HousingPANIC - The Housing Bubble Blog with an Attitude Problem, 2005 - 2008: BUBBLETALK - Open thread to talk about the housing crash, mortgage meltdown and other stuff

June 26, 2008

BUBBLETALK - Open thread to talk about the housing crash, mortgage meltdown and other stuff

Keep it clean, keep it short, use tinyurl and have at it...

284 comments:

1 – 200 of 284 Newer› Newest»

Anonymous said...: http://www.msnbc.msn.com/id/24965435/

Countrywide trying to foreclose on Ed McMahon.; June 04, 2008 7:36 PM
Anonymous said...: HOT: the cheapest flat in Moscow! $150k for 13 sq.m (140 sq.ft). 1 bedroom, 0.5 bathrooms. Dubbed "the Nanoapartment" by this reporter:

http://www.bg.ru/article/7477/

The article is in Russian but the photos are informative enough. A seedy industrial district with run-down infrastructure. The seller (an undisguised "flipper" - bought earlier at a much lower price, now seeking for the Greater Fool) is projecting the price to climb to $300k in a few months (yeah, right!) due to expected government intervention. It looks as though only a drastic devaluation of the US dollar could save our bubble at this advanced stage.; June 04, 2008 9:23 PM
Anonymous said...: "It looks as though only a drastic devaluation of the US dollar could save our bubble at this advanced stage."

So Russia has a bubble? Well, I sure hope that bubble bloggers don't start popping up over there because that will make Putin and the Kremlin angyry. And you don't want to make Putin angry, unless you enjoy drinking radioactive isotopes.; June 04, 2008 10:48 PM
Anonymous said...: I'm surprised that Ed McMahon is in foreclosure. What did he do with all of his money from the Johnny Carson show and those commercials for old people bath tubs??; June 05, 2008 1:05 AM
Anonymous said...: "Other Stuff:"

"Obama will make an excellent president of Oceania here in 1984."
http://www.eckernet.com/2008/05/obama_the_1984_candidate.html

"Obama to eliminate Iran:"
http://www.reuters.com/article/newsOne/idUSWAT00959220080604

Solution? Write in Ron Paul!; June 05, 2008 2:54 AM
Westside Bubble said...: Did you see Market Ticker's post today about Ron Paul? Not good.; June 05, 2008 3:43 AM
Anonymous said...: keith, would you mind puttin a no vote option up on the page?; June 05, 2008 4:03 AM
Anonymous said...: Anonymous Donald said...

I'm surprised that Ed McMahon is in foreclosure. What did he do with all of his money from the Johnny Carson show and those commercials for old people bath tubs??

June 05, 2008 1:05 AM<<

yeh, he said the reason why he is behind on his bills is because he fell and broke his neck and can't work right now. well geez, at 85 years young, that is a problem isn't it? something fishy about that.....where did all of his money go?; June 05, 2008 4:04 AM
Anonymous said...: Andrew from Russia said...

HOT: the cheapest flat in Moscow! $150k for 13 sq.m (140 sq.ft). 1 bedroom, 0.5 bathrooms. Dubbed "the Nanoapartment" by this reporter:

http://www.bg.ru/article/7477/

The article is in Russian but the photos are informative enough. A seedy industrial district with run-down infrastructure. The seller (an undisguised "flipper" - bought earlier at a much lower price, now seeking for the Greater Fool) is projecting the price to climb to $300k in a few months (yeah, right!) due to expected government intervention. It looks as though only a drastic devaluation of the US dollar could save our bubble at this advanced stage.

June 04, 2008 9:23 PM<<<

the flipper's name isn't serin is it?; June 05, 2008 4:05 AM
bearmaster said...: Keith, here's another sob story about an idiot who bought a house with no money down and is now in foreclosure.

But I wonder if the article touches on a major factor in food prices soaring.

"At the time, her husband (who declined to be interviewed for this story) was earning $20 an hour as a carpenter as builders turned the area's broccoli fields into housing developments."

So in this decade how much arable California land has been sold out to Big Builder for the purpose of building McMansion and Bloatominium tracts? The broccoli may now be coming home to roost.

Santa Maria house bought with no money down goes into foreclosure; June 05, 2008 3:30 PM
edd browne said...: Don't underestimate the Republican
machine that gave us GWB twice.

Register voters in Ohio, Florida, and other purple states.

Be ready to quickly trace the
sources of "dirty-tricks"
during the next five months.; June 05, 2008 5:05 PM
Anonymous said...: Would someone please explain the world to me?

How is it that Alltel

http://tinyurl.com/6r6boq

is in the hole 25 BILLION freaking dollars?

I just don't understand.; June 05, 2008 5:49 PM
Anonymous said...: Mortgage foreclosures highest in nearly 30 years: MBA

http://tinyurl.com/3h7nku

Imagine that! A bunch of morons overspent and now they are screwing over the entire country.

Thank you, morons!; June 05, 2008 6:45 PM
Refuse to buy overpriced said...: "Did you see Market Ticker's post today about Ron Paul? Not good."

1. I wouldn't accept faxes from that clown either, life's too short.

2. At Bear Stearns hearing, RP wasn't at his best, but he wasn't disgustingly shamefully bad like Schumer Kennedy Maloney etc.; June 05, 2008 10:42 PM
Anonymous said...: http://tinyurl.com/5wzfdh

Media Spin the Movie:

More painful truth, if you can handele the truth.

FlyingMonkeyWarrior
Charter HP'er

Hi Buzz,Mamoth,and Richard.; June 06, 2008 1:15 AM
Anonymous said...: Donald said...
I'm surprised that Ed McMahon is in foreclosure. What did he do with all of his money from the Johnny Carson show and those commercials for old people bath tubs??
_______________

He's in his 80's ad broke his neck 18 months ago. Must not have saved-can't work.
Don't have time to find an link my source.
FMW; June 06, 2008 1:18 AM
Anonymous said...: McMahonsion's got nothing on this guy:

"...The 54,000-square-foot home — located on Evander Holyfield Highway — has 109 rooms, including 17 bathrooms, three kitchens and a bowling alley.

Meanwhile, Holyfield’s handlers allegedly told the mother of one of his children that he will no longer be able to make his $3,000-a-month support payment. Toi Irvin claims the boxer has already missed two payments, so she has gone to court seeking restitution.

“My concern is there may be a lot of other mothers not be getting paid, and I would like my client to be at front of the line,” said Randy Kessler, Irvin’s attorney..."; June 06, 2008 5:35 AM
Anonymous said...: B of A gets approval to buy counrtywide:

http://biz.yahoo.com/ap/080606/bank_of_america_countrywide.html; June 06, 2008 6:10 AM
Anonymous said...: $4.99 for regular unlead gas

$5.15 for unlead plus gas

Shell, 690 Veterans Blvd, Redwood City, Ca.

Didn't summer driving season just started on Monday.

http://www.sanfrangasprices.com/; June 06, 2008 6:37 AM
Anonymous said...: Petrolium Nasional Bhd will increase the selling price of gas by as much as 187 % effective July 1.

Prices of natural gas for vehicles (NGV) used by taxis and liquefied natural gas (LNG) will be kept unchanged.

Gas supplied to power producers will increase by 124% to RM14.31 per million British thermal unit (mmBtu) from RM6.40 per mmBtu.

For commercial users who use less than 2 mmscfd (million standard cu ft per day), there will be a 161% price increase to RM24.54 per mmBtu from RM9.40 per mmBtu where those who use more than 2mmscfd will pay 187% more at RM32.56 per mmBtu compared with RM11.32 per mmBtu before.

http://biz.thestar.com.my/news/
story.asp?file=/2008/6/5/
business/21462637&sec=business; June 06, 2008 6:53 AM
Anonymous said...: Seems like Inflationary Expectation is already set in people mind when it comes to high gas price.

Thanks Uncle Benny

http://www.saipantribune.com/
newsstory.aspx?cat=1&newsID=80668

Rumors about another gas price hike triggered panic buying among many motorists on Saipan yesterday, resulting in long lines at many gas stations on island.

Vehicles started forming long lines at almost all Mobil and Shell gas stations on the island at 12:30pm when text messages about another gas price increase began spreading.

Text messages and phone calls had it that at 2pm gas prices would hit $5.40 cents a gallon.

Attendants at some Mobil and Shell stations told Saipan Tribune that they were surprised when cars began lining up at 12:30pm.

A woman who identified herself only as Sylvia said she filled her car to the brim after a friend informed her of news that gas prices would hit over $5 by 2pm.

Letty Santos, who was among those lining up at Mobil Station on Beach Road, Garapan before 2pm, said she rushed to the gas station after hearing about a big price increase.

A construction worker in Kagman said he had to purchase gas in Garapan because the Kagman gas station might run out of gas because of the long lines.

http://www.telegram.com/
article/20080605/APN/806051559

Fire Chief Richard Arruda told The Standard-Times of New Bedford the couple had about 45 gallons of gasoline in nine plastic jugs stacked in a closet that also housed an air conditioning unit.

The gasoline fumes apparently set off Thursday's fire, which was quickly put out by a sprinkler system.

Arruda and a spokeswoman for the state fire marshal said investigators believe the couple were storing the gas because of rising prices.; June 06, 2008 7:05 AM
Anonymous said...: Taking consumers by surprise, Taiwan's government announced Tuesday (27 May) it would raise fuel prices from Wednesday (28 May) instead of next week, so as to halt panic buying and rampant hoarding of petrol.

We have entered the era of high prices," said Liu.

But he stressed that Taiwan's fuel and power prices were still cheaper than in Asian economies such as Hong Kong and Singapore.

Still, long queues were seen outside petrol stations yesterday, bringing the peak-hour traffic to a halt at some places.

http://www.mysinchew.com/node/
12037?tid=5; June 06, 2008 7:17 AM
Anonymous said...: Newly inaugurated President Ma Ying-jeou's administration has lifted freezes on fuel and electricity prices, setting off a wave of price hikes for everything from food to household supplies.

Also about 200 farmers from Taiwan's rural south protested Friday against a 70 percent increase in fertilizer prices, demanding government subsidies to help them offset rising costs.

Last month, the government lifted a three-year freeze on fertilizer prices, allowing suppliers to factor in their rising costs amid soaring global raw material prices.

The protesters said the move encouraged widespread hoarding, leading to a severe fertilizer shortage.

http://beta.ph.news.yahoo.com/
ap/20080606/tap-as-gen-taiwan-
farmers-protest-d3b07b8.html; June 06, 2008 7:22 AM
Anonymous said...: Hoarding, rationing worries hit consumers in India

With the hike in petroleum prices imminent and the paddy sowing season under way, the consumers have started complaining of hoarding by oil marketing companies and rationing by the petrol stations across the region.

TOI has learnt that oil marketing companies have cut the fuel supply short by as much as 30% in Sangrur and Barnala, leaving the petrol pump owners in a quandary due to the widening demand-supply graph.

Dinesh Kumar, a transporter, said, "We are not being given the demanded amount of petrol and diesel. In fact, our business is suffering as fuel supply has been hit by as much as 50%."

The sales officer at Indian Oil's Sangrur depot, Avdesh Hans, denied cutting down the amount of fuel sent out.

http://timesofindia.indiatimes.com/
Cities/Hoarding_rationing_worries_
hit_consumers/rssarticleshow/
3089510.cms; June 06, 2008 7:29 AM
Anonymous said...: The economy likely shed jobs for the fifth straight month in May as flagging consumer confidence and the worst housing bust in generations discouraged hiring.

The economy is expected to have lost 58,000 jobs in May, after losing 20,000 a month earlier, according to a Reuters poll of economists.

If payrolls drop, it would mark the first five-month run of job losses since 2003, when the economy was in a so-called jobless recovery.

http://www.reuters.com/article/
reutersEdge/idUSDIS56672120080605; June 06, 2008 7:33 AM
Anonymous said...: FDIC says bigger U.S. bank failures may be coming

Future U.S. bank failures linked to the downturn in the real estate market may include "institutions of greater size" than in the recent past, Federal Deposit Insurance Corporation chairman Sheila Bair said Thursday.

An increasing number of banks face high exposure to deteriorating conditions in commercial real estate and construction lending, Bair told a Senate Banking Committee hearing on the state of the banking industry.

"There is also the possibility that future failures could include institutions of greater size than we have seen in the recent past," Bair said. "Uncertainties in today's economic environment continue to pose significant challenges for the banking industry, households, and bank regulators."

http://financialweek.com/apps/
pbcs.dll/article?AID=/20080605/
REG/437752544/1006/BANKING; June 06, 2008 7:41 AM
Anonymous said...: Record foreclosures won't ease soon

"Foreclosures are creating price declines," Zandi notes, "and price declines are leading to more foreclosures due to negative equity."; June 06, 2008 7:56 AM
Lost Cause said...: Maybe there will be a show "Celebrity Foreclosures." Like De-Cribs.

Former heavyweight champion Evander Holyfield's $10 million estate in suburban Atlanta is under foreclosure...

LA Times; June 06, 2008 11:34 AM
Anonymous said...: Here's the rumor...Hillary is going to run on a third party ticket. That's why she hasn't given a concession speech...which would have been the right thing to do on Tuesday night. I kept thinking how ungracious, classless, unsportsmanlike...where's the fairwell speech???? Get on a plane and flash a peace sign already. So, she hasn't said goodbye because SHE ISN'T LEAVING!! Oh God. I guess we'll know on Saturday.; June 06, 2008 2:15 PM
Anonymous said...: KEITH:

You HOSED the link termination.

C'mon, Thumbs. ;<); June 06, 2008 3:51 PM
Anonymous said...: It looks as though only a drastic devaluation of the US dollar could save our bubble at this advanced stage.

The weak dollar is shutting down commerce in the USA because of soaring diesel prices impact on trucking. Government now has to choose between saving the bubble or saving life itself.

I'm surprised that Ed McMahon is in foreclosure. What did he do with all of his money from the Johnny Carson show and those commercials for old people bath tubs??

Ed is a scumbag. He won a huge mold settlement on this house that he could have used to pay it off. He’s just a media whore money grabber working the system.

I’ve met people who sue for mold. They are the scariest lowlife opportunistic cock suckers you will ever meet. Nature has a way of weeding these people out.; June 06, 2008 5:39 PM
Anonymous said...: BearMaster -

You have a very good point there - over speculated housing is only one of the many problems, food and gas are going through the roof.

Here in HB Ca., I noticed gas jumping up by 14 cents in just one day! At this rate, I won't be surprised to see gas at $5.00/gal by mid June or early July.

Just think of the impact that will have on most people's daily lives.

When we jack the prices through the roof for basic needs (food, clothing, healthcare, shelter) we're quickly moving to fewer and fewer "Haves" to more and more "Have Nots".

The broccoli is home to roost, and it's moving higher and higher up the economic ladder.

bearmaster said...
Keith, here's another sob story about an idiot who bought a house with no money down and is now in foreclosure.

But I wonder if the article touches on a major factor in food prices soaring.

"At the time, her husband (who declined to be interviewed for this story) was earning $20 an hour as a carpenter as builders turned the area's broccoli fields into housing developments."

So in this decade how much arable California land has been sold out to Big Builder for the purpose of building McMansion and Bloatominium tracts? The broccoli may now be coming home to roost.

Santa Maria house bought with no money down goes into foreclosure; June 06, 2008 6:53 PM
Anonymous said...: Ted Koppel cuts the asking price of his D.C. house in half:

http://tinyurl.com/5a3ll8

Oh, and Diana Olick has an entire piece today on her blog about celebrity foreclosures:

http://tinyurl.com/6zb2uy; June 06, 2008 8:11 PM
Anonymous said...: Like clockwork, the Keith sell flag is working like a charm.

Everytime he leaves HP for a few days off, the sh1t hits the fan. I mean every-single-time.

Thanks for taking a holida Keith, I made some nice coins going short this week. Trade accordingly folks.

Keith, could you post your calendar for the rest of the year? THANKS.; June 06, 2008 8:56 PM
Anonymous said...: I'm surprised that Ed McMahon is in foreclosure. What did he do with all of his money from the Johnny Carson show and those commercials for old people bath tubs??

________

Alimony and booze.; June 06, 2008 9:45 PM
Property Pro said...: Bubble Bubble Toil & Trouble...

Irish Real Estate - Bursting The Bubble:

http://daftproperty.blogspot.com; June 06, 2008 9:45 PM
Anonymous said...: Thought I'd share this with you all...somebody sent this to me. It's a kind of "techno-ish" song made with samples from the "suzanne researched this" clip:

http://www.anonrecordings.com/yahoo_site_admin/assets/docs/suzanneresearchedthissong.143173751.mp3

Pretty funny. I don't know who made it or where it comes from, tho.; June 06, 2008 11:07 PM
Anonymous said...: Do you remember this head line from August of last year.

http://www.marketwatch.com/News/
Story/Story.aspx?guid=%
7B722D20CC-6E25-4211-8E98-
6BDD98ECDC47%7D&siteid=nwhwk

With payrolls falling in August, the Federal Reserve has the smoking gun -- the hard evidence of a weaker economy -- that it would need to cut interest rates.

Nonfarm payrolls fell 4,000 in August, the first decline in four years.; June 07, 2008 12:42 AM
Anonymous said...: Didn't Oliver Twist said the US believe in a Strong US Dollar Policy, sounds like Hanky Panky got the labor report early when he went to the Gulf to beg for more crude oil.

Hong Kong and Gulf States probably thinking how much worst is it going to get, and how far they should stay with the US Dollar peg as Uncle Benny lower rate to zero.

Abandoned the US Dollar Pegged - "Damm if you do and Damm if you don't."

Treasury Assistant Secretary for Economic Policy Phillip Swagel acknowledged today's Labor Department report of employment data, in which non-farm payrolls fell by 49,000 in May and unemployment surged to 5.5 pct, but told reporters today that the US is not in a recession.

So with the biggest jump in unemployment rate since 1986, everything is a "OK", but in August 2007, when non-farm payroll fell by 4,000 jobs it was the smoking gun the Federal Reserve needed to lower rate.

Anyone wonder why the US Dollar came crashing down and crude oil jumped $10 today.

http://www.forbes.com/
afxnewslimited/feeds/afx/2008/
06/06/afx5090029.html

He pointed to GDP, which has yet to turn negative over the last few quarters, although growth has been sluggish.; June 07, 2008 1:00 AM
Unknown said...: I have been a fan of the site for awhile and come here every day. I got hooked during the Serin saga. I see many people talking about all kinds of different commodities (gold, oil, silver, wheat, corn, etc...). I would really like to start diversifying what I buy (just stocks and mutuals right now via 401k and roth ira), but don't have alot of money. I invest about $500 per month. Can anyone suggest a good way to do this or do you think I should just stick with etf's and stocks in these particular areas?; June 07, 2008 1:20 AM
Anonymous said...: When a city has more Foreclosure than MLS listing and foreclosure continues to go up, what does that trend tell you.

4,502 MLS listings and 5,957 foreclosures

http://realestate.yahoo.com/
California/San_Jose; June 07, 2008 1:38 AM
Anonymous said...: Fidelity Investments is cutting 550 jobs – about 70 of them in Massachusetts.

The giant financial company – which has been streamlining operations since new president Rodger Lawson came aboard last year – described the layoffs today as part of its “ongoing efforts” to improve operations as it restructures recently merged units.

http://www.bostonherald.com/
business/general/view.bg?
articleid=1098943; June 07, 2008 2:34 AM
Anonymous said...: Flash memory products maker Spansion to eliminate 500 jobs as part of productivity effort

The company it would seek to execute more of its engineering and administrative functions in lower-cost regions such as Malaysia and China.

http://biz.yahoo.com/ap/080604/
spansion_job_cuts.html; June 07, 2008 2:38 AM
Anonymous said...: Sunesis Pharmaceuticals Inc. said Tuesday it plans to cut about 60 staff positions and refocus its business on its lead oncology product candidate.

South San Francisco-based Sunesis said members of the executive team who will be leaving include the chief medical officer and vice president of human resources and corporate operations.

http://www.bizjournals.com/sanjose/
stories/2008/06/02/daily34.html; June 07, 2008 2:41 AM
Anonymous said...: LucasArts has let go of around 50 to 100 employees, and product development Vice President Peter Hirschmann has resigned:

The San Francisco-based company was also said to have let go of an unspecified amount of its art and programming employees, with the weblog suggesting that Hirschmann's departure was as part of the layoffs.

The LucasArts representative could only confirm that on June 5th the company "did have a lay off... for some of our workforce" but when asked about any further specific names said confirming individuals was "not fair to the people that have left, and not our policy."

http://ve3d.ign.com/articles/
news/39172/LucasArts-Layoffs; June 07, 2008 2:44 AM
Anonymous said...: Xilinx, QuickLogic announce layoffs

Amid a lull in the IC market, two FPGA vendors--Xilinx Inc. and QuickLogic Corp.--have separately announced layoffs.

As a result of a reorganization, Xilinx said it will eliminate approximately 250 positions, or about 7 percent of the company's workforce. The workforce reduction is expected to be completed by the end of the next fiscal quarter, according to the San Jose-based FPGA house.

http://www.my-esm.com/digest/
showArticle.jhtml?articleID=
208402085; June 07, 2008 2:47 AM
Anonymous said...: US carrier Continental Airlines said Thursday it will cut 3,000 jobs, remove 67 less fuel-efficient planes from its fleet and reduce services to cope with record-high fuel prices.

http://news.yahoo.com/s/afp/20080605/
ts_alt_afp/
usairlinecompanystructurecuts
continental_080605153034; June 07, 2008 2:52 AM
Anonymous said...: Medical and surgical parts manufacturer ConMed Corp. announced it is closing plants in Rome and on Broad Street in Utica. The company will lay off at least 100 employees.

http://news10now.com/
default.aspx?ArID=117513; June 07, 2008 2:54 AM
Anonymous said...: Borders Group Inc. on Tuesday started laying off 20 percent of its corporate staff, including 156 at its headquarters in Ann Arbor and 118 people elsewhere, as part of an effort to cut $60 million in expenses this year and $120 million annually beginning in 2009.

http://www.detnews.com/apps/pbcs.dll/
article?AID=/20080604/BIZ/806040373; June 07, 2008 2:58 AM
Anonymous said...: Facing an $18 million budget shortfall, the Port of Oakland's board of commissioners has alerted employees that it may eliminate 70 to 80 positions within the next few months, said Commissioner Victor Uno.

http://www.insidebayarea.com/
oaklandtribune/localnews/ci_9494154; June 07, 2008 3:02 AM
Anonymous said...: This process must make you Realtors and mortgage brokers really happy.

It was not enough that you made thousands of dollars in the housing boom but your greed made you force the media to write articles to pressure the Federal Reverse to cut rate last year.

As the Federal Reserve cut rate lower you cheered all the way.
When mortgage rate didn't go down you force congress to made new laws to keep the party going.

Now that it is too late you realize the Federal Reserve lowering interest was suppose to help the people save their homes was instead weakening the US Dollar to a point were everything cost more.

Now companies have to lay off the people the Federal Reserve was trying to save from losing their home, because these companies need to reduce cost to boost earning due to inflation.

So in the end the Federal Reserve rate cut ended up forcing the people to lose their home instead of helping them save it.

Now you Realtors and mortgage brokers are biting your nails hoping the jobs cut do not deepen because those desirable single family homes in the good neighbor that you live in are going to get impacted.; June 07, 2008 3:23 AM
Anonymous said...: Ted Koppel cuts the asking price of his D.C. house in half:
---------------------------

i will give me 800k cash if the assessed property value is reduce accordingly.; June 07, 2008 3:23 AM
Anonymous said...: http://tinyurl.com/4z7p68

now they want to take money out of retirement accounts and pay off some of national debt....

ha ha ha

this is too surreal.....; June 07, 2008 4:05 AM
Anonymous said...: http://www.ananova.com/news/story/sm_1534821.html; June 07, 2008 4:35 AM
beerwineliquor said...: Impressions of Vegas And SanDiego from a Tampa home debtor(twice over)

My apologies for the long post. I had some extra cash and needed some down time, so I flew out to Vegas to see some old friends and after 3 days of partying and learning some expensive lessons at the cash holdem tables, I shot over to SanDiego for Saturday and Sunday of Memorial day weekend to checkout the $2M house my old college roomate was renting for $3K/month 3 blocks from DelMar beach, before I headed back to Vegas for 3 more days of debauchery. What I wanted to share with my fellow HP'ers was the dire situation of my friends in LV. My one friend who is a bartender had her house foreclosed on after a toxic loan refi - she's just waiting for the sheriff t come knocking. She was making $100k/year but only reports $30k and couldn't get another loan when her ARM reset. But the worst part she is going through is the fact no one is coming to vegas anymore. With the price of gas noone is driving over from LA, and fewer people are flying in as well. I'm friends with a couple of poker room managers, and they said business was off at least 30%. Things were getting busier with the World series of poker starting as I left but I got the perception from them that they were really worried. But what was amazing was the new construction that was continuing along the strip. When I get a chance I will post some of the pics I took. Don't these people know that lake meade is gonna be dry in another decade and living in the desert without water is not going to be to fun?

The water situation in San Diego was something new I learned while out there. With all the McMansion gated communities over developed inland over the last ten years, they are really worried about water there as well. I didn't realize that the Colorado river fed that whole region. Del Mar was awesome though. I was just amazed at the crappy $4M houses for sale along the beach by the railroad tracks that run along part of the beach. I took a took a nice 4 mile stroll through the various neighbor hoods along that stretch of the beach and really didn't see too much for sale compared to immense amount inventory in my area (south tampa). But the Sunday real estate sections of the paper was immense.

I knew housing prices in LaJolla and that area were way out of my price range, but I would be curious how much prices have gone down in area if any of you local HP's have that kind of info. Everything just seemed completely outrageous still - to me, but my cost of living is ridiculously low in my situation here in Tampa.; June 07, 2008 6:33 AM
Anonymous said...: Ben Franklin sent a story called 'The Whistle' to a friend in 1779.

This concerns a child who paid more than he should have for a whistle and later regretted his lack of caution.

> When I was a child of seven years old, my friends, on a holiday, filled my pocket with coppers. I went directly to a shop where they sold toys for children, and being charmed with the sound of a whistle, that I met by the way in the hands of another boy, I voluntarily offered and gave all my money for one. I then came home, and went whistling all over the house, much pleased with my whistle, but disturbing all the family. My, brothers, and sisters, and cousins, understanding the bargain I had made, told me I had given four times as much for it as it was worth; put me in mind what good things I might have bought with the rest of the money; and laughed at me so much for my folly, that I cried with vexation; and the reflection gave me more chagrin than the whistle gave me pleasure.

Perhaps some current FBs should have spent some time reading the literary classics (yeah right).; June 07, 2008 12:15 PM
Anonymous said...: Blogger Maxwill said...

I have been a fan of the site for awhile and come here every day. I got hooked during the Serin saga. I see many people talking about all kinds of different commodities (gold, oil, silver, wheat, corn, etc...). I would really like to start diversifying what I buy (just stocks and mutuals right now via 401k and roth ira), but don't have alot of money. I invest about $500 per month. Can anyone suggest a good way to do this or do you think I should just stick with etf's and stocks in these particular areas?

June 07, 2008 1:20 AM<<<

exchange traded commodities fund and also for your particular situation, physical junk silver...; June 07, 2008 1:24 PM
bearmaster said...: In Temecula neighbors are spray-painting the lawns of foreclosed homes green to make the lawns look alive.

And speaking of water, the governator has declared a drought, first time since 1991. Some building projects are getting waylaid because the state is now invoking a state law that requires building projects to have access to 20 years of water.; June 07, 2008 2:38 PM
Anonymous said...: Housing prices are crashing but in some high end markets prices are actually increasing. InvisibleLA recently blogged about how High-end Los Angeles Real Estate Prices Are Up in places like The Hollywood Hills (up 26%),
Rancho Palos Verdes and the Palos Verdes peninsula (up 17%),
Brentwood (up 16%), Newport Beach (is some parts up as much as 67%), and Laguna Beach (up 6%). Go figure!; June 07, 2008 6:35 PM
Anonymous said...: Last year it was Subprime companies take the blunt of the hit as the MBS business went south, but recently FDIC is saying it the BANKS turn to take the hit.

Will the CDS market unravel as when the Banks take their hit.

http://www.marketoracle.co.uk/
Article4984.html

Banks have a vested interest in keeping the swaps market opaque, because as dealers, the banks have a high volume of transactions, giving them an edge over other buyers and sellers.

The next phase of the unravelling crisis in the US-centered “revolution in finance” is emerging in the market for arcane instruments known as Credit Default Swaps or CDS.

A Credit Default Swap is a credit derivative or agreement between two counterparties, in which one makes periodic payments to the other and gets promise of a payoff if a third party defaults.

The first party gets credit protection, a kind of insurance, and is called the "buyer."

The second party gives credit protection and is called the "seller".

The third party, the one that might go bankrupt or default, is known as the "reference entity."

CDS's became staggeringly popular as credit risks exploded during the last seven years in the United States . Banks argued that with CDS they could spread risk around the globe.

Credit default swaps resemble an insurance policy, as they can be used by debt owners to hedge, or insure against a default on a debt. However, because there is no requirement to actually hold any asset or suffer a loss, credit default swaps can also be used for speculative purposes.

Like many exotic financial products which are extremely complex and profitable in times of easy credit, when markets reverse, as has been the case since August 2007, in addition to spreading risk, credit derivatives, in this case, also amplify risk considerably.

Now the other shoe is about to drop in the $62 trillion CDS market due to rising junk bond defaults by US corporations as the recession deepens.

That market has long been a disaster in the making. An estimated $1,2 trillion could be at risk of the nominal $62 trillion in CDOs outstanding, making it far larger than the sub-prime market.

A chain reaction of failures in the CDS market could trigger the next global financial crisis.

The market is entirely unregulated, and there are no public records showing whether sellers have the assets to pay out if a bond defaults.

This so-called counterparty risk is a ticking time bomb.

Counterparty risk can become complicated in a hurry. In a typical CDS deal, a hedge fund will sell protection to a bank, which will then resell the same protection to another bank, and such dealing will continue, sometimes in a circle.

That has created a huge concentration of risk.

As one leading derivatives trader expressed the process, “The risk keeps spinning around and around in this daisy chain like a vortex. There are only six to 10 dealers who sit in the middle of all this.
I don't think the regulators have the information that they need to work that out.''; June 07, 2008 8:05 PM
Anonymous said...: Credit Crisis Pressure Points Building as Major Banks Heading for Bankruptcy

Standard & Poor announced in late May it has cut or might cut debt ratings on $34 billion of securities tied to Alt-A mortgages, whose type issued in 2007 have a default rate to 6.64% for 90 days late as of end April.

Massive S&P downgrades might soon force Wall Street firms to move up to $5000 billion of assets from off-balance sheet locations back onto their books. The bank sector has so far seen very little in bank failures, compared to past cycles.

The Texas Ratio is calculated by dividing non-performing loans at a bank, including those 90 days delinquent, by their tangible equity capital plus money set aside for future loan losses.

Using this ratio, IndyMac Bancorp, Sterling Financial, Corus Bankshares, Imperial Capital Bancorp, and GMAC Bank are all on the verge of busts. Look for these banks to possibly lead the list of failures, each with unique vulnerabilities.

http://www.marketoracle.co.uk/
Article4971.html; June 07, 2008 8:07 PM
Anonymous said...: Is the whole $6.5 trillion mortgage backed securities market nothing compare to the $65.8 trillion Credit Default Swaps (CDS) market

http://niemanwatchdog.org/index.cfm
?fuseaction=background.view&
backgroundid=00258

As the sub-prime mortgage crisis moves along we are treated to a daily play-by-play account.

Losses by financial institutions, write-offs by banks, and every minor fluctuation in the real estate and housing markets make the front pages and the evening news.

But there may be another financial story we should be watching more closely.

The sub-prime mortgage crisis was a matter of a lot of mortgages and pieces of mortgages being traded at prices above their real value, or whose real value could not be determined.

The whole mortgage backed securities market was about $6.5 trillion. According to Bloomberg, the financial institutions have lost $382 billion to date – serious money by any standard.

But readers of the business press and the inside pages of business sections are aware that there is a huge international market for another kind of financial instrument – credit default swaps (CDS).

Credit Default Swaps are like insurance policies that cover lenders – banks, bondholders – in the event that companies fail to pay their debts.

If a company fails to meet its debt obligations the lenders will be made whole. From the perspective of the issuers, CDS are like bets on whether a particular loan will be paid off.

Last year the output of every living soul on the planet was only $65.8 trillion. This year the CDS market purports to be worth $62.1 trillion. Doesn’t this raise some questions?

How can it possibly be worth that much? Remember this is stuff that didn’t even exist ten years ago. Suppose they are not really worth $62 trillion?

What then? The whole sub-prime market was only worth $6.5 trillion, and look what happened when it got into trouble.

What will happen if a $62 trillion market gets into trouble?

Who is at risk if the system unwinds? The issue sails into stunning complexity since the CDS are bought and sold by parties who are likely to be unrelated to the original parties.

How does it all get sorted out?; June 07, 2008 8:17 PM
Anonymous said...: City Pacific stokes risk fear

CITY PACIFIC has conceded its largest mortgage fund could struggle to repay its 10,000 unit holders when a redemption freeze is lifted in September, fuelling concerns that the Brisbane property group and its $1billion First Mortgage Fund are on the brink of collapse.

In a desperate effort to stay alive, City Pacific confirmed yesterday that it was hatching a plan that could allow unit holders in the FMF to swap their $900million in deposits for shares in City Pacific.

http://business.smh.com.au/
city-pacific-stokes-risk-fear-
20080606-2mzx.html; June 07, 2008 8:19 PM
Anonymous said...: Credit default swaps (CDS) are the most widely used type of credit derivative.

The first CDS contract was introduced by JP Morgan in 1995 and by mid-2007, the value of the market had ballooned to an estimated $45 trillion, according to the International Swaps and Derivatives Association - over twice the size of the U.S. stock market.

A CDS contract involves the transfer of the credit risk of municipal bonds, emerging market bonds, mortgage-backed securities, or corporate debt between two parties.

It is similar to insurance because it provides the buyer of the contract, who often owns the underlying credit, with protection against default, a credit rating downgrade, or another negative "credit event."

The seller of the contract assumes the credit risk that the buyer does not wish to shoulder in exchange for a periodic protection fee similar to an insurance premium, and is obligated to pay only if a negative credit event occurs.

It is important to note that the CDS contract is not actually tied to a bond, but instead references it. For this reason, the bond involved in the transaction is called the "reference entity."

A contract can reference a single credit, or multiple credits.

CDS have the following two uses.

1. A CDS contract can be used as a hedge or insurance policy against the default of a bond or loan.

2. The second use is for speculators to "place their bets" about the credit quality of a particular reference entity.

With the value of the CDS market, larger than the bonds and loans that the contracts reference, it is obvious that speculation has grown to be the most common function for a CDS contract.

CDS provide a very efficient way to take a view on the credit of a reference entity. An investor with a positive view on the credit quality of a company can sell protection and collect the payments that go along with it rather than spend a lot of money to load up on the company's bonds.

An investor with a negative view of the company's credit can buy protection for a relatively small periodic fee and receive a big payoff if the company defaults on its bonds or has some other credit event.

A CDS can also serve as a way to access maturity exposures that would otherwise be unavailable, access credit risk when the supply of bonds is limited, or invest in foreign credits without currency risk.

http://www.investopedia.com/
articles/optioninvestor/08/cds.asp; June 07, 2008 8:29 PM
Anonymous said...: Credit default swaps: what if they default?

The CDS market is largely dominated by financial firms as either buyers or sellers. The risk of settling the derivatives stays within the financial sector. In a credit crisis, one should see credit events triggering against a large number of financial firms. This will lead to buyers of the CDS asking the sellers (other financial firms) to honour their commitments.

There are three problems. One; these CDS are traded amidst financial entities, the buyer might be in a position where he has difficulty finding who holds the CDS as of date. The entity holding the CDS might be in a much worse position than the original seller and might not be able to pay up.

Two; the credit crisis puts the entire financial sector under stress and it will not be possible for anyone to honour the commitments.

Third, CDS issuances are much higher than corporate bonds and loans leading to difficulty in settling the dues. As Geithner puts it "These create the potential for squeezes in cash markets and greater volatility across instruments in the event of a default, magnifying the risk of adverse market dynamics."

This scenario has been avoided so far as central banks have intervened and infused substantial liquidity in the system. The CDS spreads had widened but have declined post central bank intervention. However, we still do not know how the crisis will fare in the future. The camp is divided, as one-half believes the worse is over and the other half believes it is yet to come. If the latter comes true, the CDS market will be tested and there might be defaults on the payments.

Even if the former is true, policymakers should make the CDS market as one of its top priorities and understand the counterparty positions and liabilities. Satyajit Das has termed developments in CDS as a "ticking timebomb".

http://in.news.yahoo.com/
financialexpress/
20080602/r_t_fe_nl_general/
tnl-credit-default-swaps-what
-if-they-de-e651110.html; June 07, 2008 8:34 PM
bearmaster said...: Hollywood celebrity knocked nearly 25% off her original asking price on her high-end property and one commenter claims it looks like it'll be a short sale.

A May 20 L.A. Times piece by Peter Hong acknowledges the luxury end is feeling the pain too.; June 07, 2008 9:06 PM
Anonymous said...: American International Group said on Friday that the US Securities and Exchange Commission and Department of Justice were investigating whether it overstated the value of contracts linked to subprime mortgages.

"AIG has received inquiries from the SEC and the DOJ regarding the evaluation of AIG Financial Products credit default swaps portfolio,'' spokesman Chris Winans said.

Over the last two quarters, the world's largest insurer has posted record losses stemming from more than $US20 billion in write-downs on the credit default swap (CDS) investments held by its financial products unit, sending shares in the world's largest insurer down sharply.

AIG shares fell $US2.48, or 6.8%, to close at $US33.93 on the New York Stock Exchange, after touching an 11-year low of $33.65. The stock has been more than halved over the last year.

Credit protection costs have risen for AIG in recent months as losses mounted from mortgage-related investments.

"Amid the credit market uncertainty, we have consistently and promptly provided our best estimates of our CDS portfolio valuations and potential exposures,'' said Mr Winans.

AIG management said last year that the company did not expect to realise any losses from the CDS portfolio, and did not expect unrealized market valuation losses to be severe. In the months since, however, it has recorded the more than $US20 billion in write-downs of the value of these assets.

Financial services firms worldwide have recorded more than $US300 billion in write-downs and credit-related losses since the credit crunch last year caused a nosedive in the value of a range of investments with links to mortgages.

http://business.smh.com.au/
regulator-probes-aig-shares-
tumble-20080607-2n3h.html; June 07, 2008 10:14 PM
Anonymous said...: Will Lehman Collapse.

http://ftalphaville.ft.com/blog/
2008/06/06/13626/cds-report-
indices-back-to-the-widest-
while-financials-struggle

Speculation is also rife that Lehman is planning to move up its earnings call by one week to assuage fears that it is in danger of collapsing.

CDS Report: Indices back to the wides while financials struggle

The benchmark credit indices on both sides of the Atlantic hit their widest levels since mid-April on Friday, after a sharp and surprising jump in the US unemployment rate.

This week’s mixed bag of economic news had led some investors to dare hope that the “green shoots of recovery” were within sight. However, according to Markit’s Gavan Nolan, the disappointing jobs figures cast a pall over the market.

The Markit CDX IG NA index was 5.2 basis points wider at 113.21bp in afternoon trade in New York, which means that annual cost of protecting a $10m basket of investment grade US corporate debt over five years had jumped to $133,210.

In Europe, the benchmark Markit iTraxx Crossover index of mostly junk-rated companies gapped 20.3bp wider to 483.4bp.; June 07, 2008 10:19 PM
Anonymous said...: Two Federal Reserve Bank presidents warned in separate speeches on Thursday that the central bank’s decision in March to lend to securities firms might sow the seeds of further financial crises.

Jeffrey M. Lacker, president of the Federal Reserve Bank in Richmond, Va., said in a speech to the European Economics and Financial Center in London that “the effect of the recent credit extension on the incentives of financial market participants might induce greater risk-taking.”
That, in turn, “could give rise to more frequent crises,” he said.

In a separate speech on Thursday, the Philadelphia Fed president, Charles I. Plosser, urged that officials specify the conditions “under which the central bank will lend” to firms. He told reporters in New York afterward that “we run the risk of sowing the seeds of the next crisis.”

Mr. Lacker urged that the central bank “clearly” set boundaries for its help to financial markets. In an interview Wednesday on the themes of his speech, Mr. Lacker said that even those new boundaries might not be believed by investors unless a financial firm failed “in a costly way.”

Together, the remarks amounted to a strong warning about the consequences of the Fed’s aid to securities dealers, the first lending to nonbanks since the Great Depression.

http://www.nytimes.com/2008/06/06/
business/06fed.html?ref=business; June 07, 2008 10:32 PM
Anonymous said...: No end in sight to US bank woes as autumn sales flop

FEDERAL regulators have warned that US banking industry turmoil will continue as financial institutions come to terms with piles of bad loans made to finance the construction of homes and condominiums.

Until now, most of the damage to banks from the housing crisis has come from home owners defaulting on mortgages, but amid a dismal northern spring sales season for new homes, loans to home and condo builders are looking increasingly shaky.

Banks have begun dumping them at what will probably be steep discounts, leading to billions of dollars in fresh losses.

"As long as the housing market is on a downward path, as long as those prices continue to fall, there's a risk that the losses could continue to mount on a variety of loans," Federal Reserve vice-chairman Donald Kohn told the US Senate Banking Committee on Thursday.

At the same hearing, Federal Deposit Insurance Corp chairman Sheila Bair said banks that were not diversified, or those with high exposures to residential construction and development, were of particular concern. "That's where we are really seeing the delinquencies spike," she said.

http://www.theaustralian.news.com.
au/story/0,25197,23821669-36375,
00.html; June 07, 2008 10:38 PM
Anonymous said...: Are the Federal regulators saying they should act more responsible.

http://www.guardian.co.uk/
business/feedarticle/7565526

Banks may need to cut dividends, Fed warns

DUCKS LEHMAN QUESTION

"I think we have a stronger set of investment banks than we had a month and a half ago," Federal Reserve Vice Chairman Donald Kohn said.

He avoided any specific reference to embattled Wall Street firm Lehman Brothers and said he would not comment on the financial health of any specific institution.

But he added, "If something like this were coming again, I would have to make the same kind of judgments."

One regulator, Federal Deposit Insurance Corp. Chairman Sheila Bair, said some blame for current housing woes lies with regulators themselves.

"Where we did not do as well as we should have was with monitoring underwriting standards," she said.
"We let it get out of control."
Kohn said the worst was not yet over.; June 07, 2008 10:43 PM
Anonymous said...: Does it seems like the only thing the Federal Reserve has induced was Inflation rather the Growth causing higher unemployment.

Will the banks take a hit on their Commercial Mortgage Back Securities (CMBS) now that their gamble on the Federal Reserve induced recovery have failed.

Are the banks still on the hook for their CMBS if their CMBS go bad, or will banks force the insurance and securities firms who sold them the CDS to pay for the CMBS when they go bad.

http://www.forbes.com/feeds/ap/
2008/06/06/ap5089432.html

Commercial bank stocks tumbled Friday morning after the government said the unemployment rate rose sharply last month, and oil prices resumed their upward rally.; June 07, 2008 10:55 PM
Anonymous said...: MSN's "Mike Hammer" (pseudonym to avoid being wacked by the REIC?) gives four reasons to rent:

1. Renting can save money
2. Homeowners’ tax deductions are overstated
3. More options are available to renters
4. Renting gives you flexibility

http://tiny.cc/NgmBl

Also, read about "The Renter Invasion!"

http://tiny.cc/t6eKr; June 07, 2008 10:56 PM
Anonymous said...: Top execs at Lehman Brothers must feel like they have the proverbial Kick Me sign taped to their backs.

Analysts project Lehman later this month will post its first quarterly loss since going public in 1994. As a result, Wall Street now expects Lehman to raise as much as $5 billion in new capital, almost certainly at a discount to its recent market quote of $32 and change - a price that itself represents a nearly 50% decline since early January.

Not helping matters was Standard & Poor's recent downgrade of Lehman's credit rating one notch to single-A, with a negative outlook remaining in place.

A Wall Street Journal account of Lehman's trading desks buying back its own stock Tuesday also angered firm management - and likely weighed on stock and swap prices.

Stock repurchases are often taken as a bullish sign of company leaders' confidence in their prospects. But in this case any substantial purchases by Lehman of its own stock would scare savvier investors among the firm's already shaken shareholder base.

They would see any attempt to buy stock at current prices - while simultaneously offering stock at a discount to institutional investors - as a cash-burning attempt to temporarily sway market sentiment.

And as it happens, Lehman's assets values are very much in question.

As pointed out two weeks ago by Greenlight Capital's David Einhorn, who maintains a short-position in Lehman's stock, the firm has a looming headache in $6.5 billion worth of collateralized debt obligations backed by asset-backed securities.

As the firm's own filings disclose, 25% of this paper is rated BB or below.

Those CDOs are effectively worthless, traders say. The remaining ABS CDOs are worth perhaps 50 cents on the dollar. That suggests the firm could be looking at a substantial writedown on its CDO holdings.

CreditSights, an independent research boutique, says Lehman's likely revenue problems in the near future stem from the firm's reliance upon "new age" business lines such as structured finance, private equity and leveraged lending to buyout firms. All three areas have been devastated in the recent credit collapse.

Nor is the operating environment for Lehman's key residential- and commercial mortgage-backed securities franchises likely to improve in the near future.

A key CMBS AAA-index declined sharply last quarter and, as its filings indicate, the firm has $39 billion worth of exposure on its books. The future could hold some writedowns there, too.

http://money.cnn.com/2008/06/04/
news/companies/boyd_lehman.fortune
/index.htm; June 07, 2008 11:06 PM
Anonymous said...: From the WSJ:

Countrywide Friends Got Good Loans
Mozilo Sought, Received
Better Rates for Some;
Problems for Fannie Mae?
By GLENN R. SIMPSON and JAMES R. HAGERTY
June 7, 2008; Page B1

Countrywide Financial Corp. makes mortgage loans through a vast network of offices, brokers and call centers. But a few customers have gotten their loans a special way: through Countrywide Chief Executive Angelo Mozilo.

These borrowers, known internally as “friends of Angelo” or FoA, include two former CEOs of Fannie Mae, the biggest buyer of Countrywide’s mortgages, say people familiar with the matter.

One was James Johnson, a longtime Democratic Party power and an adviser to Sen. Barack Obama’s campaign, who this past week was named to a panel that is vetting running-mate possibilities for the presumed nominee. Another was Franklin Raines, a onetime Clinton administration budget director, who left Fannie Mae amid an accounting scandal in 2004.

There is nothing illegal about a mortgage firm treating some borrowers better than others. But if Fannie Mae officials received special treatment, that could cause a political problem for the government-sponsored, shareholder-owned company.

Its code of conduct, a spokesman said, “requires the disclosure of potential conflicts of interest and prohibits acceptance of substantial gifts, including loans with preferential terms, from an organization seeking to do business with the company without prior review and approval by the company.” The spokesman said the code has been in effect since the early 1990s.

As for Countrywide, “I think it is potentially an accountability and internal controls issue,” securities lawyer John Olson of Gibson, Dunn & Crutcher said. A comparison of the Fannie Mae officers’ terms with interest rates prevailing when they got their loans raises the possibility Countrywide gave them preferential terms. But it’s impossible to tell for sure from public documents. An array of other factors also can account for lower-than-average rates, including a borrower’s income, total assets and credit score; how big the loan is compared with the home’s value; and how many “points” a borrower may have paid upfront in order to get a lower rate.

One former Countrywide executive said the mortgage lender, the nation’s largest, sometimes granted “moderate” concessions on rates for customers whose loans were handled by Mr. Mozilo or other top officers.These loans were reviewed by others at the company, the former executive said, and occasionally Mr. Mozilo had to be told the terms he had promised someone couldn’t be granted.; June 07, 2008 11:29 PM
Anonymous said...: Why It’s Worse Than You Think.

Is it because it was not the banks money, the bad loans were insured by CDS and the Fed said to take the money and use it anyway to promote growth.

Who cares if the securities firms did not have the resource to back those CDS policies. What is the change of a major collapse of the system with the Fed printing money none stop. The Fed did not care about the strength of the US Dollar.

Now the credit crisis has gone from subprime to bad CMBS, because the Federal Reserve was so scare of the subprime credit crunch that the Federal Reserve told the banks to take the money and just lend it out.

Backed by CDS insurance policies the banks did just that and followed the same path of giving those money alway to anyone who needed a commercial loan.

"Credit what credit, your company is your credit."

http://www.newsweek.com/id/140553

For months, economic Pollyannas have looked beyond the dismal headlines and promised a quick recovery in the second half.
They're dead wrong.

As it seeks to regain its footing in the second half, the U.S. economy faces two significant obstacles, neither of which was evident in 2001.

The first is entirely homegrown: the self-inflicted wounds of the promiscuous extension and abuse of credit in the housing and financial sectors.

The second is a global phenomenon that has comparatively little to do with American behavior: rampant inflation in commodities such as oil, food, and steel.

These trends have conspired to inflict genuine economic pain and deflate consumer confidence. The Conference Board's Consumer Confidence Index in May slumped to a 16-year low.

While the treatment of the current malaise has been essentially identical to the reaction to the 2001 slump—aggressive Federal Reserve rate cuts and tax rebates—the symptoms are quite different.

Despite repeated claims that the damage has been contained, the banks that recklessly financed the housing boom—and then traded mortgage debt even more recklessly—are still cleaning up the mess.

But it turns out (surprise!) the same sort of clouded judgment led banks to excesses in commercial lending, and in loans to private-equity firms.

This downturn is likely to last longer than the eight-month-long recession of 2001.

On Friday, the Labor Department reported that American employers axed 49,000 jobs in May, the fifth straight month of job losses—an event that signals a recession sure as the glittery ball dropping on Times Square augurs a New Year.

The report, which inspired a 394-point decline in the Dow Jones Industrial Average Friday, was the latest in a run of bad news. Auto sales, the largest retailing sector in the U.S., were off 10.7 percent in May from the year before.; June 07, 2008 11:43 PM
Anonymous said...: "For most people starting out, rates are too high. Affordable rates are a very important part of the economy," said Ali Brown, who is hoping to stay in the Kenwood neighborhood on the mid-South Side. "I wouldn't be happy at 6 percent. But if I'm forced to, I will do what I have to do. What are your options?"

Several forces are conspiring to keep rates up, economists and mortgage experts say, and they aren't going away anytime soon.

When the subprime-lending bubble burst last summer, many large mortgage brokers went out of business because they could no longer find investors to buy their loans and fund their operations. That means the pool of mortgage lenders is much smaller than it has been in recent years, and billions of dollars in liquidity have disappeared.

Also, surviving lenders are still gun-shy about rising delinquencies and foreclosures, which have forced many to take large write-offs.

"Time heals all wounds, and we haven't had enough time yet to heal this wound," said Diane Swonk, chief economist with Mesirow Financial in Chicago. "Banks and other lenders are being more conservative. They're saying, 'I need to be compensated for this risk.' "

But there's even a bigger-picture reason behind the buoyancy in mortgage rates—the expectation that rising inflation is the biggest challenge the economy faces.

With commodity prices rising, especially for oil and food, the Fed may have little choice but to tighten credit to slow inflation, which eats away at the value of wages as well as financial assets, economists say.

When inflation goes on a tear, investors want higher premiums for lending money, which translates into higher long-term interest rates.

http://www.chicagotribune.com/
business/chi-sun-mortgage-
interest-jun08,0,3877402.story; June 08, 2008 12:07 AM
Anonymous said...: Surging oil prices are beginning to cut into the profits of a wide range of American businesses, pushing many to raise prices and maneuver aggressively to offset the rising cost of merchandise made from petroleum.

Airlines, package shippers and car owners are no longer the only ones being squeezed by the ever-mounting price of oil, which shot up almost $11 a barrel on Friday alone, to $138.54, a record.

Companies that make hard goods using raw materials derived from oil, like tires, toiletries, plastic packaging and computer screens, are watching their costs skyrocket, and they find themselves forced into unpleasant choices:

1.) Should they raise prices,

2.) shift to less costly procedures,

3.) cut workers,

or all three?

http://www.nytimes.com/
2008/06/08/business/08oil.html; June 08, 2008 12:16 AM
Anonymous said...: Evander Holyfield is the latest rich a-hole to get foreclosed. He denies it but they were getting ready to auction off his $10 million, 54,000 sf, 17 bathroom house.

I think maybe the republicans are right. The rich DO pay too much of the taxes. We should cut their taxes some more. Maybe even let them stop paying altogether.

Don't you think that's a good idea, republican blog cretins?

I guess Evander is one of those poor people you republicans always complain about who you blame for the taxes you pay.; June 08, 2008 3:04 AM
Anonymous said...: Here's ANOTHER lying realtor who incredibly on May 15 wrote in his local newspaper:

What a bunch of mo--rs
realtors are! Can the DOJ prosecute them under the RICO act?

If you’re ready to buy a home and can afford it, now is a great time to buy.
...Don’t let all of the negative media attention about the “mortgage meltdown” keep you from pursuing your homeownership dream.

http://tinyurl.com/4m26nb; June 08, 2008 7:06 AM
Anonymous said...: Evander Holyfield has 17 bathrooms, like Al Gore and John Edwards.; June 08, 2008 5:30 PM
Anonymous said...: hey being a peasant subsistance farmer aint that bad, if you can keep the revenueers away from making yours theirs, by taxation.........imposible!!!!!!; June 08, 2008 8:32 PM
Anonymous said...: Check out this article from Minneapolis Star Tribune, and check out thecomment I posted (Not realistic expectation)

http://www.startribune.com/business/19616899.html?location_refer=Business; June 08, 2008 9:55 PM
Mitesh Damania said...: There was much less traffic on the freeways in L.A. Thursday evening when the Lakers were playing. This just proves that there's a lot of cars on the roads unnecessarily. Gas to $8 per gallon!; June 08, 2008 11:46 PM
Anonymous said...: I don't know that anyone's ever found a reliable way to tax the richest 1% of the population. They just leave. It's like John Lennon and George Harrison, once it was "1 for you, nineteen for me" they just bought places in the states.; June 09, 2008 3:08 AM
Anonymous said...: today there was a riot in s korea where they don't want our beef because they want to eat their own beef and keep the money in their country. Now what if America didn't buy that cheap shit from china they would would be doing worse than eating our mad cow beef. How is it they can come to this country and demand that we honor the rules from their country and screw american rules and laws, they don't learn the language and build their own communities and Americans look the other way. They then turn around and demand that they don't have to buy American imports because it's bad for their economy so that in itself should be the reason American's should quit buying that cheap shit from over there and live within our means here and quit buying a lot of stuff we don't need. I am not talking about illegal Mexican's they think the same way SKoreans do take adavantage of the country but make a stink when things looks like they may have to give something back to the American's who made their lives so comfortable. ASSHOLES. I thought they had a lot of fing nerve. This should be a lesson to all American's born and bred, this world wide global economy is bullshit because they only want to take from us but not give anything in return. They want your jobs, they want your money and they don't give a shit how you pay your bills. The days of paying someone 10 cent an hour because they don't want to pay American wages is coming to an end, those people want what American's want and 10 an hour ain't gonna buy it. Been to gas station lately.; June 09, 2008 4:29 AM
Anonymous said...: I have to say that I am personally bored with materialism. There's so much more to life than houses, cars, and stuff. True wealth is good relationships, health, passion for life, travel, learning.; June 09, 2008 5:15 AM
Mitesh Damania said...: Once again driving in North Orange County the freeways had noticably (50-70%) less traffic during the Lakers vs. Boston game Sunday. We get jammed up even on the weekends! Just shows how much of the driving is recreational.; June 09, 2008 7:27 AM
bearmaster said...: Quote about Lawrence Yun:

Yun is the Little Orphan Annie of forecasters. He's always sure the sun will come out tomorrow.

Why it's worse than you think; June 09, 2008 12:53 PM
Anonymous said...: The next shoe has now fallen,
just as predicted several months ago.

http://tinyurl.com/63p6tf; June 09, 2008 1:39 PM
Anonymous said...: http://www.youtube.com
/watch?v=AqgePGsDqzs
&feature=user; June 09, 2008 3:58 PM
Anonymous said...: "Evander Holyfield has 17 bathrooms, like Al Gore and John Edwards."

That's nothing. There is a Russian billionaire who is presently building a 26 bathroom mansion in Greenwich, Connecticut.; June 09, 2008 4:25 PM
Anonymous said...: "A May 20 L.A. Times piece by Peter Hong acknowledges the luxury end is feeling the pain too."

The high end market in Manhattan could not be stronger. Flippers at the Plaza Hotel, 15 Central Park West, and a host of other high end buildings are making 7 digit profits left and right. Word on the street is that a Plaza resale condo is soon going to hit the market at $100 million.; June 09, 2008 4:29 PM
Anonymous said...: Anon June 08, 2008 9:55 PM:

Typical HP reader making it up as you go along:
"I think we are years away from seeing a recovery in the real estate market, and we will probably never see in our lifetimes"

"I think"..."probably"...at least Here we go again posted something of historical significance to tie the past to the present.; June 09, 2008 5:59 PM
Anonymous said...: According to the latest polls, Obama is 2 points ahead of McCain. But before you procalim that Obama has won, rememebr that all the polls you see today are MEANINGLESS. They are not worth the paper they are written on? Why? Because the GOPs are sititng on a tape of Michelle Obama saying "whities" that they will release in October.; June 09, 2008 8:16 PM
Anonymous said...: L.A. median price down another $6500 last week. That's the biggest weekly drop in over two months.; June 10, 2008 7:02 AM
Anonymous said...: What up with Obama having someone who got sweetheart deals from Countrywide to help him select a vice President candidate. Isn't Obama supposed to be anti-Countrywide?; June 10, 2008 7:11 AM
Anonymous said...: Obama wants to print another round of rebate checks! Yippie!!!!!

http://tiny.cc/dyUr3; June 10, 2008 12:49 PM
Anonymous said...: Instead of complaining about the high price of oil, why don't you people just shut your traps and buy some stocks in Exxon Mobil and BP? Or you can invest in some oil futures. Might as well make some meoney off of OilPANIC, don't you think?; June 10, 2008 4:24 PM
Anonymous said...: How can one protect their hard earned money from the ultraliebral B.O.?; June 10, 2008 4:57 PM
Anonymous said...: Obama's Housing Default

Jim Johnson, A Former CEO Of Fannie Mae And Top Obama Campaign Adviser, Received Special Loans From Countrywide:

Jim Johnson, A Former CEO Of Fannie Mae Chosen To Lead Obama's Vice Presidential Search Committee, Received Special Loans From Countrywide Financial CEO Angelo Mozilo. "Countrywide Financial Corp. makes mortgage loans through a vast network of offices, brokers and call centers. But a few customers have gotten their loans a special way: through Countrywide Chief Executive Angelo Mozilo. These borrowers, known internally as 'friends of Angelo' or FoA, include two former CEOs of Fannie Mae, the biggest buyer of Countrywide's mortgages, say people familiar with the matter. One was James Johnson, a longtime Democratic Party power and an adviser to Sen. Barack Obama's campaign, who this past week was named to a panel that is vetting running-mate possibilities for the presumed nominee." (Glenn R. Simpson and James R. Hagerty, "Countrywide Friends Got Good Loans," The Wall Street Journal, 6/7/08)

While CEO Of Fannie Mae, Johnson And Mozilo Worked Closely And Maintained A "Close Friendship." "From 1991 to 1998, Mr. Johnson served as CEO of the Federal National Mortgage Association, also known as Fannie Mae, which worked closely with Countrywide, one of the nation's leading lenders and loan servicing companies. In 1996, Mr. Johnson named Mr. Mozilo as chairman of Fannie Mae's national advisory council. A 1999 article in the American Banker said the two men had a 'close friendship.'" (Josh Gerstein, "Top Talent Scout For Obama Tied To Subprime Lender," The New York Sun, 6/9/08)
"Property Records Show Mr. Johnson Has Received More Than $7 Million In Loans From Countrywide Since 1998, The First Coming In The Waning Days Of His Fannie Mae Tenure." (Glenn R. Simpson and James R. Hagerty, "Countrywide Friends Got Good Loans," The Wall Street Journal, 6/7/08)

http://tinyurl.com/3gogbe; June 10, 2008 5:01 PM
Anonymous said...: Man, those South Koreans are really P.O.ed about American Beef!
One dude set himself on fire!?!

http://tiny.cc/i8skD; June 10, 2008 5:24 PM
Anonymous said...: Bush is coming to England this week Keith. Be sure to say hello!; June 10, 2008 8:50 PM
Anonymous said...: RFK talks about GDP

Since the fake economy and statistics show up here so often as threads, I figured you all would jump on this in a second. The words are old, but the message is great.

Enjoy!

http://www.youtube.com/watch?v=e51JnJPPY0E; June 10, 2008 9:32 PM
Anonymous said...: keith:
how do you keep the open thread at the top when you update the blog?; June 10, 2008 9:43 PM
Anonymous said...: TomatoPanic?

Chris in NC; June 10, 2008 9:49 PM
Anonymous said...: (UPDATE) - I just moved back into the UK and it'll be a bit until the worst company on the planet (British Telecom) gets me hooked up. So be patient with comments - it'll be slow this week...

________

Obviously you've never lived in India! Ha ha ha ha!; June 10, 2008 10:48 PM
Anonymous said...: Why is everyone talking about Obama so much..... Who cares about him right now, we still have JUNE,
JULY, AUGUST, SEPTEMBER, OCTOBER, NOVEMBER, AND DECEMBER with BUSHCO and his regime. It feels like OBAMA is years away and honestly is quite frightening. By the time January rolls around we may have $9.00 gas or a GW dictatorship instituted.

ICEMAN; June 11, 2008 3:33 AM
W.C. Varones said...: Overheard in Del Mar, CA, 6/10/08:

Someone who had changed careers, catching up with an old colleague:

"I'll be the first to admit that I wasn't the smartest engineer around. But the smartest real estate agent? By orders of magnitude."; June 11, 2008 5:05 AM
Tyrone said...: Interesting quote from a housing pumper...

Inland real estate sales-pending are up 16% in May

Leslie Appleton-Young:
A housing market recovery will be uneven and gradual, Appleton-Young predicted. "I think we will see months of gains and then maybe retreat a little bit. I think we will be bouncing along a bottom for a while," she said.; June 11, 2008 5:06 AM
Anonymous said...: Lehman's unanswered questions

The brokerage wants to 'end the chatter,' but it's still hard to get a handle on how risky Lehman's balance sheet is.

1) While Callan characterized Lehman's writedowns of residential real estate-related holdings as "very large," she declined to answer a question about how big the writedowns are relative to the original portfolio.

2) Callan also declined to answer a question about Lehman's exposure to so-called Alt-A mortgages, those made to borrowers with better-than-subprime credit histories but typically without full documentation.

Alt-A delinquencies have soared in recent months, leading to substantial losses at lenders such as Downey Financial (DSL).

http://money.cnn.com/2008/06/09/
news/lehman_questions.fortune/
index.htm; June 11, 2008 5:17 AM
Anonymous said...: The $62.3 trillion figure for the total principal amount of credit derivatives outstanding is to some extent a “scare” number.

In a credit crunch losses from credit derivative exposure will be bunched. With the credit system already under strain and if several underlying companies fail, financial institutions will be placed in a precarious position at a time when funding is hard to come by. Then a cascade effect would take place, with each default making other defaults more likely.

Thus in a severe credit crisis, the potential losses on credit derivatives may indeed approach the same fraction of total exposure that the $1 trillion to $1.5 trillion of potential home mortgage losses bears to the $12 trillion of home mortgages outstanding.

The ultimate loss would then be not 10% of $12 trillion, but 10% of $62.3 trillion, or $6.23 trillion, several times the capital base of the entire U.S. banking system, more than the current total of Federal government debt outstanding and about 40% of a year's U.S. gross domestic product.

That would make a credit derivatives crash far larger in monetary terms and somewhat larger in terms of the economy than the Japanese banking problems of the 1990s, which caused 13 years of recession in that country.

$62.3 trillion is real money, so the question arises: How did something so dangerous grow so big before efforts were made to control its risks?

The volume of credit derivatives outstanding is now a substantial multiple of the total volume of the loans and bonds to which they relate, and that multiple shows every sign of increasing rather than diminishing.

In this as in other derivatives markets, it is obvious that something more than mere “hedging” and risk transfer is occurring.

http://financialweek.com/apps/pbcs.dll/article?AID=/20080609/REG/806090305/1023/OTHERVIEWS; June 11, 2008 5:39 AM
Anonymous said...: The Next Real Estate Crisis

The Mortgage Bankers Assn. said on June 5 that the option ARM problem is growing.

The option ARM loan defaults could accelerate next year even if subprime defaults subside, said Chandrajit Bhattacharya, vice-president and mortgage strategist at Credit Suisse Securities.

He said California will see the bulk of the option ARM foreclosures and the rest will be spread out across the country.

Option ARMs, which were originally designed for self-employed people with fluctuating incomes, gained popularity with other workers during the peak of the real estate boom in 2004, when rapidly rising home values would have otherwise kept many buyers out of the market.

The loans, which were generally given to borrowers with better-than-subprime credit, give homeowners the option of making a minimum monthly payment, which covers none of the principal and only a portion of the interest, the rest of which is added to the loan balance. With years of unpaid interest accumulating and house prices falling, some homeowners have seen their equity disappear and now owe even more than their initial loan balance.

The loans automatically recast after five years, but many will recast sooner as loan balances hit specific principal caps—typically between 110% and 125% of the initial loan amount. Many of these loans are expected to recast within the next two years, meaning that borrowers' monthly payments will swell to include both principal and interest.

According to Credit Suisse (CS), monthly option recasts are expected to accelerate starting in April, 2009, from $5 billion to a peak of about $10 billion in January, 2010. Some of these loans have already started to recast.

About 13% of option ARMs that were issued in 2006 were delinquent by 60 days by the time they were 18 months old, Credit Suisse said.

Experts are warning that the next wave of foreclosures will begin accelerating in April, 2009.

http://images.businessweek.com/
story/08/popup/0604_arm_reset.jpg; June 11, 2008 5:50 AM
Anonymous said...: Remember those long lines when you tried to get gas in Costco, well they were common in the late 70 early 80.

Except those long gas lines were common for most gas stations people went to during that time.

http://www.breitbart.com/
article.php?id=D917DQUO0&
show_article=1

Police: Things get ugly at California gas pumps

Violence broke out at the gas pumps in Orange County.; June 11, 2008 6:05 AM
Anonymous said...: Peg Hypocrisy

Paulson may not fathom how the dollar is complicating the Fed's job. He recently traveled to the Gulf and voiced confidence that dollar pegs in economies such as Saudi Arabia, the United Arab Emirates and Bahrain aren't going away.

Never mind the hypocrisy of all this -- it's a problem for China to peg its currency, but fine for Gulf states. Paulson's bigger concern is heading off a broad-based and destabilizing shift from the dollar into the euro.

``We have conveyed to the U.S. government that a strong U.S. dollar is in the interest of the U.S. economy,'' Zhu Guangyao, an assistant minister at China's Finance Ministry said last week.

That turn of events is even more extraordinary than the yuan's 11 percent gain against the dollar in the past year. The dollar is clearly getting on Asia's nerves. Aside from hitting the region's competitiveness, the trillions of dollars of reserves held in Asia are losing value by the day.

Another implication is that the Treasury has been outmaneuvered by China. When he created the twice-a-year ``strategic economic dialogue,'' Paulson might not have anticipated China turning the U.S.'s tactics back at officials in Washington.

http://www.bloomberg.com/apps/
news?pid=20601039&sid=aP.VpLrg.
H38&refer=; June 11, 2008 7:03 AM
Anonymous said...: Gas price adjusted for Inflation

http://www.energy.ca.gov/gasoline/
statistics/
nytimes_gasoline_price.jpg; June 11, 2008 7:16 AM
Anonymous said...: RON PAUL IS BACK!!!!
Texas: Paul Plans Rival G.O.P. Event
"Representative Ron Paul is planning a daylong rally in Minnesota during the Republican National Convention there that could draw attention from the presumed nominee, Senator John McCain."

http://tinyurl.com/5h8cdt

Hmmm...... You think he sees a possible in with 18 million disenfranchised Hillary supporters and conservatives that won't be able to bring themselves to vote for the senile, dottering, John "Maverick" McCain??; June 11, 2008 1:30 PM
Anonymous said...: Zillow Banned in Arizona!!
http://www.azcentral.com/arizonarepublic/business/articles/0414biz-zillow0414.html; June 11, 2008 2:29 PM
Anonymous said...: Here is a posting about nuclear power and hydrogen-powered automobiles that I wrote a year ago (not originally for HousingPanic):

I can think of a relatively easy way to cut down CO2 emissions by at least 50% by using technologies that we already have and have been using for a long time: Nuclear power and internal combustion engines using hydrogen instead of gasoline.

The fact that these two technologies (nuclear power and internal combustion engines) have been around for a long time and the fact that they can provide us with enough energy to sustain our electricity and transpiration needs on a large scale without major changes to our infrastructure, as I see it, is why I think we should focus heavily on them.

Using hydrogen as fuel for internal combustion engines would allow people to essentially use the vehicles that they already have with slight modifications to the injection and fuel storage systems. New vehicles could be built with internal combustion engines using hydrogen without major redesigns in manufacturing. Unlike fuel cells and other technologies that have not been widely used, the general populace is already accustomed to the use of internal combustion vehicles, and would be much more likely to accept the relatively low cost of conversion to hydrogen as opposed to the major cost of implementing brand new technologies. Of course, the hurdles that must be tackled are 1) widespread distribution of hydrogen fuel, either at filling stations or possible home-based production (in which we could produce the hydrogen via electrolysis at home) and 2) ability of vehicles to store enough hydrogen to allow similar driving ranges to what we have now. Although these two hurdles will require somewhat considerable research and cost, I believe it is reasonably attainable.

Notice that I didn't mention a third hurdle, which is widespread production of hydrogen. This could be attained via electrolysis (i.e. producing H2 and O2 gas from water with salt or similar electrolyte and electricity). The production of hydrogen via electrolysis would not be difficult to implement on a wide scale as the technology already exists. The electricity must come from a non-CO2-producing source, and the way to do that on a large scale is...

Nuclear power, which is the major method of producing enough electricity to meet our needs without emitting CO2. One big hurdle to the widespread use of Nuclear power, at least in the U.S., as I see it is 1) the general public's fear and illogical association between Nuclear power and nuclear warheads. It amazes me how so many people cringe just when hearing the word "nuclear". Despite the two widely publicized incidents relating to nuclear power that occurred in 1979 and 1986, I believe that the technology in 2007 is now up to snuff as to be much safer than in the past. Safety measures must be implemented to prevent such disasters and mis-use of course, but I believe that is reasonably attainable today. Another hurdle is 2) overcoming legal expenses required for approval of new nuclear plants, which I believe could be resolved by convincing the general public and legislators of the value of having such a large-scale source of energy without producing CO2. I know of no other non-CO2 energy source that can produce a sufficient quantity of electricity to meet demand. As far as the issue of nuclear waste goes, this pales in comparison with the alternative, which is the status quo now in the U.S.--burning of fossil fuels, and emitting enormous amounts of CO2 into the atmosphere.

I think we should use as many non-CO2 technologies to provide electricity including solar, wind, and hydroelectric. Same goes for non-CO2 vehicle fuels, such as fuel cells and electricity. However, realistically, these alternate forms of energy are supplemental as they do not produce enough energy to meet our needs, even if we do conserve energy.

People need to realize that with any form of energy, there is a cost. No solution is perfect. But we have to find a solution that works, and one that provides the energy we need, and one that the public is willing to use and accept. People are resistant to change, and my proposal is the only way as I see it to meet the goal of slashing CO2 emissions by more than 50% and still providing the energy use that we are accustomed to, and one that can be reasonably attained using the technology that we already have.

I'm sure there are plenty of people that disagree with my solution or think that I'm nuts, but I'd love to hear a better solution from them. One that accomplishes the goal of slashing CO2 emissions by more than 50%, while still providing the amount of energy that we use now (which will increase in the future) and one that can be implemented NOW, not in the distant future. I'm all for developing better technologies but they do no good if they can't be implemented very soon.

Sorry if I sound bitter but I've brought up this solution to many people for over a decade and a lot of them immediately blow it off as idiotic. Of course they offer no better solution.; June 11, 2008 6:22 PM
Anonymous said...: DOW 14,000 soon!!!!!

SOME CRASH!

DOPES; June 11, 2008 9:53 PM
Anonymous said...: I would like to share with you a tasty little article from 2005. At the time this was published, most "sane" voices in the blogosphere were saying, "nuh-uh," and "only chicken littles and hippies believe that stuff." Well, what a difference three years makes:

*************
Published on 30 Mar 2005 by MSN Money. Archived on 31 Mar 2005.

Goldman Sachs: Oil Could Spike to $105

by Reuters staff

LONDON (Reuters) - Oil markets have entered a ``super-spike'' period that could see 1970's-style price surges as high as $105 a barrel, investment bank Goldman Sachs said in a research report.

Goldman's Global Investment Research note also raised the bank's 2005 and 2006 New York Mercantile Exchange crude price forecasts to $50 and $55 respectively, from $41 and $40.

These forecasts sit at the top of a table of predictions from 25 analysts, consultants and government bodies surveyed by Reuters.

``We believe oil markets may have entered the early stages of what we have referred to as a ``super spike'' period -- a multi-year trading band of oil prices high enough to meaningfully reduce energy consumption and recreate a spare capacity cushion only after which will lower energy prices return,'' Goldman's analysts wrote.

The analysts said resilient demand had led them to revise their super-spike range to $50-$105 per barrel from $50-$80 previously, noting strength in oil demand and economic growth in the United States and China especially.

U.S. oil futures on the New York Mercantile Exchange have averaged $50.03 per barrel so far in 2005.

``Based on our analysis of gasoline spending and the economy noted above, we estimate that U.S. gasoline prices may need to exceed $4 per gallon.''; June 11, 2008 11:12 PM
Anonymous said...: Commercial banks in the US face a complex and difficult situation: margins are compressed and there is increasing stress on a range of assets, from mortgages to consumer loans to debt backing commercial and residential real estate development.

IT ALL FEELS VERY 1993

It makes perfect sense that commercial real estate and loans backing development would be hit during a housing crash.

Beyond the direct linkages, it is also true that places like Arizona, California and Florida, with their rows of empty foreclosed houses, are also seeing carnage in the strip malls that were built to serve those communities.

The Markit CMBX index, which tracks commercial real estate securities, has fallen thus far this year

The AAA CMBX is trading at about 94 cents on the dollar while the riskier BBB- index is below 70.

These and other problems have increased the ratio of non-performing loans at state banks to 1.57 per cent of the whole, more than double the figure of a year ago and the highest rate since 1993, in the aftermath of the Savings & Loan crisis.

At FDIC insured banks loans 90 days delinquent or more rose by $53 billion in the six months to April, hitting 1.71 per cent.

In other words banks are not growing their reserves fast enough to keep against loan losses.

The ratio of loan loss reserves to non-current loans fell to 89 per cent in the first quarter, the lowest since, you guessed it, 1993.

So, we can probably agree that the banking industry is in a period of great stress. What is next?

Unfortunately, the difficulties in real estate seem to have a compounding effect on the way down, just as the bubble was self-reinforcing on the way up.

For bank investors this means that we are only at the beginning of lower dividends, more dilutive capital raisings and share price falls.

Don't be too surprised if more banks fail, and if the names become a bit more familiar.

http://www.businessspectator.com.
au/bs.nsf/Article/RPT-COLUMN-
Banking-crisis-spreads-to-Main-
StJames--FGQEF; June 12, 2008 3:16 AM
Anonymous said...: Why gold could hit $8,500 an ounce

How high will gold and oil go?

Well, history shows us what is possible.

The most obvious time to look to for parallels is the 1970s. Then the gold price went from the artificially suppressed price of $35 an ounce to $850. That is a rise of, give or take, 2,500%. A similar 2,500% rise from the artificially suppressed 1999 low of $250 would take us to $6,250. That is what happened before.

However, there are lots of differences between then and now: in those days interest rates were higher, the threat from derivatives was not as pronounced, debt was lower, there was not such a global crisis in banks, money supply growth was not so out of control, and crucially, Gordon Brown and Ben Bernanke were not in charge. So perhaps $6,250 is a little conservative.

Michael Hampton, who is the best trader I know, uses all sorts of cycles and technical indicators in his work and is continually looking for fractal (repeating) patterns. Among other things, he has what he calls his simple ‘ten for’ rule. Let me explain.

He argues that a 1970s dollar had about ten times the value of a 2000 vintage dollar. For example, the S&P averaged around 100 in the 1970s. It is over 1,000 this decade. Similarly the Dow averaged around 800-1,000, while for the Noughties that figure is around 10,000. Gold began the ‘70s at $35, it began the ‘00s at almost $300.

By the same reckoning, he argues that if gold went to $850 last time, it could spike to $8,500 this time.

He uses the same argument for oil. It went from low single-digits to $13 by the end of the 1974 oil crisis. Now oil has gone from $10 to over $130.

http://www.moneyweek.com/file/48581/why-gold-could-hit-8500-an-ounce.html; June 12, 2008 3:21 AM
Anonymous said...: "There's a tremendous amount of extraneous events going on away from the mortgage market that are making people scared,'' said David Castillo, a senior trader at Further Lane Securities in San Francisco.

Some of the U.S. mortgage bonds at the center of the year long credit crisis are slipping toward new lows.

The benchmark Markit ABX index linked to the last-to-be- repaid of originally AAA rated subprime-mortgage bonds from the first half of 2007 fell this afternoon to a mid-price of 50.75, according to a note to clients from RBS Greenwich Capital, from almost 60 on May 19.

Top-rated bonds of "option'' adjustable- rate mortgages are also dropping, Greenwich, Conn.-based RBS Greenwich analysts said in a report on Monday.

http://www.thebulletin.us/site/
news.cfm?newsid=19763775&BRD=
2737&PAG=461&dept_id=577547&rfi=6; June 12, 2008 3:34 AM
Anonymous said...: Keith,

Love the blog. Been here almost 3 years. It is superb.

But wanted to know if you were going to post more bull market projections?

Or did the real Kieth come back?

Thanks.
Schiff; June 12, 2008 4:28 AM
Anonymous said...: I turned off the honkey tonk music long enough to notice what's happening to LEH stock. Just getting massacred.; June 12, 2008 4:33 AM
Anonymous said...: Retail gas prices have risen to yet another record, with half the states in the nation paying more than $4 a gallon on average, auto group AAA's Web site showed Wednesday.

The national average for regular unleaded gas rose nine-tenths of a cent to a fourth straight record of $4.052, according to AAA.

Gas prices have risen nearly 9% from $3.718 last month and are 32% higher than the $3.066 average price a year ago.

The average price is $4 a gallon or more in 25 states and the District of Columbia, according to the survey.

Gas is most expensive in California, where a gallon averages $4.496. That's followed by Connecticut at $4.358 and Alaska at $4.307.

http://money.cnn.com/2008/06/11/
news/economy/gas/index.htm; June 12, 2008 4:55 AM
Anonymous said...: So why should foreign investors buy your new MBS when they can not even get their principle back on their old MBS.

http://online.wsj.com/
article/SB121314811278463077.html

The new phenomenon: the "Buy and Bail,"

In markets hit hardest by falling home prices and rising foreclosures, lenders and brokers are discovering a new phenomenon: the "buy and bail," in which borrowers with good credit buy a new home -- often at a much lower price -- then bail out of the "upside down" mortgage on their first home.

Homeowners are able to pull off this gambit -- which some lenders and real-estate agents call mortgage fraud -- by taking advantage of mortgage-lending practices that allow them to buy a new primary residence before their existing residence has been sold.

And with the lending industry in disarray as it tries to restructure millions of mortgages, some boast they are able to pull off the strategy with ease.

In some cases, homeowners are coached through the buy-and-bail process by real-estate agents and brokers who see nothing wrong with it. Some blame the phenomenon in part on lenders' unwillingness to cut deals or restructure loans made when home prices were inflated.

"It's just a business decision," says Linda Caoili, a Sacramento real-estate agent who is working with Ms. Augustine and others who are considering walking away from their mortgages. "If you're upside-down $250,000, why would you keep it? It just doesn't make sense."; June 12, 2008 5:03 AM
Anonymous said...: Is lost from covered bond hard to value.

With home price falling who has to pay for the lost, when you use a covered bond.

http://www.mondaq.com/
article.asp?articleid=61180

While covered bonds have a long history in Europe, they are a newcomer to the U.S. capital markets, with only two U.S. issuers to date (Bank of America and Washington Mutual) and an initial issuance in 2006.

Covered bonds are full-recourse obligations of the issuing IDI, secured by collateral (most often mortgage loans) that remains on the IDI's balance sheet.

What distinguishes them from typical U.S. secured debt is that they are meant to provide investors with uninterrupted access to the collateral, notwithstanding the insolvency of the issuer.

An interim final policy statement1 issued on April 23, 2008, indicates how the Federal Deposit Insurance Corporation (FDIC) will treat covered bonds issued by an insured depositary institution (IDI) in a conservatorship or receivership of the issuer.

In the covered bond transactions initiated in the U.S. to date, an IDI sells mortgage bonds, secured by mortgages, to a trust or similar entity (''special purpose vehicle'' or ''SPV'').

The pledged mortgages remain on the IDI's balance sheet, securing the IDI's obligation to make payments on the debt, and the SPV sells covered bonds, secured by the mortgage bonds, to investors.

In the event of a default by the IDI, the mortgage bond trustee takes possession of the pledged mortgages and continues to make payments to the SPV to service the covered bonds.; June 12, 2008 5:20 AM
Anonymous said...: What has been going on with Washington Mutual since their down grade.

http://news.moneycentral.msn.com/
provider/providerarticle.aspx?
feed=BCOM&date=20080521&id=
8674282

Washington Mutual: Moody's downgrades WaMu's Covered Bond rating to A2 on review, direction uncertain Moody's downgraded the rating of the Covered Bonds issued by WM Covered Bond Program to A2, on review, with direction uncertain from Aa1 under review for possible downgrade.

The downgrade of the Covered Bond rating follows the recent downgrades of the senior unsecured debt ratings of Washington Mutual Bank to Baa2 and the application of Moody's methodology for evaluating the ability of a covered bond program to continue to pay the covered bonds in the event of a sponsor default.

For the Program, the primary concern is the increased potential exposure of Covered Bond investors to the risk of a liquidation of the cover pool in a short-time frame in the event of a Sponsor default.; June 12, 2008 5:24 AM
Anonymous said...: What will happen if people start pulling money out of Washington Mutual

http://www.clusterstock.com/2008/
5/washington_mutual_wm_will_wamu
_just_finish_job_and_go_to_zero_

Remember that, with these potential-run-on-the-bank scenarios, it's not what the balance sheet looked like last quarter that matters:

It's what it looks like right now. (Bear Stearns went from comfortably solvent to bankrupt in a matter of days).

What WaMu's balance sheet looks like now depends entirely on how many WaMu customers have demanded their money in recent weeks...and only WaMu knows that.

In any case, only $6 billion of market cap to go.; June 12, 2008 5:30 AM
Anonymous said...: GlaxoSmithKline is cutting 350 of its about 15,000 research jobs worldwide, including jobs held by scientists at Research Triangle Park.

The cuts, announced this morning, are part of a restructuring the British drug maker announced in October to counter slowing sales.

Like other large pharmaceutical companies, GSK faces rising generic competition and heightened regulatory scrutiny. The company, which now employs about 4,700 at its U.S. headquarters in Research Triangle Park, also has lost about $2.5 billion in sales since last May, when a study linked its best selling diabetes pill Avandia was linked to increased risk of heart attack.

GSK declined to release further details about the layoffs this morning.

Scientists working at GSK’s research and development center in RTP expected that about half of the about 500 jobs at research and development centers in Philadelphia and RTP would be cut.

The centers are involved in finding treatments for cardiovascular and metabolic diseases, including diabetes.

http://www.charlotte.com/
business/breaking_news/story/
664390.html; June 12, 2008 6:57 AM
Anonymous said...: The Russell Corp. will close its Coosa River dyeing and finishing plant as well as partially closing its knitting operation and immediately began laying off approximately 450 workers in the process, corporate partner Fruit of the Loom said.

http://www.prattvilleprogress.com/
apps/pbcs.dll/article?AID=/
20080611/PROGRESS01/806110328/
1041/progress01; June 12, 2008 7:00 AM
Anonymous said...: Jazz Pharmaceuticals Inc. will cut 33 people, or about 8 percent of its employees, to save money.

The Palo Alto company will also delay clinical testing of two drugs.

http://www.bizjournals.com/
sanfrancisco/stories/2008/06/09/
daily28.html; June 12, 2008 7:02 AM
Anonymous said...: Albertson's LLC notified state officials that the grocery chain plans to lay off 5,131 workers statewide and another 121 at its Plant City distribution center.

The Florida Agency for Workforce Innovation was notified Monday that the grocery chain would begin laying off workers on June 22.

http://www.bizjournals.com/
jacksonville/stories/2008/06/
09/daily23.html; June 12, 2008 7:03 AM
Anonymous said...: Plug Power Inc., the Latham-based hydrogen fuel cell manufacturer, announced this morning it's cutting about 80 jobs from its 380-member workforce.

According to company officials, the job cut is part of a restructuring plan approved by the company’s board of directors to streamline general and administrative expenses to achieve “short-term revenue targets.”

Most of the cuts are expected to come from staff at the company’s headquarters.

http://www.dailygazette.com/
news/2008/jun/11/0611_plug/; June 12, 2008 7:05 AM
Anonymous said...: Battered by rising fuel costs, Trans States Airlines said today it will lay off 45 pilots, effective July 1.

The Bridgeton-based regional airline, which contracts with American Airlines, United Airlines and US Airways, is seeing its flights cut back as those airlines reduce capacity. So it will furlough 45 of its roughly 550 pilots.

In recent weeks, as oil prices have spiraled north of $130 a barrel, airlines have been announcing a wide range of cuts in service and staffing.

"The current environment is particularly difficult," said Trans States spokesman Bill Mishk. "What we're trying to do is manage our business."

http://www.stltoday.com/stltoday/
business/stories.nsf/0/
5DFB01C601B48294862574640076B99F?
OpenDocument; June 12, 2008 7:07 AM
Anonymous said...: More than 500 people will lose their jobs when the Siegel-Robert Automotive South plant in West Tennessee shuts down by year's end.

The plant, also called Tennessee Electroplating, has been in the Lauderdale County town of Ripley since 1964. It will begin laying off its 524 employees next month.

http://www.chicagotribune.com/
news/chi-ap-tn-plantclosure,
0,2665312.story; June 12, 2008 7:12 AM
Anonymous said...: By David Warren,

What I learned from Czech exiles I have known is that under an ideological regime, the best men live in jail, or are assigned to work in tanneries and collieries, where other good men may be found. The worst men live in luxury and power.

http://tinyurl.com/58ocx3; June 12, 2008 12:57 PM
Anonymous said...: Orange Mozillo is clearly a favorite target of this blog but, curiously, the sweetheart loans he arranged for Saint Obama's close political advisor James Johnson (as reported since Saturday in the WSJ) has garnered no attention on this site which formerly informed one and all about the housing bubble but is now little more than another nutty left wing political gathering spot.

The fact that Mr Johnson was former head of FNM should have raised eyebrows here given that FNM is a bankruptcy case waiting to happen (which will then be dumped on US taxpayers) but, again, not a peep on HP.

Wright, Evers, Fleger, Johnson... that Obama sure hangs with a reputable crowd.; June 12, 2008 1:27 PM
Anonymous said...: Hey, Keith,

When I saw that Obama is now saying now immediate withdrawal from Iraq, I just had to come and see if you are as wild about him as before.

In a clip on utube, Obama says "No, No, I've never said that the troops should be withdrawn...[stuff about how troops have to stay for reconstruction] ...We shouldn't have an artificial deadline when to do that..."

http://www.youtube.com/watch?v=2kFrFIFizkU

Still think he is for "CHANGE", now that he is saying the same thing that Hillary and Bush have been saying all along?; June 12, 2008 1:42 PM
Markus Arelius said...: Keith,
Is BT still using those proprietary phone jacks? God, I hated those. Same situation in France and Germany. I understood their reasoning not to use RJ45 and to keep everything proprietary, but on top of their lousy service, as a consumer I felt awfully trapped by BT, Deutsche Telecom, France Telecom.
Good luck.

Interestingly BT had an add campaign wit the soul music theme song "Working My Way Back to You, Babe..." in an effort to win back customers. Don't know if it succeeded.

Don't forget to pay your TV tax too, dude.; June 12, 2008 4:39 PM
Anonymous said...: Manufacturing company adding jobs

Calico Precision Molding, LLC plans to invest more than $330,000 for building improvements and new equipment at its location in Fort Wayne. The company says the new equipment will speed up the manufacturing process and allow it to diversify its product offerings. Calico, which currently employs 46 in Fort Wayne, also expects to create 20 new jobs by the spring of 2009.

http://www.insideindianabusiness.com/newsitem.asp?ID=29581; June 12, 2008 4:40 PM
Anonymous said...: Borg Warner (manufacturing company) adding jobs

The facility produces turbochargers and recently completed a $40 million expansion to make a new type of turbocharger for Ford F250 diesel trucks.

The expansion added 87 jobs, including hourly and salaried employees. Borg Warner’s hourly workers get an average wage of $15 an hour plus benefits, company officials said.

http://www.citizen-times.com/apps/pbcs.dll/article?AID=200880603177; June 12, 2008 4:40 PM
Anonymous said...: More Ray-o-vac jobs being added

Spectrum Brands Inc. will add 50 new employees at its Rayovac battery manufacturing facility in Fennimore, Wis., to produce advanced alkaline batteries developed out of a partnership with the U.S. Army.

http://www.bizjournals.com/atlanta/stories/2008/03/17/daily15.html?ana=from_rss; June 12, 2008 4:41 PM
Anonymous said...: Coal mining jobs being added

SOMERSET, Pa. (AP) - PBS Coals is adding employees and boosting production to meet demands of steelmaking.

Director of business development Hank Parke says the Friedens-based company has hired 101 employees since the beginning of the year and hopes to hire 125 more by the end of the year.

http://news.aol.com/story/_a/pbs-coals-adding-jobs-boosting/n20080526122509990018; June 12, 2008 4:41 PM
Anonymous said...: Absolutely CLASSIC! A must read!
http://tinyurl.com/5jsqmg; June 12, 2008 6:05 PM
Anonymous said...: "BOSTON (MarketWatch) -- Thornburg Mortgage Inc. on Thursday reported a quarterly loss of more than $3 billion as the company was hit hard by falling market values in its mortgage and loan portfolios.
The embattled company said it swung to a fiscal first-quarter loss of $3.31 billion, or $20.64 a share, compared with net income of $75 million, or 62 cents a share, in the year-ago period."

http://tinyurl.com/4eju3e; June 12, 2008 7:18 PM
Anonymous said...: We live in a world in which Russia's Vladimir Putin and Venezuela's Hugo Chávez use their vast oil and gas reserves as instruments of state power.

Here, Nancy Pelosi and Harry Reid use their control of Congress to spend a week debating a "climate-change" bill, fresh off their subsidized (and bipartisan) ethanol fiasco.

While other nations use their oil reserves to attain world status, we give ours up. Why shouldn't they conclude that, long term, these people can be taken? Nikita Khrushchev said, "We will bury you." Forget that. We'll do it ourselves.; June 12, 2008 8:49 PM
Anonymous said...: Pull the plug.; June 12, 2008 9:08 PM
BrianM said...: Mosquito-eating fish patrol foreclosed pools
PHOENIX - Authorities in Arizona are stepping up a program to put mosquito-gobbling minnows into the stagnant pools of foreclosed or abandoned homes to prevent an outbreak of West Nile virus.; June 12, 2008 9:17 PM
Anonymous said...: nonuniform-wearing terrorists now have the same legal right to appeal in US court as legal citizens. I'm sure you leftists are thrilled. This decision by the Supreme Court is an excellent example of legislating from the bench. How proud you must be! Many Americans will be killed because of this decision passed, today. It is one of those "punish Bush" decisions that "feels good" in a politically-correct way, but has horrible results. It is much like the millions killed in Vietnam when we pulled out - and the millions that will be killed in Iraq and Afghanistan if Obama pulls the troops out "as soon as possible" as he promised.; June 13, 2008 2:08 AM
Anonymous said...: http://cindycranston.texasrealestatevoices.com/; June 13, 2008 5:53 AM
Anonymous said...: BWAHAHAHA

I'm Voting Republican...

because we love cheap plastic crap from China.; June 13, 2008 6:13 AM
Anonymous said...: Nothing like the American sense of entitlement.

This article is about airlines now charging for bags:
http://tinyurl.com/4kjhss

And here's a quote by someone apparently unaware of the irony:

Some passengers said they were sympathetic to the plight of the airlines. "I can understand why they're doing it, to a degree," said Harry Sanders, an engine inspector for Nascar who flew on United for this weekend's race at the Michigan International Speedway. "Congress needs to get off their backsides and do something about the energy situation in this country."

That's right Mr. Sanders. Congress should make fuel cheap for us again. Maybe invade some more Middle Eastern countries--that seemed to work well last time. Meanwhile you keep working hard at your job, which is essentially to enable people to waste as much fuel as fast as possible.; June 13, 2008 6:28 AM
Anonymous said...: Ireland just voted to leave the european union...

Goodbye, bubble island; after you dropped the euro, you might be interested in forming a union with the UK.; June 13, 2008 2:49 PM
Mammoth said...: Good story you linked to, 'Gutless and Lazy finds a Gem!'
--------------------------
Here it is again, in case somebody missed it:
http://tinyurl.com/5jsqmg"

Another mania, another bubble. The winners get out before it bursts, the man who follows the rules is cursed."
--------------------------
Ain't that the truth? I finally cashed out a $3K CD that I've had in the bank since July 2004, and had just kept renewing.

Total amount, after nearly 4 years?
$3,426!

Shoulds put it into Gold. No wonder why we are not a nation of savers.

-Mammoth; June 13, 2008 3:53 PM
Anonymous said...: You guys gotta see this: 60% off and below the 2002 price in Orange County California!

Someone paid $468,000 for this?! Ha ha ha!; June 13, 2008 5:20 PM
Anonymous said...: Will US companies start raising wage like their counter part in Euro.

http://www.fxstreet.com/news/
forex-news/article.aspx?Story
Id=8619fe07-bbfd-4043-b96c-
09fce2651dae

Euro-zone wage growth accelerated at its fastest pace in more than six years in the first quarter, increasing the chances that the European Central Bank will hike interest rates next month in a bid to tame inflation.

Wages and salaries increased 3.7% on the year in the first quarter, half a percentage point higher than the 3.2% increase recorded in the fourth quarter of 2007, Eurostat data showed Friday.

That's the highest rate of growth since the final quarter of 2001, when wages rose 3.9% on the year. Total hourly labor costs rose 3.3% on the year in the first three month of the year, up from a rise of 2.9% in the fourth quarter of 2007.

The sharp increase in wages is likely to fuel the ECB's concerns that higher prices for food and energy are prompting workers to ask for higher wage packets to offset the costs that they're facing.

The central bank has left its key interest rate on hold at 4.0% for the past year, but recently signaled it could implement a 25-basis-point rate hike in July to counteract mounting inflationary pressures in the currency area.; June 14, 2008 2:12 AM
Anonymous said...: Now Walmart is getting into the real estate business.

http://walmart.sf.oodle.com/
housing/sale/-/-/usa:ca:sanjose/; June 14, 2008 5:36 PM
Debbie said...: Veterans for Peace Meeting With John Conyers to Demand Impeachment

http://vfpdc.blogspot.com

Online IMPEACHMENT petition petitiononline.com/HR1258

More at http://www.groundsforimpeachment.org/

We need to get all Americans to push their representatives to read the bill, co-sponsor the bill, and push Judiciary Committee members for the hearings. Find and contact your federal, state, and local officials. http://www.congress.org/congressorg/home

STORY http://veteransforpeace.org/VFP_deliver_impeachment_petition_to_conyers.vp.html; June 14, 2008 7:15 PM
Anonymous said...: Vet1776 wrote:
Veterans for Peace Meeting With John Conyers to Demand Impeachment

ummm... is this the same John Conyers who has been pushing for reperations for slavery for the past 16 years?; June 15, 2008 12:35 AM
Anonymous said...: It seems the better the war in Iraq goes, the less interest partisans show. Their attention wanders if they can't play the blame game and chant, "Bush lied."

And this time the critics were wrong when they argued the surge could not work. Obama was wrong when opposing the surge was the politically easy thing to do.

Conversely John McCain supported the surge in opposition to pundits who argued that his support for the war would doom his campaign.; June 15, 2008 5:19 PM
Anonymous said...: A little Sunday viewing:

http://tinyurl.com/4ahtvp; June 15, 2008 6:54 PM
Anonymous said...: You have to check out this San Diego radio show: Home Loan Sheldon. He's an HP'er for sure. It's a bit shocking to actually hear Keith's words over terrestrial radio.

Sundays: 3 - 4 pm Pacific
Wed: 4 - 5 pm Pacific
Fri: 7 - 8 am Pacific

http://www.kceoradio.com/

Stream live during the hours listed above; June 15, 2008 9:09 PM
Anonymous said...: I am pleased to announce that there is no housing crash or "housing panic" in northern New Jersey. There is a house in the NJMLS in Alpine that was originally listed for $40 million. I checked the house today and it is now listed for $42.5 million... that's right bitter renters, the price was raised by $2.5 million. Some housing crash. I want my money back!!!!; June 16, 2008 2:20 AM
Anonymous said...: Drop in property values affects governments, schools

"A Plain Dealer analysis found that in the last two years, home prices in many Cuyahoga communities plunged by double-digit percentages. Cleveland was down 49 percent; East Cleveland, 84 percent.

http://tinyurl.com/3vgd4h; June 16, 2008 2:34 AM
Anonymous said...: The email I got this from said it came from a speech Bill Gates gave to a High School about 11 things they won't learn in school. Whether that part is true or not I don't know but it's amusing anyhow.

Rule 1: Life is not fair - get used to it!

Rule 2 : The world won't care about your self-esteem. The world will expect you to accomplish something BEFORE you feel good about yourself.

Rule 3 : You will NOT make $60,000 a year right out of high school. You won't be a vice-president until you earn it.

Rule 4 : If you think your teacher is tough, wait till you get a boss.

Rule 5 : Flippin g burgers is not beneath your dignity. Your Grandparents had a different word for burger flipping: they called it opportunity.

Rule 6: If you mess up, it's not your parents' fault, so don't whine about your mistakes, learn from them.

Rule 7: Before you were born, your parents weren't as boring as they are now. They got that way from paying your bills, cleaning your clothes and listening to you talk about how cool you thought you were.

Rule 8: Your school may have done away with winners and losers, but life HAS NOT. In some schools, they have abolished failing grades and they'll give you as MANY TIMES as you want to get the right answer. This doesn't bear the slightest resemblance to ANYTHING in real life.

Rule 9: Life is not divided into semesters. You don't get summers off and very few employers are interested in helping you FIND YOURSELF. Do that on your own time..

Rule 10: Television is NOT real life. In real life people actually have to leave the coffee shop and go to jobs.

Rule 11: Be nice to nerds. Chances are you'll end up working for one.; June 16, 2008 4:04 PM
Anonymous said...: "READY...AIM...

...call your attorney, gather witnesses, take depositions, fly the whole squad to LA, AND...

uh, don't bother to fire, the guy ran off and killed someone else."; June 16, 2008 6:29 PM
Anonymous said...: My co-worker just bought an iphone so I know everything will be ok and home prices will begin increasing at a normal annual rate of 10% again.; June 16, 2008 9:48 PM
Anonymous said...: McCain to Ethanol lobby: FUCK YOU!!!

Obamas response was a major pander.

http://tinyurl.com/3rvbeu; June 16, 2008 9:58 PM
Anonymous said...: I think I saw the original source of that Bill Gates "11 things" post, and I think it probably was never a live speech but an online column from him.

Anyway, I think it's real and not just something made up that you got in your email...; June 16, 2008 11:47 PM
Anonymous said...: Actually, I correct my comment from a minute ago--

I thought it was a recent online column from Gates, but I did a quick search and according to snopes.com it is a hoax--a misattribution to Gates. In fact, according to snopes it's apparently from Charles J. Sykes, author of the book Dumbing Down Our Kids: Why American Children Feel Good About Themselves But Can't Read, Write, Or Add; June 16, 2008 11:52 PM
Anonymous said...: I'm working on a "Casey's Greatest Hits" audio package (final result will be 2 CDs). Listen to my work-in-progress here:

Visit my fake Casey site; June 17, 2008 3:27 AM
Anonymous said...: The median home sale price in six Southern California counties was $370,000, down from $505,000 a year earlier, according to DataQuick Information Systems.

Among all Southland resales in May, about 42 percent of homes sold for less than their prior sale price – about 34 percent less, on average, based on an analysis of sales where a full May 2008 and prior sale price were in the public record.

Most of the prior sales occurred between early 2004 and mid 2006.

Sales of post-foreclosure homes continue to dominate many inland markets.

Of all the Southland homes that resold in May, 37.4 percent had been foreclosed on at some point in the prior 12 months, compared with a revised 36.2 percent in April and 5.5 percent one year ago.

Across the six-county area, these “foreclosure resales” ranged from 25.6 percent of resale activity in Orange County to 56.6 percent in Riverside County.; June 17, 2008 5:39 AM
Anonymous said...: The November contract rose to 97.52, indicating a 96% probability of a half-a-point hike in rates by the Fed's late October meeting.

http://www.marketwatch.com/news/
story/treasurys-gain-fears-over-
interest-rate/story.aspx?guid=
%7B44DE56CF-372C-488D-B6BE-
034E4CC01074%7D&dist=msr_34; June 17, 2008 5:53 AM
Anonymous said...: On Friday, fed-fund-rate futures reflected an 88% chance of a quarter-point increase in August and had fully priced in a half-point increase in November.

http://online.wsj.com/article/
SB121356401012875647.html; June 17, 2008 5:58 AM
Anonymous said...: Hey, does anyone know how the housing market is doing in Austin, TX?; June 17, 2008 6:14 AM
Anonymous said...: Would you feel safe living in a home that was a former Brothel.

Would you feel safe allowing your kids to walk to school if you knew in their path was a house that was a former Brothel.

Can a Brothel exists in good school district like Cupertino, Ca.

What about top rate schools in California like Lincoln elementary, Kennedy Middle High School, or Monta Vista High School

http://www.burbed.com/2008/06/14/
pair-arrested-on-charges-of-
running-brothels-in-cupertino-
san-jose-san-jose-mercury-news/
#comments; June 17, 2008 6:26 AM
Anonymous said...: "I thought it was a recent online column from Gates, but I did a quick search and according to snopes.com it is a hoax"

No surprise! The points came from conservative principles. Gates, however, is a flaming liberal!; June 17, 2008 11:05 AM
Anonymous said...: .

Corn into gasoline?

I always wondered what if there was a long drought in the Midwest?

Never looked in the other direction at the effects of a flood!

When your largest corn producing states Ia, il, In, Wisc, are under water what will that do,

not only to prices but what about supply?

Did no one think that far out?

.; June 17, 2008 2:13 PM
Anonymous said...: I would rather have my ear of corn run through a charcoal grill,

not a catalytic converter!; June 17, 2008 2:15 PM
Anonymous said...: So you trash eating dipshits have a hardon for Angelo Moz? While you sit in your filthy 1 BR shithole rental trailer, masturbating and praying for the arrest of this orange dog faced baldheaded whore, a middle eastern (aka: motherf*cking towel-heads) wealth fund as scraped together a few billions and is getting ready to buy Miami Beach ocean front condos and sit on them for 10 years. They think they can make money and probably drooling to build some f*cking mosque right next to the Mansion night club.
I’m sure jackass Diddy (the faggots call him darling!) is going to like that shit. So listen up asinine morons, this is the time to get into the game. Take that finger out of your nose, get up from momma’s sofa and buy before the sand-n….. overrun us.; June 17, 2008 6:26 PM
Anonymous said...: Great article on debt by David Brooks.

Over the past 30 years [...] the social norms and institutions that encouraged frugality and spending what you earn have been undermined. The institutions that encourage debt and living for the moment have been strengthened.

The country’s moral guardians are forever looking for decadence out of Hollywood and reality TV. But the most rampant decadence today is financial decadence, the trampling of decent norms about how to use and harness money.

http://tinyurl.com/53osyn; June 17, 2008 6:51 PM
Anonymous said...: Here's a woman who worked in a mortgage office in Santa Barbara. Her job disappeared and she ended up living in her car ... in a special parking lot in Santa Barbara.

http://tinyurl.com/5a2s83

This organization is setting up special parking lots for homeless, working people to have a safe, drug-free place to sleep.

The woman was interviewed by NPR and asked why she couldn't move to a cheaper place than SB. She said she had looked into it, but she didn't have the money to pull of the move.

It's hard to know without being in her situation, but when you are living in your car, how much can it cost to move? Certainly, there are some costs, but putting everything in storage is also expensive.

This story seems overflowing with HP issues.

1. If her condo had more equity, she could have sold it.

2. If gas weren't so expensive, she could easily move anywhere.

3. If the mortgage business hadn't been so cushy, this wouldn't have happened.

The unfortunate thing is that in this high-speed age, the rules of living and supporting oneself change faster than the people in it.

I hate to say it, but this is a woman who could have benefited from reading HP about 2 years ago.

Here's her interview on PRI's "Here and Now"

http://www.here-now.org/

(Go to June 17th show - sorry, not archived at time of posting); June 17, 2008 10:38 PM
Anonymous said...: BREAKING NEWS:

The Associated Press plans to SUE BLOGGERS who copy and paste their articles. This is NOT a joke. Read all about it before you get your blogger butts hauled into court by the AP:

http://tinyurl.com/6nd68s; June 18, 2008 12:29 AM
Anonymous said...: FANNIE MAE!!!! How I loved her so....til she stabbed me in the rear.

http://theseuncertaintimes.blogspot.com/

Hobo; June 18, 2008 3:00 AM
Anonymous said...: Interesting, but the percentage of those who thing the USA is on the right track is about the same as the percentage who make more that 250k a year.....; June 18, 2008 5:58 AM
Anonymous said...: WSJ: "On June 9, FHA Commissioner Brian Montgomery told reporters that he opposes the Dodd-Frank approach, saying that the FHA "is not designed to become the federal lender of last resort, a mega-agency to subsidize bad loans." Last week the Congressional Budget Office (CBO) projected that banks will use the program to offload their "highest-risk loans" to the taxpayer, and that a stunning 35% of all of the loans refinanced through Dodd-Frank will eventually default on the FHA."

"Unsurprisingly, Countrywide executives have testified in support of expanded FHA refinancing. The company itself is a longtime and significant contributor to Messrs. Dodd and Frank. According to data from the Center for Responsive Politics' opensecrets.org, Mr. Dodd raised more than $6.3 million this election cycle -- 76% of his total war chest -- from banks, finance and real estate companies."

http://tinyurl.com/6bqatq

http://online.wsj.com/article/SB121375337067183049.html; June 18, 2008 3:35 PM
Anonymous said...: REI Summit 2008, a 12-night, 12-expert FREE teleseminar series for real estate investors, is LIVE. Check out http://www.reisummit2008.com; June 18, 2008 4:07 PM
Anonymous said...: Keith,

I tried to plug your website and this is what I got. What is your response or anybody on this site?

"I went to your web site, and all I saw was about the cost of the Russian market, however it is NOT about the Realtors making a buck, it is about the bankers making a buck with their sub-prime loans to people that are betting on the come that their income will increase so that they can make the increase payment when the loan is adjusted. That is the bubble that is now crashing, not the Realtors fault, Get your facts straight."; June 18, 2008 4:14 PM
Anonymous said...: Anon June 17, 2008 2:13 PM:

"I always wondered what if there was a long drought in the Midwest?
Never looked in the other direction at the effects of a flood!
...
Did no one think that far out?"

Mr. Pot, meet Mr. Kettle. LOL.; June 18, 2008 6:19 PM
Anonymous said...: I noticed the anonymous poster always posting how the DOW was "up today, losers" no longer posts here anymore.

hmmmmmmm; June 18, 2008 7:27 PM
Anonymous said...: donald said...

BREAKING NEWS:

The Associated Press plans to SUE BLOGGERS who copy and paste their articles. This is NOT a joke. Read all about it before you get your blogger butts hauled into court by the AP:

http://tinyurl.com/6nd68s

AP vs. Anonymous ????

JaneZ; June 18, 2008 8:29 PM
Anonymous said...: "AP vs. Anonymous ????"

The AP can find out who you are very easily by making a friendly phone call to your ISP. NOBODY is anonymous on the internet.; June 18, 2008 8:50 PM
Anonymous said...: Also, if someone here did paste something that pissed the AP off, I imagine that Keith would be the one who gets sued. Perhaps someone should start selling "blog insurance."; June 19, 2008 12:27 AM
Anonymous said...: California Average Weekly Gas price chart from 1996 to Present

http://www.energy.ca.gov/gasoline/
retail_gasoline_prices.html; June 19, 2008 4:13 AM
Anonymous said...: AAA's Media Site For Retail Gasoline Prices

http://www.fuelgaugereport.com/
CAmetro.asp; June 19, 2008 4:16 AM
Anonymous said...: WH Transportation Co. in Wausau will lay off 340 blames higher fuel cost

http://crm.tmcnet.com/news/2008/
06/14/3498599.htm; June 19, 2008 5:16 AM
Anonymous said...: Magna International Inc. will lay off 400 blames decline in demand for large trucks. Is the decline in demand due to higher fuel cost.

http://www.bloomberg.com/apps/
news?pid=20601082&sid=aqJtiXhNYfg
Q&refer=canada; June 19, 2008 5:16 AM