No way we're in Denial still. Got to be Fear or Desperation. And you know what's next... Finally.

September 17, 2008

No way we're in Denial still. Got to be Fear or Desperation. And you know what's next... Finally.

The good news? The bottom is in sight.

But first, we need Panic.

62 comments:

Anonymous said...: Homeowner exodus from Arizona town of Maryvale called "EVACUATION".

Holy sh*t!

http://tinyurl.com/6y5m4b; September 17, 2008 8:39 AM
Anonymous said...: fear, definitely fear.; September 17, 2008 8:48 AM
Anonymous said...: FLASH:
Yu Been Skooled officially acknowledges HP call on deflation.

IN OTHER NEWS:
Asian markets rush to cash, dump commodities en masse. Worldwide recession feared. Inflation and Prosperity off the table.; September 17, 2008 8:49 AM
Lost Cause said...: Is it really good news to see the bottom, after you have fallen off a cliff?; September 17, 2008 9:33 AM
blogger said...: From the WSJ:

http://tinyurl.com/585esl

Surviving the Panic

Enter the panic stage, or the great deleveraging that began some 13 months ago. Fear now trumps greed, while the short-seller and cash are kings. The core of our financial problem, as Treasury Secretary Hank Paulson said yesterday, is that these mortgage instruments are underpinned by real-estate assets whose value keeps declining. Until home prices stabilize, no one knows how large the losses will be. Thus no one is sure which financial companies are truly endangered, or how many.; September 17, 2008 11:21 AM
Anonymous said...: Sorry. out in the bible banging sticks, not a clue,STILL!

Bad economy? Oh yea, God is punishing us for allowing gay marriage.

Americans are idiots.; September 17, 2008 11:34 AM
Anonymous said...: We're still in denial.All the analysts from Cantor Fitzgerald think this is the bottom, it can't get any worse. Next quarter will be flat with a slight uptick and then better stock market after that. You should buy stocks because they always go up. They sound like Lawrence Yun except promoting stock ownership instead of homedebtorship.

You know what? Maybe stock ownership isn't the best idea for a lot of people. People don't even question the idea that it couldn't be.; September 17, 2008 11:35 AM
blogger said...: When I see this chart I'm always amazed that David Lereah and Lawrence Yun and all those brilliant "analysts" tried to call bottom two or three years ago.

As if you could skip anxiety, denial, fear, desperation, panic, capitulation and despondency.

You wonder if those idiots have ever read an economics book.; September 17, 2008 11:51 AM
Anonymous said...: Agreed the bell curve of attitudes has shifted forward to the point where the peak is nearing "panic" I'd say the spread is from anxiety to despondency. Homes in my area of NOVA that have sat on the market forever and day are now posting "under contract" or "for rent" signs. Under contract homes are ones that have slashed price.; September 17, 2008 11:57 AM
Anonymous said...: Evacuate said...
"Homeowner exodus from Arizona town of Maryvale called "EVACUATION".

Holy sh*t!

http://tinyurl.com/6y5m4b"

Maryvale is not a town it is just a sh!tty part of west Phoenix.; September 17, 2008 12:33 PM
Anonymous said...: People I hang out with still don't get it. Oh I'll be fine, we all have good jobs and are not feeling the lose of wages. It would be fear if I had not received a pay check in two months. My bother was telling me that a roofer on one of his projects was saying that he had not worked in two months and was having a hard time working in the heat, because we was out of shape. Welcome to America...; September 17, 2008 12:44 PM
Anonymous said...: We're definitely in the fear stage. Although the FED and Treasury appear to be in the desperation phase. They were crushed when the collapse of Lehman made the Dow loose 500. The thought that the Dow might loose a 1000 pts spurred them to save AIG. Just, who are these guys trying to save?; September 17, 2008 12:44 PM
Anonymous said...: DENIAL

I talked with some 27-year-old moron at a party last weekend, who said "Annapolis real estate doesn't go down."

I'm not shitting you. Direct quote. It combines the "real estate never goes down" mantra with the "it's different here pabulum."

I proceeded to berate her. I told her it's already down, and it's going down a lot more. When she said it'd be back to normal soon, I told her that the crash is getting it back to normal, and 20% annual appreciation is NOT normal. I also said it'd never come back to its current nominal price level. I also lectured her on Countrywide, Indy Mac, Fannie, Freddie, and Bear Sterns (I didn't know about Merrill or Lehman yet). Her eyes glazed over.

I think I'm never going to be invited back because the hosts' family is huge into area real estate. Plus I was pretty rough with the idiot.

I don't care, though. Idiots disgust me, and I have better things to do than hang out with boring blowhard flipper wannabes.

So sorry, Keith. Denial.; September 17, 2008 12:51 PM
Anonymous said...: Fear, definitely fear. But I think ya got to be in fear before prices to start to fall in ernest. When the stickiness principle starts to give up it's stubborn grip.

I think fear needs to be a looooog process. Lord knows denial was.; September 17, 2008 1:13 PM
Anonymous said...: >You wonder if those idiots have ever read an economics book.

No. They read An Idiots Guide to PR instead.; September 17, 2008 1:16 PM
Anonymous said...: Jersey Girl

Is confusion a point on the chart?; September 17, 2008 1:25 PM
Anonymous said...: i'll split my analysis into two parts: the average joe and the Feds.

1) the average joe -- somewhere between denial and fear. i think a lot of folks over the past few days are now more in the fear camp, but there are still so many who don't truly understand what's going on it's hard for them to be fearful. it's like some explorer in a distant land walking into a trap of an invisible monster...how can he be fearful when he can't even see the monster?

the reason that people can't see the monster -- that is, the financial tsunami that's coming -- is because they have no understanding of finance and economics. they don't understand how the dismantling of Wall Street will affect their jobs an home prices in the future. they simply don't understand the economic/financial relationships going on.

they won't see the disaster that's unfolding until it's too late...just like the hapless explorer who is walking straight into the path of the invisible monster. neither of them will know what hit them.

2) the Feds - definitely in the PANIC stage. why do you think they've spent almost 1 trillion dollars on bailouts and rebate checks, and nationalized the finacial services industry?; September 17, 2008 1:35 PM
Anonymous said...: You'd be amazed how many are still in the denial stage.
I think Vanilla Ice summed it up perfectly. Stocks have to be a dirty word before we hit bottom.; September 17, 2008 2:12 PM
Anonymous said...: We're entering the desperation phase.

Expect Bush to do a Jimmy Swaggart "My God, I have sinned!" in the Rose Garden any day now...; September 17, 2008 2:26 PM
Anonymous said...: US Government officials and the Fed are in Fear stage. Government Desperation will be when they make all short selling illegal and they are almost out of stick saves (they still have a bunch of stick save options right now). Government Panic will be when the FDIC has to continually go to the treasury for more money with every bank failure, The Fed is out of spare money, and the interest rates jump up when there is the talk of a stick save.

In CA, Arizona, Florida, the average Joe may be in Fear, but most of the country is still in Denial, but they are no longer in oblivious. A stock market crash or major drop in Christmas sales or a sudden jump in unemployment in the near future will change that to Fear.; September 17, 2008 2:34 PM
Anonymous said...: The feds PANIC

J6P Denial. When Faux News shows a real run on WAMU banks; lines, the police, camera crews everywhere or when a Wall Streeter jumps to his death THEN the sheeple will wake the F*CK UP.

At this momment - Denial.

Beignet; September 17, 2008 2:38 PM
Anonymous said...: I just shit my pants.I am scared shitless right now.I am down to my last 5k and don't have a job.At this point I don't even want one.Wall street has fleeced me of my retirement it took me 22 years to build.I cannot do it again.I think I might joinn the military and asked to be on the front lines in iraq.Do not know if they will take me at my age.; September 17, 2008 2:52 PM
Anonymous said...: Stuck in So Pa said...
Sorry. out in the bible banging sticks, not a clue,STILL!

tangelo mozilo said...
DENIAL I proceeded to berate her. I told her it's already down, and it's going down a lot more.

A friend sent out a broadcast E-mail to all of their friends and church members asking them to pray for them because her husband's employer (who by the way is on the verge of BK and on the list looking for Gov. bailout) might cut out all OT and ask them to take a slight decrease in pay.

I sent a response e-mail explaining how we ALL are facing some hard times to come and it seems no one is aware and no one is prepared.

Now I fear that friendship is ended because I was not "Supportive" of their plight like all of their family and other friends. I guess you guys are right-- DENIAL.; September 17, 2008 2:55 PM
Anonymous said...: FROM Comments at CALCULATED RISK Blog:
~~~
Mrs.J. writes:
Hi,

First time poster here. . .I come here via "DailyKos" --- I don't know that much about these kind of matters.

I don't belong to the "investor class"; my money is in the bank.

I'm not here to ask: Should I take my money out of WaMu? Because, you know, I wouldn't take random financial advice from a "blog" ---

I'm here to ask: How long do I have to educate myself? It's 5:45 am here on he West Coast.

Later this morning, I think I'll just walk over to my branch of WaMu and see if there is a line forming, if there is, maybe I'll join it.

Mrs.J.
~~

STILL IN DENIAL FOLKS BUT COMING AROUND TO FEAR; September 17, 2008 3:06 PM
Anonymous said...: Keith, I believe we are not even in the fear or denial stage. There are people who see a house (a 1800 square foot, three bedroom, two bath home, an average American home if you will) and in 2004 it sold for 449K and now the bank listed it for 399K and the idiots think "it's a great time to buy" mantra. So many people at work believe "it's a great time to buy" and they are actually home shopping! So I don't even think we are in the fear or denial stage. Heck no.; September 17, 2008 3:12 PM
Miss Goldbug said...: On the surface, its denial, but deep down its fear. Homeowners are hopeful there's a rebound within months....surprise!

Prices will have gone down drastically the other way!!

I agree with the poster-"I've had it" that most people don't understand the business cycle, and the average Joe is walking blind in total darkness until the recession knocks them down into the dirt, and they see stars.

Then, and only then will we see housing panic.; September 17, 2008 3:31 PM
Mammoth said...: Anyone seen the GOLD price today? The graph shows a $30+ increase straight up.

Shoulda bought at $750...

Any thoughts on whether this rally will rocket higher, or fizzle?

-Mammoth; September 17, 2008 3:45 PM
Anonymous said...: this is just fear. desparation is three to four thousand dow points LOWER.; September 17, 2008 3:48 PM
Anonymous said...: I still think there is a fair amount of denial. People are still thinking that the big gov is save them.; September 17, 2008 3:54 PM
Anonymous said...: Unbelievably, from what I saw on CNN, it is still denial. I forget the woman anchor's name who was doing the lead-in for a piece.

Quote, "The silver lining is that the bottom is near."

I said "no," there cannot be a person who still thinks this isn't going to be devastating.

By the way, the piece that played made no mention of a bottom, so I guess they weren't at least lying about that.; September 17, 2008 4:33 PM
Anonymous said...: President Palin?

Bwa ha ha ha ha; September 17, 2008 4:37 PM
Anonymous said...: "Agreed the bell curve of attitudes has shifted forward to the point where the peak is nearing "panic" I'd say the spread is from anxiety to despondency. Homes in my area of NOVA that have sat on the market forever and day are now posting "under contract" or "for rent" signs. Under contract homes are ones that have slashed price."

Agreed. And to think, we here in NOVA are so much farther along than the rest of the country. Our peak inventory was summer 2006 - a level we never saw again in 07 or 08. The rest of the country, peak inventory is now - they have no idea how much pain is left in front of them.; September 17, 2008 4:48 PM
Anonymous said...: I'm still going with DENIAL.

I've been watching CNBC for about half an hour. Gold is up almost $60/oz since the market opened 3 hours ago. They haven't even mentioned it.

Yet, they just had a guy who runs a mutual fund based on consumer stocks who tried to convince us that now is a good time to buy consumer stocks. He was pumping Darden restaurants. Even the money honey was like, "You think people are going to go out to Olive Garden and Red Lobster at a time like this?" Awesome.; September 17, 2008 4:53 PM
Devestment said...: All the media now touts the FDIC insured investment. Citizens of the world, I give you PANIC.; September 17, 2008 5:21 PM
Anonymous said...: It's starting to look like panic (is "scared to death" fear or panic?) - this is the latest "big box" at the top of the finance.yahoo.com web page:

Stocks Plummet as Credit Crisis Intensifies- AP

Wall Street stumbled again Wednesday, with anxieties about the financial system still running high even after the government bailed out the insurer American International Group Inc. "People are scared to death," said Bill Stone, chief investment strategist for PNC Wealth Management...; September 17, 2008 5:38 PM
Anonymous said...: "I also said it'd never come back to its current nominal price level."

WHo was calling who the idiot/moron again?; September 17, 2008 5:49 PM
Anonymous said...: Neither - it's still Denial.; September 17, 2008 5:49 PM
Anonymous said...: broke and lonely again, sorry - you did something wrong in a major-league way.

You are wiped out after 22 years? I am still way up in my 401(k) relative to cost basis after 20 years.

You are down to your last 5K? Wow. I don't know where to begin with that. I will say that I remember when I was a kid my mom went off on a neighbor who asked to borrow a few bucks. Her response was something like "You are almost 30 years old and don't have money in the bank to draw on when you need it?!? You should be ashamed of yourself."

Why are there so many 40-something losers that post on this site? Is it the Bush hating or renter status that draws them in?; September 17, 2008 5:55 PM
Roscoe said...: Tampa suburbs -- still denial.

The neighbor behind me still has his house listed for about $100k more than it is worth. He can't sell the house for less because he's even further underwater on an investment condo in town.; September 17, 2008 6:02 PM
tater said...: No way, Keith. The bottom is not in sight. If we're at your stage of fear, we've still got three big stages that are hiding the bottom of this market. This will take years.

The depression will be upon us soon enough, but don't expect it for quite a while, imo.; September 17, 2008 6:06 PM
Anonymous said...: Depression for the U.S. recession for the rest of the world.but who cares,most of you sold your RE in late '06 bought gold and $400 and have food for 24 months,right?

Most HP old timers really did. I'm not sure about this new wave of Daily Koos who live in their mom's basement.; September 17, 2008 6:26 PM
Anonymous said...: Plenty of denial left here in Fla.

RE agents still selling the Fear that interest rates will rise, or buyers will miss the bottom.

Makes me sick.

As an appraiser, I'm sick of trying to educate idiots. They looked at me like the messenger of death in 2006 when I started warning, and I get the same look today.; September 17, 2008 6:33 PM
Anonymous said...: Bwahahahaha...I love to see all the "experts" on CNBC now acting like they knew all along. Now they love gold. Bunch of crooks!; September 17, 2008 6:41 PM
Anonymous said...: Reminder: House sellers and realtor scum in the NYC metro area are still in deep denial of the collapsing housing prices!; September 17, 2008 7:09 PM
AuAgPb said...: Judging by the gold market today, I believe FEAR has arrived.

Probably give back a lot of these gains tomorrow, but damn.; September 17, 2008 7:26 PM
DancingOpossum said...: Denial, definitely. I'm not surprised by the moron in Annapolis cited above. Don't even attempt discussing collapsing home prices where I live--near Annapolis, in Ann Arundel County--because BRAC (Base Realignment and Closing) will save us. BRAC is supposed to arrive in 2010 and create several thousand new jobs. That's nice, but it sure as heck won't save our insanely overbuilt, insanely overpriced RE market.

I try to tell them that BRAC won't make a dent in the current oversupply and that we've only seen the start of a long hideous fall. But don't tell folks that. It's all "LA LA LA, BRAC, I can't hear you, LA LA LA BRAC." Everyone who wants to sell is waiting for BRAC because then "prices will go sky-high again." Denial. Deep denial.; September 17, 2008 7:48 PM
Anonymous said...: There are a lot of dumb idiots here. You are gonna wait in line like an embecile when all you have to do is go online and do it with the click of a mouse. Morons. Just cannot get it.

Anyways, the smart people are going to create an internet bank run.; September 17, 2008 8:42 PM
Anonymous said...: For all of you saying its denial where you live, be very very careful. Yes some house you may be stalking is 100K overpriced, but what about the rest??? Check your local stats - there is huge variation at the county by county level.

Where I am looking, prices are only 5-10% off peak. Normally I would think this was denial - much more to go. On another blog, some troll was screaming about how inventory was way down YOY and falling uber fast. Turns out he was right - where I am looking, there wont be any inventory left in another 4-6 months. Apparently we had capitulation - but at 5-10% off peak, it just wasnt that spectacular.

Prices will not fall the remaining 30% I want to see that would make me happy. I accept this now. I cant afford this area so I will look elsewhere in the metro area where prices are down 40% and still falling. Dont let this happen to you - watch your stats closely.; September 17, 2008 8:58 PM
Anonymous said...: Anonypus 5:49 said . . .

"I also said it'd never come back to its current nominal price level."

WHo was calling who the idiot/moron again?
----------------------------

Yeah, I meant real price level. Touche.; September 17, 2008 9:23 PM
Anonymous said...: saw a very affordable country retreat today for sale.alleluia..; September 17, 2008 9:39 PM
Anonymous said...: last time gold hit its highs and fell to its lows it took 30 years to break even?; September 17, 2008 10:00 PM
Anonymous said...: Its about time to congratulate Peter Schiff on being a wonderful predictor.; September 18, 2008 2:01 AM
Anonymous said...: If this country was a nuclear reactor it would be about 5 minutes away from a chernobyl-type meltdown. Right now, the air raid sirens are going off and warning us to get ready.

I know we are past denial for a fact. Everybody at my workplace is talking about it. Sports and movies are the things they normally always talk about; but not anymore.; September 18, 2008 2:22 AM
Anonymous said...: Ladies and Gentlemen:

KAGUNGA!

Oh, yeah! This is it! You know what I'm talking about!; September 18, 2008 3:32 AM
Anonymous said...: One day later I think we've hit fear.
Two plus 400 days down will do that to you; September 18, 2008 3:52 AM
Anonymous said...: i don't think you'll see "housing panic" in the classic sense for 2 reasons...

1) people are no longer concerned with mailing in the keys. its becoming the cool and smart thing to do. hey, live rent free for 6 months then flip the bank the bird and go rent a house. remember, very few have any skin in the game (cash down). and many put zero down and pulled $50k in "equity" out a year later. how can there be panic if you lose nothing?

2) i'm hearing the rumblings louder and louder of banks modifying more and more loans. and as this thing gets worse and worse, they will have no choice but to lock the sub primers rate and lop $100k in principal off the top. there is no other way for it to go the numbers are going to be so big.

so knowing those two things, how can there be real panic? only ones who will panic are ones who put cash down, and thats a pretty small percentage(i'm talkin REAL cash down, not $10k-$20k). and if you bought in the past 5 yrs and put real cash down, i feel for you. but again, i think thats a small percentage. the ones who are really shitting thier pants are the lenders.; September 18, 2008 4:14 AM
Anonymous said...: Keithster,

Love the site -- long time lurker, first time commenter.

Who are we kiddin'? Most of America is still in the mild Anxiety stage -- they know something is wrong but are too busy "treading water" with their jobs and bills to really research it-- only the smart and self-educated (via brightly educational blogs like yours and Mish's) are in the denial or even desperation stage (I know I am -- quietly stocking up on food and bullets).

And BTW, golld is heaed to the moon now -- the rest of the smart money is also in the Desperation stage.; September 18, 2008 5:33 AM
Anonymous said...: We are at a very mild level of anxiety. At work, dinner parties, weekend gatherings, baseball and football games, I hear the same consensus among people; "oh, it will be ok", "you gotta be optimistic for America", "the bad times won't last forever", "we are in a recession", etc.... People have this incredible faith in the U.S. government, the Federal Reserve, and in the good old "oh, we are investing for the long term", "house prices never go down in the long term", etc...; September 18, 2008 7:39 AM
Anonymous said...: If you wanna know what Panic feels like, check the Russian market.; September 18, 2008 9:47 AM
Unknown said...: As you can see from today's market, fear turned back into denial in a heartbeat. We're still hovering between the 2.; September 18, 2008 9:48 PM
Unknown said...: I love the story about Maryvale AZ being overrun with foreclosures. And the sleazy realtor still tries to con buyers in:

"Over the past two decades, there are other areas in the Valley that have faced similar situations and rebounded, so the question is, will Maryvale have the same fate and rebound and revitalize," said Fosha.; September 18, 2008 9:52 PM
Anonymous said...: I read in a blog today that we are in a full-fledged financial panic and I thought, "He used the word panic! We're finally there! At long last we are advancing along the chart!"

However, on further reflection it doesn't hold. A lot of people are still in denial and I think we clearly haven't gotten to desperation. Desperation is what will happen when all these radical government interventions fail to stop the slide.

So we must be in fear, although I thought fear would be more passive. More people being scared to move and less people running around like headless chickens.

Is it possible that you've got it wrong and fear and panic should swap positions? Where does this chart come from, anyway?

Alternatively I liked the suggestion of an earlier poster that the discrepency is due to the fact that two groups are at different stages. The common people are edging into fear while our financial masters are fully into panic.; September 19, 2008 6:27 AM