BUBBLETALK: Newest thread to talk about the housing bubble

July 03, 2006

BUBBLETALK: Newest thread to talk about the housing bubble

Knock yourself out, keep it clean, and post bubble links here

101 comments:

Anonymous said...: Weekend conversations - REFI??

Had dinner last night with a group of people - of course one real estate agent ("a great time to buy"), but more interesting was a bank branch manager for one of California's best run savings banks - a very conservative institution (no names please). . .he said that most people he delt with the last 3 years had extracted every penny of equity from their homes, now they come in and say, "my house is worth 700k," and try to get another 50K out. . .but the appraisal comes in at $600K!!! . . .these people leave in panic according to the bank manager. BTW- the real estate agent (an ageing beach-boy type with big white teeth) came over and introduced himself when he heard I had just moved here - I mentioned I was renting and waiting a few years to buy, and he said, "things have flattened out, so NOW is a great time to buy.". . . hmmm. . .I mentioned a few "fire sale" properties to him, and he didn't want to hear about it.; June 18, 2006 4:47 PM
Anonymous said...: Based upon my own theory concerning "baby boomers' and retirement, last year I sold the Hunterdon County, NJ house that contained equity I worked my entire life to grow. I sold it thinking I could save as much of the "high market" equity as possible as I approach retirement and relocation.
As I still have several factors that make renting very difficult, I didn't cash out completely and purchased a lower cost house. The thinking being I'd be hurt less in it then the much higher priced one.
Now I am wondering if and when I can possibly hope to break even on last year’s purchase. I was hoping this decline would pan out like the late 80’s early 90’s and settle into a market that may rebound enough in 3 or 4 years to break even. Do you think there’s still a shot for this? I’m hoping so, or at least some rebounding to minimize the loss.
Thanks for this blog.
It has reinforced my thinking over the last several years and provides some valuable information of the current conditions.
Thanks again.; June 18, 2006 4:57 PM
Out at the peak said...: June 18, 2006 4:57:06 PM Anonymous:
I have read stories about people buying in 1989 in SoCal that took 10 to 12 years to break even (I wish I saved the link). Although this is one of those extreme examples, it is not unprecedented.

Are you planning to sell in another four years? What's the rush for equity recovery? Is it more of an investment than a place to live? (I can relate.); June 18, 2006 7:34 PM
Anonymous said...: Mainstream financial media is now on point.

http://quote.bloomberg.com/apps/news?pid=10000006&sid=aqyxbsnKsVqs&refer=home

Home Construction Slows Along With Sales: U.S. Economy Preview

June 18 (Bloomberg) -- Home construction in the U.S. is wilting as higher interest rates deal a blow to industry hopes of extending a five-year boom, a government report is forecast to show this week.

Builders started work on homes at a 1.867 million annual rate in May, close to April's 1.849 million rate, which was the slowest in 17 months, according to the median estimate in a Bloomberg News survey of economists before the June 20 report from the Commerce Department. Construction permits are forecast to drop to the lowest since November 2003.

Housing's slowdown will hobble the economy as consumer spending shows signs of waning. Prospects of slower economic growth won't deter Federal Reserve policy makers from extending two years of interest-rate increases because inflationary pressures are mounting.

``Our view that inflation will continue to move higher will trump Fed concerns about slowing growth,'' said Drew Matus, senior economist at Lehman Brothers Inc. in New York.

Lehman economists were among others revising their interest-rate forecasts after consumer prices, excluding food and fuel, rose more than expected for a third month in May. JPMorgan Securities Inc., the third-largest U.S. bank, and UBS Securities LLC said the Fed will raise its benchmark interest rate at its next two meetings, to 5.5 percent. Lehman said it now expects a 5.75 percent rate by October.

Higher interest rates may raise the risk of a more pronounced slowdown in the housing market. The yield on the U.S. Treasury's benchmark 10-year note, used by banks to set mortgage borrowing rates, rose last week by the most since March. The note rose 15 basis points, or 0.15 percentage point.

Mortgage Rates

The average rate on a 30-year fixed mortgage was 6.63 percent last week, close to a four-year high, according to Freddie Mac. McLean, Virginia-based Freddie Mac is the second- biggest buyer of U.S. mortgages behind Fannie Mae.

Confidence among U.S. homebuilders this month probably held at the lowest level in 11 years. The National Association of Home Builders/Wells Fargo's index stayed at 45 during the month, according to a Bloomberg survey. A reading below 50 shows more builders are pessimistic about the market than optimistic.

As the U.S. housing market slows in a ``gradual way,'' homeowners likely will curb their spending because their homes will not appreciate in value as quickly, Fed Governor Susan Bies said in a speech last week. Every dollar of change in housing wealth is associated with a change in consumer spending of about 3.5 cents, she said.

``The slackening of house-price appreciation could hold back growth in consumption spending through the so-called wealth effect, or the effect that lower overall housing wealth has on consumption,'' Bies said. ``As housing prices slow down, we're not going to see the growth impetus we've seen in the last few years.''

Wealth Effect

Economists at Lehman forecast home price appreciation will give way to no appreciation. As prices stall, the wealth stimulus for consumer spending will drop to 0.3 percent by yearend from an estimated 1.1 percent currently, they said.

Investors have soured on homebuilder stocks as construction cools. A Standard & Poor's index of 16 builders is down 30 percent this year.

KB Home last week cut its 2006 earnings forecast as orders fell for the second consecutive quarter, saying profit will grow at the slowest pace in five years as higher mortgage rates put a chill on demand.

KB Home, the fifth-largest U.S. homebuilder by market value, forecast the smallest increase in profit since 2001, when earnings were stunted by a recession and the Sept. 11 terrorist attacks.

Profit Slows

Mortgage rates have risen about 1.5 percentage points from a four-decade low of 5.21 percent reached in 2003, probably ending five years of record home sales and price increases. Orders in KB Home's fiscal second quarter ended May 31 fell 19 percent, after a 12 percent drop in the previous three months, the Los Angeles-based homebuilder said.

``These conditions will likely persist at least through the remainder of 2006,'' Chief Executive Officer Bruce Karatz said in a statement.

Building permits were a drag on the Conference Board's index of leading economic indicators in May. The gauge, designed to project activity in three to six months, is forecast to drop 0.5 percent, the most since September 2005. The New York-based Conference Board will release the figure on June 22.

With housing slowing, economic growth will depend more on manufacturing. So far, corporate orders for new equipment are keeping factories busy, a Commerce Department report is expected to show on June 23. Durable goods orders rose 0.5 percent in May after a 4.4 percent slump. Excluding transportation equipment, which are volatile, bookings probably increased 0.6 percent after a 1 percent decrease.; June 18, 2006 9:20 PM
Anonymous said...: Durable orders dropped in May, that is not correct.; June 18, 2006 11:31 PM
Smart Grid blogger said...: It`s not a Buyer`s Market until we see a 30% home price Corrections in the Bubble area markets !!!!; June 18, 2006 11:32 PM
Anonymous said...: Yesterday I left my condo in South Redondo Beach and saw an enormous number of open house signs... it's like multiple signs sprouted on every corner OVERNIGHT.

It was kind of surreal because it happened so abruptly - like a switch was flipped in the public consciousness here. I have never seen so many open house signs anywhere in my life. I must explain that Redondo Beach (South) is a neighborhood where everyone believed this would never happen "it's different here... everyone wants to live here... blah blah" Some corners had signs for 6 open houses. For the past 3 years there have been almost zero for sale signs visible in this entire neighborhood - they didn't need to put up signs - everything sold immediately with a bidding war. Since 2003, if you did see a for sale sign go up and called or stopped by you would inevitably be informed by the realtor that they already had multiple offers. After driving through the beach neighborhood with all the open house signs, I headed to the freeway and drove past a street where people park their cars with "for sale" signs... there were also more cars for sale there than I had ever seen previously.

What a difference a day makes! And so it starts...; June 19, 2006 12:36 AM
Anonymous said...: Oh, I should have mentioned, Redondo Beach is near Los Angeles. Also, I rent a $1 to $1.2M condo for 2k/month.; June 19, 2006 12:39 AM
Anonymous said...: S. Redondo is a spectacular lifestyle place (unlike most beach cities that have become clogged, stressed out rich people enclaves) AND it still benefits from the aerospace industry/defense industry economy. If the bubble is bursting there, it's REALLY gonna crater in places like OC and west valley where mortgage industry accounts for a disproporationally high number of jobs. There's a lady with a south bay bubble blog at http://sbbeachbubble.blogspot.com/

Also, there will be increasing numbers of TERRORISM!!! stories at election day approaches. Headlines like you see today can't be good for homebuying:

NEW YORK - U.S. officials received intelligence that al-Qaida operatives had been 45 days away from releasing a deadly gas into the city's subways when the plan was called off by Osama bin Laden's deputy in 2003, according to a book excerpt released Sunday on Time magazine's Web site.; June 19, 2006 2:48 AM
Anonymous said...: panicearly,

Century of Self Part 1 is a great video. It really reminds me of how manipulated we all are here. And it is very relevant to the herd mentality that causes booms, their resultant bubbles and inevitable busts. Thanks for the link. Do you know how I can save it on my hard drive?; June 19, 2006 3:32 AM
Anonymous said...: Keith,
I have not logged on for a while. Car fire burned up my renta Friday night.
Missed the blog. No, really missed the HP blog. I am in transition again, and dealing with the insurance companies, yet again.
Wish me luck.
GTG read the rest of the latest.; June 19, 2006 3:33 AM
Anonymous said...: Burned up my rental house Friday, not my renta. oops.; June 19, 2006 3:34 AM
Anonymous said...: Very good videos... Here are parts 2-4:
http://www.archive.org/search.php?query=century%20self%20adam%20curtis

He also has a more recent series:
http://video.google.com/videosearch?q=power+of+nightmares; June 19, 2006 4:20 AM
Anonymous said...: anon, re:centuryself-save to disk

there is a disk drive icon at the bottom of the video image on this page.
http://tinyurl.com/lxwmm; June 19, 2006 4:56 AM
Anonymous said...: Some amusing housing crash pics from my neighborhood:

http://br.endernet.org/~akrowne/druid_hills_housing_crash/

Enjoy, friends.; June 19, 2006 6:36 AM
Out at the peak said...: Nice observation, Aaron. I just surveyed my old neighborhood. There are 12 houses for sale which isn't too bad since it peaked to 16 last year. But last year, very few were reduced while more than half are now. My old street of 17 houses had three of the listings. I'd hate to have to face that competition now.

The area feels a little more slummy as there are more extra cars than before. I guess each house needs three cars parked outside. No room in the garage perhaps?; June 19, 2006 7:07 AM
Anonymous said...: The massive speculatory bubble is shaking violently, the Real Estate by product bubble wobbling like a mad hatter. Can she hold on to September when I predict she explodes?

What I find amazing is, people selling these "bubble condo's" for whatever they can get and then buying some old house built from the 1920's cheap lol. Yet, the builders still are breaking ground on new condo projects mercy. You gotta admit, this is interesting stuff. I was young enough with the 90-91 bust to not understand what a Real Estate bust is, but this massive speculatory bubble will make 90-91 hard landing look weak.; June 19, 2006 9:08 AM
Anonymous said...: Hey Zinger,
Welcome back. (:; June 19, 2006 12:38 PM
Anonymous said...: On the way to work today (10 rural farmland miles) I saw 18 houses for sale and two for rent. The two rentals are about 20 feet from a college and still can't get rented!

One of the hosues for sale is a dump with a trailer next door (think 1950's run down type) and they're asking $650k!!; June 19, 2006 2:46 PM
Anonymous said...: How about this news story?

http://news.yahoo.com/s/ap/20060618/ap_on_re_us/park_pressures;_ylt=At7RehWA7aYXrbPuXj8bStSs0NUE;_ylu=X3oDMTA3ODdxdHBhBHNlYwM5NjQ-; June 19, 2006 2:56 PM
Anonymous said...: Oh well didn't post it right. It's a yahoo story about developments going up closer to our natioanl parks.; June 19, 2006 2:58 PM
Anonymous said...: I; June 19, 2006 4:07 PM
Anonymous said...: Live in Westchester County, New York, right outside NYC. Everyday, I'm seeing more and more homes go on the market for sale and everyday prices are dropping between $20k and $70k.; June 19, 2006 4:08 PM
Blogger said...: http://tinyurl.com/oeget

Firebugs McMansion Service Commercial; June 19, 2006 5:42 PM
Anonymous said...: quote from a yahoo article about ARMs "This year, more than $300 billion worth of hybrid ARMs will readjust for the first time. That number will jump to approximately $1 trillion in 2007, according to the MBA. Monthly payments will leap too, many beyond what homeowners can afford."

All these people thinking they had it made with ARMs.; June 19, 2006 7:04 PM
Anonymous said...: Thursday 6/22 8:00 pm EST.
Realty Check Series. It’s on housing...
Should be interesting to see way they say.; June 19, 2006 7:37 PM
Anonymous said...: paintblot, you aren't a believer in the massive speculatory bubble and its by product Real Estate Bubble? My my son, when you lose money(if you have any lol) when this thing explodes this fall(or will it be still this summer) don't come crying to phony ops like the NPR. Will NPR even exist by this time next year June 2007? Things crumble fast.; June 19, 2006 8:13 PM
Anonymous said...: Several CNBC commentators now saying we're in for a hard landing.

This is a first! Wait til word gets out to the regular news shows/mags, etc.

A couple more weeks and talk of a "soft landing" will be history.; June 19, 2006 10:19 PM
Anonymous said...: Mark in San Diego-

Had the same kind of talk with a banker here a couple weeks ago about comps dropping and how hard it was right now to get correct appraisals because of that.

This summer should be fascinating. It's interesting to see the numbers of people who are aware that housing is toast increase slightly day by day.

At some point it will just snowball.; June 19, 2006 10:26 PM
Clay said...: The new home sale news from John Wake is out. This guy is the most honest realtor in Phoenix. I ahve been watching his commentary for a few moths now. That Russ Shaw has nothing on this dude. He talks about how the media is going to eat up this bubble story in Phx starting in the next two months and how that will add pressure to home prices!

Here is the link
http://tinyurl.com/rusdv

Enjoy for those of you in Az parket should enjoy this one.; June 20, 2006 3:53 AM
Anonymous said...: Excellent comment on the Wizard of Oz.

Originally it was a metaphor for the fight over the gold standard (the yellow brick road) vs. the ability to print money at will (inflation). This war has been going on for centuries. The FED won the battle in 1913 and has been in complete control ever since. Collecting trillions in interest for money they create out of nothing. Encouraging debt because it increases their profits. So they encourage government debt and private debt alike.

It is the FED and world central bankers vs. everyone else.

It's an incredibly well executed business plan.; June 20, 2006 5:09 AM
Anonymous said...: You know things are getting bad when people are putting web pages up to take donations to save their homes. See getdshirts.com This D list celebrity is selling shirts to save his home. Interesting, he wondered if he is being treated like this, as a celebrity, how will the average man be treated? I think we know the answer to that.; June 20, 2006 6:18 AM
Anonymous said...: Higher interest rates, which are still at historically low levels, did not deal a blow to the housing market.

Can anyone with an IQ higher than 100 guess what did?

That's right. Sky high home prices.

Morons!; June 20, 2006 6:41 AM
Anonymous said...: Regarding the 1945 film, where do you get deflation out of the description of the film? You wouldn't put in rental controls in place if prices were falling! The problem was too few homes, to few AFFORDABLE homes or rentals available for all the returning soldiers and their new families. The problem resolved itself with a HOUSING Boom! Once supply meet the need the market, and prices, corrected themselves, just as every housing boom/bust has corrected itself when the fundamentals of that market get out of hand.

Speaking of inflation, now that the Congress is talking of raising the minimum wage to over $7 an hour (which in reality in most markets already is more than that) there will be pressure for everyone to get at least a $2 an hour raise to keep parity with the other workers below them! So incomes will rise, and wage inflation is the start of the the type of inflation the Fed hates! Got to protect the assets of the rich!

Prices DO come down either by deflation (which in many cases raise cost) or by inflation. The 1945 film isn't a film to justify your implication.; June 20, 2006 7:40 PM
Anonymous said...: ATL georgia said...

"You know things are getting bad when people are putting web pages up to take donations to save their homes. See getdshirts.com This D list celebrity is selling shirts to save his home. Interesting, he wondered if he is being treated like this, as a celebrity, how will the average man be treated? I think we know the answer to that."

Yeah, better than that idiot. I guess he hopes to be saved by the bell, again.

getdshirts.com

Ding dong.
Who's there?
Retard.
Retard who?
Retard from actin' t' go beggin'.; June 20, 2006 7:55 PM
Anonymous said...: >>Prices of homes are insane, while people with good paying jobs are getting laid off in groves.

Haha!

"We were suspicious when they took us out to the grove. Even so, we didn't expect to lose our jobs. I was so depressed I couldn't even eat an orange."

I think you meant "droves."; June 20, 2006 10:03 PM
Anonymous said...: Anonymous said...

"Very good videos... Here are parts 2-4:
http://www.archive.org/search.php?query=century%20self%20adam%20curtis

"He also has a more recent series:
http://video.google.com/videosearch?q=power+of+nightmares"

You do know that David Icke is insane, don't you, and believes lizard aliens are coming to eat us (a notion stolen from the 1980s television series "V")? He is also a notorious anti-Semite, believes that George Bush and Dick Cheney are Satanists (and that the Bushes have sex with children), and claims that the Illuminati rule the world?

What a great source for films . . .; June 20, 2006 11:21 PM
Anonymous said...: I wonder after the massive speculatory bubble and its offshoot Real Estate bubble bursts in the next 3 months, what will happen to all these condo's and other type "construction" projects that are still going on but nobody is going to buy into? Will the builders make major price reductions to sell them?
Just sit there for squatters?

Just a fascinating event going on here, much more interesting than the dot.com bubble during the middle of the speculatory bubble.

FWIW, Icke should never yell at Illumanti. They brought the Western world from the depths of the dark ages. Without Illumanti we would still believe the earth is the center of the universe.; June 21, 2006 1:26 AM
Anonymous said...: While a lot of people I knew were plenty richer than we are, we bought a house we could afford. Not a great house, and not a great neighborhood.

After a lot of sweat, the house doubled in value. Sold it quickly and moved to the country, paying cash for the new house. It's a modest little place on several acres, very rural area.

I kinda wonder if any of those "movers and shakers" we knew who were "investing" in rental properties and living in McMansions are gonna want to park a tent out in the west field, in coming months.; June 21, 2006 2:16 AM
Anonymous said...: paintblot said...

"What has David Icke got to do with Adam Curtis's series?"

Click on the second url that was provided (http://video.google.com/videosearch?q=power+of+nightmares) ALL of the filmclips are on davidicke.com.; June 21, 2006 2:42 AM
Anonymous said...: What happens when the economy collapses this fall, will Bernanke really try to "print up a storm" and inflate out of this mess? To me that sounds like a disaster.

When the massive speculatory bubble bursts and its ugly offshoot the Real Estate bubble burst between September and December, I think the best thing to do is to let it pass through though the contractions will be nasty, but necessary.

Trying to inflate it away IMO will bankrupt this country and possible dissolve it as money becomes worthless. Local and Regional miltias will arise everywhere from every race, sex and religion "protecing" their flock. It will almost turn into a African nation of Warlords. Only when the Federal Army intervenes will the carnage stop. Yes, you will see the Federal army and soldiers walking down your street trying to stop the violence, Tanks running over people, children getting caught in the crossfire ete ete. Mercy.

All because of stupid idiots running this country and creating this massive speculatory bubbles. We are so much more spoiled than we were in 1929, the downturn only has to be half as bad. People will crack. Be afraid, very afraid.; June 21, 2006 5:40 AM
Anonymous said...: "Be afraid, very afraid. "

How histrionic. Unless we get hit by bird flu or something equally catastrophic, nothing much is going to happen. The housing bubble will pop, and in no time at all, speculators will be out creating a new fad to replace it.

The economy will not collapse. It's all air to start with, so there's no big deal in keeping it afloat.; June 21, 2006 5:54 AM
Anonymous said...: I would not be so fast to blame the people leading the country for the mess. The people who made the mess were lazy greedy people that speculated in RE.

I agree that things may get really bad. I think that the roaring 20s have an analogy with the current mentality which is fuelled by TV (all the get rich easy game shows), MTV, and the consumerism that is rampant. I spent a few hours last night watching what is being pushed during prime time on network TV. What amazed me was the ads being run during a show about 4 single bimbos in NYC. The ads were mostly from payday check cashing and title loans. The title loan ad stressed that you can maintain your lifestyle and have the cash you want - NOW.

America is headed for an attitude adjustment. Don't just be afraid, be ready. Better have your financial stuff in order.; June 21, 2006 2:28 PM
Anonymous said...: I think they will indeed print as much money as needed. They saw this comming, why else would they drop the M3 number if not in preparation to hide the amount of money they are adding to the system and scare off investors.

Nearest I can tell the loans are created out of nothing and the meat on the bone they are after is the interest. They then sell these loans around or up the chain to Fan/Fred keeping a slice of the future interest I would guess. So it is entirely in "the banks" interest to a)loan lots of money and b) keep those loans solvent. They will print as much money as needed. And they will bail out the lenders as much as necessary to keep those loans solvent.

Our current government is buck wild on deficit spending and big government. Lower taxes and growing goverment at the same time can only be done by deficit spending. The plan is to print more money to cover debts as needed.

But inflation you say? Thats why they are being so hawkish on all their comments. They HAVE to keep printing more and more money, they have no choice. And so they HAVE to keep increasing interest rates to try and keep a lid on inflation.

The government needs to reduce spending(hehe) and banks need to reduce lending before they can slow down the money presses.

I kind of think they are going to try and time a declared rate pause around november and time the stock sells off that usually ends with october with new elections for a hopefull investor confidence boost for the market. The problem is I don't see how they can pause for long. I think they have to either keep raising 25 basis points for a long time (I don't have any idea how high rates will get) or start getting more aggresive with 50 basis point hikes(which I think would have bond market implications).
Thats why "everyone" with money is overweighting their assets to cash/MM/short term bonds right now and have been for a while. They are either poised to buy bonds when the rates are high and getting ready to pause/fall or considering the almost 5% return on MM these days just park it there for the long haul of market corrections. Basically till the RE bust has hit bottem and cant go lower or interest rates are so high that the fed has declared they are done raising. Until those events occur (and it looks like it will be YEARS to me) it's going to be choppy waters. IE flight to cash and quality over the next few years.

Just my 2 cents!; June 21, 2006 2:54 PM
Anonymous said...: "We were suspicious when they took us out to the grove. Even so, we didn't expect to lose our jobs. I was so depressed I couldn't even eat an orange."
----------------

Is that from the Grapes of Wrath? :)

{pro-union book/film about desperate depression-era Okies migrating to California to work on the farms}

True Story: During Stalinist times the USSR Communist Party decided to show the U.S. film "Grapes of Wrath" to their own people. The point they intended was to show how brutal and heartless capitalism was to the working class.

What did the Russian proletariat take away from the movie? In America, even the poorest farm family has its own pickup truck.; June 21, 2006 6:20 PM
Anonymous said...: Southern San Andreas fault waiting to explode: report

http://tinyurl.com/z8emj

That report adding any fuel to the SoCal RE collapse? I saw a TV movie on NBC that was about the big one. They tried to use nukes buried along the fault to unstress it. Didn't work. In the end they all were in Barstow watching the new oceanfront property, smiling and hugging and singing kumbaya.; June 21, 2006 8:29 PM
Anonymous said...: I am seeing some early local markets falling back toward the 99-01 price range, BIG sign there folks. Hard landing. No soft landing, No crash. Just a plain old hard landing. Early falling markets are a indictor will the rest of these bubbles decline to. So the ones with slowing Appreciation, watchout, the fall is about to begin.

For that guy that complains about the "massive" speculatory bubble and 1929 analog. Get it through your mind: This isn't 1929 nor is a depression near. Just a nasty recession. Yeah, people will panic by 2008-9, but by 2010's things will look up, the economy will improve, things will return to normal. doomsday idiots really get on my nerves.; June 22, 2006 2:49 AM
Anonymous said...: More housing gloom ahead

MSM

http://articles.moneycentral.msn.com/Investing/StreetPatrol/MoreHousingGloomAhead.aspx

A must Read; June 22, 2006 3:21 AM
Anonymous said...: More housing gloom ahead

MSM

http://articles.moneycentral.msn.com/Investing/StreetPatrol/MoreHousingGloomAhead.aspx

A must Read; June 22, 2006 3:21 AM
Anonymous said...: WE past 50 k in Phoenix!!!; June 22, 2006 3:36 AM
Anonymous said...: Anon 2:49-

Which markets are already falling back to 99/01 prices?

that's where I expect them to go but didn't know any were there already.; June 22, 2006 7:52 AM
Anonymous said...: They just made it possible to short the QQQ and DOW 30 via a stock. That means I (we) can short these in our 401K accounts, which mine does not allow shorting.

The symbols are PSQ and get this DOG.; June 22, 2006 3:43 PM
Anonymous said...: I keep hearing that Phoenix passed 50,000 active properties. When I check www.realtor.com, I see 9,100. Where are people looking that they get 50,000? And why would it differ so much from realtor.com?; June 22, 2006 4:29 PM
Anonymous said...: The PHX 50K figure comes from ziprealty.com. . .it is a COUNTY figure. The other figure may just be Phoenix City, or a selected number of listings. Like San Diego, the City proper has many fewer listings, but county figures give a better picture.; June 22, 2006 5:19 PM
Anonymous said...: The housing bubble around Westchester County, NY has popped.

See http://www.thejournalnews.com/apps/pbcs.dll/article?AID=/20060622/BUSINESS01/606220336/1066; June 22, 2006 6:19 PM
Anonymous said...: http://www.rentalhouses.com/view_listing.php?id=55001

Check it out. I love the available date.. it screams 'jesus, someone rent this before I go belly up!'

1/2 the homes here are for rent or for sale and NO ONE is in them. Looking at the property appraisers website, they are mostly mexicans who own them. They got taken to the cleaners. Of course, they are probably illegal adn when the foreclosure happens, they will just disappear and the mtg. co. takes the reaming. Either way, someone is getting the shaft BIGTIME.

LMAO. I am pouring over the owners at the property appraisers website. Some are from CA. This is FL and these hammerheads bought a place site unseen and are now stuck with it because NONE of these are selling. BTW, they are turd houses. Horribly built compliments of Lenar homes.

Hilarious!!!!!; June 23, 2006 6:26 PM
Anonymous said...: http://maps.pascogov.com/maps/showmap.asp?Name=PascoMap_New&mdi=14902364&mini=432413275436962.gif&map=432413275336961.jpg&oc=3&oce=ZO2&alyr=&plyr=&plyn=0&plys=0&glyr=&ilyr=1&id=U2VjdGlvbiAzNSwgVG93bnNoaXAgMjUsIFJhbmdlIDIxLCAyLjIgbWlsZXMgV1NXIG9mIFJpY2hsYW5k&iq=0&z=33540&zz=352521&pars=2125350120000000100

copy and paste into google and then click the link. What a hole!

Here is a zoom out overhead of these turd lots. They paid as much for a postage stamp as I paid for my 2.5 acres 10 years ago. Check out the house in the middle. That guy held out and did not sell his land to Lenar Homes. But now that they built this slum around him, his house is now for sale....for a lot less than he thought he could get. 50% of the houses are for sale.; June 23, 2006 6:35 PM
Anonymous said...: http://maps.pascogov.com/maps/showmap.asp?Name=PascoMap_New&mdi=14902487&mini=432413333337012.gif&map=432413333237011.jpg&oc=&oce=&alyr=&plyr=&plyn=&plys=&glyr=&ilyr=1&id=U2VjdGlvbiAzNSwgVG93bnNoaXAgMjUsIFJhbmdlIDIxLCAyLjQgbWlsZXMgTiBvZiBaZXBoeXJoaWxsc2==&iq=0&z=33540&zz=352521&pars=2125350120000000100

oops, try this one. or go to pasco county and put in merchantville cir as the address.; June 23, 2006 6:37 PM
Anonymous said...: >>>This revelation reminds me of the Vietnam-era draft. When the Pentagon needed warm bodies, standards dropped to near zero. At my pre-induction physical in 1972, they were basically checking to see if you had four limbs and could walk upright. If so, you were good to go.

>>>The same cursory standards have been applied to mortgages for the past few years, with the predictable result that poor risks are turning out to be, well, poor risks.

MWAHAHAHAHAHAHAHAHAHA!!!!!!!; June 23, 2006 7:41 PM
Anonymous said...: PNC Bank alleges that HSBC BANK suspected that Solomon Dwek was engaged in real estate fraud

Click: Updates on NEW JERSEY REAL ESTATE MOGUL SOLOMON DWEK`s Bank Fraud Case; June 24, 2006 6:24 PM
Bots said...: A little project I just wrapped up...
I think you'll enjoy it! Click on the top image.
http://www.putfile.com/damonbots; June 24, 2006 7:55 PM
Anonymous said...: Real estate industry is getting desperate. In DC on the metro there are ads to the effect of "buy a single family suburban home or you aren't a real person".; June 25, 2006 6:17 PM
Anonymous said...: keith,you'll love this 96 hour sale on homes,just browsed quickly but some homes had $120k knocked off the price.No bubble in south fl haha

http://www.mercedeshomes96.com/; June 26, 2006 2:44 AM
Anonymous said...: Right before the whole THING pops (anything that CAN be popped), our George is going to call Pyongyang on his purple direct line and ask that lonely dictator to throw a few missiles at us...

When everything pops, they are not George's fault...; June 26, 2006 8:54 AM
Anonymous said...: i stopped a few min into the film (century of self) when the narrator said that the Freud's theory is an accepted theory these days... tell me it gets better... or should i toss the other downloaded files too...; June 26, 2006 9:08 AM
Anonymous said...: Just for kicks, I signed up at homegain.com as a prospective 'seller' interested in finding an agent. I immediately got bombarded by emails from local realtors all begging for my business. The cool thin is that they submit their resume to you via email where it shows how mant homes they sold this year in comparison to last year. All 23 of the realtors had less than 10 sales compared to previous average of 50. LOL. Time to sell the Escalade and rims honey!; June 26, 2006 8:15 PM
Anonymous said...: "Anonymous said...
Just for kicks, I signed up at homegain.com as a prospective 'seller' interested in finding an agent. I immediately got bombarded by emails from local realtors all begging for my business. The cool thin is that they submit their resume to you via email where it shows how mant homes they sold this year in comparison to last year. All 23 of the realtors had less than 10 sales compared to previous average of 50. LOL. Time to sell the Escalade and rims honey!"

I have been getting post card/adds in the mailbox for last 2 years from various realtors in the area. Used to start with "We just sold such and such in your area....for this much....wanta sell,give us a call,yada,yada,yada."
Now they start with "We PARTICIPATED in the sale of..... etc.,etc. What the hecks that mean?
They went out and took down the 'For Sale' sign for one of the other realtor in the office?
I have a notion to go take a picture of the local realty office and staff for postarity. Something to show the great grandchildren when they say "Aw come on,those thing didn't really exist, did they???"; June 26, 2006 8:50 PM
Anonymous said...: I agree... Freud should have been seeing a therapist of his own about his sex issues, but Freud's general idea that humans are not logical creatures but are driven by emotions under the surface was ahead of its time.

The movie begins in the early 1900s when the idea of mass control through psychology first started. Of course psychology and the tools of mass control have progressed since then.

The documentary is good.; June 27, 2006 6:30 AM
Anonymous said...: The masses feel rich and their net worth has been tied directly to their self-worth. That feeling is also tied to their feelings of safety and security (their house).

I'm sure a psychologist could more precisely define the emotional connections, but that's the general idea.

When this busts, the masses will be emotionally devastated.; June 28, 2006 6:24 AM
Anonymous said...: I like your idea of auto repossessions by the way, but don't know where to find the stats.

I've been monitoring craigslist for 2005 & 2006 BMWs for sale. A few more 7-series than usual. Please take over my 1200 payment!; June 28, 2006 6:38 AM
Anonymous said...: Tinton Falls approves revaluation funding, awards contract
Posted by the Asbury Park Press on 06/28/06

BY KEITH BROWN
COASTAL MONMOUTH BUREAU
TINTON FALLS — The Borough Council at a special meeting Tuesday adopted a $500,000 bond ordinance to pay for a townwide property revaluation and awarded a contract to a West New York company to conduct it.

The vote for the bond ordinance, which followed a public hearing during which no member of the public spoke, was unanimous. No council member commented before the vote.

The vote allowed the council to pass a resolution later in the meeting awarding a contract worth $480,000 to Realty Appraisal Company, of West New York, to conduct the revaluation.

The deadline for the revaluation to be completed is Oct. 1. But, according to chief financial officer Stephen Pfeffer, the first tax bill to include the new property values won't come until August 2007.

The company, which has conducted borough revaluations three times dating back to 1978, was the sole company to answer solicitations for bids to conduct the revaluation, Mayor Peter Maclearie said.

Borough property has not been assessed since 1989. The average assessed value of a home in Tinton Falls is $152,005, according to 2005 figures.

Last month, angry residents from the upscale Willowbrook neighborhood off Swimming River Road pleaded with the council to expedite the revaluation, saying their homes are overvalued and that is driving up their property tax bills.

"We're moving on this as lightning quick as we can," Maclearie has said.

Willowbrook residents who attended a May 3 council meeting said they pay an average of $20,000 in property taxes annually.

"If I'm living next to Bon Jovi on the Navesink, I'm happy to pay it," Willowbrook resident Paul Cella, of Sire Stakes Drive, has said.; June 28, 2006 3:23 PM
Anonymous said...: Anyone with info/comment/experience in the Denver/Aurora area? I have a house for sale now - did my research, am selling for break-even. When I went to get a loan to fix it up for sale, they told me "We insist on giving you 35K - you've underestimated what your house is worth." when I only asked for 10K. So, I tried to be smart and only spent 11K (was successful), got it up to nice move-in condition with a lot more work done than I had planned because I spent wisely. Meanwhile, homes in my area went on the market for the high 180's. Wow, I thought - I only owe 145, plus 11K, and that plus the selling costs leaves me in great shape. Or so I thought. So, now my move-in place is priced to match the fixer-ups, and it's still just sitting. There are almost no buyers, even though we are at the lower end of the price range and the neighborhood looks great - lots of brick, mature trees, well-maintained homes. Everything is for sale, lots of bank-owned and distressed properties in nearby areas. Looks like we missed the last chopper out of Saigon. Fortunately, we are not desperate and can afford to stay put. We just wanted a smaller place due to a newly-empty nest. Mine is still affordable to low-end buyers, but there seem to be no buyers. We had only two showings last month, and no one came to the Open House.; June 28, 2006 3:43 PM
Anonymous said...: The bank was pushing an additional $25K on you that you did not want? I have heard that before. That raises the transaction costs and makes you tempted to consume the rest. I hope that you didn't.

We are headed for the big one. Multiply this one experience by 30,000,000 and we can see how the economy has been consumption driven.; June 28, 2006 7:15 PM
Anonymous said...: To amazed: that's right and I didn't spend it and I won't, but I can see how people can get in trouble this way. It seems they are using databases to track my home's 'value' that are based on historic sales - but if we are at the beginning of a steep slide, that data is meaningless. Of the two prevalent ones, www.zillow.com was the closest at range of high 160s to mid 180s, but http://www.realestateabc.com/ was up in the stratosphere, giving me a value of 227K for crying out loud! But I had enough sense not to spend 35K on a home in my neighborhood. Actually greed played a part, as I wanted to collect all this money I was told I would get. Then people started dropping their prices ....; June 28, 2006 7:41 PM
Anonymous said...: The massive speculatory bubble and its Real Estate offshoot or near history!!!!

Woah, June was a ROTTEN month for the RIC. Mercy. I didn't think we would get a month this bad to September. Another month(or worse) like June in July, I may have been to slow in my predictions, especially if the financial markets completely meltdown as I expect right when the RE bubble bursts at the same time.

Mercy!!!!; June 28, 2006 9:08 PM
Anonymous said...: I was on Zip realty looking up homes that had sold in Orange County. Zip lists how much per square foot the property cost.
My question is; why is there such a huge descrepancy in what people are paying per square foot? Yes, I realize that some homes will be much nicer than others, but when we're talking $300.00 per square foot vs. $1100.00, I just can't understand what the buyers are thingking or what it is that I'm missing. Sorry if this is a stupid question, can someone please enlighten me?; June 28, 2006 11:38 PM
Anonymous said...: I was on Zip realty looking up homes that had sold in Orange County. Zip lists how much per square foot the property cost.
My question is; why is there such a huge descrepancy in what people are paying per square foot? Yes, I realize that some homes will be much nicer than others, but when we're talking $300.00 per square foot vs. $1100.00, I just can't understand what the buyers are thingking or what it is that I'm missing. Sorry if this is a stupid question, can someone please enlighten me?; June 28, 2006 11:38 PM
Anonymous said...: Maybe the $300/sf is in Santa Ana and the $1100/sf is in Newport Beach.; June 29, 2006 12:57 AM
Anonymous said...: No, the homes were all in the same zip code. I live in that zip code and of course, the houses and streets vary, but not that much.; June 29, 2006 6:57 AM
Anonymous said...: maybe they are getting more per sq ft cause the lot size is larger. Most homes on large lots get more per sq ft. Not a good measure of what the HOUSE is really worth but then again you can't go wrong with a larger lot.; June 29, 2006 8:21 AM
Anonymous said...: Vanessa from post above, you are in the Real Estate industry? You are brave to come to an anti-bubble blog and posting. Oh, and thanks for letting us know how much you and your husband make flipping homes.; June 29, 2006 7:25 PM
Anonymous said...: la friends in deed:

Yes, unfortunately I agree. The 1930s led the masses into accepting the New Deal and allowed government power to grow enormously.

This one will be much deeper. I'll get flamed for this, but I believe the plan is to eradicate the Constitution. That well-designed document has held them at bay so far, and they desperately want out from under its constraints.

They're trying to destroy our will for capitalism and show us that we need the care and protection of a socialist state.

Ideas to fight this? I'd love to hear them. I've tried various tactics in person and online... very few are willing to wake up.; June 30, 2006 2:49 AM
Anonymous said...: abb, Socialist state? Again, what is that man? A myth you created because you can't except the FACT Capitalism is irrational, itself causes Market failure and the "business cycles" it creates?

The New Deal? Good program for the infrastructure. Built alot of stuff. Crap like the NRA was kicked out becuase it was crap. That is what the Constiution is for, checks and balances. Matter of fact, the Consitution gave the New Deal a thumb up to save the country from anarchy and TRUE Socialism of independent communes and cooperatives(which would have failed economically, leading to more anarchy).

aab, enough of your "pro-Capitalism" intellectual nonsense and find reality, your sound like a ranting Marxist in sheeps clothing.; June 30, 2006 2:57 AM
Anonymous said...: The massive speculatory bubble and its atrocious offshoot, the Real Estate bubble are near death!!!!

The New Deal was a Fascist program. While it had hardly orginal programs like public works, modest wage laws and SS(which was hardly a new idea), the main parts of it were corporate bailout and better regulatory functions to control the flow of "competition" so the Corporations could run the economy "better" by allowing who they thought should be allowed to grow and expand. The NRA was essentially FDR's American version of Hitler's youth. Hitler even considered the US to be the key country to defeat in WWII, though he wasn't ready to challenge us when Japan bombed Pearl Harbor because he believed we were moving more Fascist/ultra nationalist with our economic policies(which we were).

But the core of the New Deal was the end of free competition which had been declining for years(and was extremely unstable) and the regulatory rule of Corporations, which of course have different strains of ideology how they believe this should be run. In otherwords, the Democrats are ultra-nationalist with their economic policies while the Republicans are more open, though both parties intermingle on many positions.

Fascism ruling America has been here a long long time.; June 30, 2006 3:18 AM
Anonymous said...: Keith, what do you think about this?

Your Home Sold Within 59 Days* of Listing GUARANTEED; June 30, 2006 5:49 AM
Anonymous said...: Venessa, yes prices do go down in LA, have before, will again. my guess is 30-50% off current prices, depending on area.; June 30, 2006 5:57 AM
Anonymous said...: I've been looking at condos in Destin, FLA but I will NOT buy until the prices are way down (in line with rental rates).

My question: If a condo currently priced at $500,000 with annual taxes of $3000.00 drops to $250,000 how long will it take for the taxes to drop to $1500? If I were to buy at $250,000 and get a $3000 tax bill, would it be a no brainer to protest it and get it dropped to $1500?

I know there are lots of factors involved, but was wondering if anyone had seen/knows of cases where property values have dropped significantly but the gov't wouldn't drop the property tax amount?; June 30, 2006 11:38 AM
Anonymous said...: Here is the link to the Arizona Republic article. I Just read it again, and Catherine Reagor is a REIC tool. She probably has her realtor license and 6 houses for sale in Goodyear.

Total dolt.

http://www.azcentral.com/news/articles/0630zipsales0630.html; June 30, 2006 4:23 PM
Anonymous said...: Here in Vancouver everything is still going up. Apparently Its a 'great time to buy, particularly since. 'prices never go down'.

..well, other than that nasty 50% drop in '81.

http://vancouvercondo.info; June 30, 2006 7:44 PM
Anonymous said...: I didn't have much of a problem with Catherine Reagor's article until I dug through the zip code numbers. She mentions that according to the metropolitan Phoenix MLS, about a third of the zip codes experienced declines in average price. I assume she means YoY numbers, and it would have been better to get median price figures, not average price figures.

However, if you go into the Maricopa County zip codes that are listed on the link for that article, 52 of the zip codes show an increase in average price while 44 zip codes show a decline. Now zip codes were only shown for those with at least 50 sales in each quarter per zip code, so I assume several zip codes are not shown, but where the majority of sales are, you can see that the ratio of declines is much higher than one third (looks like about 45%). And would this ratio be even higher if median prices were used? What would the ratio be if compared to prices from the prior quarter?; June 30, 2006 11:45 PM
Anonymous said...: Let's throw aside all the arbitrary labels like "marxism", "socialism", and "fascism". Too many possible interpretations and the words just incite emotions and divide the participants and prevent them from finding common ground.

Humans beings have been alive and well, prosperous and growing, for thousands of years. The USA prospered and became a superpower in just a few decades. This during a time when government was not controlling and regulating and taxing everything in sight. It was limited and allowed people to run their own lives. Stepping in only when absolutely necessary.

In contrast, the 70s, 80s, 90s & 00s have seen increasing government control, regulation, and taxation. And during that time the streets are more dangerous and our quality of life has deteriorated.

Is it too much to ask for this to stop?

What happens when millions of people cry out for help from the bursting of this bubble? Government will step in and provide more safety and protection for our own good.

My contention is we don't need their protection. In fact we are worse off because of it. The Fed controlling interest rates and business cycles, taxation as a form of societal engineering, and government's endless regulations.

We did fine for thousands of years. Are we just suddenly too stupid to take care of ourselves?; July 01, 2006 1:00 AM
Anonymous said...: "Anonymous said...
I've been looking at condos in Destin, FLA but I will NOT buy until the prices are way down (in line with rental rates).

My question: If a condo currently priced at $500,000 with annual taxes of $3000.00 drops to $250,000 how long will it take for the taxes to drop to $1500? If I were to buy at $250,000 and get a $3000 tax bill, would it be a no brainer to protest it and get it dropped to $1500?

I know there are lots of factors involved, but was wondering if anyone had seen/knows of cases where property values have dropped significantly but the gov't wouldn't drop the property tax amount?"

It will be a cold day in HELL when the tax gods willingly and on their own cut the taxes that they have raised to line their own fat, bloated, over-paid pockets. Welcome to tax re-assessment court my friend! That’s IF you can get in the door.
Here in Taxsylvania, you have a series of first appeals with the SUBCONTRACTOR who has the contract with the Bureau of Assessments to assess properties in your county. This is a requirement "to avoid unnecessary backlog in the court system". HAH, WHAT A JOKE! I've talked to people who have been through it.
Total and complete farce! And these suffering, over-taxed people were intelligent and well prepared! You think that the company hired by the 'tax and spenders' to ream you out the ass to line their already fat pockets, is going to turn around and give some of it BACK! Can you say AUTOMATIC DENIAL OF ASSESSMENT REDUCTION PETITION!
The whole process is an insult to anybody with one functioning gray cell!
Expect your taxes on your $500,000 dropping down to $250,000 property to DOUBLE to $6000, not drop to $1500. Can you say MILLAGE INCREASE! Remember this above all when it comes to your 'tax majesties', this is carved in granite: SO TIMES ARE TOUGH, WHY SHOULD WE SUFFER!

Remember
"POWER CORRUPTS, ABSOLUTE POWER CORRUPTS ABSOLUTELY"; July 01, 2006 2:53 AM
Anonymous said...: uknowwhoiyam seems to be the only kid around here with his childish putdowns of the other posters here!; July 02, 2006 7:33 PM
Anonymous said...: I try to figure out what people could do for a living to earn enough to purchase the 1 million dollar mini McMansions in my area of NJ and there are now thousands of these built and being built.
I just do not understand where the money could be coming from from, I mean the mortgage is gonna be about $5,000 per month on 800K the taxes are gonna be 17K per year like $1400 a month, just there you got 77 thousand per year. Where do these people work and what do they do there to earn this type of money? I cannot figure it out.

A large percentage of the owner-occupants of the so called McMansions, used high leverage I/O ARM or NEG AM ARM and inflated stated income to qualify. Such folks are in an unstable financial position and will crash into BK in droves as time marches on. 2007 and 2008 are going to see record forclosures.; July 02, 2006 7:42 PM
Anonymous said...: Property taxes on the way down:

As a homeowner you have a right to dispute the value the assessor places on your house.

In fact, in the early 1990s a few companies worked on a contingency basis to dispute the valuations on commercial properties. I'll bet they'll be starting up again soon.; July 02, 2006 11:04 PM
Anonymous said...: Anonymous said...

"I've been looking at condos in Destin, FLA but I will NOT buy until the prices are way down (in line with rental rates).

"My question: If a condo currently priced at $500,000 with annual taxes of $3000.00 drops to $250,000 how long will it take for the taxes to drop to $1500? If I were to buy at $250,000 and get a $3000 tax bill, would it be a no brainer to protest it and get it dropped to $1500?"

Are you kidding? In "desirable" parts of Florida, especially beach communities, the annual property tax rate is 2.5% of selling price, so a 500k condo will cost $12,500.00 in annual property tax, and a 250k condo half as much, or $6,250.00. Wherever did you come up with the tax rates you cite? From a realtor's advertisement? Many crooked owners and realtors simply report what the owner is currently paying in property taxes, not what the new owner will have to pay based on the selling price. If the current owner is paying $3,000 in annual property taxes, and he has only had the property for a few years, you can be sure he paid only 125k or thereabouts for it. You will not find a half million dollar house or condo on a Florida beach with an annual property tax bill of $3,000. Not even in a slum neighborhood would the Florida property taxes be this low.

If you want to pay $1,500.00 or less a year in property taxes for a beach place, you better start looking places selling for 125k or less. In otherwords, a trailer.

It is illegal for a realtor to misrepresent what the property taxes will be on the selling price by only quoting the current tax numbers. They are completely irrelevant. However, they can be very helpful in determining what the present owner actually paid, unless he's had it the property for many years and the low tax rate dates from decades earlier. If somebody selling a newer beach condo for 500k says the taxes are $3,000.00, you can be fairly confident that he paid less than 200k for the place and is trying to screw somebody big time.; July 03, 2006 3:14 AM
Anonymous said...: It is amazing to me how people can be so revolutionay online and not in person. If a leader were to emerge who was not a Harvard educated NFL white blonde blue eyed 6'5" man, would you follow this person? I am trying not to be hypocritical at this point, but are people willing to deal with insecurities and fear to the point where courage and common sense will prevail? I have become so jaded at this point, that in many cases when I talk with conformists, I can finish their sentences. There are numerous self-help books that state that if you tell someone the truth, then you will be rewarded with hostility. Why is this the case? I may be rambling, but I know who I am and cannot lie to myself, and my best friends are inveterate truth tellers. I refuse to reward liars with value. They may have US currency, but our monetary value is largely dominated by people who got money from things that hurt other human beings. If you don't accept this sense of value, then do something about it personally. Do not reward evil.; July 03, 2006 6:14 PM
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Anonymous said...: Housing Bubble? You guys haven't seen anything yet. There is a tidal wave of people, around 40 million, that will be liquidating their homes around 2011 thru 2024. Who's going to buy all of those homes? There is a massive degentrification underway and it will hit like a tsunami!; July 28, 2006 9:36 PM
Ganga said...: The first view of Grover's vineyards is dramatic. Rattling down a rough track north of Bangalore, we take a sudden turn and there across a valley are the vineyards, like a bit of rural France dropped into Dodaballapur district.

After the first monsoon rains the vines are covered in fresh new leaves, and when we get closer we can see the differences. The more delicate varietals like Sauvignon Blanc and Viognier are at the top of the slope so water doesn't clog causing rot, on another slope are the Shiraz vines, while below is sturdier Cabernet Sauvignon, better able to deal with moisture.

The dry looking land of the Deccan might not seem promising, but Kewadkar says it's what these grapes like — good gravelly soil with warm afternoon sun, but cool nights.

Grover's is sure because they tried the alternatives. In recent years, with all the wine action centred in Maharashtra, Grover's, the one major winery outside the state has occasionally seemed overshadowed. Yet, Kanwal Grover has no regrets.

As the Grover's patriarch, whose personal passion for wine drove him to diversify from machine tools into growing grapes, reminds you, they could have been part of the Maharashtra boom. “Before we started we experimented by planting 33 types of grapes in six different locations, including Maharashtra,” he says. “We were in Narayangaon before Indage!”

The experiments were at the behest of Georges Vesselle, technical director of Champagne Mumm, who Grover had roped in after reading that he was leading a delegation of French winemakers to China. “I immediately found his number and called to ask how he could overlook India!” says Grover. Vesselle agreed to help them set up in India, but only if they were really willing to invest in finding the right place and the right grapes since wine is highly sensitive to local variations in soil and climate.

Location were shortlisted based on temperature and climate, vines planted, harvested and pressed. “Georges would carry a one kilo press in his luggage and use it in the bathroom of his room at Windsor Manor hotel,” recalls Kapil Grover. “Then he put the juice in different bottles — we had to get them from kabadiwallahs near the hotel — which he numbered himself so we didn't know which was which. He knew Nashik would have suited us better, and he didn't want that let this influence our decision.”; July 30, 2006 7:29 PM

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July 03, 2006

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