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Yes, the housing bubble burst, the crash is here, mortgages are melting down, and it's O-V-E-R. Now we just deal with the mess.
September 13, 2007
BUBBLETALK - New thread to talk about the mortgage meltdown and housing collapse
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312 comments:
«Oldest ‹Older 201 – 312 of 312Can I ask a very simplistic yet I suppose complicated question? Perhaps it is akin to looking at the proverbial crytsal ball but........
When do you all predict to be the best time to buy in this declining market? Some economists are stating that recovery will be on the horizon in 09, that seems
short sighed in my humble opinion.
We have been waiting to buy since 04 when we finally saved enough for a healthy down. We resisted persisent and somewhat undermining
proddings from friends to join the housing lemmings
and buy at the top. We have received so much grief for being a dual income family who could afford to buy but who chooses to rent. I am thinking we will buy in two years....does that seem reasonable/wise? My brother who is a financial analyst/MBA and forbid us from buying duirng the bubble seems to think the housing market will tank very rapidly in 08. Is there any financial formula to look at to determine when to buy? Curious about your projections about the best time to buy. Thank you. This Blog is and has been tremendously inspiring to me!
Credit rating agencies face SEC scrutiny
Federal regulators said Friday they are reviewing the role credit-rating agencies played in the mortgage market debacle for borrowers with weak credit.
The Securities and Exchange Commission 'has begun a review of credit-rating agency policies and procedures,' SEC spokesman John Nester said.
The review, he said, will include what ratings mean and whether conflicts of interest were created if rating agencies gave advice to issuers of mortgage debt and originators.
The agencies, whose ratings are used by investors to gauge the riskiness or safety of mortgage-backed bonds and other forms of debt, are subject to SEC oversight enacted last year.
Critics say the three biggest ratings agencies -- Standard & Poor's (NYSE:MHP) , Moody's Investors Service and Fitch Ratings -- failed to give investors adequate warning of the risk of mortgage securities containing subprime loans.
The agencies also are vulnerable to conflicts of interest because they are paid by the companies whose bonds they rate, critics charge.
http://money.cnn.com//news/
newsfeeds/articles/
newstex/AFX-0013-19430923.htm
Beazer Homes on the brink of going tits-up.
http://tinyurl.com/ytcenv
Beazer Homes USA Inc. Friday said it has received purported default notices from U.S. Bank National Association, the trustee under the indentures governing several outstanding senior note issues.
IndyMac announces that it expects to post a large loss for the quarter -- and announces massive layoffs (1000+ employees).
http://tinyurl.com/36y9m5
IndyMac to lay off 10% of its workforce.
No meltdown here folks, nothing to see.
http://tinyurl.com/35ula9
Guru Heizo Takenaka calls on BoJ to act on 'leaderless reform'
Japan's former financial services czar warns of leaderless momentum towards financial reform in the country
Mr Takenaka – famous for forcing Japan’s banks to solve their non-performing loan problems – also launched an unprecedented public attack on Prime Minister Shinzo Abe. He told an audience of business leaders at the World Economic Forum in the North Eastern Chinese city of Dalian that the newly appointed cabinet was “old fashioned” and increasingly incapable of driving reform.
But he reserved his strongest attack for the Bank of Japan – a Barclays Capital survey of financial institutions, hedge funds and other groups published yesterday found that only 16 per cent of investors said that they were “confident” they understood the BoJ’s objectives.
If the central bank fails to act fast, Mr Takenaka told The Times, Japan risks falling back into the mire of deflation, policy errors and ultra-thin interest rates that will allow the indefinite extension of the so-called “carry trade” – the practice of borrowing the Japanese currency at rock-bottom interest rates to fund investments in other currencies or assets.
The yen carry trade is believed by some to be behind the inflation of a large number of asset bubbles across the globe. Yen have been liberally borrowed by hedge funds and private equity firms in their efforts to enhance their “leverage” for buying assets. On the individual investor level, the yen carry trade has turned tens of thousands of previously conservative Japanese savers into highly speculative investors.
Last month, at the height of the market turmoil and the sudden surge of the yen, currency traders reported massive unwinding of the yen carry trade as investors panicked to exit an investment that had suddenly turned sour.
http://business.timesonline.co.uk/
tol/business/economics/
article2408089.ece
No credit crunch -- housing remains strong!
"IndyMac made $48.1 billion of mortgage loans from January to June, ranking ninth nationwide, according to the Inside Mortgage Finance newsletter. Perry said loan volumes may fall by roughly one-half in the fourth quarter."
But prices will stay high despite mortgage availability plummeting by 50% and bloated inventories of unsold new homes and foreclosed homes and unsold bubble-priced homes.
I know it will, FOX News said so!
The Canadian dollar shot higher versus the U.S. currency on Friday due a combination of strong domestic jobs data, higher commodity prices.
The Canadian dollar got an early boost when data showed the domestic economy added more jobs than expected in August, which could add pressure to the Bank of Canada as it mulls how long to hold interest rates steady amid the credit market woes.
Combined with higher oil and gold prices, common drivers of the commodity-linked Canadian dollar, the domestic currency hit an early session high of C$1.0477, or 95.45 U.S. cents.
http://ca.news.finance.yahoo.com/
s/07092007/6/finance-dollar-
rallies-strong-domestic-jobs-
data.html
"In the last decade only 14 urban areas nationwide saw more of these workers [young college educated] move in than move out: Las Vegas; Austin, Tex.; Phoenix; Atlanta; Raleigh-Durham, N.C.; Charlotte, N.C.; Salt Lake City; Portland, Ore.: Denver; Orlando; Nashville; Dallas-Fort Worth; Miami-Fort Lauderdale; and Greensboro-Winston Salem, N.C. "
from NYTimes article "What Do Young Jobseekers Want? (Something Other Than the Job)" 9/6/07
I imagine you recognize the list of cities for other reasons.
A drop in government payrolls more than erased the private sector gain, but economists pointed out that the biggest culprit was teachers, a segment that is vulnerable to large seasonal swings and appears likely to be revised higher next month to reflect the start of the school year.
Stripping out volatile government hiring figures, the latest report shows that the private sector actually added jobs last month.
The Labor Department's August employment report shows a gain of 24,000 private sector jobs. Job growth for June and July was revised lower, suggesting that the job market had been under pressure even before the latest bout of financial market unrest in August.
http://www.reuters.com/article/
ousiv/idUSN0744210620070907
Gold rallied sharply in afternoon trade, breaking through the 700 usd level for the first time since May 2006
http://www.kitco.com/
charts/livegold.html
New York's main futures contract, light sweet crude for delivery in October, edged down 11 cents to 76.19 dollars a barrel.
On Thursday it reached 77.43 dollars, which was not far off the record high of 78.77 dollars which was hit on August 1.
http://news.yahoo.com/s/afp/
20070907/ts_afp/
commoditiesenergyoilprice_
070907155122
Soaring food prices probably has nothing to do with weakness in the US Dollar.
http://www.ft.com/cms/s/0/
1f0d4c6a-5ca1-11dc-9cc9-
0000779fd2ac.html
Developing countries face serious social unrest as they struggle to cope with soaring food prices, inflation that shows no signs of abating, the United Nations’ top agriculture official has warned.
The warning comes as wheat prices are at a high, forcing developing countries such as India and Egypt to pay record prices for their food imports in what cereal traders described as “panic buying” to beef up reserves.
Wheat prices this week rose to a record $8.86 a bushel in Chicago, up about 60 per cent since January. Dairy product prices have also setting records, while other commodities, such as corn and soyabeans, are trading well above their historical averages.
How do you get job creation at full employment?
http://www.fxstreet.com/news/
forex-news/
article.aspx?StoryId=
877da244-84a2-4dca-a450-
d0ca2ea1dffb
The US economy "seems to be operating near full employment," the president of the St. Louis Federal Reserve Bank, William Poole, said today -- evidence to him that "in a strong aggregate job market.
( FW ) 09/07 05:13PM *WSJ: Countrywide Plans To Cut Up To 12,000 Jobs >CFC
(MORE TO FOLLOW) Dow Jones Newswires
07-09-07 2113GMT
Copyright (c) 2007 Dow Jones & Company, Inc.
Per Wall Street Journal. Haven't seen release yet. Countrywide just announced 12,000 job cuts.
This is the Friday after market bomb shell.
For those dumb enough to report changes on Zillow and not get a permit, guess who will be looking.
Remember all those illegal changes you made to your house, well one day it is going to catch up to you.
http://www.washingtonpost.com/
wp-dyn/content/article/2007/09/07
/AR2007090701166.html?nav=
rss_business/personalfinance
Q: DEAR BOB: I have had much work done to my home without permits. When I sell the house, is this a case of "buyer beware," or could there be a problem with the building inspectors if the buyer raises an issue? My house has more square footage than shown on the official county records. Would I be taking a risk if I mention my home's square footage? -- Steve M.
A: DEAR STEVE: When you decide to sell your home, you will regret not following the rules. You ask if this is a case of "buyer beware," but the rule has become "home seller beware of the buyer."
To protect yourself from after-sale lawsuits, you must disclose all known defects with the house, including the lack of building permits. A buyer of your house should demand a large discount for the risk he or she is taking.
If the buyer decides to make improvements requiring a building permit, the building inspector could insist that the illegal improvements be "legalized." The building inspector might demand to inspect the wiring and plumbing.
Because your house now has more square footage than shown on the official tax-assessment records, you might be assessed for back taxes. When the buyer's mortgage appraiser evaluates your home and checks the official records, the appraiser will deduct market value for the illegal space you added.
It would be a mistake for the Federal Reserve to cut U.S. interest rates simply to keep hedge funds from failing, Wall Street firms from curtailing year-end bonuses or though this might seem cruel homeowners from foreclosures.
Investment firms, which are both big borrowers and big lenders, would like the Fed to ease the credit squeeze triggered by the collapse of the market for subprime mortgages.
Futures traders are betting that the Fed will do just that by Please see Bank rate, C7
lowering the rate on overnight loans among banks to 5 percent from the current 5.25 percent.
The Fed has already pumped money into the credit markets by lowering the rate it charges on loans to banks. There's no need to go further. The mortgage market has already shown signs it can fix itself after its adventure in loans given to people with poor or no credit.
http://www.ohio.com/business/
9580122.html
50bp cut then 2 more 25bp cuts by year end.
______________________
Wow! That would equal 100 basis points.
Did the geniuses at the Federal Reserve think how that's going to impact on the dollar? Probably not.
The EU is making noises about raising their rates again; somehow they don't feel the need to lower rates.
Prediction: end of year the Euro will be at $2.00 if the Fed embarks on that insanity.
_______________________
if they cut "only" 25bp market could think that this is not enough...
if they cut 50bp market could think they are in panic
so question is..what you would do if you were in bennys place?
______________________
A rate cut could break the long term support in the USD index.
_______________________
http://www2.oanda.com/cgi-bin/
msgboard/ultimatebb.cgi?ubb=
get_topic;f=16;t=009000
This is Sept 7, and Keith you have failed to mention anything about the mystery investor who put 1 billion down on certain stocks (can't remember what kind) in order to make 2 billion not including the 1 invested, it is a bet that the stocks will crash by the third week in Sept and if not the person loses the 1 billion. Have anything to do with the chinese perhaps quietly dumping US debt so far to the tune of 35 billion. No one knows who dumping the debt but the price of gold, going up. I am not a savvy stock market know it all matter of fact I sorta just look at it and know what doesn't look good, and by god this doesn't look good. Also no one must have been paying attention to WASHINGTON MUTUAL because they are going to let a lot of people go I think 1200 people. Aren't they like a BANK. Get your money out now. That was on Bloomberg News. They were to busy watching those stock market numbers jumping around all over the place and wailing about Office Dept not selling more pens and lined paper. Plus every market all over the world was down except all the asian stocks. I think I read only 5 markets that were up all Asian except Singapore, I can't remember. So what's up?
I am thinking we will buy in two years....does that seem reasonable/wise?
_____
I would avoid putting an arbitrary timeframe on it.
However long it takes for house prices to drop another 40% to 50% is when you might want to start thinking about buying. House prices WILL collapse at least that far, no matter what anyone tries to tell you. And this phenomenon will be small in comparison to the carnage in the financial markets due to the meltdown of worthless paper. Vast sums of fake wealth need to be shaken out, and will be shaken out.
In the meantime, live frugally and save your money. A 20% downpayment with an excellent credit score will be very nice to have.
hey Keith post a article on this and HPers check out that Campbell's Soup Company just posted 4Q earnings of 39% higher then last years earnings. WTF are Americans beginning to live on SOUP to pay the mortgage and CC payments and still eat?...beginning of SOUP KITCHENS? like the 1929 great depression? Casey whats your favorite tomato broth? can you swing the Chunky cans?
http://tinyurl.com/34napd
I don't care if they cut or not...either way I'm gonna be able to afford a house here in the DC area in 2 or 3 years. I am patient and I can wait. If they cut...then inflation will eat away the value of the dollar while house prices do not rise and my wages will adjust accordingly. If they do not cut my wages may not go up as much but house prices will (and already are) crashing. Either way people...your stupid houses are only worth what they are...which is much much much less than what you think. My advice to you homeowners is to SELL now while you still can and avoid losing everything you have. But if not, I will be glad to take it. HA HA HA HA HA FLIPPERS!!!!!
Is the US dollar Doomed
Payrolls fell 4,000 in August
The US dollar plunged across the board, falling 80-ish pips in the first 5 minutes against the Euro, Pound, Yen and Swiss franc.
Bernanke and co. will surely take this bad data into consideration. While I hope they won't cut the benchmark rate despite the markets crying for it, this might make the Fed consider a series of cuts. People are now talking about a 50bp cut this month.
Treasury prices shot up after the NFP release, and the 10-year yield is hovering around 4.435% - the lowest level of the year.
The US dollar looks doomed. Carry trades look very vulnerable.
EUR/USD is an arm's length away from this year's high, so 1.3850 is an upside target if it overcomes 1.3800.
USD/JPY is currently resting near the neckline of a double top. Next downside targets around 113.50, 113.00, 112.80.
http://www.gracecheng.com/blog/514/
Profit%20From%20the%20Bearish%20
USD%20Sentiment.html
PROUD TO BE A FLIPPER
If tomorrow all the houses were gone
just like i'd flipped in all my life
And I was able to screw somebody again
Because of an inflated marked up price
I'd thank Alan Greenspan
Wish he was back at the helm today
But he's not, so America here is what I gotta say
And i'm proud to be a flipper
where at least I know I'm scum
My dream is to make every American into a worthless bum
And I'd gladly stand up
behind you
and stick it in you today
'Cause there ain't no doubt
I love money
And I ain't gonna go away
From the $750,000 condos in California
To the 1 million slums in DC
Across the desert bubble of Las Vegas
from sea to shining sea
From the rot of Detroit down to Houston and LA
I have pride in every American I rip off
and its time you start to pay
And i'm proud to be a flipper
where at least I know I'm scum
My dream is to make every American into a worthless bum
And I'd gladly stand up
behind you
and stick it in you today
'Cause there ain't no doubt
I love money
And I ain't gonna go away
151 major U.S. lenders have "imploded"
http://ml-implode.com/
10 Reasons Why Berserkers Need Rate Cuts
10) Millions of realtors and mortgage brokers are praying for it and a few thousand “capitalist Ponzinistas” are begging for it.
9) The smartest bond trader in history is losing money.
8) The emergency training course to convert auto repo men in the Brazil America marketplace into art collection “recovery specialists” in the Bully plutocratic marketplace isn’t quite completed yet.
7) Inflation expectations are “well anchored”
6) $300K/year realtors are eating meat loaf for dinner
5) Banks granted 400K mortgages to people making 40K/year and are now losing money.
4) Housing industry needs to be stimulated, because we badly need more homes in Arizona and more condos in Florida.
3) A bunch of 26 year old hedge fund managers need help, because they had no idea that once in a while stocks can have a correction and sometimes loans do not get repaid.
2) Without the cut it would be a sad Christmas this year, as many hardworking financial engineers and paper shufflers would not be able to put down a 200K waiting list deposit on a Ferrari and will not be able to afford a $50,000 Christmas tree.
1) Jim Cramer, Lawrence Kudlow and Bill Gross want it, as there are still exploding runaway crack up boom Bubbles, ‘er I mean “global” booms in gold, oil, materials, commodities, beer case hoarding, parabolic rare baseball card prices, and emerging market manias to exploit.
http://wallstreetexaminer.com/
blogs/winter/?p=1053
State-by-state subprime mortgage delinquencies and foreclosures
http://www.usatoday.com/money/
economy/housing/
2007-09-06-subprime-
delinquencies-chart_N.htm?csp=34
United States
# Subprime Past Due
6,204,535 14.82%
# Subprime ARM Past Due
2,853,245 16.95%
Not all Hedge Funds lost money in August.
http://www.marketwatch.com/news/
story/paulson-hedge-fund-up-410/
story.aspx?guid=%7BFDB43747-
F8FF-4B30-8CB8-D3C2ED738CDC%7D
The Paulson Credit Opportunities fund returned 26.67% in August, leaving it up 410% in 2007, according to a person who has seen the firm's most recent performance update.
Another fund set up a little later, called Paulson Credit Opportunities II, jumped 32% last month, leaving it up 229.57% so far this year, the person added on condition of anonymity.
An event-driven fund run by the firm climbed 5.21% in August, leaving it up 68.52% in 2007, the person also said.
Many hedge funds, it found, performed better in July and August
"This (market turmoil) is much more a problem for banks than it is for hedge funds," said Chambers, highlighting losses made by investment banks especially in fixed-income markets.
Cash-rich hedge funds are likely to spot investment opportunities in the financial market turmoil which has hit a few of their high-profile rivals, a senior official at Man Investments said on Thursday.
"I don't think this is a hedge fund problem or crisis.
OPPORTUNITY IN TURMOIL
"When we have periods of mispricing like this, often very cheaply priced because people are dumping assets, hedge funds sitting with cash are presented with great investment opportunities," said Chambers.
Chambers said the turmoil in financial markets was more likely to be a problem for smaller hedge funds than the large ones.
"This is not even a blip for hedge funds after what has been a very strong year, he said. "There is a limit to how much banks will lend. The problem for them (smaller funds) is --have they got secure financing?"
"Going forward, the difficulty some hedge funds are going to face given the events in August, is the ability to stay in the game," Chambers said.
http://investing.reuters.co.uk/
news/articleinvesting.aspx?type=
hedgeFundsNews&storyID=
2007-09-07T104905Z_01_NOA738802_
RTRUKOC_0_FUNDS-MAN-INV.xml
The average list price of homes for sale in Santa Clara County as of Aug. 31 fell 2.5 percent from a month earlier, to $857,048, Movoto said. Average list prices fell most in Contra Costa County, dropping 4 percent, and rose most in San Mateo County, up 2 percent.
List prices are the prices sellers hope to get for their homes. About one-third of Santa Clara County sellers in August got more than their list price when they sold their homes, according to data from San Jose broker Richard Calhoun of Creekside Realty.
Movoto's report also features an estimate of what percentage of homes for sale in each county are "distressed," as measured by whether terms such as "bank owned," "short sale" or "in foreclosure" are included in the comments entered by listing agents in the multiple listing service.
http://www.mercurynews.com/
realestatenews/ci_6825070
There is no such of thing like a housing bubble. You are alla lunatics.
Keith...
“I ask you if anybody in early June could contemplate what we are now confronted with?” Mr. Greenspan said, referring to the eruption in credit market turmoil and risk aversion that originated with rising delinquencies on subprime mortgages.(WSJ, 9.8.07)
YES! KEITH AND THE OTHER HP'ERS
FUNNOMINAL
.
Better get some before your priced out of the market!
.
For a taste of how long it takes for these excesses to work thier way out of the system, I live in Tokyo and last year bought a condo for less than 1/5 of what it had been sold for new in 1988, i.e almost 20 years and the thing is worth 17 cents on the dollar still, However its a great large condo in one of the nicest parts of central tokyo where I can walk to work (major us investment bank).... The mortgage payments are also about 1/3 of the rent I could get as people percieve there to be much more risk in owning after this 20 years of depression .... at a guess i would say if things go down hard in the US they dont stop until the financing costs are half the rent you can make to compensate you for the prices falling further ....
eric janson over at itulip is trying to float the idea that the FED does what the politicians want.....this is just total rubbish......the politicians do not in any way shape or form , influence what the FED does. if anything it is the other way around. i mean, come on, who owns the damn FED.....when you tell me that, i mean who really owns the banking system? Then you can say who is telling who to do what? it is very shallow to say that somehow puppets on strings , which is all politicians really are, somehow influence banking. they have no influence over it. hell, we are not even in charge of our own money. if a country does not have control of its money, then it is not a free country. so for all intents and purposes , since the beginning of this nation more or less, we have always thought we were free men, but we have never really been free. now there are degrees of freedom, yes, no doubt about it and as time has gone by in the history of this nation we have slowly lost our freedoms. and in 1913, when the FED was created, that more or less was the nail on the coffin for this country. in order to change what is happening and become what we should have become, we will have to take back control of what is ours. washington's army was a mere 10,000 men at most and he took on the british army of 40,000 regulars. determination, good luck, and God's will can defeat anything. we shall again have to revisit lexington green.....my friends......one more time .......yes it is true...
I wanted to thank "rcochran" for posting the following sage advice. My brother is a MBA/ formerly a financial analyst on Wall Street and his comments to us on timing the market are the very same.
He seems to think that prices will decline very rapidly in 08..... but only time will tell. I was curious about other HPers projections about what when they think there will be a 40-50% drop in prices............
I have a degree in English and a Masters in Counseling so Economics is not my strong suit. I have had to educate myself on the housing market. I have two young children and care about my family's financial future. We rent currently in Los Angeles and have received so much pressure to buy since 04. Now that the real estate market in crumbling people are mute about our decisin to rent...interesting.
I first became aware of the emerging housing bubble following Dr. Christopher Thornberg of the Anderson School at UCLA.
It is astonishing to me the number of people who plunged into the housing market without regrad for the fundamentals. I do not want to start up this heated debate again on HP but I found that the women I know (who bought at the top) often pressured their husbands to buy without regard for the fundamentals. I do not wish to generalize but it has been my personal observation that the "nesting urge" is synonomous with financial suicide. I
This puts an enormous pressure on a marriage particularly when equity dwindles and the finger pointing begins. I am watching this unfold with a couple who paid 740K in 05 for a 1,000 sq foot cottage in a marginal area. They have to do private schools which in LA mean 18K a year. The husband is very caustic about the purchase and the wife says she wishes she listened to my warnings.
In any event, like most women, I do have the nesting urge and want to buy a home but I want to also make a responsible financial decision so
thank you for the feedback.
------------------------------------------
I would avoid putting an arbitrary time frame on it.
However long it takes for house prices to drop another 40% to 50% is when you might want to start thinking about buying. House prices WILL collapse at least that far, no matter what anyone tries to tell you. And this phenomenon will be small in comparison to the carnage in the financial markets due to the meltdown of worthless paper. Vast sums of fake wealth need to be shaken out, and will be shaken out.
In the meantime, live frugally and save your money. A 20% downpayment with an excellent credit score will be very nice to have.
Anyone ever use realtytrac or another site to buy forclosures?
Any luck?
Hedge fund manager Clifford Asness, who oversees $10 billion at AQR Capital Management, told investors last month that rumors of severe pain at his fund were simply false.
Based on what others in the business are saying, that statement might even hold true for the global $1.9 trillion hedge fund industry as a whole. After bracing for heavy losses, investors may be surprised to see the month wasn't as bad as feared when performance numbers come out early next week.
"Things look a lot different at the end of the month than they did at the beginning and during the middle when people really were suffering big losses," said a hedge fund investor who is familiar with many funds' performance, but asked not to be named. "Now I think we are going to see much smaller losses than initially expected."
http://www.reuters.com/article/
fundsFundsNews/
idUSN0720574820070907
Goldman Said to Profit from Deal With Troubled Fund
Goldman Sachs’s $2 billion investment in one of its troubled hedge funds seems to have had a happy ending — for Goldman, anyway.
The Global Equity Oppportunities Fund made its parent $300 million last month, The Financial Times reported, after the investment bank organized a $3 billion bailout (which Goldman executives insisted was not a rescue).
http://dealbook.blogs.nytimes.com/
2007/09/07/goldman-wrings-300-
million-from-fund-after-bailout/
"In the last decade only 14 urban areas nationwide saw more of these workers [young college educated] move in than move out: Las Vegas; Austin, Tex.; Phoenix; Atlanta; Raleigh-Durham, N.C.; Charlotte, N.C.; Salt Lake City; Portland, Ore.: Denver; Orlando; Nashville; Dallas-Fort Worth; Miami-Fort Lauderdale; and Greensboro-Winston Salem, N.C. "
from NYTimes article "What Do Young Jobseekers Want? (Something Other Than the Job)" 9/6/07
I imagine you recognize the list of cities for other reasons.
This article has nothing to do with the housing crash. It's just another example of the press pandering the spoiled brat Y generation, a group of young people who have no idea about the hard times headed their way.
Found an interesting article on the net posted on the FDIC website about the 2004 (not so) housing bubble ...
On a different note, near the end of the article, it mentions housing prices collaped during the Great Depression because mortgages then were callable, and banks were calling in their mortgages...
The Feds should have seen the problem with those calable home loans way before banks started closing. If they didnt forsee that happening back then....
How do we know for sure the Federal Reserve has everything under control now?
http://www.fdic.gov/bank/analytical/regional/ro20041q/na/infocus.html
In today's L.A. Times:
Business Journal reports that L.A. County sales are down 50% in August over last year. Due to the jumbo loans.
One realtor is quoted that everything changed on August 9th.
.
If these numbers are true better get some gold!
.
.
Before your priced out of the market!
.
Dollar Plummets to 22 Year Lows, Declines Likely to Accelerate on Fed Expectations
http://ca.biz.yahoo.com/fxcm/070907/
1189189505775.html?.v=1
Treasury Rally May Falter as Overseas Holders Flee Dollar Drop
Treasury investors basking in the biggest rally in four years have reason to fear for their profits: The largest owners of U.S. government debt are heading for the exit.
``The dollar may weaken for a while,'' said Masataka Horii, one of three managers for Kokusai Global in Tokyo, which has $46.6 billion in assets.
Sumitomo Life Insurance Co., Japan's third-biggest life insurer, and Fukoku Mutual Life Insurance Co., the nation's eighth-biggest, purchased contracts that profit from a decline in the dollar to hedge their U.S. debt.
It would take a further 5 percent decline in the U.S. currency for Sumitomo Life to buy Treasuries, according to Masayuki Yoshihara, who helps manage the equivalent of $25.9 billion of non-Japanese debt at the firm in Tokyo.
``We're not so bullish on the dollar,'' he said.
Shifting Reserves
Asian central banks also reduced Treasuries last month in an effort to curb dollar gains against their currencies. Taiwan's central bank sold $4 billion to $5 billion of securities, mostly U.S. bonds, George Chou, a deputy governor of Central Bank of the Republic of China (Taiwan), said in an interview.
Even before the flurry of sales, more nations were starting to shift foreign-exchange reserves away from the dollar.
http://www.bloomberg.com/apps/
news?pid=20601101&sid=
aNgW4Fu_8.tI
One indicator that’s seen steady erosion — and is falling again today — is the U.S. dollar index, a gauge of the dollar’s value against a basket of currencies traded on the New York Board of Trade, used as a barometer of the relative strength of the U.S. currency.
That condition isn’t so strong right now, as the index today fell through 80 to 79.84, the lowest level reached for the dollar since September 1992.
“You have overall, the dollar index sitting on a large breakout level,” says Joseph Trevisani, chief market strategist at FX Solutions, who sees the index potentially falling to around 76 or so.
http://blogs.wsj.com/marketbeat/
2007/09/07/
flipping-to-the-dollar-index/
Some says Words don't mean anything. What matters is what Mr. Bernanke does with interest rates.
Therefore when Henry Paulson and George Bush say we support a "Strong Dollar" it is a Policy in Name Only.
If Mr. Bernanke lower interest rate then he is telling investors "US want a weaker dollar," and investors will allow US Dollar to get there in a hurry and it's going to feed on itself.
The question the Federal Reserve must answer is if they lower interest rate will they cause a vortex of dollar selling.
Even speculators and hedge funds know that Yen Carry Trade has been trumped by the weak US Dollar, as investors see Oil and Gold breaking out of its trading range.
It is all up to Mr. Bernanke now.
Question is how high can oil and gold get before investors see it next trading range.
http://www.fin24.co.za/articles/
default/display_article.aspx?Nav=
ns&ArticleID=1518-1793_2180025
The data looked certain to increase pressure on the Federal Reserve to cut US interest rates. A rate cut could weaken the currency further, as investors tend to exit the currency market and invest in other assets for better returns.
"Gold's resilience in the face of the recent selling impressed a lot of investors and when the dollar started to weaken, people started to believe that gold had a realistic chance of moving substantially higher," said Peter Hillyard, head of metals sales at ANZ Investment Bank.
"The market is bullish. Over the coming weeks and months, we will see an attempt to take the market higher towards the $730-$740 area," he said.
Spot gold edged back below $700 to $699.90/700.70, above $695.70/696.30 an ounce late on Thursday, but off the $707.10 peak.
http://finance.sympatico.msn.ca/
investing/news/breakingnews/
article.aspx?cp-documentid=
5409323
Oil market fundamentals do not justify a crude oil price as high as $70 a barrel, which is below today's level, Exxon Mobil Corp's top executive said on Friday.
"I cannot explain why we have $70 oil. The fundamentals behind supply and demand do not support $70 oil. The fundamentals support something much less," Exxon Mobil CEO Rex Tillerson told a business roundtable at the Spruce Meadows equestrian facility on the outskirts of Calgary.
OPEC seen leaving crude production alone, there is no reason to raise production because higher crude oil price is due to weakness in the US Dollar and not a demand and supply problem.
http://www.forbes.com/
afxnewslimited/feeds/afx/2007/09/
09/afx4097065.html
Kuwait says high oil prices not related to demand and supply.
http://www.servihoo.com/channels/
kinews/afp_details.php?id=174213&
CategoryID=47
Kuwait said on Sunday it sees no reason for the Organisation of Petroleum Exporting Countries to hike oil output during a meeting of the 12-nation cartel in Vienna this week.
"There is no real significant justification to change what we are producing now," Acting Oil Minister Mohammad al-Olaim told reporters before leaving for Tuesday's meeting in the Austrian capital.
"Up till now we don't think there are essential reasons that (an) increment should be there," he said.
Olaim said the recent rise in crude prices was "related to geopolitical reasons and to shortage of refining capacity" in consumer countries.
"It is not really related to demand problems," he said.
The oil cartel is under pressure to raise output to dampen crude prices.
Last Thursday, oil prices in New York tested their record level of 78.77 dollars per barrel, reached on August 1, while in London a barrel of Brent was trading at about 75 dollars.
At its last regular meeting in March, OPEC decided to keep its official production quota at 25.8 million barrels per day (bpd).
OPEC president and United Arab Emirates Energy Minister Mohammad bin Dhaen al-Hamli also said on Sunday that current oil supplies were sufficient.
Speculators and hedge funds feeling the pressure of a weaker US Dollar and stronger Yen.
http://business.timesonline.co.uk/
tol/business/markets/japan/
article2418996.ece
The “yen carry trade” investment gambit that has driven highly leveraged hedge-fund bets around the world may be on the brink of collapse and could trigger months of extreme currency volatility.
Analysts are telling markets to prepare for a massive surge in the yen as small investors, hedge funds and other speculators join a potential stampede out of positions that rely on the weakness of Japan’s currency.
The yen’s surge is expected initially to hit small Japanese investors hardest - pensioners and housewives who have embraced the yen carry trade as a lucrative alternative to poor returns from their post office savings.
Toru Umemoto, the chief Japan economist at Barclays Capital, believes that the yen will surge from its current range of 115 to 116 yen against the US dollar to Y109 between now and the end of the year.
US Dollar index continues to go down as the Asian markets open for trade.
Last trade: 79.891
Change: -0.067 (-0.08%)
http://quotes.ino.com/chart/
?s=NYBOT_DX&v=i
Investors Rush to Gold
"You're better off thinking of gold as a currency than a commodity," Foster says.
Thus, much of gold's moves up and down can be explained by global financial movements. It often rises alongside the price of oil, and falls when the U.S. dollar rises. The fact that oil prices rose and the dollar fell Thursday helped drive the day's big move, Holmes says.
Many Asian nations stung by subprime investments are saying "We need to diversify more in gold," says Frank Holmes, chief executive and chief investment officer of U.S. Global Investors (GROW), an expert on commodities and emerging markets.
In the past several years, the price of many commodities has spiked, driven by demand from manufacturing in emerging economies like China. Gold prices have lagged other commodities, however, because gold has fewer practical applications. If gold had followed other commodity price increases, it would be priced at $900 to $1,000 per ounce, Holmes says.
http://www.businessweek.com/
investor/content/sep2007/
pi2007096_240041.htm?chan=
top+news_top+news+index_investing
In a nut shell Saudi Arabia is saying "Crude Oil Price must raise to compensate for the weak US Dollar" or "Saudi Arabia must consider linking the value of the Riyal to a basket of foreign currencies"
http://www.bloomberg.com/apps/
news?pid=20601068&sid=
aHSoTPmeZFd0&refer=economy
Saudi Arabia's plan to control inflation by cutting state spending and reducing money in the financial system may fail as some of the factors contributing to price growth are out of their control, economists said.
Inflation in Saudi Arabia is also caused by a weak dollar, to which the Saudi riyal is pegged, low U.S. interest rates and the rising cost of food globally, economists from Jadwa Investment Co., EFG-Hermes Holding, Riyad Bank and Standard Chartered Plc, said today.
"Riiight, it's the medias fault. They were late reporting the bubble and are still trying to call the bottom. The media is not responsible for hedge fund losses, overzealous builders and 143 lenders going under. "
Yes Moron, it is....
Listen, to the sheeple of the US the box in the family room is second only to god himself. And the media is what caused the bubble with the constant "flip this house" and the constant drum beat of housing making everyone money. Now it is saying the opposite and like clockwork, the sheeple are sitting on the sidelines. If you are an investor watching good housing going on sale, now IS the time to buy. Not because the dopey Realtor says so, but because the MARKET is telling you so. Do you think someone like Warren Buffet got to a billionaire by buying when everyone else did, or selling when everyone else did? He bought when the most UNCERTAINTY existed in the market like right now.
You just continue renting and when the media tells you it is safe, then go buy something. In the meantime the pros will be buying. BTW, unless you are a banker or an economist inside the eye of the storm, you have NO IDEA how bad it REALLY IS. You just listen to the boob tube and read the media to come up with the same information everyone else "knows" Enjoy...
Hey renters - you may want to look at some math for a moment. The attitude is that Phoenix is going to plummet. Well that would seem the case on the surface, but as always, the devil is in the details. Phoenix is MUCH less vulnerable than any city in California. Why? You ask, well because, most of California's housing is priced above $417,000. That means that if you are buying in California, your lenders just hiked up interest rates by a point or two points. Not basis points, whole points as in 1 to 2%. Meanwhile, in Phoenix, where the median home is UNDER $417,000, your lender (Fannie, Freddie) just lowered your interest rate. Guess what that means...??? Hmmm. And, amazingly, what have I seen around the neighborhood, but two homes that have been on the market for a little bit, both just got sold signs on them. So much for the no demand theory. What, did you actually think that everyone wanted to live with their parents or rent until the media said it was ok to buy? Maybe most sheeple think that way, but actual, thinking humans are more worried about their family having their own home in a good school district and in a good neighborhood, and thanks to Fannie and Freddie and the bond market, that is possible in Phoenix, but not yet in LA, or San Diego.....
This year may be the first since 1991 with a 4 percent inflation rate. After years of running just under 3 percent, a 4 percent rate will be a shock, particularly since it won't apply to home prices.
At the end of July the CPI was at 208.3. It was 203.5 a year earlier. That's a 12-month increase of 2.36 percent. But inflation abated in late 2006. Last September consumer prices fell 0.5 percent. They fell another 0.4 percent in October. They were unchanged in November. The index closed the year at 201.8.
What does that mean?
If there is no additional inflation between July and the end of the year, our inflation rate for the year will rise to 3.22 percent. But if the index advances only 0.2 percent a month, our inflation rate for the year will be a hefty 4.26 percent.
We could, of course, have a replay of 2006; prices could still fall. But the more likely event is a continuation of small monthly increases. That would put us at 4 percent.
http://www.boston.com/business/
personalfinance/articles/2007/09/
09/stop_running_and_face_the_
threat_of_inflation_head_on/
Will somebody help the guy in the next street over?
He bought in 2005, remodeled, and put his house up for sale by owner in Jan 2007, since then he's gone through 3 different realtors and is now back to for sale by owner.
He's asking a peak 2005 price.
In the meantime other neighboring houses have sold. One guy put his (well maintained) house on the market and kept lowering until sold.
Now more pricier neighborhood houses are coming in below what he is asking.
Won't somebody help this poor fella?
Commodities boom may go on for five more years
THE global commodities boom is expected to continue for at least another five years, thanks to the growing supply and demand imbalances worldwide as well as huge demand from emerging economies like China and India.
Analysts said commodities like metal, energy and food-based, which are in their fifth-year upcycle, were currently trending upwards after the much-needed correction last month due to the US subprime scare.
They concurred that demand for energy, particularly in Asia, would rise further, which meant the price of crude oil would continue to appreciate and might hit as high as US$100 per barrel in the future.
The inventories of other resources like base metal and food-based oilseeds are depleting as the rapid industrialisation of China, India and certain parts of Latin America spurs demand.
“The growing population in the emerging economies, with three billion people, is putting immense pressure on the planet's resources.
“Just look at the high rate of oil and metal-related exploration activities worldwide to cater for the surge in demand,” said one analyst with a foreign stockbroking firm.
He said supply constraints would support commodity prices in the long term but cautioned that “it is not the right time to be overly bullish about the extent of price gains.”
Analysts contacted by StarBiz hold mixed views on whether the record high prices in commodities – following a rally whose extent had not been seen in over five decades – can be sustained in the current supercycle compared with the normal three-year upcycle.
Many dismissed the idea of a potential bubble in commodities, while some likened the current commodity bull-run to the case of Japanese stocks in the 1990s and the Internet bubble in 2000.
http://biz.thestar.com.my/news/
story.asp?file=/2007/9/10/
business/18821951&sec=business
In the meantime the pros will be buying.
_____
Well then, Mr. Pro, I encourage you to go ahead and buy up lots of properties and keep trying to convince everyone you've made yourself wealthy from real estate as home prices plummet at least 40% to 50% more.
PKK Grandma here--
Please read entire article: it's
not just housing...
http://www.ft.com/cms/s/0/d7a4be24-5b1c-11dc-8c32-0000779fd2ac.html
Ron Paul wins 2 straw polls:
Supporters of Republican presidential candidate Congressman Ron Paul dominated the West Alabama Republican Assembly 2007 Presidential Preference Straw Poll at Bryant Conference Center on Saturday afternoon.
Of the 266 votes casts during the poll, Paul claimed 216, landing him an easy victory.
Massachusetts Gov. Mitt Romney came in at a distant second with 14 votes
------
Ron takes the Strafford County, NH, GOP straw poll today by another landslide:
Out of 286 votes cast:
Ron - 208 (73%)
Romney - 26
Huckabee - 20
Tancredo - 8
McCain - 7
Cox - 5
Hunter - 5
Fred Thompson - 3
Giuliani - 3
Brownback - 1
http://tinyurl.com/27tgg8
I am sure its been submitted a hundred times already, but man that is getting creative.
Another Paul Win...
Maryland Republican Party State Fair: GOP presidential straw poll was won by Ron Paul...
According to the release, Paul received 263 votes, and former New York mayor Rudolph W. Giuliani (for whom Republican former governor Robert L. Ehrlich Jr. is toiling) was second with 220 votes. (Ehrlich received three write-in votes.) Former Tennessee senator Fred Thompson-- who had yet to declare his candidacy -- finished third with 188 votes. No other candidate cracked 100 votes.
My question, which I’d like feedback from all of HP nation on, is what effect do you think a reduction in the war effort (ie a pull out) would have on the greater DC market. My assumption is DC is still being largely propped by the military expansion of the past 5 years, and I’d have to think that if and when the war ends, that would cause further declines than already seen. Anyone have a different view?
40% to 50% price drops...LMAO...morons...imbeciles...dimwits...shit-hole renters!
SHIT HAPPENS BUT THIS IS NEVER GOING TO HAPPEN!!!
blowfly
If some houses tripled in price over the last say 4 years then a 40-50% correction would still leave the house up 50% over the baseline value. So a 40-50% drop in some areas would probably be correct.
My assumption is DC is still being largely propped by the military expansion of the past 5 years, and I’d have to think that if and when the war ends, that would cause further declines than already seen. Anyone have a different view?
No, the people that think DC is immune obviously have short memories. DC has cycles based on government spending AND technology. It was 9/11 and the spending that followed that saved DC from the technology bust of 2001-2003. Otherwise unemployment would have skyrocketed.
There was an 15 story office building (near my childhood home, in suburban MD) finished during the S&L crisis (late 80s); it sat vacant for 8 years before demand caught up and tenets moved in.
Sure, DC is less prone to major swings in the local economy. But, I have the feeling that DC and it's bubble/ glamour city coherts (like NY/LA/...) feel nothing will ever change. Maybe I am wrong, but I feel economic nationalism is returning. The weak dollar and 'the cheap revolution' of China will speed the demise of DC as industry returns to the heartland and labor cost are pushed downward. Lastly, the movement of young college educated folks (who create future jobs by starting small businesses) out of the glamour coasts should be the final nail on the coffin of the overpriced coastal cities.
ok it is the end of the world as we know it now...IBM has been approved to service FHA loans for the government!!!!!!!!!!!!!!
What does IBM know about mortgages? They haven't even obtained their licenses yet!!!
Blowfly said...
40% to 50% price drops...LMAO...morons...imbeciles...dimwits...shit-hole renters!
SHIT HAPPENS BUT THIS IS NEVER GOING TO HAPPEN!!!
______
Obviously you're on the hook with some property, and DESPERATELY NEED IT TO NOT HAPPEN.
You aren't paying attention to the world economy or the financial markets, are you?
A fool and his money are soon parted.
Light, sweet crude futures for October delivery rose 79 cents to $77.49 a barrel on the New York Mercantile Exchange.
The dollar slipped against most other major currencies, while gold prices, which have risen sharply in recent weeks amid concerns about the strength of the U.S. dollar, extended their gains. A rate cut by the Fed could hurt dollar-denominated assets, prompting some investors to shift into gold.
The stock market ratcheted up and down throughout the day, with Wall Street still nervous after Friday's dismal employment report. The data, which showed the first monthly decline in jobs in four years, rekindled fears about housing and credit market weakness bleeding into the overall economy and squeezing consumer spending.
Speeches from Fed officials Monday seemed to give investors a bit more reason to be optimistic about the economy, but the officials avoided hinting at how the central bank might alter rates.
San Francisco Fed President Janet Yellen said that while market turmoil has the potential to hurt the economy, rate policy should not be used to shield investors from losses. Dallas Fed President Richard Fisher said the economy appears to be "weathering the storm," and Atlanta Fed President Dennis Lockhart said investors should consider Friday's unemployment report in the context of a mostly strong batch of retail sales reports.
For many investors, a rate cut after more than a year of the Fed standing pat on rates is practically a given. The debate, as they see it, is whether the Fed on Sept. 18 will reduce rates by a quarter percentage point or a half percentage point to loosen up the tight credit markets - and also, if the central bank will continue to reduce rates as the year goes on.
There could be a major sell-off if the Fed doesn't reduce rates next week, said Scott Fullman, director of investment strategy for I. A. Englander & Co. And until then, movements will likely to be choppy, and exaggerated by low trading volumes. "It's very volatile here, but we're not seeing a tremendous amount of volume. People are on the sidelines. I think people want to be convinced of what's happening before they get back in."
The Dow Jones industrial average rose 14.47, or 0.11 percent, to 13,127.85, after falling 250 points on Friday and switching directions several times throughout the session Monday.
http://www.carolinanewspapers.com/
24hour/business/story/
3695953p-13110885c.html
"Well then, Mr. Pro, I encourage you to go ahead and buy up lots of properties and keep trying to convince everyone you've made yourself wealthy from real estate as home prices plummet at least 40% to 50% more. "
Well, actually I have been. And I also have been purchasing energy stocks with a lot of money I moved out of my properties via refi. I know, that is BAD. Well you know, I never did listen much to the sheeple. I refi'd my properties about a year or so ago that were purchased in lower cost times, took the cash, put it in stocks, and have made some good money there as well. What, you don't believe me? Well here is a little food for thought, and maybe a tip. Check out the price of one particular energy stock - Global Santa fe. Purchased about a year ago for 56.00 a share. Purchased 10000 shares. Do the math. Meanwhile, oops they also announced a dividend, check that dividend out when the merger with Transocean deal closes at the end of the year. Do that math. I am sure you can do that research. Oh and I know you want to flame me about the banks not financing a deal like that. Well, look at the balance sheet and cashflow of both companies, then tell me that the deal won't get done. This is a credit crunch on crap assets, not good assets. Now, when you finish doing that math, keep in mind that the money came from real estate that was purchased years ago and now that money is being paid for by you, the renters. Now, fast forward to now, cheap good properties sold in desperation. Drop 40 to 50% of my price that I am negotiating with sellers in panic mode - yea right. After you do all the math, come back and challenge me....How much did you make last year? You think that you are getting wealthy working the 9 to 5 and complaining about Real Estate?
Enjoy your doom and gloom, and continue to flame, but the smart folks on this blog will do the research on what I have said, and maybe instead of huddling with the masses in the fallout shelter they will make a little coin and enjoy a little better by being smart and not following the herd. And hey, if you don't like oil service, try shorting CFC, because Keith is spot on with that one. CFC will go down, and then be parted out by B of A. That was the plan from the beginning folks.
"Well, actually I have been. And I also have been purchasing energy stocks with a lot of money"
You're so full of shit! I doubt that you have any assets of substantial worth.
It's really amazing that people who fail in life write their wishful fantasies on the internet.
Clip from Fox news.
http://tinyurl.com/2b22tw
Be interesting to see what people will do when both their HELOC's and credit cards no longer have any borrowing room.
To: still making money off renters
Your so perfect. That's why you're wasting you precious time here on this blog? Based on your profile, I would imagine you would have more important things to do.
I think your tenants toilet is broken. Go fix it.
CFC continues to circle the bowl:
link
Nice job, Keith! You got the attention of Diane Orlick from CNBC...keep sending the MSM stuff, they are ready to listen.
MassBubbleGirl
Just look at this blog for the first time. I am a realtor, a buyers agent. I am glad that the market I am working is not this bad. Most houses here are selling for $150-$250K. More than that they are sitting a while. It is a buyers market, and slow, but still selling to peopel with good credit. Not the people that needed subprimes that should never of had a loan to begin with, and investors are taking a hit.
I dont see a melt down in Atlanta. Houses are still selling in the $150-$250K range with good credit. No real issues. Sellers are having to come down a little, but not what most people thing. 1-5% depending on the location.
How many of you on here actually know or understand anythign about finance and the real estate market other than what you read in the paper or want to sit back an critize the industry without any education?
Wow, with the DOW up 180 points today, it looks like everything is fine and that the Fed will not be cutting.
"You're so full of shit! I doubt that you have any assets of substantial worth.
It's really amazing that people who fail in life write their wishful fantasies on the internet."
Ok, yep you caught me. Guess you are just way too smart for me. Actually I just find it funny to stir up the bees in the hive. And telling from the response, I succeeded at that as well. But I am still a failure, right?
"To: still making money off renters
Your so perfect. That's why you're wasting you precious time here on this blog? Based on your profile, I would imagine you would have more important things to do.
I think your tenants toilet is broken. Go fix it. "
Snappy come back. Apparently you have done your research and you have no facts to back up your response, so an insult is all you can muster. Oh BTW, no toilet problems, and I have a management company that takes care of that anyway, so no worries here.
.
One thing to remember,
You can't call a bottom if you don't know how far you have to fall!
Teresa my wife in San Diego
Does anyone know where I can find out how much MEW has been drawn this year. I am just curious how bad Cristmas will be this year.
Do we still have ATM options on homes?? 5 piece bath,granite counter tops, 10 car garage, and an ATM in the master clost so the neighbors will never know.
News from the foreclosure capital of America:
NE Ohio working families poorer as good jobs disappeared, report says
From the Plain Dealer:
"Although the data, being released today, show 45,481 fewer manufacturing jobs here - a 16.7 percent decline - they also show a 63,741-job increase in various service industries.
http://tinyurl.com/2pgh6s
Thanks to Clinton for NAFTA, thanks to W for more of the same and welcome Mexican truckers!
please vote in on-line poll against a government bailout at www.tandg.com , the worcester MA newspaper
Thanks to Clinton for NAFTA, thanks to W for more of the same and welcome Mexican truckers!
I seem to recall that Daddy George Bush and the Republican controlled Congress had their hands in that, too. So please do not place the full blame on Slick Willy.
Housing Bubble 2.0!
FLASH!
You can't make this stuff up folks.
At the time everyone is criticizing "The Maestro", Greenspan for encouraging exotic mortgage products and cheering on the bubble.....
Bush's China Poodle himself, Paulson, calls for NEW and IMPROVED mortgage products to help bail out FB's.
And guess who attending the meeting?
You guessed it, Orangelo Tangelo himself.....
http://tinyurl.com/2qmt87
Just cannot make this sh*t up....
Foolish Flippers Pride
He stayed up all night and cried with his realtor
And fought off the urge to just break down and crawl
In 2005 this market seemed so darn easy
But now HP is to blame; damn they sure got balls
He thinks if he lowers his price it just shows weakness
So the hurt goes on with every payment he makes
Ain't it sad to see a good bubble fall to pieces
Chalk another bankruptcy up to foolish pride
Turn out the lights the housing bubbles over
The stubborn flippers are the losers here tonight
And while the markets burn, another hard-hard lesson's learned
As through the ashes his finances slowly dies
And this flipper goes down to foolish pride
He relives every contract he signed in greed
He walks the floor and punches out the wall
To lower his damn would be so very simple
But instead he cries I'll be damned if I'll crawl
If he loses this bubble he's lost his best friend
And that's more then just a realtor can provide
So he wrestles with emotions that defeat him
Chalk another flipper bankrupted up to foolish pride
Turn out the lights the housing bubbles over
The stubborn flippers are the losers here tonight
And while the markets burn, another hard-hard lesson's learned
As through the ashes his finances slowly dies
And this flipper goes down to foolish pride
Chalk another flipper busted up to foolish pride
http://tinyurl.com/2rd22w
misplaced nuclear cruise missles somehow transported across united states, for first time ever in known history.......how can this be? what is going on here with these missles? who is the insane person or persons responsible for this? ladies and gentlemen , we have traitors in our own government .....i hope and pray that good men who are in that very government stand up in these days and be accounted for and stop this insanity before it begins......is it not bad enough , that we have invaded two foreign sovereign nations without provocation and murdered innocent people for nothing? is it not bad enough, that now we have to use nukes? what are we doing? where were they going to use these nukes? on us perhaps and blame it on al quaeda? God help this nation and now......
If you look at oil supply it has been above the historical mean, so why has crude oil price been raising even after OPEC raised production?
http://www.theoildrum.com/topic/
supply_production
Crude Oil Price, Gold Price, Wheat Price, and everything else based on the US Dollar have been going up due to the WEAK US DOLLAR POLICY.
Remember the two rules of economic:
"FEAR and GREED" and "Path of less Resistance"
Currently greedy Speculators and Hedge Funds are going with the path of less resistance.
With the market prediction of the Federal Reverse 100% chance of lowering interest rate this Tuesday, the US Dollar has but one direction down.
If the US Dollar Index break 79 then next stop is 76.
Therefore Speculators and Hedge Funds has no fear of shorting the Dollar and bidding up the price of gold and oil.
Anderson school of economic said that California might have a chance for a recession if the stars line up correctly, but IMF's recently increased forecast of 5.2 percent economic growth for the US.
So is the Federal Reserve going to lower interest rate?
http://www.signonsandiego.com/
news/business/
20070912-0758-imf-growth-.html
No U.S. recession, is what the International Monetary Fund expects, and the rest of the world should weather that problem, IMF chief economist Simon Johnson said on Wednesday.
Nobody can say for now, however, to what extent the economy of one or other part of the world will be damaged by a credit crunch in financial markets, which politicians and regulators will now have to address, focusing on banks, he said.
“Our position on the U.S. economy is that other fundamentals remain strong,” he said, noting resilient consumer spending and investment levels despite a housing downturn that has proven worse than first thought and which would take time to ease off.
Things could pick up in the second half of 2008, he told reporters at a briefing.
While the IMF's recently increased forecast of 5.2 percent economic growth now looked unattainable, the emerging market economies of the world, notably in Asia, were strong and should stay so, and Europe was in relatively good shape, he said.
Daniel Mudd, Fannie's president and CEO, on Wednesday said his firm can play a crucial role in steadying a home loan market while a shakeout removes what he calls the “bad actors.”
As many as 2.5 million adjustable-rate mortgages, or $600 billion worth of loans, are scheduled to “reset” this year and next, jumping from low “teaser” rates for the first two or three years to much steeper rates that could cost borrowers their homes.
Some experts say many of the mortgages won't qualify for refinancing no matter how much money Fannie and Freddie have to pump into the market because many of the homeowners involved are no longer employed or the value of their house has fallen below the total due on the mortgage.
A rising tide of soured loans has already forced a number of lenders into bankruptcy, while hedge funds and other big investors in securities backed by subprime mortgages took deep financial hits. The turbulence spilled over into global credit markets and stock exchanges last month as investors faced the prospect of not being repaid.
http://www.signonsandiego.com/
news/business/20070912-1251-
mortgagemess-fanniemae.html
Airlie Opportunities, a $650m hedge fund, put the blame for heavy losses last month on the cancelling of two planned structured vehicles.
Analysts say billions of dollars of bank loans have already been anonymously dumped into the market as investment banks and hedge funds have been forced by the credit crunch to abandon plans for CLOs.
CLOs are structured credits built around pools of bank loans, and had been booming until the summer.
Market participants say the banks which had led the market could be hit, although it was unclear how much they had been warehousing when the market froze.
The main marketers of CLOs included Citigroup, Deutsche Bank, JPMorgan, Merrill Lynch, Lehman Brothers and Bear Stearns, while many hedge funds and credit specialists were also creating CLOs.
A partner at Airlie, who asked not to be named, said on Wednesday: “We are far from being the first to have to do this and we will be far from being the last.”
The dumping of loans from closed warehouses is thought to have contributed to sharp drops in the value of bank loans, already hard-hit by the more than $350bn overhang of unsold debt used to back private equity buy-outs.
http://www.ft.com/cms/s/0/
1cf9d7f6-616d-11dc-bf25-
0000779fd2ac.html
Hedge funds investing in Japan had their worst monthly performance for seven years in August, as global stock-indexes fell on fallout from U.S. subprime mortgage defaults, according to Eurekahedge.
The Eurekahedge Japan Hedge Fund Index, which tracks 124 funds investing in Japan, fell 3.4 percent in August -- the biggest drop since it started in January 2000, according to Eurekahedge, a Singapore-based hedge-fund research and publishing company.
http://www.bloomberg.com/apps/
news?pid=20601101&sid=a73l.
W5jo8LA&refer=japan
The advantage with big banks are they still have depositors money to pay with.
http://seattletimes.nwsource.com/
html/businesstechnology/
2003878606_wamu11.html
WaMu's plans to expand its loan portfolio have unnerved some analysts.
Seattle-based WaMu has hardly been unscathed by the industry's storms. More loans are being written off as bad and more property is being foreclosed, and Killinger acknowledged those trends will continue for at least a few more quarters.
But WaMu has more and bigger sources of cash than many of its more troubled competitors, and Killinger wants to take advantage of the company's relative strength.
WaMu, as Killinger took pains to point out Monday, has many other sources of funds. Its vast depositor base supplies 51 percent of the company's funding. The company also has $50 billion in assets it can pledge as collateral for Federal Home Loan Bank advances.
Since the beginning of 2006, defaulted loans, foreclosures and other "nonperforming assets" have steadily risen as a percentage of WaMu's total assets: to 1.29 percent, from 0.59 percent.
Charged-off loans have grown from $105 million in the first quarter of 2006 to $271 million last quarter; subprime charge-offs alone have risen from $20 million to $103 million.
Though Killinger maintained that "we are comfortable with the credit quality" of the $10 billion in older, nonconforming loans moved from WaMu's for-sale portfolio into its investment portfolio, the company will take a $200 million write-down on those loans.
The market for nonconforming loans — generally, those where the borrower has poor credit, borrows more than 80 percent of the home's value or borrows more than $417,000 — has evaporated in recent weeks.
That has squeezed mortgage lenders who relied on selling off such loans to investors to raise cash for new loans.
Since the turmoil in the mortgage markets has closed off credit to many would-be borrowers, institutions still making loans are demanding, and getting, higher rates.
For instance, Killinger said, the average rate on "jumbo" (greater than $417,000) option ARMs — adjustable-rate mortgages that give borrowers the option to make less-than-full monthly payments — rose from 8 percent in June to 8.6 percent in late August.
Australian banks are having to shift billions of dollars of loans from separate investment vehicles back on to their balance sheets as a global credit squeeze cuts off the supply of once-abundant funding.
National Australia Bank, Australia's top lender, could potentially bring back A$11 billion (HK$70.5 billion), while Australia and New Zealand Banking Group may bring back A$5.5 billion in loans to their books.
Rivals Commonwealth Bank of Australia and Westpac may have to follow suit.
The return of securitized assets back to balance sheets is an indication of how the turmoil in global credits markets is beginning to impact the big lenders in Australia, analysts said.
"If the credit conditions deteriorate further and we see corporations become distressed ... that is when you see write-offs for the banks. At this stage, there will be a rise in delinquencies and an uptick in nonperforming loans and write-offs," said portfolio manager Angus Gluskie.
"So on the face of it, banks have been insulated from any credit concerns. But in this circumstance, where they do have to take them back on, they are moving back into a higher risk position," he said.
Typically banks used special vehicles, known as conduits, to park longer-term loans such as mortgages off their balance sheet, freeing up capital which can then be used for lending.
The conduits funded their purchases by selling short-term commercial paper, which was once considered a relatively safe home for investor cash. Recently, however, the appetite for such paper has all but dried-up as lenders turn risk averse.
As a result, the banks are having to run down their conduits and take the loans on to their own balance sheets, so restraining their ability to lend for other things.
Westpac said its exposure is about A$6 billion, while analysts estimate Commonwealth Bank has about A$2.2 billion in conduit assets.
http://www.thestandard.com.hk/
news_detail.asp?we_cat=10&art_
id=53008&sid=15263077&con_type
=1&d_str=20070907
Here is a very good post regarding the housing panic and the consequences http://www.realestateproblem.com/2007/08/09/can-the-fed-help-save-the-sinking-real-estate-market/
House prices are starting to fall, according to the Royal Institution of Chartered Surveyors. Demand continued to weaken as rising interest rates weighed on buyer affordability, reported by the RICS.
BLOWFLY for president!
======================
There will be a bailout for the sub-prime monkeys with me in the the crib formerly known as the White House. The presidential bailout program is going to feature mandatory bulldozing of all homes not sold and on the market for more than 9 months without compensation to the home owner or lender. This will stimulate the housing market and reduce lingering inventory. Debt slaves, homebuilders and f*ck'd lenders are going to have to eat sh*t!
I say it again, I'm going to put chitlins in every pot, birth control pills in every purse and we're going to have a freakin' orgy every other weekend!
So Buffet's buying CFC? Surely it's to stake a claim on parts of the post collapse rubble, or is he going to rescue the company?
I just came from the welding supply store. Everything they now sell is made in China. I get this sinking feeling when I realize that if I want to manufacture airplanes, tanks, guns, cars, skyscrapers, ships, bridges, nuclear bomb shelters, communications equipment, submarines, or lamp shade frames, that I am at the mercy of China. They have fought the smart war in which no shot is fired. To win all they have to do is not sell me supplies to and cash in all their treasury securities to flood the market with our paper causing its collapse. Even the guy who sold me the wire expressed fear of another depression.
O'Rielly pwning Ron Paul
http://tinyurl.com/2qdlr5
Analyst: Fed rate cut won't help markets
Lower interest rates will not bring in money but instead send dollar into a tailspin, says Punk Ziegel banking analyst.
A widely watched banking analyst said late Sunday the best solution to the crisis plaguing financial markets is to let cash-strapped borrowers default and their lenders go bankrupt, rather than slashing interest rates.
Punk Ziegel & Co. analyst Richard X. Bove wrote in a client report the hoped-for cut in interest rates this month will do nothing to bring money back into the U.S. financial markets. Instead, Bove said, lower interest rates will send the dollar into a tailspin and wreak havoc in the job market.
Bove cautioned that cutting rates will not lure investors back into troubled markets. Investors and banks already have the cash to buy risky loans and investments, he said.
"There is no liquidity problem, but a serious crisis of confidence," Bove said. "In a financial system where there is ample liquidity and a desire for higher rates to compensate for risk, the solution is not to create more liquidity and lower the rates that are available to compensate for risk. ... (The Fed) cannot reduce fear by stimulating inflation."
In fact, cutting interest rates will only encourage investors to borrow dollars at the lower rate and bring the cash to places like Europe, Bove said.
"It is illogical to assume that holders of cash will have a strong desire to lend money at low rates in a currency that is declining in value when they can take these same funds and lend them at high rates in a currency that is gaining in value," he said. "By lowering interest rates the Federal Reserve will not stimulate economic growth or create jobs. It will crash the currency, stimulate inflation, and weaken the economy and the job markets."
Bove said the solution to this crisis is to allow people who cannot repay their debts to default and allow the companies that issued bad loans to fail.
http://money.cnn.com/2007/09/10/
markets/bc.apfn.liquidity.aheado.
ap/index.htm
On Thursday, the dollar briefly fell to another low against the euro of $1.3927, as a slow decline that has been under way for months picked up steam this past week.
"This is all pointing to a greatly increased risk of a fast unwinding of the U.S. current account deficit and a serious decline of the dollar," said Kenneth Rogoff, a former chief economist at the International Monetary Fund and an expert on exchange rates. "We could finally see the big kahuna hit."
While most economists just a few months ago would have dismissed the prospect of a dollar collapse outright, they now are debating the possibility that something on par with the dollar debacle of the 1970s might just happen again.
When a currency collapses, the central bank can push up interest rates to attract needed investment, but strangle the economy in the process. Alternatively, it can let the currency fall and watch prices of imports - and eventually competing domestic goods - rise sharply.
Double-digit inflation resulted in the 1970s and only a global recession brought it to an end.
Today, the dollar's current weakness is being driven by uncertainty over how central banks will react to the turmoil in financial markets, unleashed by the collapse of the U.S. market for subprime mortgages given to borrowers with shaky credit histories.
In addition to increased nervousness about the pace of the dollar's decline, many currency analysts now also are willing to make an argument they would have avoided as recently as a few years ago: that the euro should bear the brunt of the dollar's decline.
The European Central Bank put off an interest rate increase it had planned for September, but is still inclined to tighten credit at least one more time by the end of this year. By contrast, the U.S. Federal Reserve has hinted at a rate cut at its meeting next Tuesday - a step that would diminish the appeal of dollar-denominated assets, almost certainly sending the dollar lower.
But across a horizon of 18 months to two years, investors are pondering how quickly the dollar will fall, a question to which there are no easy answers.
The problem, as every economist knows, is that the current account deficit - about $770 billion - is still colossal in absolute terms.
And foreigners are being asked to provide those dollars at a time when the subprime turmoil is threatening to spill over into the broader economy.
Put another way, at a time when the psychology of crisis has gripped financial markets, intangible attitudes toward the dollar have become all the more important. And with growth strong elsewhere in the world, there are appealing places to go besides the dollar.
http://www.iht.com/articles/2007/
09/13/news/econ.php?page=2
If initial jobless claims, a leading indicator of employment, does not hint of a jobs decline, then why does Federal Reserve want to weaken the US Dollar by lowing interest rate?
http://www.dailyreportonline.com/
Editorial/News/new_singleEdit.
asp?individual_SQL=9%2F14%2F2007
%4016580%5FPublic%5F%2Ehtm
Job decline is a psychological, not statistical, stigma
A monthly increase or decrease of 150,000 does not really affect a workforce of 153 million
THE MONTHLY employment report has always been more than just another data release.
It serves as the signature economic statistic for financial markets, setting the tone for a host of other reports, including industrial production and personal income.
It acts as the lead-off batter for nightly news anchors on the first Friday of the month. (The 16 seconds allotted doesn’t leave much time for nuances in the two separate surveys from which employment growth and the unemployment rate are derived.)
It provides the key metric—a first among equals—for business-cycle gurus when And it functions as a benchmark for an administration touting the success of its economic policies or program.
In reality, there isn’t a heck of a lot of difference statistically between a monthly job increase of 50,000 and 150,000 in a workforce of 153 million. Or between a decline of 50,000 and a similar increase.
It’s the sign that matters. When job growth ebbs, even if it’s by 4,000 as it did in August, we all catch our breaths—especially when the decline is a surprise.
Working folks across America hear the news that the economy shed jobs last month and start to worry about their own. Businesses become more cautious about planning and hiring, even if their particular company or industry is seeing robust demand.
In other words, the decline in non-farm jobs in August, the first in four years, was significant for psychological if not statistical reasons. Even if employment rises in September and August’s losses are revised away, the damage is done. Homeowners unaffected by the collapse in the subprime mortgage market may not understand esoteric structured finance. Now these complex products have been given a human face.
There was nothing in initial jobless claims, a leading indicator of employment, to hint of a jobs decline. The latest reading of 318,000 turns out to be the average for the past year.
Wonder why interest rate went up.
The leading indicator initial claims for state unemployment insurance does not support a interest rate cut, as the latest initial claims of 318,000 turns out to be the average for the past year.
Traditionally a jump of 30,000 applications is worth mentioning and anything below that is worth considering.
On top of that we had 2 quarters of increasing gross domestic product GDP.
Yes job growth fell 4,000 in August, but that number is small compare to a workforce of 153 million.
This should tell speculators and hedge funds that if Bernanke lower interest rate on Tuesday then it is nothing more then an appeasement to the Market.
The market is currently adjusting itself to higher inflation due to the weaker US Dollar policy.
http://www.bea.gov/newsreleases/
national/gdp/gdpnewsrelease.htm
Real gross domestic product -- the output of goods and services produced by labor and property
located in the United States -- increased at an annual rate of 4.0 percent in the second quarter of 2007, according to preliminary estimates released by the Bureau of Economic Analysis. In the first quarter, real GDP increased 0.6 percent.
http://www.salemnews.com/pubiz/
local_story_256094048
Oil prices jump above record $80 a barrel, and Dollar drops amid rumors of interest rate cut
The dollar plunged to its lowest point ever against the euro yesterday amid speculation that the Federal Reserve will soon cut interest rates.
"Hovnanian Chief Says Housing Bottom Is `Very Near'"
http://tinyurl.com/32yjra
Is this guy dumping shares? Because I think we have a better chance of Jesus coming back in 2009. He's either a bold faced liar of he's drinking his own koolaid. Maybe if he makes them all into 2 family homes and sells them for $100k each with builder financing that he funds with magic money he doesn't have and people think buying a house is a good idea again and no one in the neighborhood forecloses and the LIBOR goes down and the banks post record profits and no natural disasters, wars or terrorist attacks occur and the dow hits 18000 while the dollar appeciates and surpasses the Euro in exchange value like in 1998. Like I said, I've got my bets on Jesus.
The next major financial crisis: credit card debt.
http://www.businessweek.com/magazine/content/07_39/b4051027.htm
"Yes, the housing bubble burst, the crash is here, mortgages are melting down, and it's O-V-E-R."
HA!
You think what we've seen is the bubble pop? Wait till next year. People are still in denial and think that everything will be right as rain come spring 08.
Now alot can happen in the next 6 months and maybe this is as bad as it gets, but I highly doubt it...
Over? It hasn't even started yet...
How would you react if the check your Title company issued you bounced? PANIC!
"Among the victims: Jordan and Elipidea Pongase, who sold their Hillsborough County home in December 2005, walked out of a Gulf Coast closing and deposited a $138,884.11 proceeds check into their checking account.
A few days later, Mrs. Pongase discovered that the title company's check was no good. "
http://www.sptimes.com/2007/09/14/Northpinellas/Lavish_life_over__pai.shtml
Just went through the listings from my realtor. New Jersey, pretty close to Manhattan, good schools, pretty nice place to live.
OLP: $499,000
Todays list price: $399,000
DOM: 50
Thats a hundred thou! Gone!
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