May 25, 2008

BUBBLETALK - Open thread to talk about the housing crash, mortgage meltdown, idiot realtors on commission and whatever else is on your mind

Have at it..

And vote early and vote often for HP at this REIC blog contest (current hilarious leaderboard here)

263 comments:

1 – 200 of 263   Newer›   Newest»
Anonymous said...

Here's a good one for everyone (from Tampa):

I just got caught up on my newspapers from the last week and surprise surprise, at the top of the Tampa Tribune business section from last Thursday is a picture of Lawrence Yun with a stupid grin on his face. He had just given a speech before 100 members of the Greater Tampa Association of Realtors.

The headline reads "Area Housing Recovery Forecast: Turnaround Imminent".

A quick paraphrase of the article:

According to Lawrence Yun (chief economist for the NAR) Tampa Bay area home sales and prices will stabilize in the second half of 2008, and then rise in 2009. Five years from now, Tampa Bay area sales and prices will be up 20 to 30 percent.

Also in his speech, Yun cited the August 2007 collapse of the subprime mortgage industry as a positive sign. There was no explanation as to why he felt that way.

I live in the heart of Tampa, and I can safely say that we are years away from any stablization let alone a recovery. We have SO many homes for sale, everywhere you look, and nobody is buying. CNN.com listed Tampa as the 7th worst city in the nation for housing price deterioration over the next five years. From what I can see first hand, that sounds about right.

I'm at a loss of words to describe how reckless and stupid this man is. What does he know about the Tampa Bay area that those who live here don't? He is so wrong yet the article painted his speech as truth. Does anyone besides me think that this guy is a total incompetent ass?

Anonymous said...

I now know the article my wife's fried must have been referencing that made her by an investment property here in Tampa. We went through all the reasons she shouldn't. We have more homes for sale here than in Pheonix which has a population 1mm more. That credit will continue to tighten. That Alt A (liar loan) resets are starting later this year and it will be worse than subprime. She said every one has their story and she just read an article by the top real estate expert who says Tampa real estate will be booming by this time next year. Shesh, I wish I'd known who she had read. She bousht a crap hole 60's ranch out in BFE for 190,000. Thinks she got a steal.

Anonymous said...

http://money.cnn.com/galleries/2008/moneymag/0805/gallery.resg_losers.moneymag/7.html

CNN Money says Tampa ` no sign of relief unil 1/2010.


Beignet

went2puke said...

Keith! I thought you'd appreciate this one from MSM:

http://tinyurl.com/5yf9mk

They are finally recognizing the utility of blogs like this one. This is a US News and World Report article on "6 tips to buy a home online."

Here's their sixth tip:

6. Find a good blog. Few resources allow home buyers to take the pulse of the national and local markets like real estate blogs. "Real estate bloggers know in real time what is going on in the market," Kitano says. Like anything else on the Internet, some blogs are better than others. Shop around. Use your favorite search engine to find a couple of blogs that cover real estate in the markets you are interested in, bookmark them and click through them every day. (Pay special attention to the blogs with the most comments and postings.) By and large, the real estate blogging community understands the dynamics of today's housing market in the way few others do. They've emerged as an important voice on housing issues and a wonderful resource for prospective home buyers.

Stuck in So Pa said...

The only local paper had its biggest article to date on the housing mess. Front-page headline followed by more in the business section.

One problem though, their ONLY source of info was the head of the local county REIC. Bottom line: “It’s different here! Never been a better time to buy!"

I wanted to scream at the newspaper in my hands. Come to think of it I think I did!

bradinsb said...

If you see a short sale it is as good as a FAKE sale. The banks are advertising its a short sale for a very low sale price to get you to look at the house and put in a bid then they reject your bid. Its a scam the banks are doing. The only way to solve the problem we have now is LOWER the price the selling price not a FAKE listing price.

gmork said...

May 10, 2009? Dude, can you get us some stock quotes while you're at it?

Anonymous said...

Here is an article about turning to St. Joseph for support in selling your home:

http://tinyurl.com/4whlxu

You can't make this stuff up. Maybe we can set up a factory for St. Joseph statues and all the housing "problems" will go away.

Aaron Krowne said...

Now up to 27 major builders imploded, with WCI looking particularly wobbly.

79 hedge funds.

(probably under-counting on both)

Two failed local banks and one credit union at BankImplode.com; as well as lots of happenings at the major banks.

And of course, up to 257 lenders at ml-implode.

We don't see too much evidence of the "crisis being over".

ROM said...

Last month I attended about 4-5 Commercial Real Estate/Financial Markets seminars for my work.

For the US Market:

The optimists (homebuilders) are predicting a recovery starting sometime in the summer. The biggest pessimist (a lender) predicted full-blown depression with a recovery in 2012.

The consensus was business as normal in about 12-18 months.

Biggest shock was watching the grizzled, respected homebuilder make a case for Phoenix housing. Population growth, immigration (both foreign and domestic) and job growth were his main arguments. They had some logic (as opposed to crazy realtor talk) but nobody was buying it.

RA said...

I am a realtor, "hiss boo" and I post under the name azrob at zillow, or aztruth on the local newspaper , the Arizona Repugnant. I am also a professor of mathematics, did my graduate work at UC Berkeley, and can easily see the reality at play: increasing foreclosures, tightening credit, increasing notices of foreclosures, increasing vacancy, state budget crisis, ALT A resets, underwater bullshit loans, recession etc. I'm not a member of the "end of the world" scenario, but honestly, I can see the derivative in my face, and its negative. Prices will continue to fall, buying now/ calling a bottom is just plain not intelligent.

Anonymous said...

Republican Grant Bosse today blasted Democratic Congressman Paul Hodes for backing a massive bailout of the home mortgage industry, and putting taxpayers on the hook for bad loans. Massachusetts Democrat Barney Frank authored the bill to force taxpayers to guarantee up to $300 billion in new home loans.

“Clearly, many people who were betting on rising home prices were hurt when the housing bubble burst, but we can not force taxpayers to insulate everyone from the costs of those bad decisions,” Bosse said. “Hodes’ massive bailout bill will allow these folks to avoid responsibility for their actions and pass along those costs to American taxpayers.”

The Frank Bailout Plan also included a separate bill with $15 billion for the federal government to purchase vacant, foreclosed homes, bailing out the banks who issued loans to unqualified applicants. The Democratically-controlled House of Representatives approved both bills with Hodes support this week. The bailout package now heads to the Senate for further consideration.

“If we use tax dollars to bail out everyone who makes a bad decision, we are setting ourselves up for an even larger housing crisis in the future,” Bosse concluded. “Paul Hodes just voted to put an additional $315 billion on our credit card, which means higher taxes for everyone when we have to pay the bill”

http://politickernh.com/
brianlawson/1459/hodes-backs-
massive-mortgage-bailout

Agent 99 said...

I have an idea. Why don't we set up a system where we elect people to represent us? We could call it something like Home of Representatives (vs House of Representatives because houses are investments for flipping which wouldn't be a good thing).

went2puke said...

gmork said...
"May 10, 2009? Dude, can you get us some stock quotes while you're at it?"

gmork, you are right! Wow!!! nobody else had noticed!!!

I think there was an honest mistake there--it should have been May 10, 2012! Coz in 2012, you'll still see housing troubles, financial turmoil, social strife and wars everywhere, starvation, 2-digit inflation, 2-digit unemployment, and most importantly, 7-digit morons like you trying as hard as ever to be cute!

GMORK, plz go dig a hole and hide in it, and don't come out until 2012. AND PLEEEEEEASE try not to mix with intelligent people!

Anonymous said...

RE the bailout. Read in the AM paper today that forgiven loans are subject to Fed Income Tax (1099C) and that there is an exemption for the first $2 million.) TWO million WTF? Where did that come from? Even for Kalifornia that's a lot of money. The joy I got from the article was that it's only on primary residences. Multiple house players, aka realtors turned investors including the TV show types - (I especially dispise Flip this House)) are screwed. And they can run away from the banks but they can't from the IRS. The IRS doesn't forgive and tax court will tap these individuals for years or even a lifetime. These hot shot investors don't yet realize what they are in for. Their only recourse is to go across the border to Mexico and come back as illegal aliens starting with new fake Social Security numbers. I'll employ them cleaning my house. HA HA

Disgruntled Baby Boomer

A.Creampuff said...

Anyone catch This American Life yesterday?
Very long, detailed segment on the whole "lending crisis" including interviews with some of the Wall Street global economy wreckers, a Joe Six Pack who took out a liar loan - the works.
Here's a link to the podcast, but I don't know what it contains:

http://www.pri.org/pri-podcasts.html

BTW - Keith, hot linking seems to be disabled.

Anonymous said...

Copper fetching $3 to $4 per pound leading to notable rise in copper theft. That includes things like plumbing out of church basements, sculptures, baseball stadium light fixtures, etc. Article in front section of WaPo today (Sunday May 11).

resisting husband said...

Housing bubble now resulting in darwinian evolution? meet the foreclosure fish!!!

http://tinyurl.com/5l4t76

Anonymous said...

This story is not about the housing market, but it is related in that for a scam to work it take a certain type of greedy fool and a greedier con-artist to pull it off.

http://news.yahoo.com/s/afp/
20080510/od_afp/
norwayvietnamfrancecrime
offbeat_080510134259

Man loses 35,000 dollars in 'marinaded money' scam

A Vietnamese man in Norway lost around 35,000 dollars after he was led to believe that mixing the cash with a special liquid would double its value, Norwegian media reported Saturday.

A 32-year-old Frenchman is set to stand trial in a lower court near Oslo next week on charges that he cheated a gullible Vietnamese man out of 180,000 kroner (35,00 dollars, 23,000 euros) earlier this year, local daily Romerikes Blad (RB) reported on its website.

The victim of the con, who was not identified, was reportedly told by the Frenchman to leave a mixture of real cash with blank bills to marinate in a special liquid overnight, and the next morning he would have double the amount of cash at his disposal.

But when he showed up the next morning to collect his prize, both the cash and the suspected con-artist, whose name was not revealed, had disappeared.

"He has given a statement that leads us to believe that he really believed this was possible. But we are of course having a hard time understanding how someone could actually believe such a tall tale," police officer Ragnar Ingberg told RB.

On March 3, the Frenchman was arrested while trying to leave the country with nearly 200,000 kroner in his possession.

The man's defence lawyer, Jan Schjatvet, told RB his client had come to Norway to find used cars in mint condition to sell in Africa, and that he was flabbergasted at the charges against him.

"He is extremely surprised to be charged with something that is so incredible. This sounds completely crazy," he told the paper.

Anonymous said...

It took more than a decade for ANB Financial to become one of the nation's top performing banks in 2006. A year later, steep losses - $80.9 million - related to real estate development and construction loans began to become more than the bank could absorb.

ANB is the first Arkansas bank failure since September 2001, when Sinclair National Bank in Gravette was closed by regulators.


Loans made by Rogers-based ANB Financial in the last two years have forced the bank's failure.

Friday, the federal Office of the Comptroller of the Currency took the bank's keys and handed them to the Federal Deposit Insurance Corporation, who closed the doors. No advance notice is given when a financial institution is closed.

Acting as receiver for the failed bank, the FDIC will oversee the disposition of ANB's $1.88 billion in remaining assets including $1.6 billion of brokered certificates of deposit.

ANB had approximately $39.2 million in 647 deposit accounts that exceeded the federal insurance deposit insurance limit. These depositors will become a creditor of the receivership for the amount of their uninsured funds.

http://www.nwaonline.net/articles/
2008/05/10/news/
051008arbankclose.txt

Anonymous said...

ANB closure marks third bank failure of the year

http://www.bankrate.com/brm/news/
chk/20080509-bank-failures-a1.asp

The Federal Deposit Insurance Corp has beef up its staffing in anticipation of banks going belly-up.

1) Hume Bank, Hume, Mo. March 7, 2008

2) Douglass National Bank, Kansas City, Mo. Jan. 25, 2008

3) ANB Financial National Association, Bentonville, AK. May 2008

The FDIC insures approximately 8,500 institutions; 79 of them are on the agency's secret list of problem banks as of Dec. 31, 2007.

The greater problem is that the damage done to financial institutions in 2007, and continuing through 2008 and perhaps beyond, may add many more names to the list.

Washington Mutual, Wachovia and National City are among the financial institutions that have announced huge losses and are looking for billions of dollars from private equity firms or others in the industry just to keep their doors open.

Community banks are the institutions raising the most concern, because, some industry analysts say, they are the ones that may be at the most risk.

Banks of all sizes, including community banks, have gone overboard in some areas. One is home equity lending, another is lending to developers for property development, and the third area is commercial real estate. We're going to see some banks fail with these problems.

"One area where we'll continue to get failures -- and recessions tend to bring this out -- is failures due to fraud; particularly when there's internal fraud of some kind.

Fraud is much more likely to bring down a small bank than a large one. Good economic conditions can mask fraud, especially if it's fraudulent lending."

Ely says that failures can lag the business cycle, and if we see a burst of failures, it may not peak until 2009 or 2010.

Anonymous said...

You walk into your bank seeking safety -- but that safe haven has now become a danger zone. Consumer beware!

You trust your bank to provide only secure, FDIC-insured deposits. But you want higher yields than the bank certificates of deposit, where those 6-month CDs are currently paying less than 2% at most local institutions.

Now you're in the danger zone.

It's happening mostly to seniors, desperate to squeeze every last drop of interest from their remaining cash. But the desire is hitting all savers who want safety and more yield. And it's given new meaning to the term "money in the bank."

A friendly banker senses your distress. He offers his business card. It says "Personal Banker." You relax. (Or maybe it's your mother who now feels she's found a friend to help her out of the low-rate dilemma.) Nobody notices that on the bottom of the card it also says "registered representative."

That's right. The friendly banker is also a broker.

That's because inside most banks there is a securities division, with brokers licensed to sell everything from annuities to unit investment trusts to stocks, bonds and mutual funds.

They sit in those desks right next to the teller's window. And those friendly "banker/brokers" are all too happy to help a senior in distress improve her monthly income. And, by the way, they are compensated by commission on the products they sell.

http://www.thestreet.com/s/
beware-your-banker--he-may-be-
a-broker-too/funds/retirement/
10416155.html?puc=_tscrss

Anonymous said...

A California man who has defaulted on nine homes and expects banks to foreclose on all of them, forcing him into bankruptcy, says he now considers it a mistake to have invested in the real estate market.

Shawn Forgaard, a 37-year-old software company project manager, bought one home for his family to live in and nine more as investments. He stands to lose all the investment houses in the mortgage meltdown but says he has come away wiser from the experience.

"Everyone stumbles. I'm not going to hide or run or live in denial, or with regrets," Forgaard told Reuters in an interview. "On the surface it looks like total devastation but it's just the opposite. I'm confident our lives will be much, much richer as a result."

Forgaard bought a house in Santa Cruz, about 60 miles south of San Francisco, in 2000. Four years later, using $800,000 in stock options, he began snapping up investment properties, putting 10 percent to 40 percent down on negative amortization loans -- in which payments do not cover the interest so that a borrower's balance grows over time.

It was those "neg-am" loans, which include triggers causing payments to balloon if the debt reaches a certain percentage of the original balance, that would come back to haunt him.

I knew I was sitting on time bombs," Forgaard said. "I knew the market was going to go soft and I knew that property values would decline. But I figured that I had enough equity to survive the storm and sell or take the loss and refinance.

"I didn't anticipate a downturn of epic proportions such that home values are 40 percent less than they were," he said.

"I'm going to lose my car and my primary (home) and we're not going to be able to live in Santa Cruz, where I was born and raised, and live by the beach. And that was pretty tough to take."

Experts say speculators like Forgaard, who count on real estate values to keep rising to pay off their debt, play a risky game and doubly so when they use neg-am loans.

http://www.cnbc.com/id/
24565063?__source=RSS*tag*&par=RSS

Anonymous said...

So exactly where did Vikram Pandit expect to find these greedy fools to buy Citigroup's toxic assets.

http://en.epochtimes.com/
news/8-5-10/70518.html

Citigroup chief executive officer Vikram Pandit said he plans to reduce $500 billion of non-core "legacy" assets, an amount he said was not "trivial," to below $100 billion in two to three years, largely through sales.

Vikram Pandit, who became chief executive of the largest U.S. bank in December, revealed the plans at a much-anticipated presentation to investors and analysts.

Among the assets to be shed are real estate, leveraged loans, complex debt and structured investment vehicles. Citigroup ended March with $2.2 trillion of assets.

Reducing assets by $500 billion would make Citigroup about the same size as Bank of America Corp and JPMorgan Chase & Co, whose market values are far higher.

Citigroup's asset base had swelled 49 percent, to $2.36 trillion from $1.59 trillion, in the 18 months ended September 30.

"The two things I wanted to hear, which we heard, were that Citigroup is shrinking the balance sheet and getting the cost structure right," said Anton Schutz, a portfolio manager at Mendon Capital Advisors in Rochester, New York. "These guys weren't defensive, they were offensive. It's a shift."

Unlike Weill, Pandit said he doesn't see the bank as a "financial supermarket," but said he is committed to struggling units such as U.S. consumer banking and credit cards.

Anonymous said...

Greenspan Modifies Comments On US Credit Crisis - CNBC

Former Federal Reserve Chairman Alan Greenspan said Friday that the worst of the U.S. credit crisis was over as long as certain conditions are met, CNBC reported.

"The worst of the credit crisis is over if we assume that current market prices for subprime and Alt-A securities have fully discounted the ultimate losses that will emerge as house prices and the value of home equities stabilize," Greenspan said to CNBC.

In addition, he said "home equities are the ultimate collateral for mortgage- backed securities. House prices still have a long way to fall. It is possible, but unlikely, they will stabilize by year-end."

Friday's statement modifies comments he made a day earlier at the Alternative Public Strategies Conference in New York City, which may have been taken out of context.

http://www.nasdaq.com/aspxcontent/NewsStory.aspx?cpath=20080509%5cACQDJON200805091706DOWJONESDJONLINE000877.htm&&mypage=newsheadlines&title=Greenspan%20Modifies%20Comments%20On%20US%20Credit%20Crisis%20-%20CNBC

Anonymous said...

At the end of 2006 a new 4,000-square-foot home with a three-car garage in a small gated subdivision in Las Vegas sold for $1 million.

On May 6 the bank that owns the now foreclosed property at 7604 Noche Oscura Circle agreed to sell it for $500,000 [$32,900 below the already discounted asking price].

Banks -- particularly in hard-hit real estate markets such as Arizona, California, Florida, Michigan, and Nevada -- are slashing prices to entice buyers and clear away rising inventories of homes.

The banks are competing with desperate builders and sellers facing foreclosure and, as a result, bargains are abundant, especially for buyers with strong credit, ready cash, and a willingness to take a chance on markets in free fall.

http://www.kcci.com/money/
16211063/detail.html

Anonymous said...

Have you ever noticed that high end homes holds up great until people can no longer trade up, then high end homes fall faster and harder then most other kind of homes.

http://www.heraldnet.com/article/
20080511/BIZ/688220443/1005

They blow up aging casinos in this town. Now, some are wondering what to do about yesterday's desert dream homes.

Take the foreclosed million-dollar house realty agent Michael Antos recently showed. Please.

To the untrained eye, the four-bedroom, five-bath retreat might appear top-drawer, shimmering with granite and marble throughout, with posh touches such as a pool with a sandy beach entry.

But Antos pointed out that the house was showing its age. After all, it was built in 2000. In Vegas, that makes it as dated as a coin-operated slot machine.

The chandelier? Plastic. The granite surrounding the upstairs bathtub is tile, not slab. And those polished travertine tiles in the entryway might look luxurious, but at 12 inches by 12 inches, they just won't cut it today.

"Now you've gotta have at least 20 by 20 to sell something at this price," Antos explained.

The housing slump has fattened the inventory of unsold homes throughout the country. But there's another twist to the story here -- a glut of glitzy homes.

About 1,000 houses are listed for sale in Las Vegas for $1 million or higher, more than 600 of them built since 2004. But unless they've been built in the past year or two, the properties are considered out of date -- making them all that more difficult to sell, real estate agents say.

Anonymous said...

AIG posts huge loss after derivative writedowns

The world's largest insurer, American International Group, has posted its largest ever quarterly loss.

The result has confirmed the second consecutive quarterly loss for AIG, which has been hurt by a write-down of derivatives exposed to bad mortgage investments.

AIG said the first-quarter net loss was US$7.81 billion, compared with net income of US$4.13 billion a year earlier.

AIG said it expected to raise US$7.5 billion of the total capital through a common stock offering.

http://www.kyrgyzstannews.net/
story/357467

Anonymous said...

The six scariest real estate markets and two of them are in California.

You can check out the prices on www.metrolistmls.com

Stockton, Calif.

Stockton has the highest rate of foreclosures in the nation. One in 30 homes in Stockton is facing foreclosure, more than double the number a year ago. (Compare this with the national average: one in 194.)

Unemployment is a whopping 10 percent, almost double the national average of 5.2 percent.

The median sale price of a two-bedroom home in Stockton is only $142,000. That’s down more than 22 percent from last year!

Many 1950s bungalows were built here as part of President Truman’s Fair Deal, and today they house residents who commute to San Francisco. Some people are simply walking away from their homes because they're spending too much on gas to commute back and forth to work in the Bay Area, plus their homes are no longer worth what they paid for them.

Local realtors report that homes have become vandalized or burglarized for copper plumbing or wiring, cabinets and other resalable fixtures.

In some areas of Stockton, there are more than five homes on a single street that are abandoned. Homeless people are squatting in homes, even without power or water, just to find shelter.

Sacramento, Calif.

One in 55 homes is in foreclosure in Sacramento, the fifth highest rate in the country. Median home prices have dropped 18.5 percent to $297,600. Unemployment is 6.5 percent. Home prices in this area more than doubled between 2000 and 2005, setting Sacramento up for a hard fall. Since last year, the price per square foot in Sacramento dropped 29.8 percent to $161, according to the real estate data company Radar Logic Inc.

Worse still, Sacramento has the highest concentration of homeowner debt in the country according to Forbes.com. More people here have combined their mortgages with home equity loans, second loans, or both.

When the housing market slowed here, jobs were lost in related industries: title companies, interior design, lumber supply companies, electricians, plumbers, roofers, appliance stores and so on, dealing a heavy blow to the Sacramento job market.

http://www.msnbc.msn.com/
id/24528877/

Anonymous said...

Even today Banks are still willing to lend 40 to 45 percent of monthly gross to buyers willing to put a large down payment.

What happened to the traditional practice of lending up to 28 percent (mortgage, tax, and insurance) of monthly gross with 20% down payment.

http://www.sfgate.com/cgi-bin/
article.cgi?f=/c/a/2007/12/16/
MNT0TM9V4.DTL&hw=foreclosures&sn
=001&sc=1000

These real estate gamblers are hardly the struggling home buyers often portrayed as victims of the Bay Area's and nation's foreclosure crisis.

Some bought houses as often as other people buy shoes, rarely putting down any money. The speculators were betting that home prices would continue to shoot up. Instead, when the market started softening and prices sagged, many of their properties ended up as foreclosures.

More than one-fifth of 6,557 Bay Area properties that fell into foreclosure from January through September this year were owned by investors, according to a Chronicle analysis of public records compiled by DataQuick Information Systems. Of properties repossessed by lenders, 1 in 6 had been owned by people who had two or more foreclosures in their names. Eighteen Bay Area investors had five or more foreclosures.

"During the frenzied period, you got people rolling the dice and buying as many properties as they could," said Andrew LePage, an analyst with DataQuick of La Jolla, San Diego County.

Easy money through no-questions-asked subprime mortgages allowed almost anyone to become a real estate speculator. The flood of investors and first-time home buyers into the market helped to fuel the Bay Area's double-digit price appreciation in recent years.

And while lenders are left holding the unpaid loans for these investments gone bad, experts say the region's homeowners and the public at large share the pain.

The Chronicle analyzed ownership information for 6,557 Bay Area homes and condos repossessed by lenders in the first nine months of this year. Those represented 94 percent of all Bay Area foreclosures during the time period; full records of past ownership were not available for the remaining foreclosures.

Of these, just under 1,000 were owned by 439 people who had multiple properties foreclosed upon from January to September. An additional 349 foreclosures were owned by people who listed mailing ZIP codes different from their property's address at the time of purchase - suggesting the properties were an investment, not a primary residence.

The vast majority of these properties were bought with little or no money down, according to an analysis of DataQuick's loan information.

About 69 percent of the investors got 100 percent financing, meaning they did not put down a dime of their own money toward the purchase prices.

An additional 12 percent made down payments that were less than 5 percent of the purchase price.

Only 10 percent of investors put down the standard 20 percent.

Anonymous said...

HSBC is expected to announce tomorrow that it is writing off a further $4.6bn (£2.3bn) against mortgages, credit cards and other loans to stricken US consumers, bringing the total over the last 15 months to almost $17bn.

Analysts believe there could be more write-offs to come: James Hutson at Keefe Bruyette & Woods is predicting it will have to write off more than $15bn over the year as the US housing market and economy continue to decline.

That would bring the bank's write-offs over two years to more than $27bn - only marginally less than the $32bn charges taken by US investment bank Merrill Lynch, although most of those related to the complex financial instruments used to parcel up mortgage debts and other loans, which have plunged in value.

Despite the huge write-offs, HSBC's profits are again expected to be ahead of last time, reflecting a strong performance in its Asian business - which accounts for half the group's profits - and some market share gains in the UK.

The bank is also facing criticism over amendments to its directors' pay arrangements from HSBC shareholder Knight Vinke. The amendments were made in response to criticisms of the existing plan made by the activist investment house, but Glen Suarez, Knight Vinke's chief investment officer, said the changes did not address the issues they raised.

He is concerned that HSBC will still rank itself mainly against large Western banks rather than those in emerging markets and that it has reduced the importance of growth in earnings per share as a determinant of executive pay.

· Barclays is expected to warn of further write-offs when it issues its trading update next week, although these are thought to be less than a third of the £9bn write-offs made by RBS.

http://boards.prudentbear.com/
bbs_read.asp?mid=674767&tid=
674767&fid=1&start=1&sr=1&sb
=1&snsa=A#M674767

Anonymous said...

Grappling with major layoffs and a stock price that's been chopped nearly in half since last year, Advanced Micro Devices Inc. kept new details about its turnaround plans close to the vest Thursday in a very brief annual meeting with shareholders.

The Sunnyvale-based company's chief executive, Hector Ruiz, notably did not discuss AMD's long-awaited plans to cut its heavy manufacturing costs.

A year ago Ruiz began hinting that AMD is thinking about offloading some of its manufacturing duties to third parties to save money, but he has been tightlipped about details since then.

"Our plans are bold, and progress is ongoing," Ruiz said Thursday in prepared remarks about the so-called "asset smart" manufacturing strategy. "And I hope to communicate additional details of this complex undertaking in the very near future."

AMD has racked up more than $4 billion in losses over the last year and a half as intensifying competition from Intel and expenses from AMD's $5.6 billion acquisition of graphics chip maker ATI Technologies have taken their toll.

The company said last month it plans to jettison 10 percent of its global work force, or about 1,600 workers, by September in an aggressive cost-cutting move.

http://www.kimatv.com/news/
business/18803159.html

Anonymous said...

Bankruptcies and defaults gather pace

The number of companies defaulting on their junk-rated debt and filing for bankruptcy in North America is running at its fastest pace in five years amid the slowing economy and contraction in credit markets.

So far this year, 28 “entities” have defaulted, according to Standard & Poor’s. The defaulted debt of the one Canadian and 27 US companies totals $18.4bn and exceeds the 17 defaults in the US for all of last year.

“As economic conditions deteriorated...and volatility in the financial markets protracted, corporate casualties began to emerge at a rate unseen in years,” said Diane Vazza, head of S&P’s Global Fixed Income Research Group. “The surge of defaults in the early months of 2008 is the first leg of an extended period of high default occurrences that will characterise the rest of 2008 and 2009.”

S&P said the pace of US defaults in the first five months of the year is the fastest since 2003.

http://www.ft.com/cms/s/0/
bfe01f0e-1d36-11dd-82ae-
000077b07658.html?nclick_check=1

Anonymous said...

Brentwood the poster child for housing bust

On the edge of Brentwood, where the hills begin to roll, surviving farmland emerges between the big-box stores and single-family developments.

The yellow wildflowers ubiquitous throughout East Contra Costa County cover nearly all the patches; "Foreclosure," "For sale" and "For rent" signs dot the streets, weeds sprout and newspapers pile up at empty homes as new residents cycle in and out.

The list of new or partially built housing projects in Brentwood is long: Sage Glen Estates by D.R. Horton Inc., Rose Garden by Pulte Homes, Mariposa by Lennar Corp., Los Ranchos by Prestige Homes, Steeplechase by Richmond American Homes, Siena by Blackhawk-Nunn and Trilogy at the Vineyards by Shea Homes, among others.

Roger Abraham stands in his driveway, one hand holding the newspaper, the other sweeping across the homes on Brentwood's Solitude Street. "This one," he points, "this one, this one."

All empty.

This farming community on the eastern edge of the Bay Area absorbed an outsize portion of the region's growth during the prolonged housing and development boom, adding 40,000 residents in the past 16 years as subdivisions and strip malls overtook agricultural land. It regularly ranked among the state's fastest-growing cities. Now, Brentwood is suffering disproportionately from the bust.

Hundreds of families have lost their homes to foreclosure since the beginning of last year, and in a sign of more to come, at least 1 out of every 16 households has received default notices.

For the neighbors left behind, the dreams of the pretty, tight-knit community that lured many there in the first place have dissolved.

http://www.sfgate.com/cgi-bin/
article.cgi?f=/c/a/2008/05/10/
MNGE1095FT.DTL&tsp=1

Anonymous said...

Perhaps if banks start going back to traditional lending practice like maximum of 28 percent (mortgage, tax, and insurance) to monthly gross then this could have been avoided.

http://www.usatoday.com/money/
2008-05-08-prime-mortgage-
delinquencies_N.htm?loc=
interstitialskip

Mortgage crisis seeps to prime loans

About 2.3% of prime loans were 60 days' past due in February, the highest level in at least a decade, according to data from FirstAmerican CoreLogic LoanPerformance. That's up from 1.4% a year ago.

Some economists, such as Brian Bethune of Global Insight and Dean Baker of the Center for Economic and Policy Research, say they think delinquencies on prime loans have likely risen further since then.

Anonymous said...

MGIC Investment Corp. said late Thursday that it will pull back the reins on its mortgage insurance underwriting standards for the second time this year, after announcing sweeping changes to its programs that went into effect March 3.

The changes announced yesterday are scheduled to go into effect June 1, and are among the most stringent standards in the industry, based on a review by Housing Wire.

For all markets — so-called restricted markets or otherwise — MGIC said it will essentially no longer provide MI for any Alt-A loan.

The company also said that it will no longer allow cash-out refinances in any market, investment properties, multiple units, and option ARMs to be eligible for its mortgage insurance.

The insurer also will require a minimum of 3 percent down on any eligible purchase transaction, following a similar underwriting policy at PMI Group Inc.

Loans in the conforming jumbo range — in a non-restricted market — must have a minimum of 90 percent CLTV and a minimum FICO of 700 to qualify for MGIC underwriting; in restricted markets, the CLTV requirement is tightened to 85 percent. MGIC said it will not insure any loan above $650,000 in any market.

http://www.housingwire.com/2008/
05/09/mgic-turns-the-screws-on-
mi-underwriting-guidelines/

Anonymous said...

Looks like IT at Barclays will be the first to go during this recession. I have a contact who says IT positions are in danger.

http://urumor.com/story/
barclays-it-reduction

Anonymous said...

About Half Of Cleveland's Subprime Loans Ended In Foreclosure

The Cleveland Plain Dealer is reporting that about half of the city's subprime mortgage loans written by top lenders in 2005 ended in foreclosure filings.

The Plain Dealer said all five of the city's top lenders in 2005 have since been absorbed by other companies or have gone out of business, and there is no accurate way to determine what percentage of subprime mortgage loans may have been based on fraudulent or unscrupulous lending practices.

http://www.newsnet5.com/money/
16231066/detail.html?rss=nn5&psp
=news

Anonymous said...

Why would anyone want to pay over $125,000 for a condo in Phily

http://www.maxspann.com/
auc-Philadelphia-060708.htm

Minimum Bid from $125,000

Luxury Townhomes Previously asking $749,990

Anonymous said...

Stockton, Calif. One year price change: -31.9%

Riverside, Calif. One year price change: -26.3%

West Palm Beach, Fla. One year price change: -18.7%

Fort Lauderdale, Fla. One year price change: -17%

Las Vegas, Nevada One year price change: -15.7%

Phoenix, Arizona One year price change: -15.2%

Orlando, Fla. One year price change: -13.1%

Tampa, Fla. One year price change: -12.8%

Miami, Fla. One year price change: -9.8%

Tucson, Arizona One year price change: -7.6%

http://money.cnn.com/galleries/
2008/moneymag/0805/
gallery.resg_losers.moneymag/10.html

Anonymous said...

Sales of homes in Vallejo and Benicia increased in the past month, and while average prices dropped Solano Association of Realtors president Lori Collins said.

Vallejo's median price fell about 33 percent since last year, while sales were down about 32 percent compared to a year ago

http://www.timesheraldonline.com/ci_9118228

Anonymous said...

Many states are looking for way to make up lost revenues due to the housing downturn.

The same thing happened in the late 1980 to 1990 downturn when small family businesses was hit by stings for not having workman's compensation insurance for family members working in the family business who were not listed as owner.

http://www.nbc11.com/news/
16196081/detail.html

Two-dozen Bay Area repair technicians found out this week they have been working without state-mandated registration and licensing.

An undercover video showed the 24 unlicensed technicians caught in a sting operation based out of Fremont, officials said.

"There were six guys there and they sat me down and asked the questions," said Sergei Blokhin, one of the technicians impacted by the sting.

Blokhin said his conversation at the Fremont house consisted of questions and explanations on why all repair technicians in the state of California need to be registered and licensed. Blokhin said officials emphasized documenting all transactions.

Authorities said the sting was set up for the protection of the public, as consumers are urged to deal with businesses that are registered and licensed.

"It's fine if the repair person in this particular instance is above board and honest, but let's say they're not.

And they're unregistered? How do we find them?" an official said, echoing concerns that prompted the operation.

"You're inviting this business person into your home -- if they're working on your computer all of your personal information is on that computer."

Blohkin said that he agrees with the law and will register immediately.

Tyrone said...

Old Ameriquest commercials.

Theme: Don't judge too quickly.

Ameriquest Ads.

Sadly, Ameriquest should not have followed that business model. But they knew it was all bullshit, anyway. Roland Arnall... a real humanitarian, when he was alive.

Anonymous said...

A nugget from Brentwood, Calif:

""Oh, big time, big time," said Peter Charitou, 52, owner of the oldest establishment in town, Sweeney's Grill & Bar, where business is off at least 30 percent. "We're a small city, and we kind of thought too big."

At least two real estate agents stop into Sweeney's each week looking for a job as bartenders or waitresses, he said."

http://tinyurl.com/

Anonymous said...

The good news is the number of days on the market is going down in West side of Silicon Valley, but the bad news is price are falling.

http://www.mercurynews.com/
ci_9172035?source=rss

"Both tighter underwriting standards and the ongoing effects of the credit/liquidity crunch continue to constrain sales," said the group's chief economist, Leslie Appleton-Young.

"The lack of available funds for loans, even for qualified buyers, continues to keep the demand side of the market thin, and enables buyers with financing or all cash to exert leverage over sellers."

Average days on market of single-family homes in both Los Gatos and Saratoga were down compared with the same period last year.

Local information from MLSListings Inc., the MLS of the Silicon Valley Association of Realtors, reveals in March 2008, the median sales price of a single family home in Los Gatos was down from the same period last year.

The median sales price for a single family home in Saratoga was down from the same period last year.

Mister Alpine said...

"We could call it something like Home of Representatives (vs House of Representatives because houses are investments for flipping which wouldn't be a good thing)."

I like Apartment of Representatives better.

Anonymous said...

Hank Greenberg sues AIG, saying it hid losses MarketWatch

A story in the New York Post on Sunday reported Greenberg claims the company hid $4 billion in losses in its portfolio of credit default swaps.

The suit, filed in state court in Manhattan, said AIG "misrepresented and concealed the truth" about the losses, adding that if Starr knew of AIG's them, it would have sold its shares, according to the Post.

http://www.marketwatch.com/news/
story/hank-greenberg-sues-aig-
saying/story.aspx?guid=%
7BF681ECA7-E52F-4CD1-ADF8-
3FB2EECBB838%7D&dist=msr_1

Anonymous said...

As safe as houses. No place like home. An Englishman's home is his castle. Our language is replete with positive references to housing. It's almost as if we're programmed to believe, from a very early age, that housing is somehow "safe".

Of course, we all need a roof over our heads and, for the homeless, life can be genuinely tragic, but I wonder whether our pre-programming sometimes goes a little too far. Houses, after all, are much more than just bricks and mortar. They involve a huge financial commitment. They bring financial novices face-to-face with complex financial transactions. And, as we're now discovering – yet again - what goes up can easily come down.

http://www.independent.co.uk/news/
business/comment/stephen-king/
stephen-king-as-safe-as-houses
-how-harsh-realities-are-
dispelling-the-home-market-
myths-826288.html

Anonymous said...

Stephen King: As safe as houses? How harsh realities are dispelling the home market myths

The level of misunderstanding about housing is really rather shocking. Many people believe, for example, that renting involves throwing money down the drain whereas buying via an interest-only mortgage does not.

Admittedly, those who were lucky enough to buy houses which then appreciated in value did well with their interest-only mortgages, but that's only because they turned out to be lucky speculators (and they'll still have to find a way of paying off the loan).

Others, who bought at the peak of the market, will be thinking very differently. For them, renting would have been the better option.

For many people, a mortgage is the mechanism by which they become part of a property-owning democracy. They don't worry too much about the small print.

They like to believe –and are encouraged to do so via programmes such as Channel 4's Property Ladder – that homes somehow are automatic gen-erators of additional wealth.

Borrow some more money, paint the door a new colour, add a bit of decking and the house suddenly surges a few thousand pounds in value.

http://www.independent.co.uk/news/business/comment/stephen-king/stephen-king-as-safe-as-houses-how-harsh-realities-are-dispelling-the-home-market-myths-826288.html

Anonymous said...

This time around, there are at least seven reasons for concern over both the length and depth of a housing adjustment.

First, even more so than in earlier episodes, the downturn was preceded by an extraordinary period of house price in-flation. Relative to people's incomes, house prices are now ludicrously high.

Second, the remarkable surge in house prices was helped along by the availability of easy credit. Notwithstanding the recent injections of liquidity into the banking system by the Bank of England, that earlier credit flood has now turned into a drought.

Third, even if house prices decline, the chances of first-time buyers getting on to the property ladder now are low. Banks will demand more collateral which, in turn, will require first-time buyers to offer more savings. This will take time.

Fourth, as job losses begin to come through, so housing repossessions will rise. Banks will have no interest in hanging on to these properties. The resulting fire sales will drive prices down even further.

Fifth, during the boom, many people – particularly those of a certain maturity – will have regarded the capital gain on their primary residence as a wonderful tax-free addition to their pension. As this form of "automatic saving" goes into reverse, the willingness of people to consume is likely to fade (the underlying problem is that the baby boomers need to sell their properties to the next generation which, by definition, is fewer in number).

Sixth, in contrast to the 1970s, the Bank of England has an inflation target. Even though there have been a few overshoots recently, it's very unlikely that we'll see an inflationary surge that would, in real terms, reduce the debts of those who chose to borrow too much in recent years. With no inflation bailout, the housing adjustment is likely to be all the more painful.

Seventh, notwithstanding the absence of any 1970s-style inflationary surge, rising food and energy prices are reducing people's take-home pay. This reduces still further the ability of people to buy houses or, for those already on the property ladder, to service their debts.

http://www.independent.co.uk/news/business/comment/stephen-king/stephen-king-as-safe-as-houses-how-harsh-realities-are-dispelling-the-home-market-myths-826288.html

Vanilla Ice said...

Guy buys nine houses as investments and loses them all. Bwhahahahhah!

http://www.msnbc.msn.com/id/24569891/

Anonymous said...

Call options bet on oil hitting $200

The number of financial bets on crude oil prices hitting $200 before the end of this year have spiked almost 40 per cent since the start of May, a further sign of growing concern that oil prices will continue to rise sharply in the near term.

There were 21,002 outstanding contracts for Nymex December 2008 call options at $200 a barrel on Thursday, up 38 per cent since the end of April.

Holders of the options would make a profit if the oil price exceeds that level by the end of the year.

Since the beginning of the year, the so-called “open interest” in these contracts has jumped fourfold. The number of outstanding contracts at $150 a barrel is also rising sharply.

Traders said the rise in call options buying reflected the fact that energy consumers, such as airlines or utilities, were hedging their exposure to rising oil prices, and financial investors were also trying to profit from a potential spike.

http://www.ft.com/cms/s/0/
94cc3612-1d32-11dd-82ae-
000077b07658.html?nclick_check=1

Anonymous said...

Lehman Brothers Raises Layoff Axe, Invents New Way To Say "You're Fired"

Lehman Brothers (LEH) layoffs are expected next week. Some soon-to-be-whacked employees have apparently found out their unfortunate fates in advance. A reader submits:

A friend of mine...has heard of their likely layoff (rumors are many coming next week), not thru a direct communication from a superior, but by receiving a notice re COBRA benefits and monthly costs. They expect the official word of layoffs is coming next week. Sad way to learn about your future.

Definitely. Eliminates the need for those awkward termination speeches, though.

http://www.alleyinsider.com/2008/5/
lehman_brothers_raises_layoff_axe_
invents_new_way_to_say_you_re_
fired_

BMW Driving Sex Machine said...

Nine houses lost, investor reflects on ‘stumbles’

California man speculated with ‘neg-am’ loans, now says it was mistake

LOS ANGELES - A California man who has defaulted on nine homes and expects banks to foreclose on all of them, forcing him into bankruptcy, says he now considers it a mistake to have invested in the real estate market.

Shawn Forgaard, a 37-year-old software company project manager, bought one home for his family to live in and nine more as investments. He stands to lose all the investment houses in the mortgage meltdown but says he has come away wiser from the experience.

"Everyone stumbles. I'm not going to hide or run or live in denial, or with regrets," Forgaard told Reuters in an interview. "On the surface it looks like total devastation but it's just the opposite. I'm confident our lives will be much, much richer as a result."

http://www.msnbc.msn.com/id/24569891/

Remember, this is who Barney Frank wants to give a bailout too.

jorghis said...

Keith, you should put a link to angryrenter.com on your blog. There are a lot of people here who would support that petition.

Anonymous said...

He stands to lose all the investment houses in the mortgage meltdown but says he has come away wiser from the experience.

"Everyone stumbles. I'm not going to hide or run or live in denial, or with regrets," Forgaard told Reuters in an interview. "On the surface it looks like total devastation but it's just the opposite. I'm confident our lives will be much, much richer as a result.


He can put whatever spin on this he wishes, but the fact remains that many people say this coming who never bought a single house. If he had any knowledge of the history of past bubbles and had the ability to recognize patterns, he would not have fallen for lines like "it will only continue to go up forever" and "it's different this time".

This guy has only learned that investing in houses is a danger and will probably fall for the next bubble in whatever form it takes.

Anonymous said...

Good story just posted yesterday.

Nine houses lost, investor reflects on ‘stumbles’
California man speculated with ‘neg-am’ loans, now says it was mistake
http://www.msnbc.msn.com/id/24569891/

GT said...

i have my TiVo setup to auto-record anything with "housing house home" and "crash bubble downturn mania boom", and the other day it taped a show called 'ax men' about loggers and how the housing downturn has hurt the logging business.

interesting and sad, less sad though

Anonymous said...

I came across this Japanese manga, and thought it might be of interest to some of you.

http://www.onemanga.com/Living_Game/1/

It's a romance story of a couple and their struggle with finding a place of their own. It takes place over a period of two and a half years starting at the height of the japanese housing bubble in 1990.

Anonymous said...

Check the Standard Pacific earning report (SPF) :

Three Months Ended March 31,
2008 2007 % Change
Average selling prices of homes
delivered:
Southern California $629,000 $702,000 (10%)
Northern California 425,000 575,000 (26%)
Total California 533,000 656,000 (19%)
Arizona (1) 246,000 320,000 (23%)
Texas (1) 267,000 247,000 8%
Colorado 334,000 351,000 (5%)
Nevada 305,000 427,000 (29%)
Total Southwest 268,000 299,000 (10%)
Florida 213,000 279,000 (24%)
Carolinas 258,000 217,000 19%
Total Southeast 231,000 258,000 (10%)
Consolidated (excluding joint
ventures) 334,000 378,000 (12%)
Unconsolidated joint ventures 481,000 517,000 (7%)
Total continuing operations
(including joint ventures) $347,000 $385,000 (10%)
Discontinued operations (including
joint ventures) $164,000 $208,000 (21%)
(1) Arizona and Texas exclude the Tucson and San Antonio divisions, which
are classified as discontinued operations.


21 % drop in prices - WOW !

PIT

Reddy Watt said...

The poison spreads, interesting article from the UK, but the first comment is brilliant:

http://tinyurl.com/5jdo47

BMW driving sex machine said...

MBIA posted a $2.4 billion first-quarter loss as it continues to struggle under the weight of credit derivative losses.

The Armonk, N.Y.-based firm logged $3.6 billion in unrealized losses on credit default swaps that resulted in a quarterly loss of $13.03 per share, vs. a profit of $1.46 a share in the year-ago quarter.

Anonymous said...

For your viewing pleasure

Bill O'Reilly meltdown.

warning; foul langauge

http://tinyurl.com/5qugcf

Anonymous said...

LOS ANGELES - A California man who has defaulted on nine homes and expects banks to foreclose on all of them, forcing him into bankruptcy, says he now considers it a mistake to have invested in the real estate market.

hmmm multiply this guy by several tems of thousands and now we're talkin' real numbers! unfortunately this 40 yr old optimist who plans to "start his own business" and start over in a recessionary environment may be like the cat w/9 lives...already past #9.

Macaca

went2puke said...

When I look at these so-called homes people are buying nowadays, I can't help think that cavemen had a better life.

Just look at those sad structures being torn apart like matchboxes whenever a twister or even a mild storm comes their way.

Homes are supposed to be sweet and safe. But those sorry homes look as if they were only built to give politicians a good photo op-- an opportunity to go out of their bunkers and shed their fake tears every time honest Americans lose their lives and/or livelihoods in those cardboard shacks.

Wakeup people! Stop buying recycled garbage. You deserve much, much better.

Mammoth said...

For anybody who is adopting a child from Russia, part of the process involves being questioned in court by both a judge and procecutor. Looks like a new topic has come up during these not-so-pleasant Q & A sessions:

“In Tver Region, a CHI family was asked many questions about their mortgage. Why are families being questioned about this? Because this is what is on the news in Russia: people in America losing their homes to foreclosure. Judges and prosecutors are concerned that the child could go home to a family without a home to live in, and want assurance from the family that they have the means to raise this child and will be able to keep the home they are living in.”

So, if you purchased your home with a neg-am loan, then turned around and HELOC’D the McMansion in order to get the cash needed to pay for the adoption, you may not want to say so in court. But hey – since you lied so that you could qualify for the loan, I’m sure that you could lie again in court.

Just don’t get caught, because Siberia is a very, very cold place.
-Mammoth

BMW Driving Sex Machine said...

Luxury home builder Toll Brothers Inc. said preliminary results show homebuilding revenue fell 30 percent in its fiscal second quarter amid a weak spring selling season. The company also expects to continue to face "challenging times" ahead, given soft conditions in most markets.

sundry vermin said...

In case you've ever had the sneaking suspicion Steve Forbes is a shamless market cheerleader and complete ass hat, here's some backup (from Krugman's recent column).


>“The Oil Bubble: Set to Burst?” That was the headline of an October 2004 article in National Review, which argued that oil prices, then $50 a barrel, would soon collapse.

Ten months later, oil was selling for $70 a barrel. “It’s a huge bubble,” declared Steve Forbes, the publisher, who warned that the coming crash in oil prices would make the popping of the technology bubble “look like a picnic.”

hurin said...

"When I look at these so-called homes people are buying nowadays, I can't help think that cavemen had a better life."

I'm from Europe, and I thought the same thing.

Before Catrina I used to be envious of how people lived in the US with much bigger houses than we have in the EU.
Then I saw pictures of the houses Katrina had destroyed, and I was like 'what is that shit?'. How can anyone live in such lousy constructions. I have never seen such poor build quality anywhere in Europe, and I've been to Romania.

keyser soze said...

Kudos to El Keith - the only investment in which I disagreed with this blog originator was IMB i.e. Indymac, the Alt-A king. Being self-employed, though I am honest with my 1040, I was offered an Alt-A loan in 2005, and therefore thought those loans were a reasonable alternative for the self-employed, and would not be subject to high foreclosure rates etc. Man, was I wrong! I've never owned IMB, but I thought Keith was wrong to short or buy their puts.
I believe we both own COP.
Best of luck to all.

lazy and gutless gets Keefer good said...

I guess Keefer would NOT be a big Roubini fan:




Why the Frank-Dodd Proposal for Resolving the Mortgage Crisis Makes Sense and Why the Threatened Veto of This Legislation by the White House is Reckless

Nouriel Roubini | May 13, 2008

The Barney Frank and Chris Dodd proposal for an effective 'nationalization' of a good part of the distressed mortgages is the only sensible proposal that would start to tackle the vicious circle of falling home prices, rising defaults and foreclosures and growing mortgage losses for financial institutions.

It does indeed represents a “nationalization of mortgages as the financial institutions that would be willing to reduce the face value of their mortgages by 15% of the current (lower) market value of the home property and let home owners refinance at this lower debt level at a more affordable mortgage rate (effectively converting variable rate mortgages into fixed rate mortgage) would have the new mortgage balance guaranteed by the FHA (or some other government agency). It is nationalization because it is equivalent to a plan where the government buys these mortgages outright at the same discount of the current market value of the property and then refinances home owners into a mortgage of lower principal value and with a more affordable fixed rate interest rate.

Why is this effective nationalization of mortgages necessary and desirable to start resolving the severe mortgage crisis? Let us discuss in more detail the logic of this proposal…

Anonymous said...

The California "hard money" real estate investments are going up like smoke. Check out the link for one example. They promised 12% return, and investors were screwed. One guy lost $500,000! And that was just one project out on hundreds that have gone "belly Up"!
http://www.sanluisobispo.com/427/story/357552.html

Anonymous said...

Good news for FL or spin?

HOME SALES

Florida Realtors reported positive signs in their local housing markets during first quarter 2008, noting a slower rate of expansion for inventory levels and an increase in pending home sales in some areas. Another positive note: A total of 8,581 existing condos sold statewide during the quarter, up 8.3 percent over fourth quarter 2007. "If we look at what is happening month-over-month for 2008, it appears that the bottom may be here," says 2008 FAR President Chuck Bonfiglio. "We are now seeing more activity, more sales and even prices starting to rise in some markets."

Read the full story:

http://www.floridarealtors.org/NewsAndEvents/n1-051308.cfm


Beignet

Anonymous said...

Comment:

"Before Catrina I used to be envious of how people lived in the US with much bigger houses than we have in the EU.
Then I saw pictures of the houses Katrina had destroyed, and I was like 'what is that shit?'. How can anyone live in such lousy constructions. I have never seen such poor build quality anywhere in Europe, and I've been to Romania."

I lived in NOLA and still have a lot of relatives that are there. NOLA is a world unto its own.

What you see in New Orleans before and after Katrina is no way representative of the rest of America. When I go home to NOLA I leave the United States or better yet stay in the US and live in another century.

Beignet

Anonymous said...

Citibank beyond repair!!

http://www.nypost.com/seven/05132008/business/citi_is_beyond_repair_110684.htm

Anonymous said...

"It is a vicious cycle that has never been seen before." - Mr. Mortgage


This is the primary problem with so many ‘analysts’ positive housing predictions. How can you truly judge inventory vs. sales numbers when the banks are taking back more homes at auction and adding to their shadow inventory than sell each month? Remember, the NAR only reports homes listed with a real estate broker as ‘inventory’ and a very small percentage of bank REO inventory is listed. The amount of ‘non-listed’ bank REO inventory is staggering.

What is most frightening is how quickly values are dropping as a result of this. With as much bank REO inventory selling for as deep of discounts as we are seeing, it is forcing an immediate and swift mark-to-market change in values of entire neighborhoods all over the state. If a few of these homes sell at a 30% discount within a mile radius of your home and they are similar properties, your home value will be negatively impacted. Very quickly, America’s real estate is being marked-to-market by the bank’s shadow inventory, accelerating a natural process that should take years. This causes even greater numbers of home owners to go into a negative equity position causing even more loan defaults. It is a vicious cycle that has never been seen before.

Tyrone said...

Bill O'Reilly - F**k It!.

F**k It! Remix
LOL

Tyrone said...

Fox 5 News Subliminal Message.

Anonymous said...

Pfizer to close Indiana plant; 140 jobs lost

Drug maker Pfizer Inc. announced Tuesday it would close its western Indiana manufacturing plant by the middle of next year.

The company said the closure will eliminate the remaining 140 jobs at the plant.

The announcement is not surprising since the New York-based company said in January that it would lay off 660 workers at the plant. It warned then that the remaining jobs could be cut later.

http://news.ino.com/headlines/
?newsid=689075838103

Anonymous said...

Wachovia says cutting fixed-income jobs

The Charlotte, North Carolina, bank plans to cut a third of its fixed-income headcount, as well as a 10 percent reduction in corporate and investment bank support staff, Thompson said at a UBS bank investor conference.

Wachovia, which marked down fixed income assets by $5 billion so far in the credit crunch, is "exiting non-client-driven businesses," Thompson said. The comment echoes moves made by other firms, where mortgage and debt trading businesses generated the bulk of losses.

"Many structured product businesses are gone. Any business with leverage on top of leverage will not be part of our model going forward," he said.

A bank spokeswoman could not immediately say whether the cuts were the same as some 500 investment bank job reductions disclosed last month during a first quarter conference call.

http://news.yahoo.com/s/nm/
20080512/bs_nm/wachovia_jobs_dc_4

Anonymous said...

Will EDS and HP cut 20,000 jobs.

http://www.dallasnews.com/
sharedcontent/dws/dn/
yahoolatestnews/stories/
051408dnbuseds.3b5143f.html?npc

EDS to cut jobs, stay in Plano under Hewlett-Packard

Mr. Rittenmeyer said EDS was already looking to reduce its headcount before the H-P purchase materialized.

"In terms of job cuts, we are continuing to streamline our workforce at EDS," Mr. Rittenmeyer said during the call. "We've been doing that for some time. There obviously are going to be some changes. We had plans for that this year."

Research and consulting firm Technology Business Research Inc. is predicting fairly substantial cuts.

The firm noted that H-P's services division and EDS will have a combined headcount of about 209,000 workers.

"The addition of EDS will be a drag on [H-P's service] margins, and CEO Hurd will be aggressively targeting efficiencies," the research firm said in a note. "TBR expects that initial headcount reductions will be at least 10% to 15% of the combined headcount."

That would mean 20,000 job cuts or more, although the consulting firm didn't speculate on how those cuts would be divided between EDS and H-P employees.

Anonymous said...

JPMorgan Chase on Tuesday said it plans to transfer 420 customer-service jobs from the Valley to locations outside Arizona as part of an ongoing workforce-efficiency drive.

http://www.azcentral.com/news/
articles/2008/05/13/
20080513biz-chase0514-ON.html

Anonymous said...

Remember when home builders were offering plasma TV when you buy one of their home.

http://news.yahoo.com/s/afp/
20080513/bs_afp/
japanelectricalcompany
structurecutspioneer_080513074618

Japan's Pioneer to cut 2,000 jobs: report

The job losses in Japan and overseas, which are expected to be implemented in the current fiscal year to next March, follow the company's decision in March to stop making plasma display panels.

Instead it will buy them from Matsushita Electrical Industrial Co.

The Nikkei said Pioneer would transfer about 200 researchers and engineers involved in the plasma operations to Matsushita.

Pioneer, which is expected to report later Tuesday a fourth straight year in the red, has had a hard time in recent years after being saddled with overcapacity in plasma display panels amid declining prices.

Anonymous said...

North central Wisconsin window and door manufacturers continue to feel the effects of a U.S. housing downturn expected to drag on into next year.

A spokeswoman for Medford-based Weather Shield Windows & Doors and The Peachtree Cos., parent company of SNE Enterprises in Mosinee, confirmed Monday plans to permanently cut about 50 jobs across the two organizations.

http://www.wausaudailyherald.com/
apps/pbcs.dll/article?AID=/
20080513/WDH0101/805130644

Anonymous said...

Countrywide Financial grabbed the attention of the single-name credit-default swaps market last week as speculation around the fate of Countrywide's $38 billion of outstanding debt lingered and investors brought protection.

Bank of America recently raised doubts whether it would guarantee all of the mortgage lenders' debt when it acquires the company.

Under current federal regulations, B of A would only be obligated to guarantee debt issued by Countrywide's depository bank and not the debt issued by Countrywide Home Loans or Countrywide Financial Corporation which is a holding company.

http://www.emii.com/Articles/
1931291/Derivatives/Derivatives-
Articles/Countrywide-Debt-
Drives-Rush-To-Hedge.aspx

Anonymous said...

Oppenheimer cuts earnings estimates on Goldman, Lehman, Merrill, Morgan

The outlook for brokers is "far more bleak" than reflected in the market, Oppenheimer analyst Meredith Whitney said Tuesday, as she slashed her 2008 and 2009 earnings forecasts for the group.

Whitney cut her second-quarter, fiscal 2008 and fiscal 2009 estimates on brokers by an average of 41%, 48% and 20%, respectively.

With less than three weeks until the end of the fiscal second quarter, the global capital markets activity for the quarter shows continued weakness with declines of over 40% year-over-year across the different segments, she said.

In addition, based on the action in credit default swap spreads so far this quarter, Whitney said brokers' earnings will "face sizable headwinds" from the reversal of revenue resulting from the narrowing of firms' CDS spreads.

http://www.sharewatch.com/
story.php?storynumber=322283

Anonymous said...

April Foreclosure 2008 Report just came out.

http://www.youtube.com/
watch?v=LCW4A0ACDKM

Anonymous said...

First Lowndes Bank, a state-chartered financial institution headquartered outside of Montgomery, was hit with a cease and desist order for engaging in "unsafe or unsound banking practices."

The regulatory order, issued by the Federal Deposit Insurance Corp. and the Alabama State Banking Department, cited the bank for operating with an unqualified board of directors and senior management, engaging in hazardous lending and lax collection practices, having a large volume of poor quality loans and for operating with an inadequate allowance for loan losses to cover for defaulted loans, according to FDIC documents.

http://www.bizjournals.com/
birmingham/stories/2008/05/12/
story5.html?ana=from_rss

Anonymous said...

Fitch Ratings said Tuesday it cut its rating on IndyMac Bancorp, saying the mortgage lender's losses have made it tougher for the company to meet its financial obligations.

Fitch cut IndyMac's issuer default rating, which tries to judge how likely a company is to meet all its obligations, to "B-" from "BB."

Several quarters of losses have forced the company to cut the dividends it pays on certain investments, Fitch said. The ratings agency does not foresee the Pasadena, Calif.-based company returning to profitability this year and expects the losses to exert "undue pressure" on IndyMac's finances.

"The rating cut has no impact on the safety of the deposits for our depositors in that over 95 percent of the deposits are FDIC insured," said IndyMac spokesman Grove Nichols.

IndyMac lost $614.8 million last year and $184.2 million this year.

The rating affects $19.9 billion in debt and deposits.

http://biz.yahoo.com/ap/080513/
fitch_indymac.html?.v=3

Anonymous said...

This made me feel sick, like I was going to puke on my keyboard.

WHEN are AMERICANS going to STOP letting all of these big BANKS quit pushing us little people around.

BofA need to go. But they are too big now. . . . . .

Beignet

http://abcnews.go.com/print?id=4832471

Agent 99 said...

This is appalling. Potential buyers making low offers are characterized as "stealing":


APP.com May 14, 2008
"There seems to be people going around, kicking the tires, but since the market has been declining, they are offering very, very low numbers to try to "steal' one as opposed to coming in with comparable sales," said Jennings, a senior loan officer at Allstate Mortgage in West Long Branch.

My position: Keep your d*mn house!

dopes said...

Firefighters don't want to go in crap boxes built with OSB wood products...

http://www.nbc4.com/news/16241012/detail.html

Anonymous said...

All is well. All is well. See.

http://news.yahoo.com/s/ap/20080514/ap_on_bi_go_ec_fi/economy

Is there anybody that even beleives this shit they spew anymore?

BMW Driving Sex Machine said...

Rick Santeli, the only person I trust on CNBC to tell the truth just said the government is flat out cooking the books on inflation with the April numbers that were released today.

Anonymous said...

"When I look at these so-called homes people are buying nowadays, I can't help think that cavemen had a better life."
...
"I'm from Europe, and I thought the same thing."

1) Go live like a caveman, both of you. You've probably never even been camping before. You have no idea how good you've got it. Get a 10-pound bag of rice like that idiot that died on the bus in Alaska and take it from there.

2) You're not from Europe. Not even close. Why you children like to pretend you're European is beyond me, but I do remember some 19-year old chicks talking about liking European guys...which they had never met before. Pathetic that you would fall over yourself for a lie like that.

The Mortgage & More Blog said...

I have to say that for all the negative things that happen in the Real Estate industry today, there ar just as many positive things going on in our industry.

I read where people blame Realtors, some groups blame the mortgage professionals, and even some blame the consumers for pushing so hard.

All in all, it was a concerted effort on everyones part to make this happen and it will take a concerted effort to get the system back on line and running properly.

Anonymous said...

READ ABOUT HUNDREDS OF HOUSES TAX ASSESSED AT 100,000 IN gEORGIA SELLING FOR 10,000
..............................A NICE RETIREMENT COMMUNITY STATE..........

Anonymous said...

GET IN AT THOSE PRICES AND NOT GIVE A DAMN EITHER WAY

Anonymous said...

was i the only one who noticed the Realtor advertisement ? ? is Google trying to send a message?.. wow. I never would guessed it would be google to try to take dwn hp.

Shot across the brow mayb?

Alpine the Realist said...

We need a WeatherPANIC blog. Earhtquakes in China. Cyclones in Burma. Wildfires in Florida started by homedebtors on the verge of foreclosure (ok, did I say too much there- stike that), etc.

LibVet said...

Anonymous, May 14, 2008 5:19 PM.

I love you guys. The things you say just strike me funny.

Now, your family, that is another matter. Are you the head of your family? LOL.

gutless and lazy goes negative said...

Vallejo, CA going bankrupt:
http://www.cnbc.com/id/24609981

soon the entire illegal alien hugging state will go BK with them.

Good riddens.

Anonymous said...

libvet:

Do you have a point? Make it.

Glad to see you're LOL and having a good day. I always get a kick out of reading the posts here too. It reminds me of when I was 20 and knew everything.

DOPES said...

http://tinyurl.com/47cpm2

"In Miami, Chicago and San Diego, condo owners are adjusting to the economic woes, sometimes by mowing themselves and working shifts for building security — all while lamenting their lost community."

"Even though she pays more, her building has broken washers and dryers and unusable exercise equipment, and her hallway is spotted with mold."

DOPES (with lawnmowers)!!!

Anonymous said...

1,295 SF house in Los Gatos was listed for $689,900 103 days but no one pick it up so the bank took it back.

http://www.redfin.com/CA/Los-Gatos/
299-CALLE-MARGUERITA-Dr-95032/
home/820517

The same 1,295 SF house is now being listed as a Bank Foreclosure for $799,000

http://www.redfin.com/CA/Los-Gatos/
299-Calle-Marguerita-95032/home/
820517/bankOwned-2299571

Another 1,226 SF house in the same block sold for $400,000

http://www.redfin.com/CA/Los-Gatos/
170-Calle-Marguerita-95032/home/
820506

Another 1,351 SF house close by sold for $399,500

http://www.redfin.com/CA/Los-Gatos/
100-Smith-Ranch-Ct-95032/home/
559938

Another 2,515 SF house close by
sold for $425,000

http://www.redfin.com/CA/
LOS-GATOS/103-SHIRE-CT-95032/
home/1777474

So what so a person offer for this house.

Anonymous said...

Last month's foreclosures totaled 22,838 statewide, according to ForeclosureRadar.com, said company President and founder Sean O'Toole.

In Santa Clara County, 500 properties were foreclosed upon in April, up 47 percent from March 2008, and up 585 percent from April 2007.

O'Toole said that despite the fact that lenders are frequently offering big discounts at the courthouse auctions, 98 percent of the state's foreclosed properties in April failed to find buyers, so the lenders took ownership.

The properties then become known as "REOs," for "real estate owned" by banks and other financial institutions. The banks then try to sell the homes through real estate agents who list them on local multiple listing services.

http://www.mercurynews.com/
realestatetransactions/ci_9253771

Eddie Carr said...

I can only see the housing crisis getting worse... or better... depending on how you look at it. This first wave of foreclosures we're seeing has mostly hit real estate investors who got in over their heads but the next wave we'll see will primarily be homeowners and it will probably be much greater. So if you're the guy in the house who receives the notice of foreclosure then it's a sad day but it will present an incredible opportunity to those outside the crisis. Properties are being discounted more than we've ever seen so dig in. I recently found a great Google Maps mashup that lists all US properties for sale, foreclosure properties, and real estate in Florida. It's been a great help in finding the right stuff.

WhatEquity said...

Here's a Washington Post article about luxury foreclosures:

The money quotes:

"A lot of people on the market with McMansions for sale ended up foreclosing them," said Danilo Bogdanovic, an agent with Market Advantage Real Estate and Arko's co-blogger. "They found it easier to walk away."

Real estate agents said this was only the beginning for luxury home foreclosures.

"We're going to be back to the prices we were at 15 years ago," said Bill Milletary, an agent with Century 21 Redwood Realty.

Finally, a semi-truthful REaltor.

Anonymous said...

Growing Number of Affluent Homeowners Can No Longer Afford Their Mortgages

Affluent neighborhoods have been able to stave off foreclosure longer, but the effects of once-popular loans, such as adjustable-rate and interest-only mortgages, are beginning to take their toll, economists and real estate agents said.

The foreclosure signs that have been sprouting up in less-affluent communities since 2006 are beginning to appear in the well-off suburbs, attached to houses that once cost $1 million or more.

Although those kinds of homes are in the minority now, real estate agents predict the numbers will swell.

http://www.washingtonpost.com/
wp-dyn/content/article/2008/
05/14/AR2008051403698.html

Anonymous said...

The Mortgage & More Blog said.The Mortgage & More Blog said.

I have to say that for all the negative things that happen in the Real Estate industry today, there ar just as many positive things going on in our industry.

Yes, many realtors and mortgage brokers will now have to go out and find real jobs and/or be forced to train to obatin real skills, and that's a positive thing since this country has far too many salseman who sell worthless crap.

All in all, it was a concerted effort on everyones part to make this happen and it will take a concerted effort to get the system back on line and running properly.

No it wasn't. Many people, including most of us here, saw the insanity in home prices and the mortgage industry as far back as 2003-04. We wanted no part of the risk and we'll be damned if we'll be any part of a "concerted effort to get the system back on line and running".


If you were dumb enough to believe homes would continue to increase at rates of 10% to 20% annually, admit that you're naive rather than trying to claim "everyone" believed it.

Take your propoganda somewhere else!

Anonymous said...

Judge: Countrywide shareholders' suit can proceed

A federal judge has ruled that a shareholder lawsuit against Countrywide Financial Corp. executives and directors should go to trial, rejecting several arguments by the troubled mortgage lender to dismiss the case.

"Plaintiffs' allegations create a cogent and compelling inference that (Countrywide directors) misled the public with regard to the rigor of Countrywide's loan origination process, the quality of its loans, and the company's financial situation — even as they realized that Countrywide had virtually abandoned its own loan underwriting practices," Pfaelzer wrote in the 61-page ruling.

Pfaelzer noted that several witnesses ready to testify for the funds gave persuasive accounts of Countrywide's business, including allegations that the company rewarded employees for boosting loan volume rather than for generating quality loans.

http://www.businessweek.com/ap/
financialnews/D90LRFM00.htm

Anonymous said...

California woman charged in real estate scam may face a maximum of 180 years in federal prison if convicted.

http://www.wwj.com/topic/ap_news.php?
story=AP/APTV/National/a/a/
InvestmentScam

Anonymous said...

The National Association of Realtors said Tuesday that median prices for existing single-family homes dropped in 100 of 149 metropolitan areas in the January-March period, while 48 metropolitan areas saw price increases and one reported no change.

The 67 percent of cities reporting price declines was the largest percentage of cities reporting price drops in the history of the survey, which goes back to 1979. In the fourth quarter, prices fell in 36 percent of the cities surveyed.

Nationally, the median home price — the point where half the homes sold for more and half for less — fell to $196,300 in the first quarter, down by 7.7 percent from the same period a year ago.

The biggest percentage price decline by metro area was a 29.2 percent drop in the Sacramento area.

http://www.montereyherald.com
/business/ci_9254097?
nclick_check=1

Anonymous said...

Fitch Takes Various Actions on 2 PHH 2007 Alt-A Deals

http://calibre.mworld.com/m/m.w?
lp=GetStory&id=306443941

Fitch Takes Various Actions on 4 Luminent, Nomura & Terwin 2005-2006 Alt-A Deals

http://biz.yahoo.com/bw/
080514/20080514006501.html

Fitch Takes Various Actions on 26 First Horizon 2005-2007 Alt-A Deals

http://www.pr-inside.com/fitch-
takes-various-actions-on-r589695.htm

Fitch Takes Various Actions on 50 RALI 2005-2007 Alt-A Deals

http://biz.yahoo.com/bw/
080514/20080514006490.html

Anonymous said...

Global banks have now written off more than 80% of their losses against assets linked to the US subprime mortgage market, according to a report by Fitch Ratings.

Fitch estimates that total losses on subprime residential mortgage backed securities and CDOs will total about $400bn. Half the potential losses sit with banks, which have now disclosed 80% of them.

Fitch stressed that progress on mortgage write-offs did not mean it was calling an end to the entire crisis, as banks may still have some losses to take.

http://ftalphaville.ft.com/blog/
2008/05/15/13067/
banks-write-off-80-of-subprime
-losses

rom said...

Amazing article in USA Today about mental health and foreclosure.

http://www.usatoday.com/money/economy/housing/2008-05-14-mortgage-foreclosures-mental-health_N.htm

Anonymous said...

Wonder how Swan Dive is doing.

Anonymous said...

6,000 condos for sale in Downtown Chicago!

http://tiny.cc/YR9l2

Apparently the $400-800K Condo has market dried up. Hmmm....
(Keep in mind these are big buildings with four-digit assessments!)

greg swan said...

What do you mean you're wondering how I'm doing Anon?

I'm having a GREAT year. Next year is looking to be even better. I'm having a GREAT year!


Swanny

Anonymous said...

http://tinyurl.com/6q8v2v

Good Washington Post article. Tech worker turned realtor/flipper loses 10 properties into forclosure.

Anonymous said...

.




FMW?




.

Anonymous said...

Americans are feeling a lot more economic pain than the government's official statistics would lead you to believe, according to a growing number of experts.

They argue that figures for unemployment and inflation are being understated by the government.

Unemployment and inflation are typically added together to come up with a so-called "Misery Index."

The "Misery Index" was often cited during periods of high unemployment and inflation, such as the mid 1970s and late 1970s to early 1980s.

And some fear the economy may be approaching those levels again.

The official numbers produce a current Misery Index of only 8.9 - inflation of 3.9% plus unemployment of 5%. That's not far from the Misery Index's low of 6.1 seen in 1998.

But using the estimates on CPI and unemployment from economists skeptical of the government numbers, the Misery Index is actually in the teens. Some worry it could even approach the post-World War II record of 20.6 in 1980.

"We're looking at government numbers that are really out of whack," said Kevin Phillips, author of the book "Bad Money."

No inflation if you don't eat or drive

http://biz.yahoo.com/cnnm/080514/
051308_misery.html?.v=6

Anonymous said...

The rating actions taken today reflect Fitch's analysis of expected default and loss from delinquent loans, in addition to projected losses from the currently performing pool.

Fitch Takes Various Actions on 5 American Home Mortgage Alt-A Deals

http://www.macroworldinvestor.com/
m/m.w?lp=GetStory&id=306590721

Fitch Takes Various Rating Actions on 7 Bear Stearns Alt-A Transactions

http://biz.yahoo.com/bw/080515/
20080515006493.html?.v=1

Fitch Takes Various Actions on 9 Greenwich Alt-A Transactions

http://www.macroworldinvestor.com/
m/m.w?lp=GetStory&id=306590711

Anonymous said...

British bank Barclays, reported a drop in first-quarter earnings because of $3.3 billion (1.7 billion pounds) of writedowns and said further losses from the credit markets are possible.

http://www.deccanherald.com/Content/
May162008/business2008051568139.asp

Anonymous said...

From the New York Times:

Directors and officers of Countrywide Financial, the beleaguered mortgage lender, must answer shareholder accusations of insider trading and an overall failure to monitor lending practices that led to the company’s collapse, a federal judge in California has ruled.

Rejecting the arguments of Countrywide executives and directors that they were unaware of lax loan operations that led to ballooning defaults, Judge Mariana R. Pfaelzer of Federal District Court in Los Angeles ruled Tuesday that she found confidential witness accounts in the shareholder complaint to be credible and that they suggested “a widespread company culture that encouraged employees to push mortgages through without regard to underwriting standards.”

Plaintiffs also identified “numerous red flags” that would have warned directors of increasingly risky loans made by Countrywide, according to the judge, who rejected a motion to dismiss the suit. “It defies reason, given the entirety of the allegations,” Judge Pfaelzer wrote, “that these committee members could be blind to widespread deviations from the underwriting policies and standards being committed by employees at all levels. At the same time, it does not appear that the committees took corrective action.”....

The plaintiffs in the case said they hoped to recover money for shareholders from Countrywide officials named in the case who sold $850 million in stock from 2004 to 2007. The plaintiffs contend that the directors and officers dumped shares even as the company spent $2.4 billion to repurchase its own stock in late 2006 and early 2007.

The chief executive of Countrywide, Angelo R. Mozilo, has argued that his $474 million in stock sales during the three-year period complied with securities laws under a planned selling program. But he revised the program, known as a 10b5-1 plan, several times, each time increasing the shares to be sold.

As a result, the judge wrote: “Mozilo’s actions appear to defeat the very purpose of 10b5-1 plans,” created to allow corporate insiders to sell stock regularly and without direct involvement.

Gerald H. Silk, who also represents the plaintiffs, said: “Corporate fiduciaries cannot expect to evade liability by blaming a general market downturn when there is specific and systematic misconduct taking place right beneath their noses.”

The suit names 14 current and former directors and officials as defendants; it is known as a derivative action because shareholders of Countrywide are suing its officers and directors on behalf of the company.

Anonymous said...

- Fitch Ratings has placed the following classes of Rutland Rated Investments - Sheraton (Series 54) (Sheraton (Series 54)) notes on Rating Watch Negative:

--$25,000,000 Sheraton (Series 54) Tranche A1-L secured limited recourse credit-linked notes due 2012, rated 'AAA', Rating Watch Negative.

The Rating Watch Negative placement reflects Fitch's view on the credit risk of the rated notes
following the release of its new Corporate CDO rating Criteria.

http://www.pr-inside.com/
fitch-places-rutland-rated-
investments-r591980.htm

Anonymous said...

- Fitch Ratings has today placed the following classes of notes on Rating Watch Negative:

Camber Master Trust Series 9

--US$125,000,000 rated 'AAA'.

Camber Master Trust Series 10

--US$125,000,000 rated 'AAA'.

The Rating Watch Negative action reflects Fitch's view on the credit risk of the rated notes following the release of its new Corporate CDO rating Criteria.

http://www.pr-inside.com/
fitch-places-camber-master-
trust-series-r591988.htm

Anonymous said...

- Fitch Ratings has placed the following series of Pivot Master Trust on Rating Watch Negative:

Series 1

--US$125,000,000 certificates due 2017 'AAA'.

Series 2

--US$125,000,000 certificates due 2017 'AAA'.

The Rating Watch Negative status reflects Fitch's view on the credit risk of the rated certificates following the release of its new Corporate CDO rating
criteria.

http://www.pr-inside.com/
fitch-places-pivot-master-
trust-r591962.htm

Anonymous said...

In its monthly report released Thursday, the Organization of Petroleum Exporting Countries said Saudi Arabia produced 9 million barrels a day in April, down slightly from March.

Still, its output again topped the country's 8.9 million barrel-quota, as it has for the prior five months.

The cartel of 13 countries has resisted pressure from the United States and other large oil-consuming nations to increase oil production to dampen rising oil prices, which hit a new record near $127 a barrel this week.

http://www.marketwatch.com/news/
story/story.aspx?guid=
%7B2EA08014%2D671E%2D4D7C%
2D908D%2DA3F45DE9CD88%7D&siteid=
rss

Anonymous said...

People on Wall Street seem to be vanishing overnight.

Thousands are losing their jobs as hard-pressed banks cut deep. But while layoffs are nothing new in the financial industry (they come with almost every downturn), this round seems different: it is eerily quiet.

So quiet, in fact, that people refer to these cuts as stealth layoffs. Some bosses hardly say a word after people are fired. At Citigroup, Goldman Sachs and Morgan Stanley, for example, the first clue that someone is gone can be e-mail messages that are returned to senders from a former colleague's inactivated corporate address.

While the financial markets have found a bit of a footing lately, banks are pushing ahead with plans for some of the deepest job reductions in years. Since last summer, banks worldwide have announced plans to cut 65,000 employees.

But exactly how many jobs have been or will be eliminated is unclear. In the past, banks typically made sharp reductions all at once. After the 1987 stock market crash, for example, employees were herded into conference rooms and dismissed en masse.

This time, companies are making many small cuts over the course of weeks or even months. Some people who have lost jobs, and many more struggling to hold them, say banks are keeping employees in the dark about the size and timing of layoffs.

The idea that banks will slowly wield the knife again and again unnerves many employees. People know the cuts are coming — they just don't know when or where.

"Nobody knows who is coming in; nobody knows who is going out," said JoAn

http://www.iht.com/articles/
2008/05/16/business/16layoff.php

Anonymous said...

British Bank Chief Expects No Relief From Inflation

The Bank of England painted a bleak picture of Britain’s economy on Wednesday, saying that it expected inflation to accelerate, making further rate cuts unlikely.

The central bank governor, Mervyn King, said that inflation, which rose to 3 percent in April, would probably remain that high or rise even further because of higher prices for energy and food.

http://biz.yahoo.com/nytimes/
080516/1194775169869.html?.v=19

Anonymous said...

Paul A. Volcker, former chairman of the Federal Reserve, warned on Wednesday the United States could face a 1970s-style period of skyrocketing inflation if investors lost confidence in the buying power of the dollar.

“If there is a real loss of confidence in the dollar, then I think we are in trouble. That is something that has to be watched,” Mr. Volcker told the Congressional Joint Economic Committee.

The former Fed chief, who championed the battle against double-digit inflation in the 1970s by raising interest rates sharply, warned that without careful focus on the declining dollar and inflation, the United States could face similar, or even worse, inflation pressures.

“That has to be very much in the forefront of our thinking. Without that, we are back to the inflation of the 1970s or worse,” Mr. Volcker said, questioning the relevance of measuring inflation by stripping away volatile food and energy prices.

http://biz.yahoo.com/nytimes/
080516/1194775198266.html?.v=19

Anonymous said...

Let those who are involved in luxury home foreclosures eate cake.

Anonymous said...

VW will sell a 200-mpg car in 2010

http://green.yahoo.com/blog/
ecogeek/497/vw-will-sell-a-200-
mpg-car-in-2010.html

madhaus said...

AngryRenter.com is Astroturf. Story in the Wall St Journal.

Run by Dick Armey and a group called FreedomWatch, most of whom own very expensive homes.

Wondering if you'll actually report on this.

Dick Army said...

"Run by Dick Armey and a group called FreedomWatch, most of whom own very expensive homes."

"DICK ARMY" what a great name! If I had a Punk Rock Band I would for sure name it Dick Army

devestment said...

http://tinyurl.com/66xfve

gutless and lazy posts a challenge said...

Nouriel Roubini's Global EconoMonitor
Broad Support Among Economists and Experts of the Goal of Providing Mortgage Debt Relief to Distressed Borrowers
Nouriel Roubini | May 15, 2008
My latest note supporting the Frank-Dodd proposal for mortgage debt relief has caused some vituperative reactions among some of the readers of this forum: some accused me of being a Socialist/Marxist (too bad I am a centrist economist who believes in market economies where governments provide the necessary public goods); some suggested I am supporting the Democrats’ plan as a way to seek a job in the next administration (sorry but I have not been involved in any form in any presidential campaign, have no intention of going back to policy in D.C. and I already have two full time jobs being an academic and running an economic consultancy); and so on….

Very few reflected on the substance of this proposal and its strong economic logic that would benefit borrowers, lenders and even the government as the fiscal cost of no action (a systemic banking crisis that would trigger a costly fiscal bailout of banks given deposit insurance) is much higher than the potential modest fiscal cost of this proposal.

The story is simple: many homeowners are underwater (have negative equity in their homes) and/or are unable to service their mortgage payments. Given that mortgages are mostly non-recourse loans millions of such homeowners will walk away from their homes and/or end up into an avoidable foreclosure. Freezing reset of interest rate on mortgages is not enough; when economic agents are unable to pay (insolvent) debt relief is both unavoidable and necessary. A disorderly workout of unsustainable debts make everyone – borrowers, lenders and the government – worse off.

Unfortunately for the critics of this proposal the experts who are supporting it are very broad and ranging from Democrats to Republicans, from folks to the left of the center and others to the right of the center or outright conservative. And the latest news is that Senator Dodd is on the verge of reaching an compromise with Senate Republicans on a slightly modified version of his plan.

Here is below a sample of the views of a number of leading economists and experts who are either directly supporting the Frank-Dodd proposal or supporting its core idea of providing debt relief to those mortgage borrowers who are deserving it via a reduction of the face value of the unsustainable debt payments…



Evidently Keefer is leaving lots of hate posts over at Roubini's web site. I'd like to have the ole Keefer post some logical arguments against what a PhD. in economics has to say on this topic. Care to take the challenger Keefer?

Anonymous said...

It is hard to recruit the best, but during the recent housing boom many of the best went went to the construction field.

Now, remember in the 1990 housing slump when construction firms did not want to let go of their best workers, so they built at cost to keep them working.

It building season again will construction firms continue this trend or will they give in. Plus the profit margin were upward of 200% for some builders, so some still have money in their reserve to continue to build.

Housing Starts Rise Unexpectedly.

Builders' confidence continues to flag. The National Association of Home Builders/Wells Fargo sentiment index fell one point to 19 this month, the group said yesterday. All three components of the gauge fell, with the reading on current sales of single-family homes reaching a record low.

``The trends are horrific,'' said Ian Shepherdson, chief U.S. economist at High Frequency Economics in Valhalla, New York, who had the closest housing-starts estimate in Bloomberg's survey. ``There's just no reason things are getting any better. Why would you buy a house? Why would you spend money to buy a depreciating asset?''

New-home construction increased 8.2 percent in April, offering signs of life in a deeply troubled sector, the Commerce Department reported on Friday.

Housing starts rose to a seasonally adjusted annual rate of 1.032 million. Construction of multifamily units surged 36 percent, compared with a 35 percent drop in March, a huge swing — and an average one in recent months, the agency said in a report.

Building permits, a sign of future construction, rose 4.9 percent to a 978,000 pace, reflecting gains in both single- and multifamily units.

However, lower prices and other incentives have yet to revive demand for houses, indicating builders will need to come up with even more discounts to attract buyers. Stricter lending rules, job losses and growing pessimism about the economy signal sales will not rebound quickly.

http://www.bloomberg.com/
apps/news?pid=20601087&sid
=abWYAJPuHSAY&refer=home

Anonymous said...

Yes, MBS investors your money has an imply guarantee, but if many more homes go into foreclosure due to this new policy then the Dollar will get weaker and Inflation will continue to grow.

If you are a foriegn investor of MBS then your return will be lost to the weaking dollar. If you are an US investor then your return will be lost to Inflation when the dollar weaken, so wouldn't it be better to invest in TIPS.

http://www.usatoday.com/money/
economy/housing/2008-05-16-
fannie-mae_N.htm

Fannie Mae cuts mortgage down payments

Fannie Mae , the nation's largest source of home financing, said Friday it is lowering the amount of down payments required on mortgages it purchases, even in areas where home prices are falling.

Starting June 1, the new requirements of 3% or 5% will apply nationally to loans on single-family primary residences, it said.

That replaces a December policy that required a higher minimum if the loan was for a home in a market with declining real estate prices.

The rule change comes as many in the housing industry call for Fannie Mae and Freddie Mac (FRE), the second largest federally chartered home funding company, to make more affordable housing available.

The two government-sponsored, shareholder-owned companies buy mortgages, freeing up funds for more lending.

Anonymous said...

Oil prices spike to record near $128 a barrel, as retail gas and diesel hit new highs

The gains come 10 days before the Memorial Day holiday, the traditional start of the peak U.S. summer driving season, suggesting that retail gas prices still have further to rise.

Motorists are now paying a national average of $3.787 a gallon for regular gasoline, up nearly a penny from the previous day, according to AAA and the Oil Price Information Service.

Diesel prices also have risen to record levels, meaning that even Americans who don't drive will likely face even higher prices on all sorts of goods because of increased shipping costs. A gallon of diesel now sells for $4.482 a gallon.

http://biz.yahoo.com/ap/080516/
oil_prices.html

Anonymous said...

Fixed mortgage rates were modestly higher, with the average conforming 30-year fixed mortgage rate rising to 6.19 percent. According to Bankrate.com's weekly national survey of large lenders, the average 30-year fixed mortgage has an average of 0.39 discount and origination points.

The average 15-year fixed rate mortgage popular for refinancing increased to 5.78 percent, while the average jumbo 30-year fixed rate is now 7.41 percent. Adjustable mortgage rates slumped, with the average 3/1 ARM retreating to 5.79 percent and the average 7/1 ARM falling to 6.06 percent.

Inflation worries continue to pressure mortgage rates. Fixed mortgage rates are closely related to yields on long-term government bonds, and both are heavily influenced by the outlook for the economy and inflation.

http://www.week.com/news/
business/?feed=bim&id=18988154

Anonymous said...

Farmers and consumers, not commodity market speculators, are pushing crop prices to record highs, officials with the Commodity Futures Trading Commission told a House panel Thursday.

During the past three months, prices on the commodity futures markets for wheat, corn, soybeans, rice and oats have hit all-time highs.

The commodity commission's market surveillance system shows crop prices appear to be driven by the laws of supply and demand, not speculators, Jeff Harris, the agency's chief economist, and John Fenton, who heads its market surveillance section, said.

Commercial traders were the ones driving wheat prices when they hit $24 a bushel in late February.

"Millers and export buyers were bidding high prices," Fenton said. "There's strong world demand."

In addition to increased demand for commodities from developing countries, Fenton and Harris blamed droughts, the use of corn for ethanol production and export restrictions adopted by some countries for tight commodity supplies.

http://www.argusleader.com/apps/
pbcs.dll/article?AID=/20080516/
NEWS/805160309/1001/RSS

Anonymous said...

The head of the Federal Deposit Insurance Corp said on Friday that another wave of U.S. credit stress was coming, involving non-mortgage loans.

Sheila Bair, in remarks prepared for a Brookings Institution event, said delinquency rates were rising for construction and development lending as well as for commercial and consumer debt.

"Data show there could be a second wave of the more traditional credit stress you see in an economic slowdown," Bair said. "The slowdown we've seen in the U.S. economy since late last year appears to be directly linked to the housing crisis and the self-reinforcing cycle of defaults and foreclosures, putting more downward pressure on the housing market and leading to yet more defaults and foreclosures."

http://www.reuters.com/
article/governmentFilingsNews/
idUSN1639558420080516

deepcgi said...

The earthquake in China must be Bush's fault somehow. Or carbon dioxide.

Anonymous said...

Saudi Arabia, the world's largest oil exporter, will increase crude production next month in response to rising demand from its customers and a request by U.S. President George W. Bush to ease the strain of record oil prices.

``On May 10 we increased our response to our customers by 300,000 barrels because they asked for it,'' al-Naimi said. ``So our production for June will be 9.45 million barrels per day. This is the request of about 50 customers worldwide.''

``It's just a token increase but it shows that the Saudis realize just how important it is for the president to not come back empty handed,''

Nor should Saudi King Abdullah bin Abdul Aziz come out of the deal empty handed.

http://afp.google.com/article/ALeqM5hvx6I_y9so8CykQ5XB3RNj5fU34A

The White House announced major new cooperation agreements with Saudi Arabia on Friday as US President George W. Bush made his second visit to the oil superpower this year.

The agreements cover cooperation on civil nuclear power and protecting the kingdom's oil infrastructure which has come under attack by Islamist militants.

The White House said Washington and Riyadh were also to sign an agreement on nuclear cooperation that would clear the way for Saudi Arabia to receive enriched uranium for its reactors, without the need to master the fuel nuclear cycle itself as Iran has done.

Anonymous said...

In an age where governments of every political stripe distort economic data to promote their own self-interests, it’s hardly surprising that they present inflation statistics that are wildly at odds with the reality faced by consumers and businesses, and regarded with utter disbelief.

In the latest US government report on inflation for instance, there was a glaring “seasonal adjustment,” for energy prices that cast great doubt as to the accuracy of the findings.

US Labor Dept apparatchiks said consumer prices rose a smaller than expected 0.2% in April, tamed by energy prices, which were unchanged last month.

Utilizing an obscure “seasonal adjustment,” Labor figured that gasoline prices actually fell 2% in April, which doesn’t reflect the reality of what consumers were paying at the pump.

Furthermore, the IMF’s global food price index rose 43% over the last 12-months, but the US consumer price index for food is only 5.1% higher.

Wall Street cheered the tame inflation rate, reckoning it gives the Federal Reserve more time to peg the fed funds rate at 2% to jig-up the stock market with massive money injections.

But the folks who aren’t fooled by the government’s propaganda on inflation are the American people, whose dollars buy less with each passing month. The inflation tax is the great thief of the middle class.

For the 12-months through April, prices for US imports were 15.4% higher. Yet Wall Street economists massaged the data and explained that wholesalers and retailers are absorbing the higher costs out of reluctance to increasing prices and driving away customers.

Should we trust the inflation statistics conjured-up by government apparatchiks, or rather place greater faith in the depreciating dollars and cents that flow through the commodity markets each business-day?

http://www.financialsense.com/
Market/wrapup.htm

Anonymous said...

"rom said...
Amazing article in USA Today about mental health and foreclosure."
Are you suffering from uncertainty and fear about your home and/or job?

Let's see; 8 million citizens displaced and 1 million dead since the US invasion of Iraq.

Karma is a bitch!!!

Refuse to buy overpriced said...

HEY MADHAUS!

Thanks for bringing the WSJ article to my attention. I emailed the following to author Michael Phillips:

Dear Mr. Phillips,

Why don't you take note of the authentic grass-roots anti-bailout movement? stopthehousingbailout.com, patrick.net, housingpanic.blogspot.com, etc.

Also, please see the attached petition which I wrote, circulated and mailed to Senator Menendez. The signers of my petition included Democrats, Republicans, Libertarians, and one Socialist. Most were under 30, hoped to buy a home, were saving for a substantial down payment, and were outraged to learn Congress and the Federal Reserve actually want to keep prices high. Those who refused to sign tended to have debt, multiple houses, or a large stock portfolio. Sadly, they were pleased to learn Ben Bernanke, Timothy Geithner, Chuck Schumer and Barney Frank rigged the system in their favor.

As for Angry Renter - well, we can use all the help we can get. Thanks for the astro-turf, Steve Forbes and Dick Armey!


John Gruskos
New Jersey

HERE IS THE TEXT OF MY PETITION:

No Mortgage Bailout!

We are outraged that Congress and the Federal Reserve have implemented a series of measures designed to prop up home prices at their current artificially high level – with little apparent concern for the resulting inflation or the cost to taxpayers.

A house is not a government guaranteed investment, it is a place to live. Like water, food and clothing, shelter is a basic human need. When a basic human need becomes more affordable for the working citizens of this country, that is a good thing. Houses are currently in the process of becoming affordable again for responsible first time homebuyers. The government should welcome this development, not intervene to stop it.

We were dismayed when rampant speculation, enabled by low interest rates, drastically increased home prices. A climate of fear and greed was deliberately fostered by the real estate industry – “buy now or you’ll be priced out of the market forever / buy quick, its not too late to get in on the easy profit.” During the price run-up, home prices were increasing much faster than household incomes. This was an obviously unsustainable situation.

Unfortunately, reckless lending practices kept pushing prices higher after homes had become unaffordable. Loans were given to home buyers who made little or no down payment. Loans were given for amounts greater than the income of the borrower justified. Loans were given without adequate income verification

Lenders and mortgage-backed securities investors are now experiencing the predictable results of their own extreme folly.

Those who hoped to profit from the real estate bubble shouldn’t now expect society as a whole to bail them out. Accordingly, we hereby petition you:

 Do not spend our tax dollars to assist borrowers, lenders or investors who made unwise decisions.
 Do not let inflation and low interest rates destroy the value of savings accounts. Many future home buyers are prudently saving their money for a substantial down payment.
 Do not ignore the justice of this petition in the name of “the economy”. An economic slowdown is temporary, but injustice will permanently tarnish our society.
 Above all, do not in any way attempt to prop up home prices at the current artificially high level. This will reward speculators at the expense of an entire generation of future home buyers.


I hope Mike Phillips responds. I'd also love to hear your comments, madhaus.

Jennifer said...

Unfortunately some have already reached the point of despondency, as this story evidences.
http://www.usatoday.com/money/economy/housing/2008-05-14-mortgage-foreclosures-mental-health_N.htm

Anonymous said...

Perhaps the biggest story of the week was CDO woes anew at Alesco Financial.

This week’s blowup came courtesy of ailing Alt-A lender IndyMac Bancorp, which announced (in addition to a worse-than-expected quarterly loss) that it would defer the interest payment on its trust preferred securities.

Alesco holds a portion of the equity interests in eight CDOs that include trust preferred securities issued by IndyMac.

http://www.housingwire.com/2008/
05/16/mortage-reit-insider-
alescoes-cdo-woe/

Anonymous said...

Everyone is talking about the sluggish economy, housing slump, credit crisis, weak labor market and flagging consumer confidence, but new Yankelovich research shows just how quickly consumers' anxieties have intensified -- and which issues are causing them the most concern.

From January to May 2008, the percentage of American consumers who reported feeling "severe anxiety" about economic and other issues doubled -- from 14 percent to 30 percent -- according to Yankelovich, Inc., a leading consumer-trends research company that turned 50 this year and merged with Henley Centre HeadlightVision of London.

The percentage of consumers who reported feeling either high anxiety or severe anxiety rose from 33 percent to 54 percent.

http://sev.prnewswire.com/
advertising/20080514/
CLW11514052008-1.html

Anonymous said...

A separate poll released by ABC showed economic anxiety to be at its highest point on record since 1981.

In the Post-ABC poll, the nearly 70 percent who said they were worried about maintaining their lifestyles represented a 17 percent jump since December of last year. The growing anxiety reported by respondents cut across party and income lines, “spreading rapidly among Republicans, people from rural areas and those from middle- and upper-income households,” according to the Post.

The newspaper said that nearly six in ten people from households with an annual income of $100,000 or higher said they were worried, up from a third in December. Of those who identified themselves as Republicans, 56 percent expressed concern, up from 32 percent.

Twenty percent cited higher gasoline prices as the single most important economic issue, and about a third pointed more generally to rising prices as the primary cause of their apprehension. Two-thirds called rising gasoline prices a financial hardship, including a third who said higher fuel prices were a severe burden.

There is, of course, a very real basis for these concerns. Just on the question of gasoline, the Energy Department reported that the average cost of gas rose 11 cents in the past week alone, and has gone up 33 cents over the past month on its way to over $4 a gallon.

According to a report issued Wednesday by the Labor Department, food prices shot up 5.1 percent in April over a year earlier, and 0.9 percent from the previous month. Both of these gains are the biggest since 1990. The spike in food prices was propelled by increases in the price of bread, fruit, coffee and other consumer staples.

A major component of the “deleveraging” process is an assault on jobs by means of downsizing, restructuring and corporate bankruptcies. The last three months have seen, according to the Labor Department, a net loss of 180,000 jobs in the US. Aside from construction and manufacturing, where job cuts continue to escalate, the financial sector is bearing the brunt of the job-cutting.

http://www.wsws.org/articles/
2008/may2008/econ-m16.shtml

Anonymous said...

And look right on cue - down here in Naples...http://tinyurl.com/65rgnr

My favorite Line: "I think we’ve hit bottom in Naples and that comes from the economists who really study this," said Arlene Carozza, a Realtor and NABOR’s president.

Is that a direct slap at Housing Panic?

Anonymous said...

My wife and I we're told by a realtor in Rancho Mirage, Ca., that "We have hit bottom and prices are going back up", so we had better buy Now!

This was in April 08

Guess what?

The home is still available......and at a lower price!

.

Anonymous said...

Check this out! People camped out in Mesa (some for an entire week) to buy houses this weekend. Unbelievable...

http://tinyurl.com/5ergoz

Anonymous said...

There is a glut of housing, driving down prices. So let's build some more!

Building permits for single-family homes, an indicator of future activity, rose 4 percent in April from March.

http://www.portfolio.com/
news-markets/top-5/2008/05/16/
Housing-Starts-Surge?rss=true

Anonymous said...

Applications for building permits, considered a good sign of future activity, recorded an increase in April, rising by 4.9 percent to 978,000 units. It was the first gain in permits in five months but it still left permits 20 percent below where they were a year ago.

Economists said housing construction will remain under pressure until builders have more success in reducing a huge backlog of unsold homes, a challenge amid the current economic weakness.

"The demand for new homes still is quite weak, the overhang of vacant housing units is at record proportions, consumer sentiment continues to fall and the economy has been losing jobs since the end of last year," said David Seiders, chief economist at the National Association of Home Builders.

He said the economic fundamentals point to continued weakness in the single-family market for the rest of this year.

http://www.rutlandherald.com/apps/
pbcs.dll/article?AID=/20080517/
BUSINESS/805170320/1011/BUSINESS

Anonymous said...

I bought a car today. Got a pretty good deal I think. But here is the kicker, the place was crazy busy. And not just with people kicking tires. Cars were being sold.

I bought the car I test drove last weekend. I came back this morning and my salesman was with someone else. So I waited for him to finish up writing up the sale for her. Then we did the paperwork and off I went to financing. I paid cash but wanted to talk to them to see if they had any 0% type financing available (they didn't). As soon I walked out, I saw the finance guy I had someone else come in. And every sales office seemed to have someone in it.

I keep hearing and reading about this supposed recession. Sure not seeing it real life. Maybe this was an isolated dealer, I dunno. What I do know is that the doom and gloom I keep reading about is non existent in my daily life.

Anonymous said...

``Our entire food system is broken,'' said Carin Smaller, an agricultural trade analyst in Geneva for the Institute for Agriculture and Trade Policy. ``Some countries have to take unilateral measures now because there is not enough food on the world market. It's going to intensify the crisis.''

The wealth gap among Middle Eastern nations may widen as countries with crude oil spend their way out of the food crisis and those without bust their budgets.

The region's powers are pursuing different approaches to defusing the tensions unleashed by the jump in the cost of staples such as rice, vegetable oils and dairy products.

Egypt has forbidden the export of rice and is raising taxes to help pay for an 88 percent increase in subsidies, while Saudi Arabia can afford to lower tariffs and the United Arab Emirates is looking to buy farms as far away as Thailand.

http://www.bloomberg.com/apps/
news?pid=20601087&sid=akvRvLQ_
A7N8&refer=home

Anonymous said...

Fannie Mae and Freddie Mac are "a point of vulnerability for the financial system" because their capital is meager in relation to their mortgage assets and obligations, the companies' main regulator said.

With that skimpy capital cushion, the government-sponsored companies "could pose significant risk to taxpayers as well as to financial institutions and other investors," the regulator, James Lockhart, director of the Office of Federal Housing Enterprise Oversight, said at a conference in Chicago.

Fannie and Freddie each have "core" capital equaling less than 2% of the mortgages they own or guarantee. Fannie's core capital as of March 31 was about $43 billion, and the company has since then raised about $6.5 billion more through sales of common and preferred shares, bringing the total to around $50 billion.

If Fannie were a bank, regulators would require it to hold $135 billion of capital to be considered "well-capitalized," estimated Karen Petrou, managing partner at research firm Federal Financial Analytics in Washington.

Fannie and Freddie argue that, as government-backed providers of money for home mortgages, they aren't equivalent to banks. Setting capital requirements promises to be tricky for the new regulator if Congress approves the legislation. The two companies are likely to resist any requirements that they see as unduly reducing their profitability or ability to play a major role in the mortgage market. But some big mortgage lenders say Fannie and Freddie should face capital rules as stiff as those for federally regulated banks.

http://online.wsj.com/article/
SB121098464797800459.html

Anonymous said...

American Axle & Manufacturing Holdings Inc. will cut pay and offer buyouts to its workers, according to an agreement reached after an 11-week strike that halted some production at General Motors Corp. plants.

Wages will be cut as much as $10 an hour for some jobs, according to the proposal.

The automotive-parts supplier will offer buyouts of $140,000 to workers on the job 10 years or more, according to a contract proposal handed out at a United Auto Workers meeting in Detroit today. American Axle will pay a maximum of $105,000 over three years to ease workers into lower salaries, and those with seniority will be offered early retirement.

http://www.bloomberg.com/apps/
news?pid=20601087&sid=aqUZwL_b5J.8
&refer=home

Anonymous said...

Lear Corp. plans to lay off 336 employees at its Janesville location.

Lear Corp. supplies interiors and seating systems to General Motors. In late April, GM announced that it was laying off 750 employees and eliminating a second shift at the Janesville plant.

http://wkow.madison.com/
News/index.php?ID=21630

Anonymous said...

The fate of some workers at Hewlett Packard's Boise plant is in question as HP's Imaging & Printing Group undergoes changes.

HP was mum Friday on possible layoffs, saying that it would communicate any layoff information to employees first.

But HP released a statement Friday saying the Imaging & Printing Group, which employs about 3,400 people at HP's campus on Chinden Boulevard, is undergoing a "transformation."

http://www.idahostatesman.com/
business/story/383895.html

Anonymous said...

As of March approximately 15,000 construction jobs had been lost in San Bernardino and Riverside Counties since the same month in 2007, according to the California Employment Development Department.

The construction business is a cycle of rising and falling fortunes said Thurston “Smitty” Smith, Hesperia councilman and president of Smitty’s Concrete Pumping. Smith said the trickle down effect of the housing slump also effects the supply side of the construction, as his business is going to Riverside for work.

“This is a cyclical thing, usually over 10 years,” said Smith. “This is about my fourth go around. I don’t know how long this one will last or how bad it will get.”

Smith said this downturn part of the cycle is always bad because construction workers are sometimes caught living beyond their means.

http://www.vvdailypress.com/news/
construction_6468___article.html/
jobs_hard.html

Anonymous said...

Construction away from housing could be next bust

Demand for new homes collapsed last year. Next up could be a similar drop in the rest of the construction market -- and that could be the latest drag on an already sputtering U.S. economy

Nonresidential construction, which includes office buildings and retail centers, hotels and institutions such as schools, hospitals or government buildings, remained strong through much of 2007.

But a combination of the economic slowdown and tighter credit appears to be putting the brakes on nonresidential projects. Even if work continues on those projects already underway, there are signs that the pipeline of new construction is about to dry up.

"The trend is much weaker," said Kenneth Simonson, the chief economist for the Associated General Contractors of America, the trade group for contractors outside of single-family home construction. "My conversations with contractors show they're still quite busy. But their order books are shrinking and they're quite worried."

A slowdown in the entire construction market would be bad news for the economy. Investment in nonresidential buildings added an average of $250 billion to the economy every year since 1990. A downturn is also expected to lead to the loss of many well-paying jobs in the months ahead.

What's more, Haughey said construction on some public infrastructure projects, such as highways and sewers, are being put on hold or slowed down as local governments struggle with declining tax revenue and tight budgets.

Credit crunch hitting commercial construction

Industry tracker McGraw-Hill Construction reported that nonresidential construction starts had remained strong through February, then plunged 23% in March, the most recent month for which a reading is available.

Hotel starts tumbled 67% after the start of large hotel projects in Las Vegas and Atlantic City in February, while office construction was down 28% and store construction was off 18%.

McGraw-Hill Construction said the outlook isn't improving either.

Another troubling sign is that the Architecture Billings Index, a widely respected leading indicator of commercial construction from the American Institute of Architects, has been in a free-fall for several months. It hit a record low in March and has fallen more than 20% in the past three months.

http://biz.yahoo.com/cnnm/080517/
051608_nonresidential_
construction.html?.v=2

Anonymous said...

A major home-building supply and construction company is pulling out of Tucson, shedding 180 jobs.
San Francisco-based Building Materials Holding Corp. announced on Wednesday that it will close its SelectBuild Arizona framing and concrete business in Tucson in July.

The company provides supplies and construction services to many home builders, including KB Home and Canoa Development in Tucson. About 180 workers in Tucson will be affected by the closure, according to the company.

http://www.azstarnet.com/
sn/business/239055.php

Anonymous said...

Alex Shively, owner of Independent Construction Co. in Cape St. Claire, said most of his business used to come from commercial and government work.

But as the competition grew more cutthroat in a bleak economy, Mr. Shively decided to go after more residential work.

This year, he started Annapolis Renovators, a home-renovation division, to help pay the bills.

"It's frustrating, but it's something as a business owner that you have to recognize," he said. "We are looking forward to the other opportunities."

Mr. Shively is part of a trend manifesting itself in Anne Arundel County as construction companies shift to other markets and change strategies to generate income during the slow period.

Residential contractors are dipping into commercial work while business owners like Mr.

Shively are trying to gain home-renovation jobs, experts who follow the local building market said.

"I've heard several stories of people trying other segments of the market to see if they can maintain themselves for a while until this market adjusts or readjusts," said John Kortecamp, executive vice president of the Home Builders Association of Maryland.

"In a down cycle people shift gears and try to find other segments of the industry that they can easily adapt to."

http://www.hometownannapolis.com/
cgi-bin/read/2008/05_18-50/BUS

Anonymous said...

The East Bay employment slump shows no signs it will relent any time soon, according to a state report released Friday that sketched a grim picture of hundreds more jobs being lost in the area.

Employers shed 1,500 jobs in the East Bay during April, adjusted for seasonal changes. The setbacks mark the fourth-straight month the Alameda County-Contra Costa County region has lost jobs.

So far in 2008, the East Bay has lost 9,200 jobs, the state's Employment Development Department said.

The job problems in the East Bay demonstrate how the debacle in the housing market has jolted the rest of the region's economy.

Propelled in part by a super-heated housing market, the East Bay economy in recent years rocketed higher and was the strongest in the Bay Area. With the fuel now largely spent, the region has spiraled lower during the last several months.

"Housing is still in free fall, consumer spending is drying up and the government is getting pummelled by loss of revenue," said Christopher Thornberg, an economist with Beacon Economics. "Where is the strength in the East Bay economy? Not much points to a recovery" soon.

The April employment reductions represent the longest monthly losing streak for the East Bay in more than four years. September 2003 marked the 10th-straight month of job losses for the East Bay at the tail end of the last economic slump.

"This is the ripple effect from housing-led declines in consumer spending," Thornberg said.

"There is no sign in the numbers that the housing downturn is slowing in California," Roth said. "The job losses are accelerating."

The wobbly economy has produced tough times for some East Bay job seekers.

"It's very difficult to find a job. It's really bad," said Sheena Lewis, a Livermore resident. "The only jobs you can find are low paying jobs that offer no advancement."

http://www.contracostatimes.com/
ci_9286792?source=rss

sundry vermin said...

Dick Morris on McCain, Obama:

Meanwhile, the right wing will carry the attack against Obama. McCain is not a mudslinging politician by nature, but he doesn't need to be. The collected quotes of Rev. Wright will be a bestseller this summer. Obama once had to prove to us that he was not a Muslim; now he must convince us that he never really went to church much.

http://tinyurl.com/5mf75z

Anonymous said...

Chart of S&P/Case-Shiller Home Price Index from Jan 2000 to Feb 2008

http://www.europe2020.org/IMG/jpg/
case_shiller_indices_2000-2008.jpg

Anonymous said...

U.S. consumers won't really feel comfortable until home values stop falling. They could be in for a rough year because there's no sign that home-price declines are letting up.

And with home prices falling, fewer buyers are willing to take the plunge.

Fresh data on housing to be released in the coming week should show further declines in both sales and prices, economists said.

http://www.marketwatch.com/news/
story/more-awful-housing-inflation-
data/story.aspx

Anonymous said...

The average price of gasoline has jumped another 17 cents a gallon in the past two weeks to a record-breaking $3.79 a gallon for self-serve regular, according to a national survey released Sunday.

This climb in prices makes it a "high possibility" that many cities will see $4 a gallon regular gas soon, said survey publisher Trilby Lundberg.

"We are within 21 cents of $4 a gallon," said Lundberg. "There seems to be very good chance that we will reach it."

Four dollars a gallon of regular unleaded happened in two metro areas in the latest survey, according to the biweekly Lundberg Survey.

These areas had the highest average gas prices in the survey. They were Chicago, $4.07 and Long Island, New York, $4.01.

"That is the first time in history we have ever had two metro areas over $4 a gallon," said Lundberg.

http://money.cnn.com/2008/05/18/
news/economy/lundberg_gas_prices/

Anonymous said...

Cyclone Nargis damaged 20 percent of the rice paddy in Myanmar's five disaster areas, the U.N. food agency said on Thursday, warning that farmers needed immediate aid to plant a new crop to avoid food shortages.

http://www.reuters.com/article/
GCA-Agflation/idUSBKK16479620080515

Anonymous said...

Rice and Baloney

Irrational Policies the World Over Are Making the Food Crisis Worse

The scandal is not just Japanese, however. In order for Japan to sell its rice outside its borders, it needs permission from the countries that supplied it -- the United States, Thailand and Vietnam. A bit of U.S. leadership could deliver that permission easily, but the Bush administration is apparently worried about a backlash from American rice growers who see no downside in high prices, thank you very much. Not for the first time in Washington do the fat welfare queens of the farm lobby trample on the poorest people in the world.

Speaking of welfare queens, Congress passed a farm bill last week with thunderous bipartisan support. The bill includes reasonable subsidies for low-income Americans hit by high food prices, but it also sprays money at farmers who already earn more than the average taxpayer and contains shockingly little for the world's poor. Congress is considering a separate bill that would boost international food aid more substantially. But that measure has been met with shameful indifference by lawmakers and consequently has stalled.

Congress won't even act on a common-sense proposal from the Bush administration that food aid be reformed. If the United States bought some of the food that it donates from other countries, it could get aid to the needy faster and more cheaply. But that would upset American farmers and shipping interests, as a new Council on Foreign Relations paper emphasizes. The president's proposal has few takers on the Hill.

http://www.washingtonpost.com/
wp-dyn/content/article/2008/05/18/
AR2008051801917.html

Anonymous said...

Rice Plunges as U.S. Supports Export Sale by Japan

Rice tumbled to a five-week low after the U.S. said it wouldn't invoke trade agreements to block Japan from reselling imported rice to ease tight global supplies that had pushed the price to a record last month.

Japan, which is in talks to export rice to the Philippines, needs U.S. support to avoid a complaint under World Trade Organization rules. Japan is obliged to import American rice and can't re-export it without U.S. permission. A trade official in Washington said the U.S. government won't object.

Rice has plunged 11 percent this week after Japan said it is in talks to sell rice to the Philippines from its stockpiles of about 1.2 million metric tons, which amount to about 4.4 percent of world trade. The price reached a record on April 24 after some exporters curbed sales to ensure domestic supplies, stoking riots from Haiti to Egypt.

``There is no reason for the U.S. to oppose the Japanese government's move,'' said Takaki Shigemoto, an analyst at Tokyo- based commodity broker Okachi & Co. Possible exports from Japan will discourage speculators, who have been hoarding rice, as the market may see unexpected supplies, he said.

Rough rice for July delivery fell $1.15, or 5.4 percent, to $20.34 per 100 pounds, the lowest since April 9, on the Chicago Board of Trade. Prices have gained 88 percent in the past year as China, Vietnam and India limited exports of the grain, a staple for half the world.

http://en.unsbiz.com/articles/
Rice-Plunges-as-U.S.-Supports-
Export-Sale-by-Japan/
00200804161210899224845.html

Anonymous said...

The ongoing loss of rice crops throughout the Philippines at the hands of a growing insect horde could have been prevented, researchers say.

International Rice Research Institute researchers say they could have created rice varieties that would have been resistant to brown plant hoppers, but budget cuts by the Filipino government hindered their research, The New York Times reported Sunday.

Institute Director General Robert S. Zeigler said the budget cuts were due to the international stance that the world's food problems had finally been under control.

"People felt that the world food crisis was solved, that food security was no longer an issue, and it really fell off the agenda," he told the Times.

Yet with East Asian rice crops now threatened with billions of the minuscule insects, global leaders have begun to finally take action.

The Times said the U.S. Congress has been asked for $770 million to provide food aid to struggling global populations. Nonetheless, the United States has begun cutting funding to global research sites such as the rice institute that are aimed at improving crops in poor countries, the U.S. newspaper said.

http://www.upi.com/NewsTrack/
Business/2008/05/18/loss_of_
filipino_rice_crops_was_stoppable/
9377/

Anonymous said...

China's devastating earthquake killed 12.5 million farm animals _ mostly chickens _ and wrecked vegetable crops and irrigation systems needed to grow rice, the government says.

More than 20,000 hectares (50,000 acres) of vegetables and more than 10,000 hectares (25,000 acres) of wheat were destroyed by the May 12 quake in Sichuan province, according to the Agriculture Ministry.

Damage to irrigation systems could prevent farmers from growing rice on as much as 100,000 hectares (250,000 acres) of rice paddies, the ministry said. But it said that land might be used for alternative crops while the damage is repaired.

Sichuan usually supplies about 6 percent of China's grain and 5 percent of its vegetables, according to Wei.

http://malaysia.news.yahoo.com/ap/
20080519/tbs-as-fin-eco-china-
quake-economy-618743b.html

Anonymous said...


I bought a car today. Got a pretty good deal I think. But here is the kicker, the place was crazy busy. And not just with people kicking tires. Cars were being sold.

I bought the car I test drove last weekend. I came back this morning and my salesman was with someone else. So I waited for him to finish up writing up the sale for her. Then we did the paperwork and off I went to financing. I paid cash but wanted to talk to them to see if they had any 0% type financing available (they didn't). As soon I walked out, I saw the finance guy I had someone else come in. And every sales office seemed to have someone in it.

I keep hearing and reading about this supposed recession. Sure not seeing it real life. Maybe this was an isolated dealer, I dunno. What I do know is that the doom and gloom I keep reading about is non existent in my daily life.


Your mental masturbation is getting very stale!

Blowfly said...

High gas prices squeeze consumers

Welcome back to Slavery 2.0 dipshits. We "the elite" and not we "the people" are going to squeeze you until you are again what you once were before. Slaves. That cushy IT job and that nice little cubicle will soon be history. Welcome back to Share-Cropping 2.0 shit for brains "own nothing" renter morons and homeless pan handling imbeciles. If you would have bought a house, you'd now have a garden where you could at least survive instead of the slow death by starvation you'll soon surely face. If you’d had any brains at all, just a smidgeon, you’d have invested in the only viable investment there is. Internet Porn and songs by Blowfly.

dopes said...

"Since 2006, soaring food and fuel prices have combined with lost jobs and stagnant wages to boost the number of Americans needing food aid. More than 41% of those on food stamps came from working families in 2006, up from 30% a decade earlier, according to the latest Agriculture Department data."

"They are real estate agents and homebuilders hit by the housing slump, seniors on Social Security, parents of students whose free breakfast and lunch programs don't solve the problem of dinner. Increasingly in recent months, they have signed up for food stamps and shown up at food pantries, trying to make ends meet."

http://www.usatoday.com/news/nation/2008-05-18-foodstamps_N.htm?csp=15

Anonymous said...

Anon May 18, 2008 8:22 PM:

"It's very difficult to find a job. It's really bad," said Sheena Lewis, a Livermore resident. "The only jobs you can find are low paying jobs that offer no advancement."

The next paragraph, for anyone who's interested:
"Lewis, who held a wide array of jobs in two mortgage companies in recent years, said she is not being picky in trying to find work."

Kind of a stretch, but there is a Sheena Lewis listed in ZoomInfo as working for a CMG Mortgage in CA. From the CMG Mortgage website:
"With this new mortgage you deposit your payroll directly into the mortgage, dramatically driving down your principal balance. You pay all of your expenses out of the mortgage using the unlimited checks, ATM card and online bill-pay that comes with the account."

I guess we're supposed to feel sorry for poor Sheena, but I can't quite get there.

Anonymous said...

I keep coming back to this simple question. Are realtors buying homes right now? There ought to be an index, like those for the stock market, that keeps track of purchasing and selling activity by realtors.

Of course, it goes without saying that there has been a sea change in realtors attitudes about real estate, but that is the point. It would be easier to get them to shut up with the "its a great time to buy" stuff if we could all quote a statistic that said, in essence "Well, YOU GUYS are not buying!!"

Rational expectations

gutless and lazy steals tag line said...

CNBC video of Angry Renters to bailout. Didn't even watch it, must be good.

http://www.cnbc.com/id/15840232?video=746618747

I report. You decide.

Anonymous said...

Blowfly wrote:

"Welcome back to Slavery 2.0 dipshits. We "the elite" and not we "the people" are going to squeeze you until you are again what you once were before. Slaves. That cushy IT job and that nice little cubicle will soon be history. Welcome back to Share-Cropping 2.0 shit for brains "own nothing" renter morons and homeless pan handling imbeciles. If you would have bought a house, you'd now have a garden where you could at least survive instead of the slow death by starvation you'll soon surely face. If you’d had any brains at all, just a smidgeon, you’d have invested in the only viable investment there is. Internet Porn and songs by Blowfly."

Is Blowfly a jew?

Mammoth said...

You know the Housing Crash is in full swing when it becomes a regular topic in newspaper comic strips. From today’s (May 19) Seattle Times:

Arlo and Janis: http://tinyurl.com/5drym
Crankshaft: http://tinyurl.com/ysszfn

-Mammoth

Anonymous said...

Anon 6:05 asks,
"Is Blowfly a jew?"
--------------------
No, Blowfly is just a moron!

Anonymous said...

Must listen to NPR's Global Pool of Money.

http://www.thislife.org/Radio_Episode.aspx?sched=1242

Anonymous said...

I think Blowfly is an African American rap musician. You can google him, he has his own website.

Anonymous said...

"I keep coming back to this simple question. Are realtors buying homes right now? There ought to be an index..."

WTF? realtors were buying right up to, and through, the pop. Their industry publications just parrot the NAR line. Most of them didn't know any better. I love it, though, they deserve it the most.

Anonymous said...

"...That was the headline of an October 2004 article in National Review, which argued that oil prices, then $50 a barrel, would soon collapse..."

______

Wall Street is currently pushing "news" stories that are trying to manipulate sentiment in this same way with regards to silver.

"It's gone as high as it's going to go, production has increased and demand has dwindled so the price is about to plummet, sell your silver now, silver can't go any higher"...and on and on. Of course, people believe this stuff because it gets printed in "reputable" newspapers and on TV.

Goldman Sachs spouted similar hype about gold shortly before it sprang from $700 to $1,000.

When you people figure out what's being done to you...never mind...most of you will never figure it out. You're doomed to masturbating over the fact that the housing market has collapsed.

Well............DUH!!!!

Anonymous said...

Hey Keith,

I just thought I would share a classic story with you.


I was driving around a Riverside subdivision of homes known as "The Presidio" late yesterday evening. I just so happened to come upon a foreclosure that was a 4000 s.f. home on a half acre lot. After doing my due diligence on the property, I was able to find out that this home was purchased by a Realtor for 1.4 million and had ran into a little bit of financial trouble. My sources tell me that there are actual statements by this person pleading for utility noncancellation, welfare application processing, and currently living off food stamps.

She went from living in a million dollar community to living in a ghetto apartment on food stamps.

I just had to share it with you guys, have fun with it!!!


TRUE STORY

ICEMAN

anonywuss said...

http://news.google.com/news?hl=en&ned=us&ie=UTF-8&ncl=1210899496

Great stories and videos of a scam artist getting his $2M house foreclosed upon. Right across the street from my parents, too. We've gone from 'no such thing as a housing bubble' to 'the DC area is immune' to 'DC itself is immune' to 'Georgetown is immune' to 'Foxhall is immune' to...

LibVet said...

Mom forced to live in car with dogs

A former loan processor


http://tinyurl.com/5a2s83

Keahi Pelayo said...

Honolulu is strong and not experiencing the crash. Limited land and strong demand add up to a bright future.
Aloha,
Keahi

deepcgi said...

If Nitrogen Oxide compounds are 200 times more potent as a greenhouse gas than CO2, and make up 60% of the greenhouse gas contributions made by humans that are not water vapor, and Nitrogen Oxide emissions are the principle side effect of modern miracle fertilizers promising to feed the world, are modern attempts to feed the hungry in Africa through more effective farming actually going to worsen the global warming problem?

Let me save you some time.

YES!! It is well known among climate scientists that modern miracle fertilizers, that promise to quadruple or even quintuple the crop yields in famine struck countries such as Ethiopia, are in fact two hundred times more potent as a greenhouse gas than carbon dioxide. Oh, dear. What to do? Feed the hungry or save the planet? This is a real problem, unless you realize that it isn't really about saving the planet at all, but actually about feeling better about yourself politically. Just remember, the politically-correct, "progressive" thing to do is to let them starve. Don't feel bad, they probably would've starved anyway.

Just a thought from a right wing, science ignoring, knuckle dragger, who believes global warming is not a crisis.

Oh, and one more thing... Because I have a 170 IQ, does it mean I can't enjoy NASCAR? Or am I only reverse projecting my need to resolve the cognitive dissonance between intellect and normalcy in the conservative milieu by subconsciously pretending to enjoy the roar of a finely tuned internal combustion engine?

Just thought I'd throw it out there to all of the superior progressive minds in the room.

Anonymous said...

Do your duty with this one Keefer...

http://www.cepr.net/documents/publications/100city_2008_05.pdf

Anonymous said...

Yo Keith, why do you censor views you don't agree with, like a tin pot communist, ruling over your pathetic cyber blog?

Anonymous said...

Let's try this CEPR rental report again with a tinyurl:

http://tinyurl.com/3ebr2v

Anonymous said...

Frogs swarming China before quake? It is happening now in Cali.

Someone made a post about this earlier and I did some research. If you out there I hope you see this extra research.

http://www.unknowncountry.com/news/?id=6882

«Oldest ‹Older   1 – 200 of 263   Newer› Newest»