K's last year are now in the low-mid 400K's. This is getting good.
I say wait.........wait until the bottom hits........there has been much discussion about hard landings and soft landings......but all of this discussion has not taken into account the intrinsic nature of federal reserve notes....they are paper dollars without any gold backing......who really knows what that house is really worth....who really knows where all of this is going........my guess we are heading toward the greatest depression and financial disaster in history.......the only question is when it will happen.......for me, i would be very nervous buying a place like that right now....all you are doing is buying someone else's problem........the problem with so much of the discussion about all of this , is that so many people think that the things that are happening are just business as usual and that this is merely a shaking out and financial adjustment.......to me it is not......for you see, it is my opinion that this is the start of the plunge into the third world status by the united states and this is all by plan and that we are never coming back....this must be stated........this is not a usual event.......this is a one time event.........this is the final curtain on a once and great nation and we have ourselves to blame....some say, well how can this be? if they destroy this country won't they take down a lot of their buds with them? perhaps....but there is no honor among thieves......there will be those who in the know and those who are not.......and it will be every man for themselves.....but the trillionaires......oh they will know and maybe some of the billionaires, but the millionaires will be left holding the bag.....and so it goes......
i wish i could be more pleasant about this wonderful home you are thinking about buying but i can't.....sorry......
GM can not blame the weak yen for their subprime mess.
Congress should not help GM with their GMAC mess.
GMAC got into this subprime market due to greed so they need to pay the price for their bad investment move.
http://www.paperdinero.com/
BNN.aspx?id=171
Busts point to boom in indoor pot farms
In the last year, crops worth $100 million have been seized in the state. Two homes were raided outside L.A. this week.
http://www.latimes.com/news/local/la-me-housepot6apr06,0,6581455,full.story
Guy wants tales of Real Estate loses, got one, we held New York lands for years and years spending 20 percent of its final sales price, after years and years of trying to sell in taxes every year, do to increasing assessments and what was bogus values, and would have probably waited 15 years more to get even to evaluations, so in my opinion, none of it is worth more than 20 times tax
"Value" buyers may insists at 10 time tax as fair?!?!
Berkshire Hathaway AGM in Omaha
Buffett: No subprime panic
This is on front of CBS Marketwatch in big bold letters. Odd thing is, Buffet is NOT known for lying or being a shill. He's got a reputation as a straight shooter. BUT, he may also be trying to stem panic for the GREATER GOOD.
Didn't they reassure everybody on the Titanic before it went down too? What were the platitudes mentioned?
YEAH BABY, is this the first hedge fund to go belly up do to the housing bubble?
http://www.nytimes.com/2007/05/04/business/04ubs.html?_r=2&oref=slogin&oref=slogin
A couple paragraphs in is the juicy part.
UBS, the big Swiss bank, said that it would close its hedge fund arm, Dillon Read Capital Management, after less than two years because of losses in the United States mortgage market. The losses contributed to a 7 percent drop in first-quarter profit, the third consecutive quarterly decline.
Pardon my disbelief in the thought of money going into bonds to loan to corporations at five percent return at risk while the money is being used to pay CEO's and directors wages and benifits of hundreds of millions of dollars, and my experience in New York real estate lands was that receiving 10 times tax as value would be a reason to celebrate.....
pardon my disbelief in the thought that money will go into bonds to earn 5 percent yeilds at risk to lend money to pay CEO's and directors wages of hundred of millions of dollars and my experience in New York real estate is that receiving 10 times tax for properties would be a reason to celebrate
"Krugman on the US Housing Bubble"
http://www.youtube.com/watch?v=qo4ExWEAl_k&mode=related&search=
Guy Daley said...
Berkshire Hathaway AGM in Omaha
Buffett: No subprime panic
This is on front of CBS Marketwatch in big bold letters. Odd thing is, Buffet is NOT known for lying or being a shill. He's got a reputation as a straight shooter. BUT, he may also be trying to stem panic for the GREATER GOOD.
Didn't they reassure everybody on the Titanic before it went down too? What were the platitudes mentioned?
May 06, 2007 3:32 AM
=====================
Sounds like a classic case of watch what he does and not listen to what he says. Buffet has been buying companies outside the U.S. because of a weak dollar concern for quite sometime.
What did Buffet have to say about derivatives this year?
In the past he has called them a nightmare waiting to happen.
Can't form....... paragraphs..... or use...... the shift key......oh zeus..... why have we turned our back on your mighty lightning bolt..... oh thor, why do we keep ducking your hammer of justice...... oh buddha, why didn't we rub your belly for luck..... yeah, moses, jesus, and mohammed, too.....
sorry to rain on the parade guys....... it just had to be said......
Here's a good article.
Warren Buffet's comments are
mentioned about mid-section.
He's dead on correct.
http://www.marketoracle.co.uk/Article795.html
Guy Daley said...
Berkshire Hathaway AGM in Omaha
Buffett: No subprime panic
This is on front of CBS Marketwatch in big bold letters. Odd thing is, Buffet is NOT known for lying or being a shill. He's got a reputation as a straight shooter. BUT, he may also be trying to stem panic for the GREATER GOOD.
Didn't they reassure everybody on the Titanic before it went down too? What were the platitudes mentioned?
I live in Southern California,
where all along the coast I see
for-sale signs.
No one is buying ... why do you
think that is? This is a "prime" area (as the realtors) would put it. That means nothing because it's the market that eventually sets pricing.
Even when supply comes down, it still won't make sense for quite
some time because prices are too
high.
Wages are *not* going up for the
majority of US citizens, so it doesn't take a genius to see that prices will need to fall - alot - before a dent is even made in all the over (many times poorly built) supply of housing now in the US.
There are many good hard-working people here who take the time to blog, who have a platform to really tell it like it is.
Some are paying motgage payments, and some are renters, but none of them are "loosers".
Anonymous said...
morning wingnuts,
How's that record DOW and record S&P500 treating everyone today? How ae all your shorts doing today?
I especially want to hear from you geniuses who shorted Countrywide at $35. How's that CFC at $38 working out for you?
Oh and as an added bonus Orange County median home price is up 0.8%. How's that housing crash going for everyone in SoCal these days?
Keep renting that basement apartment and stuffing your money under the mattress losers.
Anybody seen this one yet? http://tinyurl.com/2uadgl
Lereah is almost, like, honest. Says we're in a housing recession. Okay, that's stating the undeniably obvious but I still didn't think Lereah would admit it.
I have to laugh at this, because
the *only* reason Lereah is admitting he was wrong is that he'll look even dumber if he keeps cheer-leading that everything is still A-OK.
He knew, along with everyone else at the NAR, that the speculative ballooning house prices would not be sustainable.
Lereah's fine though - it's the others who got caught up in all his cheer-leading that will have to pay the price dearly.
Here's another good URL:
http://tinyurl.com/3d7rcu
Within the article it states:
"Yes, you can lose on real estate. That is the great lesson of 2007."
We can safely replace "can lose" with "will lose" now.
~~~
Paul E. Math said...
Anybody seen this one yet? http://tinyurl.com/2uadgl
Lereah is almost, like, honest. Says we're in a housing recession. Okay, that's stating the undeniably obvious but I still didn't think Lereah would admit it.
Like i said the last time, i would get looser if i could afford more drink and as loose as i would be would make a loser of me, burp... only about Buffet, why do i not get any fudge in my supermarket, and a lot of other things also????????????/
189 new foreclosures TODAY in San Diego county. WAAAAAY more here than any other CA county:
http://tinyurl.com/3celdt
Need a good laugh? Try this: http://tinyurl.com/35lqar - especially the part about the prospective buyer writing a pathetic letter to the seller.
Article on how London's bubble has not popped...yet. (Hint: it's on the verge, folks. Yeeehah!):
http://tinyurl.com/2kgxmw
- puff daddy
MSM out with a story that renting is cheaper over the long term.
Why rent? To get richer
I have something un-American to confess: I rent an apartment despite having enough money to buy a house. I plan to keep renting for as long as I can. I'm not just holding out for better prices. Renting will make me richer.
The average real return for houses over long periods might surprise you: It's virtually zero.
Hooooo-weee, these hard core "Bushie Christian Republicans" keep on fooling the sheeple and taking their money and votes:
"Tampa minister found with crack
(AP) -- A 70-year-old minister was arrested after police found him at his church with 16 rocks of crack cocaine and a pipe to smoke them, authorities said.
Acting on a tip that a minister at Living Word Fellowship was using cocaine, an officer approached the Rev. David Brian Anton in the church parking lot Sunday morning and struck up a conversation about drug dealing in the area, police spokeswoman Lisa Parashis said.
During the course of the conversation, Anton made a point of saying he didn't use drugs and consented to a search. The officer pulled a plastic bag containing the crack out of Anton's front shirt pocket, Parashis said. A crack pipe was found in his pants pocket."
Remember that other famous Minister, Bush's pal, who liked to take meta-amphetamines while having rough sex with male prostitutes? You Republicans (especially Jesus freaks) should have your voter registration card revoked, since people like you are a danger to humanity.
I need somewhere to vent a bit - feel free to skip past this post. A friend of mine just bought a condo. I tried to warn her. I was polite and careful about my wording. I was non-argumentative and non-threatening. I didn't expect her to take my word for it - I urged her to investigate, analyze and think for herself.
But it didn't matter how many facts I confronted her with she refused to do her own independent analysis. She has no experience or education in economics but swears to me, with my law degree and mba, that her realtor friend knows better than I do. She KNOWS that real estate is a good investment. No matter what.
In short, I am friends with a bona fide idiot who has just sealed her financial fate.
How do you deal with this? How do you remain friends with people when they are so resistant to any form of dissent and refuse to think for themselves?
I guess you can lead a horse to water but you can't make her drink the truth.
I have something un-American to confess: I rent an apartment despite having enough money to buy a house. I plan to keep renting for as long as I can. I'm not just holding out for better prices. Renting will make me richer.
The average real return for houses over long periods might surprise you: It's virtually zero.
Yup! In most cases, everything you said is true. I know this comes as a shock to the anonymous troll, but his simple mind is not capable comprehending this simple fact.
"Need a good laugh? Try this: http://tinyurl.com/35lqar - especially the part about the prospective buyer writing a pathetic letter to the seller. "
It shows you just how stupid people were.
Pit says:
Photos and video of homedebtors here:
http://www.dailymail.co.uk/pages/live/articles/news/worldnews.html?in_article_id=453166&in_page_id=1811
In short, I am friends with a bona fide idiot who has just sealed her financial fate. How do you deal with this? How do you remain friends with people when they are so resistant to any form of dissent and refuse to think for themselves?
___________________
I hear you, paul. My niece just bought a house, and my sister and brother-in-law are looking for a new house as well. I tried to warn them we're in the middle of a housing bubble and it would be better to wait a while until prices come down, but they got mad at me for interfering in their business. Sometimes you just can't win....
How do you deal with this? How do you remain friends with people when they are so resistant to any form of dissent and refuse to think for themselves?
-----------
Dear PaulE,
Sounds like she is lucky to have you for a friend.
I think, listen to her with out judgment, as she will have repercussions down the road, maybe, and then just vent here at HP.
We like anecdotal stories.
(:
Here is the map of misery.
http://tinyurl.com/36gqtc
"I have something un-American to confess: I rent an apartment despite having enough money to buy a house. I plan to keep renting for as long as I can. I'm not just holding out for better prices. Renting will make me richer."
The very words I live by, after owning a few homes in the past and selling at bubble peak. Now I just rent in the US but own a diversified portfolio of properties in another country, which includes commercial, oceanfront, farm, and condo.
Apparently, the term Cap Rate or IRR doesn't belong in the vocabulary of several hamster-trolls posting on this Blog.
"How do you deal with this? How do you remain friends with people when they are so resistant to any form of dissent and refuse to think for themselves?'
Is she hot? If so, just feed her for sex, when her finances go into a funk.
Casey is now saying that his wife Galina is telling him to get a job or else. Yeah, right. That Russian crook is running out of topics and is now using his wife to troll. I don't believe a word that guy says.
For god sakes, Keith, do you ever sleep?
GM Slams Japan on Yen
In a rare move, Rep. Sander Levin, D-Mich. chair of the House Ways and Means subcommittee on trade, has asked members of the Financial Services Committee and Energy and Commerce Committee to join the hearing.
Is Japan intervening in currency markets unfairly, and what effect those interventions would have on U.S. companies, and what action, if any, the U.S. government could or should take.
At an unusual congressional hearing slated for Wednesday, General Motors Corp. plans to accuse Japan of keeping the yen's value artificially low so that its exports are unfairly cheap compared to prices of U.S.-made cars.
Mustafa Mohatarem, GM's chief economist, plans to testify that Japan has "deliberately weakened the yen to promote its exports at the expense of U.S. and other global manufacturers," according to the Automotive Trade Policy Council, which represents GM, Ford Motor Co. and DaimlerChrysler AG.
http://www.chron.com/disp/
story.mpl/ap/fn/4788113.html
A bit off topic, but I saw today that Sen. Susan Collins, (R, Maine), is drawing a challenge in her attempt to secure a third term in 2008. Her opponent pledges to use her record of votes regarding funding for troop support against her. Sen. Collins is certainly no Bushite! She is independent, thoughtful, pragmatic, and moderate in her approach. Her defeat would signal the beginning of the end of the Republican Party legacy that has been the source of party pride. I strongly believe the future of the Republican Party lies in those members who are moderate and pragmatic, and work with all members of Congress to find solutions to problems, and rarely engage in any form of political gamesmanship.
Maine has been particularly blessed over time with solid representation in the U.S. Senate, including Margaret Chase Smith (moderate Republican), Edmund Muskie (moderate Democrat), George Mitchell (moderate Democrat), William Cohen (moderate Republican), Olympia Snowe (moderate Republican), and Collins.
With the defeat of Sen. Lincoln Chafee, (R, R.I.) last year, the number of these "Theodore Roosevelt, Dwight Eisenhower" Republicans is dwindling. Do we want our party to be the party of a bunch of narrow-minded, single-issue idealogues?
I'm sending this from Texas, where moderate Republicans never stand a chance of getting elected to anything. Sen. Collins, we know about you down here and are pulling for you to succeed.
Hillary for President and Jane Fonda for VP (with Al Gore as Secretary of Defense). That's a duo I would vote for. I want these neocon crooks and Republican sheeple to suffer.
Hillary for President and Jane Fonda for VP (with Al Gore as Secretary of Defense). That's a duo I would vote for. I want these neocon crooks and Republican sheeple to suffer.
You must want the middle-class to suffer also. Hillary supports outsourcing good jobs to India, even more so than George Bush. Obama, however, is for the middle-class. Why don't you support him? It wouldn't happen to be because he is black, would it?
Typical liberal wants everyone to suffer!
Great realtor story from San Diego.
My best friend of 35yrs. is a grading contractor (since 1980). He was called about a potential job. He set up a time to meet with a local realtor woman who was having this job done.
She showed what was to be done, or what was needed....but what was really happening was she was picking his brain for 'Free' ideas and cost cutting short-cuts!
She kept saying "Time is Money"!
SO, after 3hrs. of his (free) time, she informed the grader that someone else already had the job! She was just getting another opinion on what and how the job should be done!!!
I would like to call her, set up a time to look at homes for sale. Take 3hrs. of her time, then say, 'I'm alredy working with another agent (clerk), and have aleady purchased a home'!
Just another A**HOLE in real estate
Wow, Walmart down, Whole foods down, what gives?
God damn, I knew I should've read the articles before I made my post- they're down because of the cold weather in April.
http://tinyurl.com/2b9bed
"It wouldn't happen to be because he is black, would it?"
Should we vote for him JUST because he's black? Hillary has much more experience and balls than Obama, plus she has one of the best presidents US ever had as husband and adviser.
Hillary will win, and you all know that, deep inside. That last Republican debate proved that. What a bunch of losers in that crowd: "Ronald Reagan this, Ronald Reagan that"...it's sad to see so much desperation in the GOP.
Have you seen the news today? No big surprise here: now comes the economic depression, after skyrocketing deficit, phony wars, corruption, incompetence (9-11, Katrina, Iraq, Afghanistan, etc), housing bubble, out-of-control illegal immigration, increased violence and poverty, expensive gas, inflation, weak dollar, treating injured soldiers like trash at Walter Reed, Abu Ghraib, 8 billion from tax payers disappeared in Iraq (secret society took it), rampant cronyism, Bush's Ambassador (former executive of big pharma) paying $300 / per hour to hookers from Central America in Washington with taxpayer money, Republican Congressman Folley trying to have sex with boys working as interns in Washington, Pervert head/priest (Bush's pal) of the biggest evangelical Church in the country taking meta-amphetamine during rough sex with male prostitutes...man, this list never ends!
Nice job the Republican White House and majority in the Senate and House have done since the Baby Boomers voted those freaks into office. No matter what you sheeple say, you can't possibly hide this mountain of evidence. No fallacies allowed either by saying that since something minuscule happened 10 years ago, now the Republicans in power have cart blanche to be a crook and incompetent. Another thing, if something was wrong in the past, Republicans have had enough time to corrected it by now. Nice excuse! Don't you people have any sense of accountability? Weren't you the people who were bringing dignity to the White House? Weren't you the big shots and everybody else was inferior? Nice lies to fool the sheeple.
And it just gets worse, have you noticed? Every week is another Republican scandal, case of incompetence, corruption, perverts. The crooks at the board of MSM have been trying hard to push all that dirt under the rug, but it's just too much to cope with. Just like CNBC and your hero Kudlow have been doing all along...it's catching up with them, though.
BTW, McCain = Keating 5
http://www.devvy.com/notax.html
How many people out there are good at putting clues together to form the entire picture? Anybody? Funny thing is don't know if its one anonymous troll or a dozen that keeps on making the irritating posts but I bet he couldn't put a 3 piece puzzle together.
But here are more pieces of the puzzle for your puzzling pleasure. BLG hit a 52 week low today. The Company's presence is principally in the single-family home construction markets of California; Las Vegas, Nevada; Phoenix and Tucson, Arizona; Texas; the Intermountain and Northwest states as well as Florida. The Company employs approximately 21,000 people.
Guess who is going to be laying off people soon? Oh and this is despite the DOW hitting records every day. But the powers to be have put up that wonderful smokescreen, but I submit to you, all is not wonderful in Disneyland.
Next we have (these are all new 52 week lows), CPF, which is a giant holding company and SURPRISE, they have a huge basket of mortgage loan companies. They employ 972 people.
Next, Sterling Bankcorp, STL, its a bank holding company but guess what, they are heavily into real estate and real estate loans.
FCF, First Commonwealth Financial, As a bank holding company, First Commonwealth Financial Corporation is subject to the provisions of the Bank Holding Company Act of 1956, as amended. First Commonwealth employed approximately 1,598 employees at December 31, 2005.
FBN, Furniture Brands International, Furniture Brands International Inc is one of the manufacturers of residential furniture in the United States, markets its products through its four operating subsidiaries: Broyhill Furniture Industries, Inc.; Lane Furniture Industries, Inc.; Thomasville Furniture Industries, Inc.; and HDM Furniture Industries, Inc. As of December 31, 2005, the Company employed approximately 15,150 full-time employees.
But HEY, as long as the media shills keep touting the success of the DOW, we really have nothing to be concerned about, do we?
Here's an article from Salem's paper today. In the article were these facts; There are about 2,350 homes on the market, up 41 percent from a year ago. That reflects a larger housing stock and the return of sellers who took their homes off the market during the winter; The jump in sales was accompanied by a 7.1 percent drop in the median sales price -- to $257,200, according to figures supplied by the Southern Oregon Multiple Listing Service.
But guess what the headline was? Home sales up in southern Oregon. Eleven more homes sold in April 2007 than April 2006. Hey if a bank forecloses and buys it back at the auction, is that a sale?
I challenge other puzzle players to submit other "pieces". Looking at all the pieces will help determine how big and fast the collapse will be.
These guys http://tinyurl.com/2bvsyj are apparently buying up the ad space that all the out of business mortgage brokers used to buy.
I've heard it a couple times on 103.7fm
Yen Set for First Weekly Gain in Two Months as Carry Unwinds
The yen headed for a weekly gain as a slump in global stocks prompted traders to reduce investments in higher-yielding assets funded by borrowing in Japan.
Japan's yen was poised to break nine weeks of losses against the euro as the steepest drop in U.S. equities in two months prompted fund managers to cut so-called carry trades, repaying loans in yen.
``The yen may gain on the back of the unwinding of carry trades,'' said Toru Umemoto, chief currency strategist at Barclays Capital in Tokyo. ``With investors beginning to take a risk-averse attitude, the yen may face some upward momentum.''
Japan's currency climbed against all 16 of the most-traded currencies tracked by Bloomberg, rising most against the South African rand and New Zealand dollar, after the Standard & Poor's 500 Index yesterday fell 1.4 percent on concern U.S. economic growth will slow.
http://www.bloomberg.com/apps/
news?pid=20601087&sid=
atL9a69iwQRo&refer=home
As the yen carry trade unwinds, US Hedge Funds abilities to make easy loans will also diminished.
"A fall in the euro looked to be a catalyst for the broad yen buybacks. But we don't know yet if this is only a part of an adjustment in yen short positions or the beginning of a new trend,"
http://investing.reuters.co.uk/
news/articleinvesting.aspx?type=
hotStocksNewsUS&storyID=
2007-05-11T023815Z_01_T39466_
RTRUKOC_0_US-MARKETS-FOREX.xml
Impac Mortgage Holdings Inc., a specialist in mortgages whose risk levels rank between prime and subprime loans, reported a first-quarter loss, hurt by a mark-to-market loss in the fair value of derivatives.
The Irvine, California-based company posted a net loss of $121.7 million, or $1.65 a share, compared with net earnings of $85.6 million, or $1.07 a share, a year earlier.
The latest quarter included a derivatives-related loss of $58.7 million compared with a gain of $51.4 million in the year-ago quarter, the company said.
http://www.reuters.com/article/
marketsNews/idUSN1024364220070510
U.S. mortgage finance company Fannie Mae said on Wednesday that it could not present a timely quarterly report due to unresolved accounting problems.
"We are not able to file a timely Form 10-Q because we have not completed our consolidated financial statements for the quarter ended March 31, 2007," the company said in its 12B-25 filing with the U.S. Securities and Exchange Commission.
Fannie said it believes its "exposure to the Alt-A and subprime mortgage loans... is limited." Increased delinquencies among those two classes of mortgages offered to borrowers with few documents or damaged credit has shaken the home finance system in recent months.
http://today.reuters.com/news/
articleinvesting.aspx?type=
bondsNews&storyID=
2007-05-09T221301Z_01_
N09326148_RTRIDST_0_
FANNIEMAE-UPDATE-1.XML
Bear Stearns Asset Backed Securities Inc. mortgage pass-through certificates, series 2005-1, has been downgraded from BB to B-plus by Fitch Ratings.
Nine classes from four IndyMac ABS Inc. home equity issues have been downgraded by Fitch Ratings.
Asset Backed Funding Corp. mortgage-backed securities have been placed on Rating Watch Negative by Fitch Ratings.
Four certificates from Ace Securities Corp. Home Equity Loan Trust series 2005-SL1 have been downgraded by Moody's Investors Service.
http://mortgageservicingnews.com/
plus/
NovaStar Financial Inc., a subprime mortgage lender that is seeking a buyer, posted a big first-quarter operating loss on Thursday, amid tough conditions for lenders that make home loans to people with poor credit histories.
The Kansas City, Missouri-based company also plans to drop its tax-friendly real estate investment trust status on Jan. 1, 2008, after concluding it may generate no taxable income from 2007 through 2011.
http://www.reuters.com/article/
mergersNews/idUSN1019758320070510
It's official. Warren Buffet said last night, during an interview with Charlie Rose, that things are looking a lot like 1929. He also said that he's endorsing Hillary Clinton or Obama for president of the US, and that the country would be better off if any of those two candidates were elected. Hey, when the sage of Omaha speaks, the world listens. The second richest man in the world must be right about a thing or two. You decide.
Wanna bet 5 bucks that PPT will make the market positive today, starting from 12 noon to 2 p.m.? It's so predictable. It's all fixed.
Keith, why don't you take some pictures of London life and post on the Blog for us to see. Show the real estate, hot girls, cafes, businesses, whatever...
PCI will come higher today. Buy Corn, buy corn.
Am I the only one who has a huge crush on Becky from CNBC? Whatta babe! She has that little mouth of Disneyland's bear. If I only had a private jet, we could chat about sexy things like EBITDA, Free Cash Flow, etc. Hot, hot..all right back to work.
Condo supply in Orlando, valued at 400,000 thousand and up at a
41 year supply backlog
according to Mike Thomas!
_______________________
If you do a breakout looking at specific segments of the market last month, you can see what is moving and what is not. The numbers are pretty telling about this current situation and about the Central Florida market in general.
The healthiest sales are homes valued under $200K, where there is only a 9-month inventory.
Condos in the same price range: 14.5 month inventory.
Now, let’s move up the price range:
Homes valued from $200K to $300K: 13 months.
Condos in the same price range: 52 months.
Homes valued $300K to $400K: 20 months.
Condos in same price range: 36 months.
Homes valued over $400K: 27 months.
Condos in same price range: 41 years!
That’s right, 41 years. In April there were 493 condos listed at more than $400,000, with only one sale. At that pace, it would take 41 years to sell them all.
Here
http://tinyurl.com/2amcgu
or here
http://blogs.orlandosentinel.com/news_columnist_mikethomas/2007/05/a_closer_look_a.html#more
has anyone taken a look at the Ft. Myers new press and 1st homes?
Hi FMW!
FMW has the ear of every guy here!
Let's start a topic on why FMW ROCKS this site!
Sacramento Bee reports auto dealers feeling it now - as HP predicted
Weak home market spills over to autos
Anyone hear Lereah on NPR (http://www.npr.org/templates/story/story.php?storyId=10118254)? The audio file is there. Quite a change for the man we once knew.
"New construction on single-family homes will fall to 1.16 million this year, the lowest since 1997, the National Association of Home Builders has said. That will rise in 2008 to 1.23 million, the builders said."
Are they nuts? Investors are going heavy into Home Depot on news of this report.
http://tinyurl.com/37rt6k
It's entitled "A Real Estate Bull Has a Change of Heart"
This is rather funny: "Real Estate Agent Finds Grenades in Home" (http://tinyurl.com/2qpe3m). I like the last line: "Once the house is cleaned up it will go on the market." I don't know exactly why that's funny; it just sounds funny to me.
FMW has the ear of every guy here!
Let's start a topic on why FMW ROCKS this site!
FMW ROCKS! You can say that again. Can we hear an AMEN! Keith?
"Are they nuts? Investors are going heavy into Home Depot on news of this report.
http://tinyurl.com/37rt6k "
They are nuts indeed. When Lereah says things are turning bad, they're turning really bad! Even DL has stopped calling bottom. Who are these idiots all of a sudden who are now calling bottom?
People are loosing jobs, and have
very limited income.
The jobs the majority of
people are getting don't pay
enough to even cover their
monthly (ballooning) mortgage
or rental payment.
Even $1.95 for a T-Shirt is alot
when you don't have money.
Welcome to the beginning stages
of the next great depression.
~~~
Wow, Walmart down, Whole f7oods down, what gives?
People of all economic brackets
got roped into believing all the housing hype.
It's going to hit all areas of
our economy.
Your friends - like too many - are in serious denial at this point.
Anonymous said...
In short, I am friends with a bona fide idiot who has just sealed her financial fate. How do you deal with this? How do you remain friends with people when they are so resistant to any form of dissent and refuse to think for themselves?
___________________
I hear you, paul. My niece just bought a house, and my sister and brother-in-law are looking for a new house as well. I tried to warn them we're in the middle of a housing bubble and it would be better to wait a while until prices come down, but they got mad at me for interfering in their business. Sometimes you just can't win....
My neighbor had a tree fall on their 500K 1200SqFt 1950s home. Ripped off two corners of the roof. About 3 months ago.
Still covered with plastic. Hmmm. Got mortgage payments?
I need some feedback. Here in Southern California, my neighbor just sold his house for about 10 under asking price. I am now thinking of cashing in and bubblesitting. Now I know some of you will say 'you missed your chance, the peak is long gone' but again, my neighbor just sold his!....would you guys try to sell the house so late in the game if you were me? Theres gotta be some more suckers out there.
"My niece just bought a house, and my sister and brother-in-law are looking for a new house as well. I tried to warn them we're in the middle of a housing bubble and it would be better to wait a while until prices come down, but they got mad at me for interfering in their business."
GREAT!! This just answered my question. Still suckers out there to buy my depreciating asset and put me in the rich house with 200k equity in my pocket. MUAHAHAHAHAH!!!
I live in the "HOT" Olympia, Wa market and have seen prices decline. Over the past 5 years I have NEVER seen a price reduced sign, until recently that is. Most of the houses are re-sales, with most new homes already adjusted to sell already via pricee cuts, inventives etc etc. Most of the "Real Estate Barons" here I predict will wake up come the end of the summer and that's when the franzy will take hold.
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