Welcome to the Third Avenue Lofts Lock Box Rail of Desperation in Failed Flipper Central Scottsdale Arizona

Thanks Chris at mortgage-lender-reviews.com for sending in this great lockbox from hell picture.

I KNEW I had to start HousingPANIC after seeing tiny little apartments advertised at $500,000 to $3 million. When I mean tiny, I mean as in 600 square foot studio apartments for a half mil. Seriously.

Check out this 834 square foot 1-bedroom for $719,000. $862 a square foot. Or if you financed today (jumbo 30 at 7%) it'd be $4800 a month, plus $1000 a month condo fee (gag gag) and taxes of $1000 a month, we're at $6800 a month for a FRICKING ONE BEDROOM APARTMENT THAT'LL BE LUCKY TO RENT OUT FOR $1500 A MONTH!

6800 - 1500 = 5,300 loss per month. Or a 78% fall to get back to reality.

Today 25 of the 88 units are for sale, you just know it's a building full of f*cked flippers and failed mortgage brokers, and the development now reeks of desperation and despair. Watch them race each other to the bottom now - last one out is a rotten egg! Anyone want to bet most of these units go to foreclosure?

Seriously, these hilariously overpriced bubblerific units will see drops of 50% to 70% when all is said and done. Just do the math. It's the P/E stupid. It'll always be the P/E stupid.

Man, did people lose their minds during this housing madness. Some days it's mindblowing.

Anybody else got 1987 (or 1929) deja-vu?

My foreign funds, oil, gold, silver and stocks have been flying (in dollar terms) since Bernanke's panicked cut a few days ago. Flying. But I've got a strange feeling....

The housing market may still be in denial, but it appears that Wall Street and foreign markets are in Denial Squared.

It looks like the majority of you think the stock market is going to crash this October (see poll to the right). Kinda tough to have that opinion when a full-fledged stock party is breaking out, eh? And remember, 1987 was a blip in the road. 1929 on the other hand...

I've got one finger on the SELL button. And remember, from Manias, Panics and Crashes, eventually cash will be king. The only question is when.

This October marks the 20th anniversary of the 1987 stock market crash, the biggest one day post-war percentage drop for US markets.

In a few short hours on Monday, October 19, 1987, the Dow industrials (DJI) gave up 508 points, or 22%, bringing an abrupt end to what had been a lively Wall Street party.

The crash came against a backdrop of inflation fears, rising oil prices, Middle East tensions and a host of other eerily familiar worry signs in Wall Street's most notorious month, and helped cement October's reputation as the toughest month for the markets, at least psychologically.

So, could it happen again?

Will Countrywide Toxic Mortgage's Angelo Mozilo go to jail?

A) Yes
B) No
C) Not soon enough

Here's another couple of stinging exposes of The Orange One by Bloomberg and Krugman at the NY Times. Nice to see (again) the MSM catch up to HP. I especially liked the point that the damage caused by Mozilo to Americans (and foreign investors) is SIGNIFICANTLY worse than anything Ebbers or Lay did. SIGNIFICANTLY worse.

Note I'm short CFC via Oct puts.

Countrywide CEO sold big as stock dropped - Quick changes in Mozilo's trading plan raise red flags, experts say. The mortgage firm says the sales were in line with company policy.

As the mortgage industry swooned in late 2006 and 2007, Countrywide Financial Corp. Chief Executive Angelo Mozilo cashed in stock options valued at $138 million -- vastly expanding his wealth even as his shareholders watched their stock shrink in value.

"There is clearly no legal prohibition of altering your plan," said David Priebe, a Bay Area attorney who has helped set up more than 50 of such plans for executives. "But the more that you modify or add to your plan over a short period of time, the more risk that someone will call it into question. I would not say that you cannot do it. I would say there is a risk if you do do it."

And now here's Krugman highlights:

Enron’s Second Coming?

These days, of course, Mr. Mozilo doesn’t look like such a wonderful guy, after all. Instead, he’s starting to bring back memories of other people who used to be praised not just as great businessmen but as great human beings — people like Enron’s Ken Lay and WorldCom’s Bernie Ebbers.

So far, nobody has accused Mr. Mozilo of breaking the law. Still, what we’re learning from the housing mess is that the crisis of corporate governance, which made headlines in the early years of this decade, never went away.

Still, how can it be that so soon after Enron, WorldCom and other scandals rocked the business world, we’re once again hearing about executives cashing in just before their companies are revealed as less successful than advertised? The answer, of course, is that we never dealt properly with those scandals.

There is one big difference this time: the number of victims — misled borrowers, homeowners whose neighborhoods are being destroyed by foreclosures, investors who thought they were buying safe assets — is even larger.

Here's the NAR's secret talking points countering Jim Cramer's pummeling of the NAR doofus on the Today Show. Have a good laugh!

[UPDATE] - The monkey-led NAR's #1 "Housing is Doing Fine" market is Beaufort, Texas. One problem - it doesn't appear that Beaufort Texas actually exists...

Monkeys I tell ya. The NAR is run by monkeys...

Here's the evil-doers talking points:

September 28, 2007

NAR First Vice President Charles McMillan faced off with Jim Cramer on NBC’s Today Show, countering Cramer’s earlier irresponsible statement on the show telling consumers NOT to buy a house right now. Cramer would treat homes like stock purchases, and McMillan was there to tell him and consumers across the country that housing is not a day-trading activity – it’s a good, solid long-term investment that has proven its value over time. McMillan spoke for Realtors® everywhere as he countered misconceptions about the real estate market and drove home positive messages about the value of homeownership.

What’s Happening Now

Local media may be contacting you to develop related stories about the housing market and whether it’s a good time to buy a home.

Gather your local facts.

Use the talking points below to help prepare your local spokesperson.

You can view the Today Show interview with Charles McMillan at:
http://video.msn.com/video.aspx?mkt=en-US&brand=msnbc&vid=8f128f4c-3428-4f0e-9908-a803893ec6ce

Talking Points
Housing is a good long-term investment – it’s not a day-trading activity.

Owning a home isn’t just about investment, although that’s certainly important. It’s also about building community, a place of your own, and having a part of the American Dream.

Homes are not stocks. Most people stay in their home for about 6 years – they buy for the long haul to create a home for their family, not to buy then turn around and sell six months later.

It’s impossible to time any market. Right now, interest rates are favorable and buyers have lots of options.

For buyers able to qualify for conventional financing, there are ample opportunities in the current market. Conventional loans are available and rates are reasonable, and FHA-insured mortgage applications have been rising as low- and moderate-income buyers seek alternatives to subprime loans.

Two-thirds of metropolitan areas across the country are showing modest price gains, and the national median home price in August showed a slight increase.

Some examples of markets that have shown both increased sales volume and price (you should collect information from your own market and be prepared to talk about specifics in your own area):

Beaufort, TX
El Paso, TX
Farmington, NM
Salem, OR
Salt Lake City, UT
Spokane, WA

The average homeowner has seen an increase of 50 percent in value over the past five years. We project prices to rise about 2 percent next year, and in coming years, average home price appreciation should return to historical averages, around 6 percent.

Realtors® are passionate about helping people into homes and expanding homeownership opportunities. Realtors® live where they work and can see the benefits of homeownership firsthand.

HousingPANIC Stupid Question of the Day

Do you think America is sick and tired of the National Association of Realtors, their army of 1.3 million six-percenters, and their lies, spin, deception, corruption and arrogance?

Is there enough blood in the streets and failed flipper desperation to begin making insulting 50% off offers on unwanted homes?

When everyone's buying, it's time to be selling.

When everyone's selling, it's time to be buying.

So is it time?

I don't think so (look to Japan) but if I were back in the States I'd be making some crazy low-ball offers to see if any of 'em stuck. As long as the home would be cash-flow positive from day one, with a yield of at least 8%, and the selling price was based on 2001 or prior comp.

Plus it would just be fun to see the reaction as people come to understand that the fundamentals DO matter, that homes DO have a P/E ratio that must be respected, and that incomes DO relate to prices.

So, anyone itching to low-ball? Anyone doing foreclosures?

Or is buying now, even at a low-ball price, still catching a falling knife?

CHICAGO - Home sellers are not automatically turning up their noses at offers that come in far below their asking price these days as prices stagnate and the inventory of homes for sale remains elevated in many markets.

But buyers who do ask for deep discounts still risk offending sellers to the point where they quash any deal. So before making an aggressive offer, some homework is in order, real estate professionals say. Further, buyers need to effectively explain why the price of a home should be lower.

That's what Pat O'Heron did recently when buying a home in Ann Arbor, Mich. He was able to negotiate a steep discount with a seller who relocated for a job, in a neighborhood that had two years' worth of inventory on the market.

Before he even made an offer, the asking price had already dropped by about $80,000, he said. After O'Heron made his case why the cost should be even lower, he eventually bought the home for $270,400, with about $11,000 in other credits. The net price ended up being $115,000 below the initial asking price.

FLASH: Sorry boss. My bad. I just lost us $3.4 billion on subprime mortgage CDOs.. UBS announces massive f*ck-up

It's just subprime blowing up and being announced today, but with homes in America crashing, and those AAA CDO's soon to go into default as well, these billion dollar write-downs are just the beginning. The losses will be in the trillions folks. Yes, in the trillions. And banks will fail.

UBS to report $3.4 billion subprime hit - Swiss bank plans management changes; 1,500 jobs to go

LONDON (MarketWatch) -- Swiss banking giant UBS on Monday said it will take a 4 billion Swiss franc ($3.4 billion) hit in the third quarter from its subprime mortgage exposure and plans sweeping management changes and job cuts at its investment-banking division.

The group estimated that it would report a quarterly net loss -- its first in nine years -- of 600 million francs to 800 million francs, compared with profit of 2.2 billion francs in the year-earlier period.