April 15, 2008

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

Have at it...

333 comments:

1 – 200 of 333   Newer›   Newest»
Anonymous said...

Nobody talks about it, but doesn't HGTV (Home & Garden Television) share at least a small percentage of the blame for our current mess?

For the past several years, everybody I knew watched that stupid channel. Every single program was about flipping, buying, renovating, and generally having a fabulous time with houses. Every remodel cost a thousand bucks and only took 15 minutes. Every bathroom redo added tens of thousands to the house's value. Every neighborhood was an undiscovered gem.

Media fuels mania, and nowhere did I see new house mania fueled more than on HGTV. We don't own a television, so I don't know what kind of programs HGTV is running now, but when I've seen it in the past it was a like a non-stop infomercial supporting the magical US housing boom.

To the long HP list of bad guys, I propose to add HGTV as a willing accomplice to the crime.

Mammoth said...

A while back some poster wrote that he didn't care if milk went up to $5.00/gallon because it wouldn't affect him.

Two years ago, a 10-lb bag of potatoes was $0.99. Today that bag of potatoes will now set you back $3.00.

But of course, this has nothing to do with housing, does it?

O.k., here is the connection between the tripled cost of potatoes and housing:
The price of energy skyrockets, driving up the cost of growing and transporting food to your local grocery store.

Average Joe and Jane, already dismayed by the high price of gas they see at the pump, feel even more negative when they notice the cost of food going up. They are also aware that their paychecks are not going up, so they feel poor. This causes them to decide against making purchases that they would have made, say in 2006.

So, Joe and Jane decide NOT to purchase any new appliances or make improvements to their house this year. They quit going out to dinner once a week. Instead of shopping for clothes at Macy’s, Jane now shops at Wal-Mart (sorry, Keith). Instead of taking a vacation on the other side of the country this summer, Joe and Jane stay home for those two weeks and spend their time painting their house and doing their own landscaping.

This results in the appliance sellers, restaurants, upscale stores, travel & hospitality industry, house painters and landscape firms losing some of their business. Now, multiply these losses by the number of people out there who are cutting down on their spending due to the rising cost of everything (including the lowly potato), and suddenly there is not enough money to keep all of the people in these industries employed.

Some of these folks will thus find themselves laid off from their job and unable to make their house payment, and will wind up foreclosed on. And that is how the rising cost of potatoes affects housing.

-Mammoth

bradinsb said...

House here in the Modesto area can be found for $100,000 now and at one time they were $300,000
http://www.icantsellmyhouse.blogspot.com/

Anonymous said...

Down payments are baaaaaaaaaaaack!

So is full doc.

Housing prices accelerating to the down side.

Stuck in So Pa said...

My government seizure/auction email updates have gotten so ridiculous that I only check them once every other week or so. Our taxpaying dollars have gone to guarantee loans on garbage. I get six to twelve email lists a day, and most of the shacks aren’t worth the price of a match to light them up.

And if the houses are decent and worth something, Big Uncle is trying to get back every dime with out-of-touch-with-reality minimum opening bids. I guess the government dolts never took Econ 101 either.

We taxpayers are on the hook either way!

g said...

Keith - Karl Denninger has a petition out calling for Congress to impeach Bush for illegal activities in the Bear takeover. It would be great if you could post it, if people would "digg" it and especially click and sign the petition it might goad Congress into further action.

digg:
http://tinyurl.com/3dqtbd

blog on why it was illegal:
http://tinyurl.com/39ohph

petition will be automatically faxed to congress at Denninger's expense:
http://tinyurl.com/3yz8q7

Sigma said...

WHOOOOOA

8 Months Ago, Bear Stearns Liquidated Fund in Cayman Islands to Prevent Creditors from Collecting

http://tinyurl.com/34npsc

Anonymous said...

Thanks for the blog keith. Seems like there are fewer and fewer serious blogs online where you can speak your mind.

One thing I've been thinking about recently is all the whining about how people are losing their houses and how we're supposed to feel sorry for them. Uhm, these people, first off, bought houses even though it was obvious to anyone tuned into the real world that housing was grossly overpriced. Who would pay $600K for some condo to begin with? I don't think even the Manhattan penthouses are worth that much. Everyone knew about the fraud that went on: the bogus appraisals, the cronyism at the federal, state and local governments, the rampant ID theft, the lack of enforcement of laws in place to keep this BS from happening in the first place to begin with, and so on.

Another thing, a lot of the people complaining make VERY good money. If you ask me 50K is upper middle class. I can't see how I should feel sorry for some yuppie corporate flunkie couple who make $120K yearly but have to eat ramen noodles for dinner. Or how about the ditzy 20-something crowd who waste their money on some fly-by-night real estate scam. What about the couple who run up credit card bills or they buy a Ford Excursion then complain about how gas is $3.50 a gallon or someone eats potato chips and Burger king everyday and they drink like a horse at the bar and then they can't figure out why they're fat and broke. Dumm dee dum dum....no wonder so many people are whining now. Go to the MSN Money Blogs and you'll see an endless parade of whining and crying about people's money problems: "My crappy house is only worth $100K and I think its worth 250K" "Organic milk is at $8 a gallon and it was only $3 years ago" "My realtor is an idiot and he/she/whatever is married to my wife and my husband's pregnant"

Does anyone really care about the whining and cheese that goes on? I can't imagine I'm the only one who thinks that people's financial problems are NOT the end of all life on earth.

area 51 said...

FLORIDA REALTORS CALL BOTTOM!!!

“Realtors noted other signs that real estate sales’ downward trend is reversing. Summer Greene from Broward County said her area has seen a 16 percent increase in pending transactions.”

Anonymous said...

"Dear Citigroup Customer,

It appears that we might not be screwing you to the maximum level possible. Please allow us to talk you into giving us more of your hard earned dollars, because we are corrupt credit shark whores, and this is what we do (allegedly​).

Sincere​ly,
Citigro​up"

GT said...

i'm still confused...money doesnt just vanish. right? someone loses money...ok, it didnt burn, it was transferred to someone else. someone overpays to buy a condo for 600k, ok, the seller made out like a bandit. where's that seller's money gone to?

all these mortgages that were made to sheeple had huge commissions on them, those mortgage brokers made good money. i know pmi isnt nearly as prevalent as it once was, but that insurance premium is just that, insurance, maybe it wasnt high enough.

home prices can, and should, fall to 2002 levels, ok a lot of money is 'lost', but really the only effect should be that 1/2 the people made a lot of money and 1/2 the people lost a lot of money, it should even out, no?

Anonymous said...

area 51 = douchebag

Anonymous said...

How can these big banks write off such a huge loss for mortgage defaults (UBS @ 10B; Citi@10B; Barclays@3B) ? Are they valuing the houses at Zero? What about PMI? Another thing if every one of one of a large banks customers re-financed their loans, that bank wouldn't be making the inflated interest (income), and would that mean they also need to do a write off for mortgage pre-payments? With defaults they get a bunch of houses (value of the house) rather than the $ balance of a loan, which should be a % of the same ammount. How can the be 'losing' anything when they made interest money off the mortgage holder for the last 3 years?

Lets take UBS loss is 10 Billion, which is 10,000,000,000. If they lose $50k per house that has defaulted that is 200,000 houses that have defaulted? Multiply that by 2 for Citibank, and that's 400,000 houses? Do they have that many customers? What happens when they sell all these properties they now own, will they show a 10 Billion Gain?

The Bruiser said...

To the Anonymous folks and gt who don't understand where the money went...its all about leverage. The seller who sold the condo for $600K either used the money as a downpayment for their own overpriced home that they bought (they have to live somewhere too) or they bought a few 'spec' houses as 'investments. When the seller couldn't sell his investment homes, they went into foreclosure and the money is now gone.

As for the iBanks and global banks, they took the mortgages they made and sold them off for cash, then levered up on that cash 30x and bought CDO's, other banks' MBS's, etc. Now that those securities are nothing but pieces of paper, those banks are now writing off debts that are multiples of the original dollar value of their originated mortgages, due to leverage.

Buzz Saw said...

They are still building very many houses here. Houses are good,one can never have too many houses. All the bankers are in bed with the developers to turn pasture land into solid gold. I am so happy that the economy is booming with new construction. It is different here, my Realtwhores® told me so in the paper and on tv and I believe them.

Anonymous said...

Has anyone seen this sap of a poster child that CNN in using today.

http://www.cnn.com/2008/LIVING/personal/03/27/foodbank.family/index.html?eref=rss_topstories#cnnSTCVideo

This lady was a loan processor, lost her job, she had an ARM paying interest only and now she is getting food at the food bank. Her interst reset and her house payment is through roof. Boo Hoo. People feel bad for her I say take her house and her kids. She is not fir to be breeding in my book.

Anonymous said...

keith, could you put another choice up there at the top for the voting poll? would you please put a choice for those who will not vote for anyone of these jerks....? please...thanks

BondsOfSteel said...

How can these big banks write off such a huge loss for mortgage defaults (UBS @ 10B; Citi@10B; Barclays@3B) ? Are they valuing the houses at Zero?

For the most part, these banks have been writing off the bonds (CDOs) that hold many, many mortgages. The bonds are secured though the mortgages... but trade on their own value.

The banks have been valuing these bonds by 'mark to market'... what someone else will pay for them.

Would you want to buy a collection of mortgage debit right now? I wouldn't... and few people do. So, the bonds are worth 'less' than the assets securing them since any buyer wants significant risk premium.

What's worse, is that the banks bought these things with other banks people's money. As the price of the bonds decrease... the banks's lenders want more collateral.

Who knows what the real 'recovery' value of the defaulted bonds will be... how many mortgages default... and when... and how much the homes will be worth at that time. There's probably a lot of money to be made on these things... if you can buy and hold without leverage.

Anonymous said...

To the Anonymous folks and gt who don't understand where the money went...its all about leverage. The seller who sold the condo for $600K either used the money as a downpayment for their own overpriced home that they bought (they have to live somewhere too) or they bought a few 'spec' houses as 'investments. When the seller couldn't sell his investment homes, they went into foreclosure and the money is now gone.

Or the ones like me who stuffed the gains into a nice little money market and found an apartment to wait out the carnage in...it's not all gone, just depreciating quickly.

Anonymous said...

Got Gold???

Listen to the John Williams from Shadow Government Statistics interview here
http://neogentrading.com/Home_Page.html

hlowe

Patti herrington said...

Not all market are alike throughout the US. Our market has slowed down since last year but we are still selling homes. National news does affect how our buyers look at the market. Home sales would be much better if the national news would shut their mouths....

Anonymous said...

NAR Economist Opposes Big Rate Cut
Low rates would be "counterproductive"

Cutting rates too much could ignite inflation, which would make the housing mess worse, says National Association of Realtors Chief Economist Lawrence Yun


http://tinyurl.com/2cceym

area 51 said...

BAY AREA REALTOR CALLS BOTTOM!!!

“‘Sales in the Bay Area have been increasing for the past four months,’ Schwartzman said. ‘We’re seeing multiple offers going on, mostly in the lower-range, bank-owned properties. And that’s good. It seems like things are getting better. Or maybe we should say things are bottoming out.’”

area 51 said...

Keith, topic for discussion:

Has anyone seen realtors resort to the strategy of actually *raising* prices? To try to psyche-out buyers?

I have.....

One house locally I have been watching for a VERY LONG time, just bumped up the price from $580k to $600k. There must be some psychological element to it.

Also see this Denver Post story...

“‘I think the public was anticipating that would happen because of everything they hear about the market,’ she said. ‘But raising the prices is the way to get projects sold. You’ve got to give people deadlines.’”

http://tinyurl.com/3533a7

Anonymous said...

Have you read the Chase memo yet, Keith?

http://www.oregonlive.com/printer/printer.ssf?/base/business/120658650589950.xml&coll=7

A newly surfaced memo from banking giant JPMorgan Chase provides a rare glimpse into the mentality that fueled the mortgage crisis.

The memo's title says it all: "Zippy Cheats & Tricks."

It is a primer on how to get risky mortgage loans approved by Zippy, Chase's in-house automated loan underwriting system. The secret to approval? Inflate the borrowers' income or otherwise falsify their loan application.

The document, a copy of which was obtained by The Oregonian, bears a Chase corporate logo. But it's unclear how widely it was circulated or used within Chase.

Bank spokesman Tom Kelly confirmed that the "Cheats & Tricks" memo was e-mailed from Chase but added that it does not reflect Chase corporate policy.

WildBill said...

Keith,

MSNBC has news out on how leading Democrats in congress conducted illegal activities supporting Saddam Hussein, secretly funded by him. It would be great if you could post it, if people would "digg" it and especially it might goad them into dumping crooks from Congress.

http://www.msnbc.msn.com/id/23817013/

I don't actually expect you'll post this since I've noticed you are not posting items critical of Obama but are posting items critical of Bush. I want to see if this is still a housing blog or has become a political one so I can save time by not visiting it if the latter is now true.

Thanks!

Anonymous said...

Realtors are CROOKS

Anonymous said...

.


I was told, to my face that, "the market has hit bottom" by a realtorette in Rancho Mirage on tues the 25.

Guess I'd better hurry up n buy sumthin!

.

Anonymous said...

Down payments and full docs have returned!

Kinda like closing the barn door after all the cows have run out.

The damage is done....now their gonna get serious?

gregoryw said...

Life long republican just turned Obama voter:

http://tinyurl.com/2nm97x

I'm voting for him now. That is EXACTLY what we need.

GT said...

bruiser said
"When the seller couldn't sell his investment homes, they went into foreclosure and the money is now gone."

no, see, it isnt gone, they bought that spec home and now the seller of that spec home has the money. it's a big long chain reaction, and money is never lost.
or as the other poster mentioned, they sold and saved it. money was only transferred (from the dumb to the smart).

GT said...

anony said..
"Has anyone seen this sap of a poster child that CNN in using today.

http://www.cnn.com/2008/LIVING/personal/03/27/foodbank.family/index.html?eref=rss_topstories#cnnSTCVideo

This lady was a loan processor, lost her job, she had an ARM paying interest only and now she is getting food at the food bank. Her interst reset and her house payment is through roof. Boo Hoo. People feel bad for her I say take her house and her kids. She is not fir to be breeding in my book."

yes i saw her, unbelievable. she basically never saved a die, she bought coach purses and lived to the nines, and when she lost her job now she needs the gov to pay her for food, all the while she has the standard granite, stainless, etc
WTF

Anonymous said...

Did patti herrington really say what she said? Woman you are one dumb bitch.

GT said...

job market 2009
awesome!

http://www.youtube.com/watch?v=O2uErWWwQTo

viva la klownifornia

BondsOfSteel said...

Hi WildBill.

One of those congressmen you talk about is mine... Jim McDermott. He's not going to be thrown out.

McDermott gets a lot of credit around here for standing aganist the Iraq war in 2002-3. People think he was one of the few that got it right about Iraqi WMD:

http://www.seattleweekly.com/2007-10-10/news/why-jim-mcdermott-thinks-global-disdains-local.php?page=full

He'll be elected for life... and it's all because of this trip.

P.S. What the congressmen did was not illegal. They went on a fact finding trip sponcered by the church council of greater Seattle (CCGS). The illegalities occured by the person who donated to the CCGS... unknown by the CCGS.

Oh, and CCGS isn't some small fringe church. It's over 400 churches in 15 Denominations... these are the largest mainstream churchs in the region:

http://www.churchcouncilseattle.org/subpages/directory/directory.html

Anonymous said...

Incredible!!! I keep waking up in the middle of the night these days, after dreaming I can see into the future. I wake up thinking the same but feel like a deer in the headlights. Unfortunately all those around me seem unaware.
Then I see this article.
A MUST READ!!!
http://www.leap2020.eu/GEAB-N-22-is-available!-Global-systemic-crisis-September-2008-Phase-of-collapse-of-US-real-economy_a1298.html

hlowe

Theodore said...

wildbill, you're a moron troll. The article you linked to doesn't say any such thing. You need to read it again a few hundred times until your 5 or 6 working brain cells can "digg" it.

Blowfly said...

Woman you are one dumb bitch

And you f*cking stupid ass 1 BR shit hole renter are out of luck eating your Ramen soup under the bridge with your fellow piss ass homeless retards. I am surprised that the blog owner, probably an imbecile himself allows 14 year old morons to post. Please do me a big favor and scurry away with the other rats. Go back to your beautiful redneck 1 BR rental trailer and scratch your hairy ass!

WildBill said...

bondsofsteel: P.S. What the congressmen did was not illegal. They went on a fact finding trip sponcered by the church council of greater Seattle (CCGS).

You are correct, BOS -- what they did was not illegal.

Just immoral.

Anonymous said...

ITS ALL OVER WHEN I GET ONE OF THOSE 3 FOR 1 DEALS IN RIVERSIDE COUNTY FOR 78,000 THE FLORIDA TREND IS REVERSING AS SALES WENT UP WHEN THE STILL OVERPRICED CRACKERBOXWS WERE 50 PERCENT OFF

Seek Professional Help, douchebag. said...

"Blowfly said...
Woman you are one dumb bitch"

Seek Professional Help, douchebag.

Anonymous said...

blowfly,

I posted about patti. I live in a 4 bedroom house that I rent for 1/3 of what it could cost for me to buy. No debt whatsoever and putting away about 70% of my income which transales to $15K a month with the goal of retirement at 40. At which point I will leave this god-forsaken shithole of a country and spend my days on a sun soaked beach while you slave away for the next 40 years making payments on houses, cars and credit cards.

If that makes me a redneck loser, OK, I'm a redneck loser.

Anonymous said...

http://tinyurl.com/252mp7

and they say that renters are trash?

Anonymous said...

Interest rate seems kind of low for a S&L that has to raise money fast.

http://www.1800fremont.com/
products/currentrates.aspx

FDIC tells Fremont to raise money or sell itself within 60 days

Fremont General Corp. and its Fremont Investment & Loan subsidiary have been categorized as an "undercapitalized" depository insititution by the Federal Deposit Insurance Corp. and was directed to recapitalize the bank by May 26, or sell, the company said Friday.

The directive also sets limitations and restricts the bank's business, restricting the interest rates it may pay on deposits, preventing capital distributions to the company and affiliates, preventing bonuses or increased compensation for directors and officers, and also limits transactions between the bank and its affiliates, according to a release.

The limits will stay in place until the bank is "adequately" capitalized, on average, for four consecutive calendar quarters, according to a release.

Brea-based Fremont (NYSE: FMT) is a holding company that does business primarily through its bank subsidiary Fremont Investment & Loan.

Anonymous said...

In general, the number of financial services companies with liquidity and a competent management team is very few these days.

"First, there are several banks in California that are in terrible shape because of exposure to subprime, Alt-A, and option ARM mortgages, declining customer deposits, and/or the inability to access FHLB lines of credit or raise equity in the form of preferred/ common stock.

For example, if you look at First Federal Bank (NYSE: FED), Fremont General (NYSE: FMT), Downey Financial (NYSE: DSL), and Indymac Bancorp (NYSE: IMB), it is obvious that the chances of these banks becoming insolvent in the next couple of years are the same as a 'coin-flip.'

http://www.centredaily.com/business/story/

Anonymous said...

FDIC insurance - Is your bank safe?

If you are keeping non-FDIC insured money in a bank just because it is locked up in a certificate of deposit (CD), or savings are getting a decent interest rate, you had better be willing to lose the noninsured portion if the bank fails.

It is easy to become complacent with FDIC insurance if we don't hear firsthand about people losing money in a bank failure. To be sure, we are in an environment where the chances of a bank failure are much higher than normal.

In his semi-annual appearance before Congress on Feb. 28, Federal Reserve Chairman Ben Bernanke predicted that the current economic crisis will likely result in bank failures. He also said that some small U.S. banks were likely to go under from the effects of the credit crunch and soaring mortgage delinquencies.

It may not seem like these problems are in our backyard. However, if you have money in Fremont Investment and Loan, I would take an extra-long look at your accounts to make sure you have FDIC insurance coverage. Fremont has a branch located on State Street in downtown Redlands.

Fremont's parent company, Fremont General, reported on Wednesday, March 12: "Due to continuing ongoing review and determination of adjustments to 2007 consolidated financial statements, Fremont General's 2007 Report on Form 10-K will continue to be delayed and the Annual Meeting will be postponed."

On Tuesday, March 4, Fremont General declared that they received default notices on $3.15 billion in subprime mortgages sold to investors a year ago.

Additionally, Fremont indicated they will likely fail to meet conditions of the deal that call for the bank to maintain a minimum net worth or buy back the loans. It also warned that, should the default lead to a lawsuit and judgment against the company, its ability to continue as anon going concern "would be called into question".

Last year, on March 8, the FDIC issued a cease-and-desist order against Fremont Investment & Loan, and its parent corporations, Fremont General Corporation and Fremont General Credit Corporation.

The FDIC found that the bank was operating without effective risk management policies and procedures in place in relation to its subprime mortgage and commercial real estate lending operations.

http://www.redlandsdailyfacts.com/
business/ci_8637144

BondsOfSteel said...

Hi willbill

Isn't war immoral? I think I remember reading that Jesus said something about how the peacemakers are the childern of god.

But... then I also remember I'm a nihilist, and I don't really believe in morality anyway :)

Anonymous said...

Just when they need the guys with bank failure experience, they let them go.

http://www.bizjournals.com/
jacksonville/stories/2008/03
/24/daily21.html

FDIC beefs up bank failure unit

The Federal Deposit Insurance Corp. is beefing up its bank failure unit, with plans to hire 140 new employees.

The FDIC hopes to have up to 380 employees in its Division of Resolutions & Receiverships.

The move is due to expected increases in bank failures and the retirement of employees.

An FDIC spokesman said the move allows the agency to offer reassurance that it will be prepared.

There have been five bank failures since February 2007 after an uneventful stretch of more than two years. The last time the agency was hit hard with failures was during the 1990-1991 recession, when 502 banks failed in three years, according to reports.

There are 76 banks on the FDIC's "problem institutions" list.

FDIC officials said about six banks fail each year.

Anonymous said...

Latest Ramen Eating Sideline = Acting

Here in Central Florida, I personally know of one Realtor Family(husband and wife who moved from New Jersey 5 years ago) who have found a new career. Part time extras for entertainment. Started with their son getting into it to gen up some income. Now Hubby and wife are taking $75 per day jobs to suck tourists a#$%s. Pathetic. By the way they dtill drive their BMW. I don't think that will last long. Back to Jerswy with you!

Anonymous said...

Who said home prices down fall in the bay area

Recent homes that sold and for sell in San Jose, Ca

Bed 4 Bath 3
Sold: $115,000 (01/24/2008)
Last Sale: $1,260,000 (08/10/2007)

Bed 3 Bath 2
Sold: $119,000 (01/22/2008)
Last Sale: $555,000 (11/22/2002)

Bed 3 Bath 2
Sold: $119,000 (01/15/2008)
Last Sale: $1,295,000 (7/12/2006)

Bed 5 Bath 3
Sold: $126,000 (02/26/2008)
Last Sale: $798,500 (8/02/2006)

Bed 3 Bath 1
Asking: $278,950
Last Sale: $640,000 (12/22/2006)

Bed 3 Bath 1
Asking: $284,900
Last Sale: $416,035 (10/09/2007)

Bed 3 Bath 1
Asking: $289,000
Last Sale: $550,000 (12/29/2006)

Bed 3 Bath 2
Asking: $299,000
Last Sale: $478,000 (09/01/2004)

Bed 2 Bath 2
Asking: $299,000
Last Sale: $450,000 (08/11/2005)

Bed 2 Bath 1
Asking: $299,000
Last Sale: $387,000 (01/31/2005)

Bed 3 Bath 1
Asking: $299,000
Last Sale: $394,000 (06/13/2002)

Bed 2 Bath 1
Asking: $299,000
Last Sale: $432,000 (01/23/2008)

Bed 4 Bath 3
Asking: $299,000
Last Sale: $685,000 (06/27/2007)

deepcgi said...

My landlord put our place up for sale one week ago for 479,000 and got absolutely no lookers. Yesterday, he lowered the price 20,000 (already) and we haven't had a single call.

I think I'm going to need a Landlord Application for our next rental. Better safe than sorry, I always say. I do not want to rent from another desperate flipper.

Anonymous said...

Why would anyone give a $600,000 loan to a house that not worth more then $135,000 ten years ago.

Part of the reason why these homes are worthless is due to their high crime.

Check out the video

http://www.mercurynews.com/
centralcoast/ci_8729881

SAN JOSE: Brazen purse snatchers preying on Vietnamese women

Watch out for The Rippers. The Rippers are watching for you.

The Rippers are what San Jose police are dubbing packs of purse snatchers who have been targeting Asian women - in particular Vietnamese women - in recent months as they stroll through parking lots.

Why Asian women? They tend to carry lots of cash, police say.

The dangerous and unprecedented epidemic includes 21 recent robberies, according to San Jose detective John McElvy, many of them carried out brazenly in crowded and well-lit lots.

Despite four arrests in the robberies, the crime wave continues. Tuesday, a woman was robbed of her purse at 7:20 p.m as she walked through the Costco parking lot at Senter Road. It was the second Ripper robbery in that lot.

"The word on the street is that if you need cash, this is an easy way to get it," said McElvy. "They seem to be going after Asian woman as easy targets."

A security tape from a strip mall on Senter Road shows how cunning and forceful the robbers can be: Two Rippers stalk the woman in tandem as she walks through the busy San Jose parking lot. She is Asian, alone and casually carrying her pocketbook. She is the perfect prey.

shtove said...

Britain's version of Suzanne researched this:

http://tinyurl.com/ypwxv6

Anonymous said...

Paulson working hard this weekend again. Planning on rearranging FED/SEC other agencies. - dc2o

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

Anonymous said...

.


Obama is all talk....No substance!


.

Anonymous said...

Here's a chart that will make you crap your pants:

chart

Alex3191 said...

“But if we think home prices overshot on the way up, why can't they overshoot on the way down too?”

Princeton economist Paul Krugman

area 51 said...

Yo Keith, post "shtove's" video, it is f-ing awesome....

area 51 said...

REALTOR AND PULTE HOMES CALL BOTTOM IN RIO RANCHO!!!

Molly Kraft from Pulte Homes thinks it is a great time for the market, and that buyers sitting on the fence waiting for changes either way should go out and buy.

“It will not get any worse,” Kraft says, “or any better for the buyer.”

Karen Gauze with Desert West Properties thinks it is a good market, and that housing sales have leveled off."

area 51 said...

LAS VEGAS REIC CALLS BOTTOM!!!


"‘The tough times are not over, but we may be reaching the bottom."
--Bernard Markstein, director of forecasting and analysis for the National Home Builders Association.

"I think we’re close to the bottom....."
--Housing Analyst Dennis Smith

http://tinyurl.com/2ufqly

Anonymous said...

Isn't it time for ECB to raise rate.

German price spike fuels eurozone inflation fears

Eurozone inflation could hit its highest level for almost 16 years, economists warned yesterday, after Germany reported that price pressures accelerated unexpectedly sharply in March.

Powered largely by rises in energy costs, German inflation leapt to 3.2 per cent this month, from 2.9 per cent in February, on a harmonised European basis, according to Germany's federal statistics office.

The latest figure was below the 3.3 per cent reported for November but was still the second highest since the series started in 1996.

It suggested that the eurozone rate, to be released on Monday, could rise from February's 3.3 per cent, possibly to as high as 3.5 per cent - which would be the highest level since 1992, economists said.

That would be a significant blow for the European Central Bank, which aims to keep inflation "below but close" to 2 per cent over the medium term.

Inflationary pressures might have been exacerbated this month by the early Easter holiday, which could have resulted in service sector prices rising faster than normal.

But the ECB's fear is that a temporary inflation surge, caused by food and fuel price rises, will become entrenched if it -carries over into other prices and wage deals.

Anonymous said...

India's inflation spurted to a 13-month high, data showed Friday, dashing hopes of an interest rate cut to spur a slowing economy and putting pressure on the government with elections looming.

Inflation accelerated by nearly eight-tenths of a percentage point to 6.68 percent for the week ended March 15 from 5.92 percent a week earlier, according to the Wholesale Price Index, India's closely tracked cost-of-living monitor.

The level was far above analysts' forecasts of 5.96 percent.

India's HDFC Bank Chief Economist Abheek Baruah called the new inflation level "shocking" and said it was "led by a surge in global commodity and food prices coupled with higher vegetable prices at home."

Anonymous said...

http://news.yahoo.com/s/ap/20080329/ap_on_go_pr_wh/fed_overhaul

How is this going to help. This is scary..

Anonymous said...

http://www.bloodhoundrealty.com/?p=33

A new low. Greg swine has a new listing. It is a double wide trailer for 60k. The sick thing is that the house is a family members.

Anonymous said...

I wanna be a "chief economist"!
Where do I sign up?
Only better job would be a weatherman for Phoenix Arizona/ya can't miss!

W.C. Varones said...

A questions for "homeowners" looking for a bailout.

Anonymous said...

Home builders realize best incentive for buyers is bottom line

Jim Hammett, 64, was the first person to move into Taylor Morrison's 76-unit Sendera development in Concord in November. His three-bedroom, two-and-a-half-bath, Plan 1 home was $597,000, but in a phone call from the builder he found out that prices dropped $50,000.

"I asked if that was going to include me because I was already in contract," he said. "They said yes."

But Taylor Morrison didn't stop there. When Hammett couldn't pay more than $3,000 a month, the builder kicked in money to lower his monthly mortgage payment from $3,800 to less than $2,500 a month.

"They really wanted me to buy out here and gave me what I wanted," Hammett, a retired police officer, said.

Forget trips to Hawaii, luxury cars and 50-inch plasma screen televisions, now builders know the only incentives that work for buyers are cheaper homes and smaller monthly payments.

"For most, it's payment-sensitive," said Vickie Nyland, Taylor Morrison division president of the Bay Area. "In the core Bay Area market, they're really buying a monthly payment."

Cheryl O'Connor, vice president of sales and marketing for Warmington Homes in San Ramon, said that builders adjusted their prices to compete in markets now littered with bank-owned properties and resale homes.

"We've gotten rid of a lot of the gimmicky trips and stuff like that," she said. "Now you will find most of the incentives are buying down the interest rate or help with closing costs."

http://www.mercurynews.com/
greenenergy/ci_8716597

Anonymous said...

Ok - here's my take on it. The current administration was already intent on privatizing mortgage lending as evidenced by the witchhunt against Freddie Mac and Fannie Mae (not condoning faulty accounting practices) and limiting the size of their portfolios and saddling them with closer scrutiny in everything they did. In effect, making them impotent and irrelevant in the face of the new megalo money center and investment banks. These banks didn't have the experience with risk management that they agencies had and, besides, "things had changed and none of the old rules" applied. Ha. That's what they thought. Everyone with good credit had already refinanced and the "underserved" markets wouldn't qualify under existing underwriting guidelines. Enter the sub-prime mortgage. As long as property values continued to climb, EVERYONE and EVERY LOAN PROGRAM and NEW FINANCIAL VEHICLE looked like sheer genius. There appeared to be so little risk and such high return that the issuers of this new debt (banks/investment brokerages) started RETAINING the bonds. The real estate market stalls, properties stop appreciating, there are fewer buyers -not sure which happened first. Owners could no longer sell when things hit the wall. Defaults occur and guess who's holding these bonds? The banks and brokerages who enabled all of the risky loans and programs. In the end, though, everyone suffers because there were influencers in the marketplace with cash in their pockets and earnings targets to make. The guilty parties? Investors. Their greed for higher stock values and higher than market returns created a market for loan products which were taken on by poorly or unqualified borrowers. This kind of thing can happen when housing ceases to be a place to live with a acceptable level of appreciation and becomes the next hot destination for investment dollars. I say let the investment community suffer. The homeowners who will likely NEVER recover from such an incredible blow to their "net worth" will likely never have an interest in homeownership again. Prob neither will the homeowners who don't default, but also experience zero appreciation. Who's going to buy/own all of these empty houses? Prob why we are turning the other way with illegal immigration. There will need to be new incentives to homeownership to rekindle the romance. Perhaps tax deductibility of ANY home improvements for a period of time. Make the existing deductions more valuable.... Something. Next: we get through this and we'll try again to qualify this group of potential homeowners for loans with their otherwise lousy credit.

Anonymous said...

Roadshow: $1,200 a month fuels long commutes

COUPLE DRIVE FROM LOS BANOS TO JOBS IN PALO ALTO AND FRESNO

Record-setting fuel prices have hammered California drivers, but few are reeling like Rick and Arleen Roberts of Los Banos. Their monthly bill to fill up his diesel VW Golf and her Corolla:

Just shy of $1,200.

No typo, no misplaced comma.

"It's killing me," said Rick, 50, a scientist for Roche Pharmaceutical in Palo Alto.

"I never believed we'd be paying this much," sighed Arleen, a catering manager for a hotel in Fresno.

Yep, he commutes 220 miles a day over Pacheco Pass to the Peninsula. She travels 165 miles deep into the Central Valley. That's 1,925 miles a week, or more when they work six days out of seven - which both do often.

Rick in 2003 opted for a diesel car, which gets 45 miles a gallon and needs little maintenance. At the time, he could get a gallon for $1.19 and a fill-up cost "maybe $19."

They bought a fuel-efficient Toyota Corolla for Arleen. Gas was going for around $1.39 a gallon, and a tankful cost her less than $20.

Today the fill-ups cost $55 for the diesel, $35 for the Corolla. And Rick and Arleen each buy fuel every two days. That comes to about $300 a week, combined.

Last week, the lights on Rick's VW went out inexplicably, forcing him to drive his Ford Explorer to Palo Alto - a $53 round trip for the day. Ouch.

http://www.mercurynews.com/
ci_8739025?nclick_check=1

bizwiz said...

I really need a house because i pay a lot for rent and storage of my things and have a couple of pets. I made an offer to buy a house this week for 10% less than the asking price and my real estate agent was not happy because the seller had recently droped the price about 10%. So he thought i should make another higher offer.

I told him that it does not matter if he recently dropped the price. My offer is based on the price he is selling now.

Anyway here is the answer i sent him:

"Let’s see. We made an offer.

They can either revive it or counter offer.

We can make another offer but in about 2 weeks be sure that my offer will even be lower
because time is on our side… as the days go by, things in the housing market get worse.

You saw prices from 2001 to 2005 going up VERY fast. Well, now you will see how much faster they can drop.

I see houses that were 700k in January selling for $450k now. That is a dramatic drop.

You know that in a couple of months millions of arms will readjust and mass foreclosures will follow.


I am predicting another drop of at least 15% in CA housing pricing by end of July and about a 25% drop by
The end of the year.

Remember market price is determined by the price buyers are willing to pay in a given period of time.

But the problem is even worse than that…. i.e., worse than the price buyers are willing to pay.

The problem for sellers is that there is no news or information that there are even going to be any substantial number of buyers in the near future.

1. Hard to get loans
2. No cash buyers
3. jumbo loans interest to high.
4. home owners and banks will be stuck with big / expensive and depreciating high maintenance cost houses.
5. Only way out of a losing situation is to drop the prices to get rid of the houses.
6. Naturally, we will see another 25% drop in prices this year.

I am reading that it will bottom out around 2010 at the earliest.

Other opportunities will come up."

Hey folks, start any business related to foreclosures, bankrupties etc. There is always a way to make money.

Get your licenses at this site to start your business:

www.businessnameusa.com

Anonymous said...

Clinton campaign manager was director for failed subprime lender

Anonymous said...

Graph of S&P Case-Shiller house price index from 1987 to present over lay with San Francisco Aggregate Index (MSA)

http://www.socketsite.com/
S%26P%20Case-Shiller%20SF
%20Tiers%2012-07.jpg

Anonymous said...

California house price changes in Selected Metropolitan Areas, Annualized

Check out the Central Valley. Some area like the city of Merced has almost lost all of it's gain from 2001 to 2007 in just one year.

http://www.socketsite.com/
PPIC%20MSA%20Chart.jpg

Anonymous said...

Aren't house price falling like a rock in Merced Ca.

http://www.costar.com/News/
Article.aspx?id=4E21C0FA7F64
6513087D51A2517F2C87&ref=1&
src=rss#bank

Capital Corp of the West, the bank holding company for County Bank in Merced, CA, is going to miss its deadlines for filing its annual report with the Securities and Exchange Commission.

Anonymous said...

Central California Housing was dropping from $500,000 to $300,000 back in Nov 2007.

However when you think about what house were selling for back in 2000 ($99,000 to $150,000) in the central valley, it makes you wonder if house price can go back to those level considering majority of the people working in central valley are still getting paid at the same 2000 salary level.

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

Anonymous said...

She came up with a theory about the housing market.

http://www.youtube.com/
watch?v=gRL_AlK-4Ww

http://www.youtube.com/
watch?v=gGRI2uRQDsA

http://www.youtube.com/
watch?v=MnuH33xD434

Anonymous said...

Philadelphia has suspended the sale of foreclosed homes. That should really help lending standards.


http://tinyurl.com/33uyec

W.C. Varones said...

Greenspan's Body Count">Greenspan's Body Count hits 7.

Anonymous said...

I've been reading McElvaine's The Great Depression to get some historical perspective of this entire housing debacle. A quote really jumped out at me since it seems so timely now. Just thought I'd share, it's a bit frightening in my opinion....

"Believing confidence to be central to recovery and credit to confidence, the President (Hoover) was sincere in his advocacy of the RFC. The purpose of the RFC was to make government credit available to banks and other financial institutions. This, its bankers hoped, would loosen credit throughout the economy and bring about recovery. Had the underlying assumptions been correct, it might have worked. The fundamental mistake was to think that the credit problem was one of supply. Given the paucity of purchasing power, businesses were not interested in obtaining loans. Expansion was the last thing on the minds of most businessmen in 1932. And bankers, fearful that their own positions were insufficiently liquid, were not anxious to make new commercial loans. In short, an enlarged supply of credit would not create its own demand. Hoover and the RFC were on the wrong side of the equation."

Very interesting... deja vu anyone?

Anonymous said...

Anonymous said...

I've been reading McElvaine's The Great Depression to get some historical perspective of this entire housing debacle. A quote really jumped out at me since it seems so timely now. Just thought I'd share, it's a bit frightening in my opinion....

"Believing confidence to be central to recovery and credit to confidence, the President (Hoover) was sincere in his advocacy of the RFC. The purpose of the RFC was to make government credit available to banks and other financial institutions. This, its bankers hoped, would loosen credit throughout the economy and bring about recovery. Had the underlying assumptions been correct, it might have worked. The fundamental mistake was to think that the credit problem was one of supply. Given the paucity of purchasing power, businesses were not interested in obtaining loans. Expansion was the last thing on the minds of most businessmen in 1932. And bankers, fearful that their own positions were insufficiently liquid, were not anxious to make new commercial loans. In short, an enlarged supply of credit would not create its own demand. Hoover and the RFC were on the wrong side of the equation."

Very interesting... deja vu anyone?

Bernanke is a student of the Great Depression. That is his claim to fame. He has built his entire career on it.

So with that in mind?

1. Is he retarded?
2. Did he cheat his way through school and career?
3. Is there another motive to his behavior?

Mitesh Damania said...

Why does the FED keep giving money to the top? Give the money to the bottom so we can keep buying crap! What a sham! This happens under people's eyes yet they let it happen!

Anonymous said...

Bail me out Bennie

By: Peter Schiff

The current mess did not result from a failure of the free market, but from too much government interference.

The real estate bubble, and the shaky securitized products it spawned, resulted from the Fed artificially setting interest rates too low.

Had interest rates been allowed to find their market levels, rather than be set by government decree, the real estate bubble never would have been inflated in the first place.

In a nation short on savings and heavy with debt, the free market would naturally set interest rates quite high.

With lots of demand for credit, but a limited supply of savings, the risk of lending and therefore the price of credit (interest rates) would be high.

Although onerous to borrowers, high rates would have both encouraged saving and discouraged borrowing.

In the end, these market forces would reduce interest rates and produce a more stable balance between savings and consumption.

However, the Fed did not want American consumers to be subjected to free market discipline that might otherwise reign in their non-stop spending.

After all, reckless consumption was falsely believed to be the engine of our prosperity.

So the Fed fixed the price of credit (interest rates) well below the rate that would have been set by the free market.

This sent false economic signals to the market that more savings were available than actually existed, leading to an over-investment in housing.

Also, by keeping the rate of interest below the rate of inflation, rampant speculation was encouraged, and the foundation was laid for the very type of mortgage financing that has now come back to bite us.

Anonymous said...

Barron's, Saturday, March 29, 2008
Dr. Greenspan's Amazing Invisible Thesis


Greenspan appears to have taken only a few months to obtain his NYU doctorate in '77.

Although Auerbach's evidence is circumstantial, it certainly is provocative. For years, NYU told the public that, at Greenspan's request, the thesis was locked away from public view in a vault at its Bobst Library. Auerbach himself was told this in January 2004 when he tried to obtain a copy.

"Normally," writes Auerbach, "a Ph.D. dissertation in a field such as economics must be in a form sophisticated enough to be usable in research, must make a contribution to the existing body of knowledge, and must be original, unpublished work. When approved, the Ph.D. candidate is normally required to supply a bound copy of the dissertation, which remains in the university's library and is available for future researchers to consult."


Auerbach, who has a Ph.D. in economics from the University of Chicago (Nobel laureate Milton Friedman was his thesis adviser), kept requesting access to the papers until NYU's provost, David McLaughlin, finally admitted in August 2005 that, "I can tell you that it was the practice of the business school, during the 1970s, not to deposit dissertations with the library. Thus, a copy of Greenspan's dissertation is not in the Bobst Library. We suggest that you contact Greenspan directly in order to obtain a copy of his dissertation."

Writes Auerbach: "Evidently, he wanted me to believe that NYU business Ph.D.s just took their dissertations home and put them in a drawer."

Auerbach says in a footnote that he made no request to Greenspan for a copy because "the publication of a scholarly addition to existing knowledge is the obligation of the university and the Ph.D. candidate."

http://boards.prudentbear.com/
bbs_read.asp?mid=656379&tid=
656379&fid=1&start=1&sr=1&sb
=1&snsa=A#M656379

Anonymous said...

Earlier this year, Eight Orchids was marketed as an upscale, Asian-influenced part of the revitalization of Oakland's Chinatown.

Developed by BayRock Residential, the 157-condominium project, priced the 770- to 1,645-square-feet homes starting at $550,888.

Now the developer will start auctioning 41 of those condominiums at $245,000 on Sunday.

Homeowner association dues range from $389 to around $520 a month based on the unit, according to Gruendl.

http://www.contracostatimes.com/
ci_8732901

Anonymous said...

April 13, 41 units at Cypress Park Monterey Bay — including some furnished model units — are going on the auction block.

Minimum bids start at $225,000 for a one-bedroom, one-bath 551-square-foot condo; the largest units — two bedrooms, one bath and 920 square feet — have starting bids of $265,000.

Previous pricing for those same units ranged from $335,990 to $479,990.

177 single-family homes were on the multiple listings in Seaside and, of those, about 20 properties had dropped under $300,000. One 650-square-foot house had even dropped to $149,000, he said.

"Those are prices that are cheaper than the condos," said Anapol. "If all those 41 sell, it will have a domino effect and other condo prices will fall in the county."

The Cypress Park condo auction isn't the only auction Accelerated Marketing Partners is handling in Monterey County.

The company was scheduled to auction off 22 new single-family homes in the Tuscany at Monte Bella development in Salinas on Saturday.

Minimum bids on those properties, built by Valley Community Homes, were starting at $295,000, compared to previous asking prices of more than $800,000.

http://www.montereyherald.com/
ci_8747725?source=rss

Anonymous said...

PROMOTIONS, PROMOTIONS, PROMOTIONS

If you are going to visit a new home development remember the Key Words is PROMOTIONS.

Many building developers are not doing INCENTIVES anymore, meaning no new car, free vacation, or flat screen TV.

It back to business, so ask them when will they run a weekly PROMOTIONS.

Typically 5% to 10% off asking price, and if you don't bring a buyer's realtor, you get that 3% as well.

Anonymous said...

Washington Mutual Alt-A Pool

New chart of WMALT 2007-0C1

The pool data just keeps getting uglier and uglier.

Month REO 60+

10-2007 0.00% 11.53%
11-2007 0.04% 13.30%
12-2007 0.64% 16.83%
01-2008 1.83% 19.32%
02-2008 3.56% 22.69%

60 day delinquencies or greater has been rising at a nice steady pace of 2.5% to 3.5% or so every month since August 2007. The Real Estate Owned (REO) number is now a whopping 3.56% of the pool.

Inquiring minds may be asking about lines 7 and 8 as well as the GEO lines at the bottom of the screen shot.

* Line 7 is the sum of lines 3 through 6 (anything 60 days late or greater plus all previous foreclosures and REOs)

* Line 8 is the sum of lines 4 through 6 (anything 90 days late or greater plus all previous foreclosures and REOs).

* The GEO lines (geographic distribution) show this pool is 48% California and 14% Florida.

Cesspool Bottom Line

22.69% of a pool that was 92.6% rated AAA is 60 days delinquent or worse. 3.56% of that pool is REO. That's an amazing performance for an AAA pool whose issue date was May, 2007. At the current rate of progression it would not be surprising to see 30% of this pool get to REO status.

http://www.howestreet.com/
articles/index.php?article_id=6061

Anonymous said...

Three tranches of mortgage-backed securities from Sequoia Alternative Loan Trust 2006-1 have been downgraded by Moody's Investors Service.

The downgrades were as follows: class B-1, from Aa3 to B2 (and placed under review for possible further downgrade); class B-2, from B1 to Ca; and class B-3, from Caa2 to Ca. In addition, class A-2 was placed on review for possible downgrade.

The negative rating actions were generally based on higher-than-expected rates of delinquency, foreclosure, and real estate owned in the underlying collateral relative to credit enhancement levels, Moody's said.

The collateral consists primarily of first-lien, adjustable-rate, alternative-A mortgage loans.

http://www.mortgageservicingnews.
com/plus/

Anonymous said...

Luminent MBS Classes Downgraded

Three tranches of mortgage-backed securities from Luminent Mortgage Trust 2005-1 have been downgraded by Moody's Investors Service. The downgrades were as follows: class M-1, from Aa1 to Aa3; class M-2, from Aa2 to A3; and class B-1, from Aa3 to Baa1.

The downgrades were generally based on higher-than-expected rates of delinquency, foreclosure, and real estate owned in the underlying collateral relative to credit enhancement levels, Moody's said.

The collateral consists primarily of first-lien, adjustable-rate, alternative-A mortgage loans.

http://www.mortgageservicingnews
.com/plus/

Anonymous said...

Moody's Downgrades GSC Capital MBS Classes

Eleven tranches from two transactions issued by GSC Capital in 2006 have been downgraded by Moody's Investors Service. Six downgraded tranches remain on review for possible further downgrade, and four other tranches were placed on review for possible downgrade.

The negative rating actions were generally based on higher-than-expected rates of delinquency, foreclosure, and real estate owned in the underlying collateral relative to credit enhancement levels, Moody's said.

The collateral consists primarily of first-lien, adjustable-rate, alternative-A mortgage loans.

http://www.mortgageservicingnews
.com/plus/

Anonymous said...

SAIL Subprime MBS Tranches

Twenty-two tranches from four subprime deals issued by Structured Asset Investment Loan Trust in 2004 and 2005 have been downgraded by Moody's Investors Service.

The downgrades were based on an "analysis of the credit enhancement provided by subordination, overcollateralization and excess spread relative to expected losses," Moody's said.

The transactions are backed primarily by first-lien, fixed- and adjustable-rate subprime mortgage loans.

http://www.mortgageservicingnews
.com/plus/

Anonymous said...

Thought you guys would like this one...
http://www.nytimes.com/2008/03/30/realestate/30cov.html?_r=1&oref=slogin

It's about how haaaaaaaaard it is to earn that 6% as a real estate broker.

Anonymous said...

Opteum MBS Classes Downgraded

Thirty-eight tranches from four transactions issued by Opteum Mortgage Acceptance Corp. have been downgraded by Moody's Investors Service.

Ten downgraded tranches remain on review for possible further downgrade, and six other tranches were placed on review for possible downgrade.

The negative rating actions were generally based on higher-than-expected rates of delinquency, foreclosure, and real estate owned in the underlying collateral relative to credit enhancement levels, Moody's said.

The collateral consists primarily of first-lien, fixed- and adjustable-rate, alternative-A mortgage loans.

http://www.mortgageservicingnews
.com/plus/

Anonymous said...

Fitch Ratings has placed eleven classes of notes issued by Baker Street Finance Limited (Baker Street) and nine classes of notes issued by Baker Street Finance USD Limited (Baker Street USD) on Rating Watch Negative.

Baker Street (and Baker Street USD) is a synthetic collateralized debt obligation (CDO) that references a EUR2.75 billion/US$250 million portfolio of primarily investment grade corporate bonds referenced via direct investments (50% of the total referenced amount), and indirectly through ten inner tranche credit default swaps (30% of the total referenced amount), as well as various asset backed securities (ABS) (20% of total referenced amount).

The ratings of the notes address the likelihood that investors will receive full and timely payments of interest and ultimate receipt of principal by the scheduled maturity date.

Fitch's rating actions primarily reflect the negative credit rating migration within the ABS portion of the underlying collateral, which currently comprises 20% of the total portfolio.

The ABS exposure consists primarily of structured finance (SF) CDOs and residential mortgage-backed securities (RMBS) backed by Alternative-A (Alt-A) and subprime mortgages from the 2005, 2006, and 2007 vintages, whose performance has deteriorated in recent periods.

Approximately 23.5% of the ABS portion of the portfolio (4.7% of the entire portfolio) carries a current rating of 'CCC+' or lower.

http://ca.us.biz.yahoo.com/
bw/080327/20080327006242.html?.v=1

Anonymous said...

Fitch Ratings has placed nine classes of notes issued by Regent Street Finance Limited (Regent Street) on Rating Watch Negative.

Regent Street is a synthetic collateralized debt obligation (CDO) that references a EUR3.0 billion portfolio, which consists of primarily investment grade corporate obligations referenced via direct investments (50% of the total referenced amount) and indirectly through ten inner credit default swaps (35% of the total referenced amount), as well as various asset backed securities (ABS) (15% of the total referenced amount).

Fitch's rating actions primarily reflect the negative credit rating migration within the ABS portion of the underlying collateral, which currently comprises 15% of the total portfolio.

The ABS exposure consists primarily of structured finance (SF) CDOs and residential mortgage-backed securities (RMBS) backed by Alternative-A (Alt-A) and subprime mortgages from the 2005, 2006, and 2007 vintages, whose performance has deteriorated in recent periods.

Approximately 30.4% of the ABS portion of the portfolio (4.5% of the entire portfolio) carries a current rating of 'CCC+' or lower.

http://biz.yahoo.com/bw/
080327/20080327006255.html?.v=1

Anonymous said...

Chase mortgage memo pushes 'Cheats & Tricks'

The bank says it never backed the strategies, which detail how to get an iffy loan approved

A newly surfaced memo from banking giant JPMorgan Chase provides a rare glimpse into the mentality that fueled the mortgage crisis.

The memo's title says it all: "Zippy Cheats & Tricks."

It is a primer on how to get risky mortgage loans approved by Zippy, Chase's in-house automated loan underwriting system. The secret to approval? Inflate the borrowers' income or otherwise falsify their loan application.

The document, a copy of which was obtained by The Oregonian, bears a Chase corporate logo.

Bank spokesman Tom Kelly confirmed that the "Cheats & Tricks" memo was e-mailed from Chase

In the face of sustained and significant home price increases, much of the industry veered away from traditional notions of safe and sound lending.

Loan volume became as important as loan quality, particularly for the rank and file typically paid on commission.

During the boom, it was common for lenders and brokers to get paid more for risky subprime loans than for 30-year fixed-rate loans because the higher-interest loans fetched a higher price on Wall Street.

Chase, the nation's second-largest bank, originates mortgage loans itself but also operates a wholesale arm that underwrites and funds loans brought to them by a network of mortgage brokers. The "Cheats & Tricks" memo was instructing those brokers how to get difficult loans approved by Zippy.

"Never fear," the memo states. "Zippy can be adjusted (just ever so slightly.)"

The Chase memo deals specifically with so-called stated-income asset loans, one of the most dangerous of the mortgage industry's innovations of recent years.

Known as "liar loans" in some circles because lenders made little effort to verify information in the borrowers' loan application, they have defaulted in large number since the housing bust began in 2007.

Still, some local mortgage brokers view the memo as vindication. Brokers have argued they've been unfairly blamed for the lax lending standards that led to a wave of defaults. The large national lenders drove the weakening standards, they argue.

The Chase memo is "a perfect example of one of the big five banks out and out telling mortgage brokers to commit fraud," said Todd Williams, a broker with Evergreen Ohana Group in Portland. "And this has been going on for years."

http://www.oregonlive.com/business/
oregonian/index.ssf?/base/business/
120658650589950.xml&coll=7

Anonymous said...

Wachovia`s balance sheet does not fool Mr Market

How will we know when it’s time to call a bottom to the mortgage mess? Here’s one benchmark: As long as Wachovia Corp hasn’t cleaned up its books, there’s probably still more to come.

The fourth-largest US bank ended last year with a book value, or assets minus liabilities, of $76.9 billion. By comparison, the company’s current market capitalization is $60.9 billion, following a 19 per cent decline in its stock price this year to $30.72.

The $16 billion gap shows the market doesn’t believe the company’s balance sheet is holding up. It’s probably right, too. I started my research for this column with a simple question: Why has the growth in Wachovia’s loan-loss allowance not kept pace with the growth in the bank’s nonperforming assets? It turns out the company hasn’t been using its allowance to stay ahead of bad loans, so much as it has been taking its time in recognizing expenses.

First, a brief primer on loan-loss allowances. These are the reserves lenders are supposed to set up on their balance sheets in anticipation of bad loans. Provisions are the expenses lenders record against earnings to boost their loan-loss allowances. As loans are written down, lenders take charge-offs, reducing their allowances.

A traditional rule of thumb is that when a bank’s allowance is less than nonperforming assets, it’s a sign the bank might not be setting aside enough reserves. The norm is for banks to bulk up on reserves, rather than run lean, when their forecasts show the economy is worsening.

http://www.business-standard.com/common/
news_article.php

Tyrone said...

Krugman, kiss my ass.

George Will: Let Them Eat Cake: Krugman: It's Like Katrina.

Anonymous said...

How the subprime crisis began

In 14 easy to follow steps

http://opinion.inquirer.net/
inquireropinion/talkofthetown/
view/20080330-127263/
How-the-subprime-crisis-began

bay400 said...

Apparently there are no consequences for the Orange One:

http://tiny.cc/aif8F

BondsOfSteel said...

FGIC, the 3rd largest monoline was just cut to junk (B) by S&P.

http://www.reuters.com/article/marketsNews/idUSN2835032720080328

Sucks. I own FGIC insured munis. But then so does everyone else. They insure $200 billion in bonds, which will most likly also get downgraded...

The financial doomsday clock just ticked a couple seconds closer to midnight.

AgentCampus said...

Downpayment and overprice I would say.

BondsOfSteel said...

More on FGIC. S&P will cut all bonds insured to Not Rated (NR) unless the underlying issuer has their own rating.

You can still buy/sell these munis untill Moodys dowgrades. (Moodys has FGIC on negative credit watch.)

No idea how this effects CDO valuations yet.

area 51 said...

Suzanne is alive and well in Mass......


"Carol Anderson,who lives in Dorchester, said she and her husband make $70,000 to $80,000 a year combined and borrowed $465,000 to purchase their home with no down payment.”

“To finance it, they agreed to two mortgages with rates of 11 percent and more than 9 percent. ‘I wanted a house,’ she said."

IN OTHER NEWS:
Dorchester, Massachusetts woman claims she was duped by unscrupulous mortgage lenders and wants a free bailout from the govt.....

Noodles said...

More fun and profit. Love and loss via New Century-
http://tinyurl.com/2m4u5w

area 51 said...

“They purchased their two-bedroom condo in 2000 for $82,000. As the value of the condo increased, as it did for most real estate in the state, the Jacobses dipped into the equity, spending money for fun.

“‘It was my fault,’ said Lisa Jacobs, who had had financial problems before and had to file for bankruptcy in 2001. ‘I just bought stuff for the sake of buying.’”

IN OTHER NEWS:
Bostonians allowed bankruptcy protection after blowing banks money....
AND...
Barney Frank, Nancy Pelosi, Barack Obama and Hillary propose bill for $50 Billion tax funded housing free-for-all.

Anonymous said...

I'm the guy who kept saying, "Buy gold and silver on dips" and "it's not time to sell your gold and silver; they're going much much higher."

Now I'm saying, "Buy silver now. Buy all you can afford."

Basically, most major suppliers of physical silver are OUT OF SILVER, and the price of silver is being manipulated downward. As I write this, you can buy silver for just over $17 per ounce.

SILVER WILL BE GOING MUCH, MUCH HIGHER. The law of supply and demand, the fact that silver is still low in its traditional proportion to gold prices, and the rapidly plummeting US Dollar dictate that silver will be going higher. Much, much higher.

Ignore me at your own cost.

Peace, out.

Anonymous said...

Oh yeah...you geniuses who mocked me for a fool when I used to say, "Buy gold and silver on dips" back when you could buy gold for under $500/ounce and silver for under $12/ounce, can all EAT MY SHORTS.

In yer face.

You were wrong, you will continue to be wrong, you have no clue what is happening in the global economy, your destiny is to be poor and indebted for all of your days.

Anonymous said...

bailout is here morons, thanks for the cash

keep renting the 1 bed 1 bath

DOPES

Anonymous said...

Accelerated Marketing Partners Announces Real Estate Auction for Single-Family Homes and Townhomes in Historic Downtown Gilroy

The 13 three-bedroom residences available at the auction range in size from approximately 1,394 sq. ft. to 1,590 sq. ft., each with a minimum selling price of $335,000. The 12 four-bedroom residences range in size from approximately 1,590 sq. ft. to 2,403 sq. ft., each with a minimum selling price of $355,000. Three five-bedroom single-family residences boast more than 2,400 sq. ft., each with a minimum selling price of $475,000.

Three-bedroom homes had previous asking prices of up to $610,000 and four- and five-bedroom homes had previous asking prices of up to $810,000.

http://biz.yahoo.com/prnews/
080326/nyw104.html?.v=101

BlowFly said...

At which point I will leave this god-forsaken shithole of a country

I just can't wait for you to pack your shit and hit the road you stupid pissante imbecile. We don't need any more morons, jackasses and masturbatin' dipshits in this country. Anyone with an IQ (i.e. renter) of less than 80 - OUT! Go down to the Banana Republic and never the f*ck come back. I'll kick your ass till my foot gets cramped! Last warning to all RENTERS, ILLEGAL ALIENS and PANHANDLERS go F*CK YOURSELF!

Anonymous said...

When Torrence James was finished serving a federal prison sentence for dealing cocaine in 2004, he took one of the few white-collar jobs then still available to convicted felons.

He became a mortgage broker.

Last week, Chief U.S. District Judge Edward W. Nottingham sentenced James to 12 years in prison for mortgage fraud. James, 44, of Centennial, was part of a ring that fleeced several mortgage companies out of $3.7 million by taking out fraudulent loans.

Many of the luxury properties that James and six other defendants skimmed became party pads as they fell into foreclosure, devastating local property values.

Crime and punishment. Law and order. Justice served.

But how does a convicted dope peddler become a mortgage broker and get instant access to millions of dollars in the first place?

One of the companies James and his crew defrauded was New Century Financial Corp. of Irvine, Calif., which is now under federal investigation for fraud itself.

It's the same old story. New Century is in bankruptcy after paying its executives millions in bonuses and stock options.

Its three founders made more than $40 million selling stock between 2004 and 2006 as the company apparently made loans to anyone with a pulse.

When the company is liquidated, its shareholders will receive a penny to 25 cents on the dollar.

New Century had a "brazen obsession" with making subprime loans, turning "a blind eye" to a "ticking time bomb," according to an independent report released last week that was commissioned by the Justice Department.

New Century wrote $357 million worth of mortgages in 1995, the year it was founded. In 2006 it wrote $60 billion. How did it grow so fast? Liar loans.

Lending standards were so lax that all some borrowers had to do was fill out a form stating incomes that would never be verified. It was just this easy.

New Century, like every mortgage lender, did not have an incentive to think about loan quality.

The loans would usually become somebody else's problem once they were sold.

But how does a publicly traded company get away with such fiscal slop?

Doesn't it have an auditor?

The 580-page report from examiner Michael Missal, which was more than five months in the making, concludes that New Century's auditor, KPMG, failed to exercise due care in reviewing the books, leading to misstated financial results.

"It's an Arthur Andersen re-do," said Lynn Turner, the former chief accountant for the U.S. Securities and Exchange Commission, who now sits on the U.S. Treasury's committee on the auditing profession. "We're right back where we were in pre-Enron days."

Remember all those Arthur Andersen guys who lost their jobs after Enron blew? Well, many of them found new jobs at KPMG.

http://www.denverpost.com/
ci_8737751?source=rss

Anonymous said...

One of the state's larger privately held mortgage lenders in the Twin Cities, Centennial Mortgage and Funding Inc. of Bloomington, was shut down Friday by the Minnesota Department of Commerce for what it called "financial irresponsibility or incompetence."

The cease-and-desist order for the company, also doing business as Award Mortgage, was signed Friday by company President Alvin Gelschus.

http://www.startribune.com/
business/17115221.html

Anonymous said...

Hey, what is going on at Lehman Brothers, they just raised 3 -4 Billion from somewhere, oh, yes, they said last week they were just fine.

BMW driving sex machine said...

http://money.cnn.com/2008/03/31/news/economy/copes/index.htm?section=money_latest

"Kent and Mysti Cope were well-paid executives at subprime lenders who never thought the industry could disappear overnight. Now they're just trying to get by."

Check out the subprime viagra addict and his OC trophy wife who are still living in denial about living beyond their means.

Anonymous said...

ABC News tonight (Monday 31st) "Kitchen Table" segment had on a couple who got burned speculating on two condos in Florida.

Nowadays, I'm looking at HP to see if Keith has stories I see in the MSM, instead of the other way around.

Anonymous said...

Mentioned here a while back, the free Washington City Paper used to have a column of absurdly overpriced local real estate. They still do, but now it's on the down side!

http://tinyurl.com/2n2ha9

This on is a suburban McMansion, but usually they cover row houses in the District. Let the good times roll, buddies!

Anonymous said...

watch www.zeitgeistmovie.com.

the trilateral commission is the real U.S. Government.

nice knowin' ya, America.

BondsOfSteel said...

RE: Lehman Brothers

Yea... very interesting. Lehmans says they have tons of capitol, and is one of the most liquid investment houses.

The WSJ hints that it might be to shake off shorts... but this makes no sense to me since doesn't selling preferred stock increase shorting from buys then hedging?

I tried to see if it was related to FGIC getting downgraded. Moodys cut them to Baa3 one above junk. With S&P at BB and Fitch at BBB, any counterparties will be effected.

The largest counterparty I could find is CIBC with ~$500 mil insured. Nothing on the remaining billions FGIC insured...

Buzz Saw said...

Visit Good Riddance, enjoy your stay

Downturn Blues said...

That article on Kent and Mysti is full of gems. Incredibly, they actually are "Ramen eaters":
"We used to eat out a lot. Now we are the leftover king and queen," said Kent.


9,000 layoffs in OC. People in the RE industry would "rather be laid off than work [on commission]".
Mysti finding the term 'broker' "like having Enron on your resume".
Despite all the HP-isms, I'm having trouble stirring up any schadenfreude. It's just sad. And their name is even "Cope".

Mammoth said...

What happened to "Gold to the Moon, Alice?"

Gold to the floor.
Yikes!

Hang on to your seatbelt, because we're all in for one wild ride!

Is it time to buy in, or has the Gold bubble already burst for good (this time around, that is)?

-Mammoth

Mark said...

This is how bad its getting in Central Texas, where the bubble was never that big anyway but was propped up by a large amount of Californians relocating to a cheaper place:

http://austin.craigslist.org/rfs/626216715.html

Anonymous said...

I got a ? Will homeowners be rewarded twice. Once with write down with principal and then when values rebound ?

Anonymous said...

What happened to "Gold to the Moon, Alice?"

Gold to the floor.
Yikes!

Hang on to your seatbelt, because we're all in for one wild ride!

Is it time to buy in, or has the Gold bubble already burst for good (this time around, that is)?


_______

Market newbie, eh?

Don't let little technical pullbacks rattle you.

Anonymous said...

Gold is STILL above yesteryear all-time highs....good grief, people, grow some b@||$.

Keyser Soze said...

Memoirs from a former banker: I hope you folks don't get too tired of my ramblings!
Anywho...as I read the unfolding tragedies of the housing bust, I remember people coming in for bridge loans because they found their 'dream home' and haven't sold their current home. My standard reply...will your budget allow you to make 2 mortgage payments in a worst case scenario? If they had the current home paid paid off, then I've give my standard line,'You realize that you are placing yourself in the cold clutches of the local realtors? The minute you buy the new home and list your existing home, they will now know you are a distressed seller. How does that sit with you?'

I also used to do construction loans and I used to tell the folks to sell their house first....rent a nasty apartment for a year, and spend your evenings checking out the quality of the construction of your new house.

My clients loved me.
The realtors hated my guts.
I was years ahead of you Keith....I've hated realtors since the 80's. Most of them would put their client's at risk...I am talking about blue collar factory workers. There were two realtors I worked with which I will never forget, Linda and Shirley...who would always put their client's first. 2out of 100.
I bet the advent of the sleazy mortgage broker was a big relief for the slimy realtors.
Rant over.

Anonymous said...

Traders woke up to a pleasant surprise on Tuesday morning, with equity Futures strongly higher. CNBC anchors were exuberant as previous earnings and credit fears melted away.

The cause? An internet April Fool's hoax that backfired.

http://bigpicture.typepad.com/comments/2008/04/internet-hoax-g.html?cid=109012310#comment-109012310

hlowe

Mammoth said...

Not really a newbie, but I did get burned on dot-com back when I was a newbie.

Once burned, a person can be a little shy...

Sold SOME of my holdings a few fridays back, when Gold hit $1000.

Anonymous said...

There have been threads to determine which communities are infested with the highest and lowest numbers of lowlife scum. Well, your search is over! New Scum-O-Meter formula announced! Calculate the Scum Index for any city! It's simple. Just tally the telephone listings of local businesses engaged in any of the following:
Tattoos
Check Cashing
Body Piercing
Payday Loans
Pawn Shops
Fortune Telling
Video Arcades
Cheap Apartments
Rent-To-Buy
Used Cars
Used Furniture
Used Clothing
Used Tires
Used Anything

Then, divide the total into the population of the community, and voila! The higher the resulting number, the greater the Scum Index.

Anonymous said...

all interest rates seem low for a savingsless society

Anonymous said...

area 51 said,
FLORIDA REALTORS CALL BOTTOM!!!

Oh, honey. Realtors, brokers, lenders - they've always been tops. They may be bottoms now, but I'm sure they didn't volunteer.

BondsOfSteel said...

This disgusts me:

Senate leaders reach deal on foreclosure relief

Highlights:

- $10 Billion to States to bailout subprime borrowers

- Tax changes to allow home builders to write off losses from previous quarters

- $4 Billion for states to get into the house flipping biz! (Or just fund failed ones with taxpayer money?)

- $15,000 tax credits for buyer of foreclosed properties... to prop up prices

- $100s of Billions of FHA loans for subprime refis if the lender forgives principal debt

Pigs at the trough. God bless Bank of America!

W.C. Varones said...

Greenspan's Body Count hits eight.

Anonymous said...

Rifts are growing among Gulf Arab states preparing for monetary union on how to tackle inflation at a 27-year peak of 8.7 percent in Saudi Arabia, a 19-year high of 9.3 percent in the UAE and just off a record at 13.7 percent in Qatar.

Saudi Arabia, the Gulf's strongest supporter of the dollar peg, gave the latest signal of its commitment to the U.S. currency by slashing import tariffs on 180 goods as of Tuesday to offset the impact of price rises on its people.

Echoing comments by Qatar's prime minister in February, UAE Prime Minister Sheikh Mohammed bin Rashid al-Maktoum said in rare comments to the media that the oil producer had set up a committee to reconsider its fixed exchange rate.

"They are seriously considering currency reform and it's right that they do," said Simon Williams, regional economist at HSBC in Dubai.

"The shortcomings of the dollar peg that tie the monetary policy of the booming Gulf to the troubled U.S. economy are plain to see," he said.

While the United States tries to ward off a recession by cutting interest rates, economies of Gulf oil producers are surging on a five-fold rise in oil prices in the last six years.

Dollar pegs restrain Gulf states in their fight against inflation by forcing them to cut interest rates when they should be raising them, while the dollar's drop to record lows against the euro and a basket of currencies drives up import costs.

A committee reporting to the UAE government would study "the benefits of staying with the peg or not", Sheikh Mohammed said during a visit to China, adding the peg would stay in place for the foreseeable future.

http://www.guardian.co.uk/
feedarticle?id=7428041

Anonymous said...

Treasury Secretary Hank Paulson announced the laying of the government's foundation stone for the next big financial bubble, heralding an era of hyperinflation and probable further runs on the U.S. dollar.

Of course, like most politics, there is usually a 'good' reason and a 'real' reason for actions. Today's announcement was no exception.

In today's case, the 'good' reason was the effective 'policing' of the financial, derivative, insurance and mortgage markets.

Some cynics could be excused for thinking that the so-called 'restructuring' and massive increase in the powers of the Federal Reserve Board were like locking the stable doors after the horses had bolted.

The extension of the 'supervisory' powers of the Fed to non-bank (deposit) financial houses (like stock brokers), derivative dealers, insurance companies, and even to the private, high risk investment companies of the rich, like hedge funds, is dramatic to say the least.

But when it is realized that, in return for supervision, the Fed will stand behind those industries as a lender of last resort, the true revolutionary magnitude of today's proposal becomes manifest.

http://www.safehaven.com/
article-9847.htm

Anonymous said...

Yea!
http://larouchepac.com/news/2008/01/28/fed-copies-weimar-hyperinflation.html

hlowe

Anonymous said...

Thirty-six condominiums in Elk Grove will return to the auction block April 20, the second time the new complex has been on the bid-and-sell market.

Kennedy Wilson is marketing the one-, two- and three-bedroom condos with minimum selling prices ranging from $85,000 to $140,000. The company will auction the condos with published reserve prices.

The asking price was $150,689 to $230,989, before the new-home market stalled. Some of the condos were sold as part of a previous auction.

The condos include laundry rooms and private garages.

http://www.bizjournals.com/
sacramento/stories/2008/03/31/
daily11.html?ana=from_rss

W.C. Varones said...

Sorry, spoke too soon.

Greenspan's Body Count now stands at nine.

edd said...

Deborah Orr, April 2nd
The Independent [uk]:
"People are flowing from the countryside into the cities in search of urban futures that are not there. … A quarter of city
dwellers live in absolute poverty,
surviving on less than a dollar
a day.
An influx of humans that we do not
have the resources to look after is what we fret about in Britain. And no wonder.
The hopeless consequences of such
population movement are already
starkly plain to see. "

Peter said...

Bad Credit Car Loans provides various information on bad credit car loans. Know more about personal car loans, used car loans, bad credit car loans and bad credit car loans UK.

Anonymous said...

The regulars at this site were quite right to stay out of housing the last couple years, but its something of a leap to start calling for doom and hoarding guns and canned food just because housing prices are correcting and the economy is going into recession. The reality is that the government and the REIC will pretend a soft (and prolonged) landing really did occur, because the Fed-induced inflation will keep NOMIMAL prices from declining severely in most areas. Remember that a few years of 10% inflation and no change in median home prices will quickly bring that famous "home prices since 1890" chart back to the mean. Meanwhile stagflation/recession does not equal doom. It means recession for China and India too, and thus decreased global demand for energy which will help mitigate soaring real energy prices (though these too may simply stay flat in nominal terms). Gold and silver will likely rise further in the next few years, rewarding those who have invested as such (you guys, right??), and people who bought houses recently will be stuck in them (most people are not subprime and CAN afford their payments: being underwater does not equal going into foreclosure). My point is, that a recession is no reason to get ready to battle in the Thunderdome. Just get ready to tuck your belt in a few notches, and stick through the volatility with the silver/gold, as there should be lots of upside left to go. And if you're really that panicky, get some valium and try to relax. The world probably isn't going to end.

Straw Buyer said...

karl denninger wrote: I want pictures of the prison rapes committed upon your person....

He should work at Abu Graib, like the good little fascist that he is.

Anonymous said...

Here's some other douchebag who is trying to keep the Ponzi/Pyramid scheme going...www.thehomexchange.biz

Just check out the first paragraph!! Unreal!!

Chris in HB said...

OPERATION REPO ON TRUETV CHANNEL.anyone seen it? Lets start a thread Keith.

This reality show of a tough repo crew in SoCal. Last night they go to a mansion in the hills repo a 120K beemer while used as a prop for a porno flick. Then off to the valley where they repo a H2 WITH ALL THE CHROME from some guy and he is bawling I WANT MY HUMMER BACK I PAID FOR IT. Then off to Lake Castaic near magic Mountain to a cookie cutter new development and they nab a huge 4x4 truck with a very nice powerboat hooked up. Homeboy and his woman were getting ready to head to the lake. The young debtor couple were behind in payments on both boat and truck...house is next.I HOPE THEY DO ONE IN SCOTTSDALE ...FRANK CAN YOU ARRANGE IT?

BlowFly said...

Headline: Renter sets apartment complex on fire while trying to light a candle!

When lighting a candle becomes too complex of a task, just ask any renter-moron to give you a hand. I bet you that most of you imbecile, brain-dead 1BR shit-hole dwellers and dumpster divers need a hand when wiping your own ass. Face it retard, home ownership is permanently out of your reach. The crash is f*cking over, this is the best time to buy!!!!!

Anonymous said...

Not really a newbie, but I did get burned on dot-com back when I was a newbie.

Once burned, a person can be a little shy...

Sold SOME of my holdings a few fridays back, when Gold hit $1000.


_______

Dot-com stocks rose on no solid fundamentals of any kind.

Gold will resume its rise based on every sensible and solid fundamental economic reason in the known universe.

Arise, ye sheeple, and THINK.
.
.
.

Anonymous said...

The world may not end now, but what about when the $50 TRILLION bill from Social Security and Medicare come due? Our GDP is only $14 trillion...I think we're going to come up short. We have literally spent ourselves to death. What do you really think is going to happen to this country? We won't even be able to afford the interest only payments on 50 trillion. That means NO OTHER GOVERNMENT SPENDING PERIOD. No government at all. Chaos. Anarchy.


AND we'll be so dependent on the government at that time, that we're going to be helpless to do anything. Our right to own weapons will be gone by then (probably even owning butter knives will be illegal).

The police, who will not be paid because there is no money, won't be able to keep up, much less respond to crime. Courts and prisons will become so choked and overcrowded that prisoners will be summarily executed to make room or a certain amount will be "set loose" on a weekly basis.

Families will be regulated. Each family will only be allowed to have one child, if any at all. Medical procedures and doctor visits will only be available for the super rich. Forget about medical insurance...that'll be history. Any medicine a layman can get will be iffy at best. I'd feel safer going to TJ for a treatment.

The border will be either completely gone or so incredibly pourous with people trying to get out.

Manufacturing will be non-existent. We are ALREADY a 70% consumer based economy...how about 30 years from now? "Made in America" will just be a footnote in history books.

But we won't be able to afford history books, much less produce them. And the ones that are written, will not be written by us.

Religion will become more polarizing. There will be Christian, Muslim, and other camps. People will self-segregate into them.

American's won't care what's happening in the world--at all.

Our military will become dilapidated. The equipment will falter FAR above the usual expected failure rates. Training will be a joke, if any at all. Even people who are disabled, if they live long enough, will be welcomed into the military, until of course, we're unable to pay for anything.

Our military presence around the world will erode, both because we are unable to assert ourselves in a meaningful way (by way of strength) and therefore we will become a joke or laughingstock, because we can no longer run a war like a war. And by ourselves who will be further taught/indoctrinated that our military is an evil institution which must be disbanded altogether.

Political parties will eventually look exactly alike. Platforms will blur and the succession of the Presidency will just be like an assembly line. Same old rhetoric...next...same old rhetoric...next....voter turnout numbers will get smaller and smaller. Someone will suggest getting rid of voting altogether. "It's not like people vote, anyways" is what they'll say. You can figure out what will happen from here...

It'll be every man for himself. Grow your own food. Slaughter your own animals.

Those who are still lucky enough to have purchased a home decades ago and PAID IT OFF and still have it in their family will be able to still live there, probably with their family and several generations of their family under the same roof.

Until the taxes are raised so high that the government forecloses on the family and then takes posession of the home.

Water will be scarce. It will be horded and highly valuable.

Whatever new kind of "environmentally friendly and/or Green" project which the government will have sunk billions into to change the infrastructure, will not be completed and will sit unused and unfinished, literally leaving people in the dark because, of couse, by then, any kind of old energy systems will be in disrepair or illegal to operate because someone sued to get them to be shut down.

Malls won't exist anymore, except to house the homeless.

Those lucky enough to have jobs will be 'personal servants' to the extremely wealthy. The middle class will not exist.

Seeds will be astronomically expensive per pound, and rationed.

Millions will die as a result of the inability to survive. All of the skills of our fathers and grandfathers will have been lost.

Think it can't happen? Then just how are we supposed to pay for the 50 trillion? Write that one off? How? Take a serious look at the current state of affairs. Apply the scenario, and you'll understand it, too.

Anonymous said...

Straw Buyer said...

karl denninger wrote: I want pictures of the prison rapes committed upon your person....

He should work at Abu Graib, like the good little fascist that he is.

You mean Abu Ghraib? At least he can spell.

Denninger has forgotten more in life than you ever knew in the first place.

Fascist:
3. a person who is dictatorial or has extreme right-wing views.

Dumbass:

a thoroughly stupid person; blockhead.

Anonymous said...

The European Central Bank will likely delay any rate cuts to the second half of the year with inflation now at a record high, a Reuters poll showed on Wednesday.

All 80 economists in a poll carried out March 31-April 2 said the ECB would leave rates on hold at 4.0 percent when it meets on April 10 with no sign yet of any imminent move to come from the bank.

European producer-price inflation accelerated in February to the fastest pace in more than a year.

Factory-gate prices rose 5.3 percent from the year-earlier month, the most since August 2006, after increasing 5 percent in January, the European Union statistics office in Luxembourg said today. The February rate exceeded the 5.2 percent median forecast of 25 economists in a Bloomberg News survey.

ECB governing council member Christian Noyer said yesterday that policy makers must ensure that inflation expectations are anchored before they consider lowering interest rates to support economic growth.

Anonymous said...

When she stopped by a Wachovia branch in Charlotte last month, Marilyn O'Connor asked about refinancing her townhome.

Instead, she got a pitch for a "Pick-A-Payment" mortgage that offered flexible payment options but a higher interest rate.

O'Connor said she initially agreed to apply for a Pick-A-Payment loan until she learned the interest rate.

The full principal and interest payment option had a rate of 6.85 percent, higher than the 6.75 percent rate on her existing mortgage.

A regular 30-year fixed rate at the time had a 5.5 percent rate, according to her loan documents.

"I said, `Are you crazy?' " O'Connor, 66, said. "I'm not going to spend that much on interest. It was very disheartening."

Since buying Pick-A-Payment specialist Golden West Financial in 2006, the Charlotte-based bank has been rolling out these nontraditional loans at branches and mortgage offices around the country.

But the push has become a sore spot with some customers and employees. Loan officers say they have faced intense pressure from the company to persuade borrowers to use the loans.

Wachovia has required its loan officers to sell a minimum number of Pick-A-Payment, traditional and other loans or face discipline, including termination, according to interviews and documents.

A training script obtained by the Observer tells loan officers, known as mortgage consultants, how to sell Pick-A-Payment loans, including empathizing with customers' cash flow problems.

http://www.newsobserver.com/
business/story/1019504.html

W.C. Varones said...

Competitive devaluation begins.

Anonymous said...

Rice shelves in the UAE's supermarkets might become empty within six weeks, if the government fails to intervene soon, traders said on Wednesday.

"The market price of the top quality super cornell rice is Dh200-210, however, the government has fixed it at Dh140, which makes it uneconomic for us to import," said a member of Foodstuff Trading Group which represents the trade, requesting anonymity.

"We want the UAE government to match the market price or subsidise. Otherwise, importers will stop buying it. As it is, the flow of import has reduced significantly and the current stock could last six weeks at best."

Food price inflation has already replaced the list of other public worries, including house rents and traffic earlier this year. Traders warned, if the current situation is bad, then the worst is yet to come.

http://www.gulfnews.com/business/
Trade/10202679.html

Anonymous said...

A year ago, investors like Guan Ling were ebullient. Chinese share prices had climbed over 500 percent in the span of two years, setting off a nationwide stock buying frenzy.

When experts periodically warned about the possibility of a bubble, prices would dip temporarily then soar even higher, breaking records and inciting another mad dash to snap up equities.

“The market was going wild,” says Mr. Guan, 49, who a few years ago closed his real estate company to invest in stocks full time. “Everybody was talking about how much they had earned, how much more they would invest, and which stocks had jumped 20 times, or even 30 times.”

That was last year. The Shanghai composite index has plunged 45 percent from its high, reached last October. The first quarter of this year, which ended Monday with a huge sell-off, was the worst ever for the market.

Suddenly, millions of small investors who were crowding into brokerage houses, spending the entire day there playing cards, trading stocks, eating noodles and cheering on the markets with other day traders and retirees, are feeling depressed and angry.

http://www.nytimes.com/2008/04/
02/business/worldbusiness/
02yuan.html

Anonymous said...

Say good bye to 95% FHA cash out refi's at the higher loan limits:

April 1, 2008

MORTGAGEE LETTER 2008-09


TO:ALL APPROVED MORTGAGEES
ALL FHA ROSTER APPRAISERS

SUBJECT:Second Appraisal Requirements/Limits on Cash-Out Refinances

Now, with FHA in position to insure mortgage amounts greatly in excess of what has been its experience as a mortgage insurer, we believe it prudent to set forth additional underwriting and collateral assessment practices for “high-balance” loans.

Specifically, for mortgage amounts that will exceed the January 1, 2008 conforming limit of $417,000, FHA is establishing a second appraisal requirement for loans on properties in declining areas, and limiting the loan-to-value for cash-out refinances. These requirements are further described below and are effective for all mortgages with FHA case number assignments made on or after the date of this mortgagee letter.

Second Appraisal Requirements in Certain High-Cost Areas

Recognizing FHA’s counter-cyclical role in the mortgage market, and its ability to help stabilize declining housing markets, FHA is not at this time establishing higher downpayment requirements or borrower credit bureau score thresholds for properties located in declining areas. However, to mitigate risk to the FHA insurance fund as well as FHA borrowers, FHA will require a second appraisal for higher balance loans secured by properties in declining markets as indicated on the appraisal report or determined by the lender using other sources.

Loan-to-Value Limits for Cash-Out Refinances

If a homeowner is pursuing a cash-out refinance and the loan balance exclusive of FHA’s upfront mortgage insurance premium will exceed $417,000, the loan-to-value may not exceed 85 percent of the appraiser’s estimate of value.


Sincerely,

Brian D. Montgomery
Assistant Secretary for Housing-
Federal Housing Commissioner

Anonymous said...

Is this a sign of something bad or am I paranoid?

I own two retail stores and have a merchants account to process credit cards. Mastercards and Visas always post the next morning. This morning, I had no credit cards posted to my business account.

I called the merchants account service and they gave me an ACH tracer number, since they released the funds at midnight, as is their usual practice. I called my bank and the ACH officer could not find the money, using the tracer. I called the Merchant Services again and they were experiencing such a high volume of calls that they had to take my number to call me back.

My father gets a military retirement check. It did not go into the bank on the 1st as it usually does.

I don't know what is going on, but I am giving discounts for cash today.

Keyser Soze said...

Please forgive my last post. My English teachers, long dead, must be turning over in their graves. Please forgive me Miss Rademacher and Mrs. McCarthy!

Anonymous said...

Keith, I'm a long time reader. I'm about to lose my mind here. If Barney Frank gets his way I'll be paying taxes so that some scumbag can live BETTER than me. I have a modest home and lifestyle (why???because that's what I can f*cking afford). If I bail out a guy who is living in a million dollar home with 2 bimmers in the drive and an inground pool I will hate this country forever. Can you raise some awareness about this issue, becuase the FED is going to start buying mortgages soon.

Keyser Soze said...

The 50T of potential liabilities of Social Security and Medicare will be reigned in by:
1)means testing
2)limiting now unlimited 'end of life' expenses. Yes, this will put a damper on Seychelles vacations of doctors, but it must be done.
3) raise ss age to that of average life-span, as it was when SS was inplemented.

Next problem.....

edd said...

"self-regulation"
"self-policing"
"free market"
"transparency"
"professionals"
… … …
… … … HAH !!

~ ~ ~ ~ ~ ~
" Yes, Dmitri ----
it's great to be fine."
But Dmitri ……

Anonymous said...

1) Means testing???

2) Not gonna happen. There are too many religious groups that will oppose that. Who is the government to say when it's time for so-and-so to die? Plus, we can't say right now what sort of medical advances will take place in the next 10-20 years which will extend humna life. What sort of ethics is it to decide when a life is no longer worth living? I understand there are obvious circumstances when someone is close to death, but that is currently not up to Uncle Sam or medical doctors to decide.

Can you imagine a doctor telling you that he will not take lifesaving measures because it's not worth it? Your loved one is 65 and had a stroke. She could live decades longer...what if your loved one is 85? Where do you draw the line and how do you legislate that?

3) Not going to happen. There are too many people on the hook for age 65 (or whatever it is), including Gen Xers and Gen Yers. Now, I for one, am going to work for as long as I can, even if past that age designation, and I'm sure a lot of other people will, too.

Don't get me wrong. I agree with you that it needs fixing. But I don't think those measures will suffice. And if they are put into place, it just puts off the problem.

Anonymous said...

This Realtor (TM) has some great advice to commit mortgage fraud:

"Buying a New Home Before Letting The Old Go Into Foreclosure"
http://tinyurl.com/2aogrg
http://kathyneilsen.blogspot.com/2008/02/buying-new-home-then-letting-old-go.html

TXBROKER said...

It is absurd for people to think it is okay to walk away from a high mortgage payment to purchase the house next store that has been put into foreclosure. Taking a ding on your credit with that velocity is crazy.

statist said...

denninger = always wrong. Fascist, racist, narcisist, hypocrytie, perma bear, drooling caveman day trader.

Anonymous said...

Weren't house price not suppose to fall
San Francisco, CA

Bed 2 Bath 1
Sold: $260,000 (1/11/2008)
Last Sale: $371,386 (5/01/2007)

Bed 2 Bath 1
Asking: $269,900
Last Sale: $400,500 (10/30/2007)

Bed 3 Bath 2
Sold: $270,500 (2/06/2008)
Last Sale: $668,000 (5/13/2004)

Bed 3 Bath 2
Sold: $281,500 (2/21/2008)
Last Sale: $510,000 (8/16/2002)

Bed 4 Bath 2.5
Asking: $359,000
Last Sale: $500,000 (08/03/2006)

Bed 4 Bath 2
Asking: $383,600
Last Sale: $519,017 (10/01/2007)

Bed 4 Bath 2 SF 2,400
Sold: $385,000 (1/24/2008)

Anonymous said...

Are house prices going down in Milpitas, Ca

Bed 3 Bath 1
Sold $139,500 (02/13/2008)
Last sale: $560,000 (10/21/2007)

Bed 3 Bath 2
Sold $218,500 (02/13/2008)
Last sale: $465,000 (11/15/2002)

Bed 3 Bath 2
Sold $405,000 (01/30/2008)
Last sale: $472,000 (05/20/2005)

Bed 3 Bath 1
Asking: $429,000
Last Sale: $475,000 (11/29/2004)

Bed 3 Bath 1
Asking: $439,000

Bed 3 Bath 2
Sold $442,000 (03/04/2008)
Last sale: $680,000 (08/30/2005)

Bed 3 Bath 2
Asking: $450,000
Last Sale: $555,000 (06/21/2005)

Bed 4 Bath 2.5
Sold $415,000 (01/25/2008)
Last sale: $805,000 (05/18/2007)

Bed 4 Bath 2.5
Sold $335,000 (03/04/2008)
Last sale: $675,000 (10/06/2005)

Bed 4 Bath 2.5
Sold $415,000 (01/25/2008)
Last sale: $805,000 (05/18/2007)

Anonymous said...

Check it out!!!
Lehman Level 3 assets exposed

Mr Mortgage Exposes Lehman ALT-A

http://www.youtube.com/watch?v=tebO2v3qBVY

hlowe

Danny said...

New rule of thumb: offer 2002 prices for a house. Check the address on Zillow, look at the 10 year trend-line. 2002 prices are our floor. There is the chance that the market over-corrects and drops below that, but I think 2002 is a realistic bet.

Anonymous said...

statist said...

denninger = always wrong. Fascist, racist, narcisist, hypocrytie, perma bear, drooling caveman day trader.

he spells better than you do.

Anonymous said...

Ladies and Gentlemen: You are all overlooking a very BIG problem coming up in the Fall of '08.
THE STUDENT LOAN CRISIS.
Check it out! There is no money to lend because of the Auction failures on municipals, etc.
This is the end of the College degree for average people who are strapped by debts and can't pay the average $20K or more to go to school for one year.
These loans are considered DEAD LAST now when lending institutions consider a loan. In part because of liquidity and another because of notorious no pays.

area 51 said...

CEO of NATIONAL ASSOCIATION OF HOMEBUILDERS CALLS BOTTOM!!!

"We're predicting that by the end of the second quarter of this year, you'll start to see serious stabilization..."
---Jerry Howard, CEO NAH

Heck that's only three months off!
You all better buy now or be priced out forever!

striker said...

Hey keeferino and all Hp'ers,
You have to listen to this to this guy!
Turn the frickin t.v. off and listen to this today!

http://www.npr.org/templates/story/story.php?storyId=89338743&ft=1&f=13

http://tinyurl.com/4llp4l

Out at the peak said...

Burning the house the day before the foreclosure. You've always known this stuff would happen.
http://www.wyff4.com/news/15776757/detail.html

Anonymous said...

uh oh Keith:

http://tinyurl.com/5ms2kj

Anonymous said...

Lenders Swamped By Foreclosures Let Homeowners Stay

http://www.bloomberg.com/apps/
news?pid=20601109&sid=
aOluOO8Vy0gc&refer=home

Banks are so overwhelmed by the U.S. housing crisis they've started to look the other way when homeowners stop paying their mortgages.

The number of borrowers at least 90 days late on their home loans rose to 3.6 percent at the end of December, the highest in at least five years, according to the Mortgage Bankers Association in Washington. That figure, for the first time, is almost double the 2 percent who have been foreclosed on.

Lenders who allow owners to stay in their homes are distorting the record foreclosure rate and delaying the worst of the housing decline, said Mark Zandi, chief economist at Moody's Economy.com, a unit of New York-based Moody's Corp. These borrowers will eventually push the number of delinquencies even higher and send more homes onto an already glutted market.

``We don't have a sense of the magnitude of what's really going on because the whole process is being delayed,'' Zandi said in an interview. ``Looking at the data, we see the problems, but they are probably measurably greater than we think.''

area 51 said...

Will ya just listen to this guy...aww shucks he's so honest and sweet I just GOT to buy somethin' from him!!!!!

"Awww SHUCKS, heck these houses are so sweet I WOULD GO and BUY one meself!!!!!
(er uh except for the ol' "conflick o' innerist..")
SORRY FOLKS, just can't done do it nawww....but HEY YOU ALL COME down here and set a spell and plop down a COUPLE HUNNER dollars and we'll fix ya a PUNKIN' pie fer yer trubbals!"

http://www.sbsun.com/news/ci_8803890

Buzz Saw said...

This asshole took out $500k on his heloc, plans to buy it back from the bank for 20%

edd said...

If you know of someone who's getting away with "murder" in
this tragedy, have the guts to
take some action.

If you are not "sure", then let some
office or agency decide what smells.

Covering butts is not acceptable.
Watching the fires is not acceptable.

sandman said...

Check this out.

Banks letting folks stay in their houses after they stop paying.

Holy cow.

http://www.bloomberg.com/apps/news?pid=20601068&sid=aefAJU_88vfs&refer=economy

I like how the one person says it smart for the banks.... so they keep the plumbing in rough neighborhoods. That guy must work for Fox Business News.

Anonymous said...

Anyone notice CFC has been downgraded to "D" and the stock fell from 6.29 to 5.90? Will somebody please let this bleeder die?

Anonymous said...

Those blindsided by the recent financial meltdown are now loudly blaming the free market for its failure to police its own excesses, and are calling for greater regulation to prevent future disasters.

But for those who clearly observed the problems developing (in high definition slow motion) the blame can be directed squarely at the policies of the Greenspan/Bernanke Federal Reserve.

As has been the case countless times in history, the free market will now pay the price for government incompetence.

http://boards.prudentbear.com/
bbs_read.asp?mid=659626&tid=
659626&fid=1&start=1&sr=1&sb=
1&snsa=A#M659626

Anonymous said...

Shiller index shows RE price decline next 5 year

http://sfbay.craigslist.org/
forums/?ID=87997802

no jobs means no buyers and more forclosures

Anonymous said...

Lots of dung flying downtown Tampa today smell bad for the banks. I went to the Tampa REDC foreclosure sale at the Tampa convention center. It was a joke. In my opinion, these are just markerting plows to move dead inventory not sell homes. In my opinion, these banks are not ready to sell. They want to try and trick people and con people into paying high values or full market price. What happened today proves it. The I want to educate people on was a for sale 4/5/08 and the house which was number 3 on the auction list 5157 Loquat Ct Palm Harbour , FL 34685. Look at the market comps yourself first. Well first they skipped it and auctioned it off as number #5 in the auction order. It was a cash sale. It went up on the auction block and got auctioned for 390k. About 50k higher than market value. A third of the audience beleived it was shill betting and walked out of the auction. Yes a mass exodus. The auctioned begged the people to stay as they were leaving saying it may be auctioned off again later. Well an hour and a half later it was back up for auction like many of the homes. In my opinion, lots of shill bids. If auctionaire doesnt get the price he wants in the shrill bid process it goes up again later the sam day. Scam cheating and lies still beware. Sencond time on auction block 350k. Ya right. I believe that everyone in the same neiborhood can sell similar homes for 350k but magically this ones sells. Make your own judgement.

Cspan said...

Not just in Tampa, Banks EVERYWHERE are not willing to price their inventory at the fire sale prices they should be at NOW!!

It's alright--Just let them choke on it a little bit more--more inventory stacks up by the day.

how much underwater? said...

re: anon
"""
Bed 3 Bath 1
Sold $139,500 (02/13/2008)
Last sale: $560,000 (10/21/2007)
"""

That has to be straw buyer fraud sale in 2007. Or someone *really* stupid. Or a meteor strike I guess...

no obama said...

What a bunch of crap! Anyone from Chicago knows that Obama nad his handlers are gun grappers. They will be devastated when the US Sup Ct affirms the 2nd Amend...


http://www.politico.com/
news/stories/0408/9398.html

Obama aims for pro-gun vote

Barack Obama did not hunt or fish as a child. He lives in a big city. And as an Illinois state legislator and a U.S. senator, he consistently backed gun control legislation.

But he is nevertheless making a play for pro-gun voters in rural Pennsylvania.

By highlighting his background in constitutional law and downplaying his voting record, Obama is engaging in a quiet but targeted drive to win over an important constituency that on the surface might seem hostile to his views.

Mac10 said...

Keith,

You don't like Hillary Clinton, we get it...I don't see why you have a problem with her making $109 million, assuming she paid her share of taxes. Are those who support left-wing causes supposed to "eat dirt"? Are those who are anti-poverty expected to live in poverty? Attack the message, not the messenger. Meanwhile, the global ponzi scheme is coming unglued, so the gap between rich and poor is about to become much narrower...

Anonymous said...

http://www.heraldtribune.com/apps/pbcs.dll/article?AID=/20080402/APN/804020853&template=printart

TALLAHASSEE, Fla. Threats of early prisoner releases and the potential for bank failures emerged Wednesday as a series of austere spending measures advanced in the Senate as part of the budget-writing process.

Several prison guards sat in the front row as one panel unanimously agreed on a justice system budget that includes eliminating 2,200 positions from the Department of Corrections and 382 from court support staff. The cuts would amount to 8 percent for Corrections and 11 percent for the courts.

One lawmaker, meanwhile, said banks could be at risk if decimated courts are forced to delay foreclosure cases.

Lawmakers expect to spend about $5 billion less than this year as tax revenues continue to decline due to the state's slumping economy

"It's not beyond the realm of possibility that prosecutors will not be able to prosecute certain cases," Perry told the committee. He said charges may be dropped if defendants cannot get speedy trials.

Perry said the courts also are being deluged with foreclosure cases. Without enough resources, that could mean greater financial losses for banks and other lenders due to long waits before they can sell distressed properties, particularly if courts shift resources to criminal cases. Sen. Alex Villalobos, R-Miami, suggested that could result in bank failures.

Beignet

Anonymous said...

This is from ituplip. Where his poster got this from I don't know.

WHAT COMPANY? Macy's/Federation Dept Stores

I have worked retail for several years. I am in mid-level store management right now. I don't want to say exactly what company I work for, but it is in the top 3 largest. I work at a store in a major city.

There have been some crazy things going on recently. The changes that we are being asked me make per corporates direction makes me think that the people at the top think something VERY big is going to be happening to the economy soon. I don't think the media or the government is giving us the full details of what is actually going on, but I think the CEO's and others at the top are fully aware and are making plans.

For one thing I check sales every day. At the store level we usually compare what sales are today compared to sales for the same day, week, month, and year last year. Sales at our store, our district, and company wide have taken a HUGE drop compared to the same time last year. When I looked at them today my store and every store in our district was down over 30% for the same time last year. The company as a whole is also in the negative for the same time last year. (but not as much, but it gets lower every day)

Honestly at my store I could say that we have done everything in our power at the store level to increase sales, but it just isn't happening. Departments like electronics are literally almost completely empty the entire day. The only departments that actually are getting sales are consumables, health, and chemicals. Just walking the store these are the only departments I ever even see people in ever since christmas ended.

Sometimes I will cover the service desk so a team member can take a lunch/break. When I do I sometimes process peoples credit card payments which lets me see how much they owe and how much they are paying. There are tons of people with THOUSANDS of dollars on their card only making minimum payments. These balances are usually at interest rates over 20%. Then there are people bringing in checks for the full amount, but they are BALANCE TRANSFER checks.... they are just moving it to other cards.

But that isn't what really worries me. What worries me is the changes corporate is making. I have worked here for years, and in the last 4 months I have seen more changes than all that time combined.

We are getting emails all the time from corporate telling us to reduce costs anyway we can. We recently got one telling us to start pulling fluorescent light bulbs, that we don't need all of them in order to provide illumination.... and those bulbs barely use any power.

Corporate has instructed all stores to lower the AC. It has been lowered enough to the point we get complaints from team members and customers.

Corporate has sent us emails telling us to make sure we fill bags to the absolute possibly maximum. They are not even sending us large bags anymore to some stores.

Corporate has recently eliminated (what I would estimate based on how many positions we lost vs the thousands of stores we have) several thousnad management positions at *all levels* of management at stores. This NEVER APPEARED ON THE NEWS! I suspect because it was not a traditional lay off. What corporate basically told us was "Your position is eliminated, but you are not laid off. Once you quit/get your self fired/whatever your position just won't be filled again" So we are basically slowly losing jobs as people company wide quit, get fired, etc.... but the jobs are never filled again. So basically we are cutting jobs, but the way it is being done is preventing it from getting reported in the media or tracked by the government as job losses.

No non-management positions have been eliminated, instead hours have been cut for them.

Raises this year have also been lowered in amount compared to in previous years. They have been lowered enough that corporate is keeping it a secret until we have to tell team members.

The company is also buying less. Our distribution centers are sending us, for example, 3 of a certain item when normally we would get 50.... and they don't send us more until those sell. I have not been able to keep departments full of product despite contacting corporate and asking for more because we are being sent such small amounts of product.

We have had trucks cancelled all the time now simply because we sold so little that they can't justify sending so few items to a store.

People are simply NOT buying things. They are not buying anything that isn't a consumable basically. I asked our pricing team to do a store mark down and lower the price on almost all of our TVs by 30-50%. We still have not sold a single one in over a week after! Our TVs were not priced very high to begin with.

Our pricing team is also being sent price increase changes from corporate in huge numbers. I am talking entire aisles of product for them to raise the prices on. The other day we got a STACK of pages of product to increase prices on. We thought it HAD to be a mistake because that has simply never happened before. We have emailed corporate asking if it was a mistake... we have not heard back yet, but I suspect it was not.

Many stores are now changing to non-overnight stores. They will be closed overnight and ALL power except in office areas will be cut overnight to save on costs.

There have even been changes to job descriptions recently. Corporate is basically giving job dutys to people at lower levels which used to be reserved for people at higher levels. Even some management tasks are being given to people in non-management positions. Basically they are paying people less to do what people used to get paid more to do.

Things are NOT looking pretty right now. I can tell you from a consumer spending point of view something is definantely going on.... All these changes tell me the people at the top are trying to brace for something big that is going to be happening to the economy.

Beignet

i've had it said...

Beignet,

thanks for this information; very helpful. yes, i'm sure major retailers are starting to prepare for about what's to come.

Anonymous said...

Did anyone see the "Don't try this at home" warning added to the show Flip That House? I couldn't believe it. Sign of the times, can't wait until the lawsuits are filed against.

Small Hat

Anonymous said...

Sunday, April 6, 2008
A Potential (Partial) Solution To Falling Tax Revenues

Ok folks, sit down because this one is going to piss a lot of people off.

I am faxing this Ticker to the IRS. Yes, to the Internal Revenue Service.

Why?

Because I believe they need to collect the taxes actually due, and as someone who's paid my share for an awfully long time (and a big share it is), and as I finish up my 2007 1040 (which is the size of a damn book, with a check attached that is giving me writer's cramp filling out), I've gotten increasingly pissed off at the people who have exploited the system not only to get us into this housing bubble, but also to force my tax rates higher.

Hillary, Obama, McCain - you all need to listen to this as well, and yes, you're getting a copy of this in your fax "inbox" also.

We all know that "Stated" income and asset loans were a mainstay in the "housing bubble."

Well, who took those loans out?

Two groups of people:

* Those who were lying about their incomes. They are W2 folks who actually pay their taxes on what they really owe, but lied to lenders in order to get into a house they can't afford. Those people are defaulting left and right and will continue to. I have no sympathy for them.
* Those who are cheating the IRS, that is, they are cheating you and I.

Let me explain.

I have spent a good part of my life earning my living either from 1099 work or "SE" work (self-employed under some sort of structure, whether it be a Sub-S corporation, an LLC, etc.) I have also had plenty of years where I was a W2 employee, including those when I ran my Internet Provider (which was an ordinary "C" Corp.)

In each and every case I could prove my income, and it matched what I reported on my taxes. In the early 1990s I bought a townhouse in Chicago when I was a "hybrid" employee, earning most of my money via pass-income from what was at the time a "Sub-S" corporation, with some "W2" contribution.

I took out a full-doc mortgage and was asked for (and provided) both corporate and personal balance sheets and my personal tax returns. They substantiated my income, against which I had paid taxes, and the loan was approved.

I believe the IRS needs to go after these Stated Income folks.

God knows we need the revenue right now. We have $9 trillion and counting in public debt and everyone is clamoring for a bailout (which will be disaster if it happens, as I've outlined multiple times.)

We just added $165 billion in additional deficit (which will turn directly into debt) via handouts in the "stimulus" program.

I'm willing to bet the IRS can collect all of that and more through this program.

Please understand one thing folks - there is no statute of limitations on willfully understated income. The statute of limitations on a mistake is 3 years, but on a willful failure to pay that does not apply. Yes, the IRS can come after you 5, 10, even 20 years later, and while they can jail you for that sort of thing its usually far more productive to bankrupt you instead (its hard to get money out of someone sitting in a jail cell)

So here's my proposal:

The IRS should subpoena all loan servicers and originators for all "stated income" loans, then match each and every one against tax returns. If there is a discrepancy in claimed income then those persons should be audited, starting with the performing loans.

For those people where the IRS scores a "hit" on the first examination, they then need to go back through that person's entire tax file and see for how long - in both directions - the deception on income reporting goes!

While many of these people will turn out to have overstated income to defraud lenders, a good number of them, especially those loans that are performing, are going to be people who are cheating the IRS!

We can call it "The Deficit Reduction Act of 2008."

I like it.

posted by Genesis | 12:37 PM Links to this post


posted on market ticker....



hey keith, do you believe this s***? I don't believe this s***.... somebody needs to tell this moron, that money paid to the IRS does not go to the general fund........man somebody slap this idiot.

stocksystm said...

A home auction run by the Real Estate Disposition Corp. (REDC) on Saturday in Tampa was a wake up call. I sat through the disposition of 49 of the more than 100 properties auctioned off. The average sales price was $129,000. The average "previously valued to" number was $234,000. This was a 45% haircut. Granted, I didn't inspect the properties which may have been gutted wrecks, but this indicated that we are not even close to the end of the decline in values.

Anonymous said...

I wanted to share this story with you all, and would love any feedback on it. My 88-year old grandmother was visiting me tonight, and we got to talking about the economy, housing, etc.

First, she lamented to me how her costs of food, fuel, medical, and taxes, are going up way faster than her Social Security fixed income (good example of how using the "core" rate helps save the government money, and fools the general public).

The other topic of disucssion was how my grandfather paid off the mortgage in 7 years. They had a 20 year mortgage (apparently, that was standard in those days), but he didn't like the stress of having any debt. In modern times, this is unheard of. Most people have barely made a dent in their principle after 7 years.

Anyone know if the mortage interest deduction applied during the GI-bill days? (I think they bought their house in 1949).

--Chet

Anonymous said...

anonymous said...

hey keith, do you believe this s***? I don't believe this s***.... somebody needs to tell this moron, that money paid to the IRS does not go to the general fund........man somebody slap this idiot.

As Denninger said:

Ok folks, sit down because this one is going to piss a lot of people off.

So tell us Anon, do you have a Liar Loan? hahahahahha

JaneZ

Anonymous said...

4/7/08:

S&P +1.0%
Gold +1.3%
2% APR CD: +0.005%

BrianKL said...

WHY haven't we heard more about Fitch's recent down-grade of MBIA?! (Would have thought that would have been big news)!-???

I got a laugh out of the fact that MBIA now requests that Fitch just stop rating their credit-worthiness...HAAAAA Like, OK scumbags at MBIA..let's just change the rules for you!!

went2p said...

Why do people pay attention to any of what those so-called analysts say or predict on the economy, corporate earnings, etc..?

Here's a Bloomberg article about the widest misses in those idiots' predictions:

http://tinyurl.com/622rgb

"Earnings estimates for U.S. consumer-related companies, materials producers and financial firms missed by the most. Analysts predicted profit increases of 17.4 percent, 10.4 percent and 1.6 percent, respectively. Consumer companies reported a 10.3 percent decline in fourth-quarter earnings, and materials suppliers a 4.5 percent drop. Financial companies posted losses."

Peter T said...

In the media, an argument is often made to help poor homeowners to keep their house, which they would loose, because they can't pay the mortgage. What about renters who can't pay their rent: They are out after one month, and nobody cares, because that's the way it's always been. Note to homedebtors: If you can't pay what you promised, you should be out.

BondsOfSteel said...

RE: Fitch's downgrade of MBIA.

Isn't the silence deafing? I guess no one takes the rating agencies that seriously anymore. Or maybe the market just doesn't want any more bad news or thinks it's all priced in.

I used to value Moodys over S&P over Fitch. Not any more... Fitch's word is good. Moodys and S&P are now suspect.

BTW, FGIC went to junk and no one noticed. My broker didn't even notify me one of my muni resets is now baa3/NR down from AA1/AA. Of course, it's being called in a week anyway...

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