WARNING: If you're drinking your morning coffee, set down the cup, swallow, breathe in, breathe out, OK, now you can proceed.
Here's probably the most hilarious advice I've ever seen when it comes to "should I buy a home". Everything you wanted to know about the late great housing ponzi scheme can be wrapped up with this.
And away we go... The first question is:
AS A FIRST-TIME BUYER, SHOULD I WAIT UNTIL PRICES GO LOWER TO BUY A HOME?
No. If you continue to wait, you may never be able to afford to get into the housing market. Even as home prices are currently moderating – or even falling in some areas – rents continue to climb. The best way to build household wealth is to own a home
IF I WAIT TO BUY A HOME, WON'T PRICES GO DOWN EVEN LOWER?
Timing the market isn't a great idea. All the market fundamentals show that now is a good time to buy – prices are down, interest rates are affordable, there are lots of homes to choose from and you can bargain with sellers.
IS IT BETTER TO WAIT UNTIL THE ECONOMIC PICTURE IS CLEARER SO MY HOUSE WILL APPRECIATE?
No. The fact is, the economy is still solid. After expanding rapidly over the past couple of years, economic growth is moderating – and this is actually good for housing.
ISN'T IT BETTER TO "PLAY IT SAFE" AND KEEP RENTING UNTIL THINGS ARE MORE CERTAIN?
No. The best way to “play it safe” is to actually buy a home
SHOULD I INVEST MY MONEY IN THE STOCK MARKET, OR USE IT TO BUY A HOME?
Buy a home. Thanks to the concept of “leveraging,” purchasing a home is by far the best long-term investment. Leveraging means putting down a small amount of money to earn a big return.
SHOULD I WAIT TO SELL MY HOUSE UNTIL I CAN GET THE SAME PRICE MY NEIGHBOR SOLD THEIR HOUSE FOR?
No. It’s always better to trade up in a buyer’s market, like the one we are in now. While the value of your house has fallen, the price of higher-end homes has also dropped
November 30, 2006
Words of wisdom from the National Association of Homebuilders (NAHB)
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54 comments:
If they had been stockbrokers ("National Association of Securities Dealers") they'd have been so sued up the wazoo for spewing that crap.
Have you ever read this before?
----------------------------------
Is it a good time to buy stocks?
1) Yes it is definitely a good time to buy stocks. In fact, "playing it safe" by putting money in cash and bonds is throwing money away, and the best way to play it safe is to buy shares.
Should I wait until the economic picture becomes clearer?
2) No, the economy is still strong so today is a great day to buy more stocks.
What about margin? I've heard it can be risky.
3) Margin, known as leverage, is why stocks are such a great way to build wealth, you can get a big return from a little investment.
And what about higher P/E growth stocks, like internet stocks?
4) Their prices have come down, so it is a great time to trade up to a higher-end growth stock, like Google.
Remember, as Jim Cramer says, when it comes to stocks, there's only one answer: Buy!Buy!Buy!
Prices are falling, so I can build wealth if I buy the asset that is falling in price?
Me so confused
But Greg Swann researched it!
WTF? Everyone with a FICO greater than 500 lready has a house (or 2 or 12). Exactly who are they marketing to, then?
Maybe they should drop flyers in Spanish from airplanes in the Arizona desert near the Mexican border. Those are the only GFs in sight right now who might delay the floundering (and inevitable) Ponzi collapse.
Question: I am stuck in a McMansion that has now appraised at $50k LESS than the payoff on my loan. Am I an FB?
Answer: Yes, it is a good time to buy a home.
Question: I live in a McSh*tbox that I signed off on last summer. Now, the homebuilder is selling an even BETTER model, RIGHT NEXT DOOR, for $100k less, throwing in a pool, a Maserati, and a vacation. Is my house worth as much as the one next door?
Answer: Yes, now is a good time to buy a house.
Question: I am being foreclosed. My credit is trashed. I am living in my Hummer, which will be repossesed in one month. Can you help me?
Answer: Yes, now is a good time to buy a house.
And on and on it goes...
Now is ALWAYS a GOOD TIME TO BUY. Always! Just buy. Just do it. The realtors of America are counting on you mr. and mrs. FB!
WOW. At least the realtors are starting to change their tune in order to play the market in the other direction. These guys just stink of desperation.
The only truth is ... the last one and that too sorta ...
It is better to trade up in a down market. If the houses are all 50% down you can lose say 100K on your old 200K house and make up 200K on that 400K house. Of course ... that assumes the market stays still, or you sell the old and buy the new at the same instant.
If the market is dropping you have to sell first before buying. Else you may buy when its down 10% and sell when down 20% ... thereby losing a lot more than you planned on. The rest are all ... well lies. But we knew that.
The real question to ask them is ... is it a good time to flip a house. Buy now and 3-6 months later sell. Ofcourse if the answer to that is no, they have automagically said, its better to buy 3-6 months from now. Of course 3-6 months from now, the question still is, it is a good time to flip a house. Again No, OK ... repeat.
Easy to beat the liars at their own game.
Cool.
Cow_tipping.
GOOD NEWS, THE WORST OF THE BUBBLE IS OVER, BUY BUY BUY , FLIP FLIP FLIP, HAPPY DAYS!!!!!
Tuesday, November 21, 2006 9:59:33 PM
AndyMiamiBeach said...
Without a doubt, the main stream media has started a campaign to alleviate the worried consumer/citizen. Check out the analysis in the link below. This will give you a sense of what may potentially happen in the next five years:
http://www.safehaven.com/article-6329.htm
Tuesday, November 21, 2006 10:02:21 PM
beebs said...
Only one of the four homes for sale around my block has sold this year.
I guess they are waiting for spring.
Tuesday, November 21, 2006 10:08:47 PM
foxwoodlief said...
Here in Austin things are selling well and in most neighborhoods there are very few for sale signs. I drive around getting the feel for the area and drive up and down streets and am lucky to see one for sale sign every 30-50 blocks. New home sales seems to have slowed as people worry about the national market or maybe it is the season? My realtor says November is one of her busiest months and she has quite a few showings and six closings this month. She says Jan-March is the hungry season for her, which she budgets for.
I was shocked to see one of the houses I sold in Phoenix and the guy refinanced it in December for $230,000 (he bought in 2000 from me for $139,00) sold it in one week. The house is only 1025 sq ft in a historic district in central Phoenix. Zillow had showed the price go down to $198,000 before rising to $205,000, up and down, up and down, but he sold and covered all his expenses. One of our best friends lives next door and keeps us updated.
With Google going over $500 I guess there is still a lot of capital seeking havens and real estate still seems to be a haven for now. I think as people see interest rates continue down, they've dropped almost 3/8% here and people sense they are not over paying they are still buying.
Tuesday, November 21, 2006 10:39:01 PM
kilobar said...
Economists only look at supply, demand and interest rates. They aren't taking the mortgage derivatives into consideration. I don't think I've seen any bullish or neutral housing projections that took the re-setting ARMs as a contibuting factor in projecting future prices.
Tuesday, November 21, 2006 11:08:38 PM
The Thinker said...
The economists are responding to the fact that in many areas, the inventory levels are beginning to plateau or even come down a bit. The fact that inventory is plateauing is probably attributable to frustrated and defeated would-be sellers pulling their homes off the market for the holidays with the intention of having them come online as new listings in the spring.
Tuesday, November 21, 2006 11:21:13 PM
Richard said...
Oil Director Gunnar Berge fears that the
Norwegian oil production may fall
dramatically in a few years, unless new finds are
made within a few years.
http://www.norwaypost.no/cgi-bin/norwaypost/imaker?id=30466
Wednesday, November 22, 2006 12:12:53 AM
Anonymous said...
Subprime Loans Doing Badly
Wednesday, November 22, 2006 3:51:54 AM
Stuck in So Pa said...
With the liquidity spigot still wide open for easy (free) money, the Fed can make the 'good times roll’ (or at least the appearance) for a few more years. That, along with the MSM’s : the bubble is over B.S., should get the old consumer juices flowing in time for Black Friday!
Wednesday, November 22, 2006 4:40:31 AM
Anonymous said...
"The latest blog news"
Wednesday, November 22, 2006 6:04:59 AM
Anonymous said...
"With the liquidity spigot still wide open for easy (free) money, the Fed can make the 'good times roll’ (or at least the appearance) for a few more years."
Sorry, they cannot do that anymore. Consumers have already borrowed to the max and everybody with a pulse is already in the game.
FED will only cause dollar crash combined with skyhigh interest rates if they continue printing more and more money.
Wednesday, November 22, 2006 1:45:35 PM
Anonymous said...
Things couldn't be worse in North Scottsdale. In my development of 150 homes there are 22 homes for sale. Most all of them are investors. The builder recent reduced their last spec. $200K the homeowners are irrate. Nothing seems to be moving. Several developments nearby are in the same position. At the rate listings are selling, there is at least 3 years worth of inventory. Toll Brothers just cleared a development for 600+ homes. I'm worried that land is going to be sitting empty for a while.
Thankfully we cashed out of a house we bought in 2004 for $815K and sold this June for $1.535. We were able to take the cash and buy our current house for $817K. So happy to have downsized and to be living without a mortgage. So many of our neighbors are living beyond their means. They think we are crazy to be living in our current house. But I'll have the last laugh because I know they can't even pay their real estate taxes. Now many with adjusting mortgages are trying to get out, but they can't sell.
Things are going to get much worse before they get better here.
Wednesday, November 22, 2006 2:35:00 PM
Mammoth said...
Last week I posted:
“Edmonds, WA is a quiet bedroom community nestled alongside Puget Sound, just north of Seattle. It is fairly affluent with lots of retirees, and cute knick-knack shops lining its downtown streets.
There was a condo for sale there; every day I walked past it on the way to work. It started out at $460K back in June. I’d thought about contacting the agent, evaluating the place and then offering her ½ the asking price, but never had the time for this.
The price stayed there for a long while, then dropped to $410K. Still no takers. Then the price dropped to $399K, then to $395K. One day last month, surprise surprise, the sign was gone! Usually RE is posted with a “SOLD” sign attached to the “for sale” sign, but not in this case.
So either the place finally sold, or the seller just took the condo off the market. In other words, either the buyer got (at least) 14% shaved off the asking price, OR a 14% price cut still didn’t move this condo.
Looks like housing in the Seattle area has passed it’s peak.”
-----------------------
On Monday 11/20, the “For Sale” sign was back up, this time by Remax (the one with the bubble...er, the balloon image), with the asking price dropped again to $389K. This is a classic case of chasing a declining value.
-Mammoth
Wednesday, November 22, 2006 3:27:46 PM
Anonymous said...
Mammouth -
They should drop it $325, then maybe they would have some takers. Its funny we made offers on two houses before we purchased this one. Neither would come down enough. They are still on the market, one listed for our previous offer and the other list $50K under what we offered in June. When will these sellers learn? They are all so full of greed. You would think they had their heads stuck in the sand, unaware what a 180 the market has made.
Wednesday, November 22, 2006 4:33:03 PM
Anonymous said...
Sorry Mammoth not "Mammouth"
Wednesday, November 22, 2006 4:34:24 PM
foxwoodlief said...
I don't know. Last night read in the Economist that prices on homes went up 9.5% in nine Australian cities and up 47% in Perth this year to the third quarter.
Last year there was talk of how over-heated their market was and then the fear the bubble would burst, a contraction and draw back in sales, a slight decrease in prices and now this?
I had posted some stats from the Economist from June 2005 that showed Five major countries outside the USA that showed the increase in price in other countries from over 112% to 221% where the USA was only 73% and Australia was in the top four and now this? If gauging markets and potential outcomes by these countries I think the USA has a long way to go before a "historic meltdown."
I am beginning to believe that the past year has been a "touch and go" and ready for another slight take-off in the spring barring a major calamity or war.
With the stock market booming I think they money game isn't over yet. I do believe a correction will have to come and the sooner the better but I'm beginning to doubt it has arrived.
Wednesday, November 22, 2006 4:44:39 PM
kilobar said...
The market is soft here in Denver as well. A friend of mine had a downtown loft on the market for $550k. He got offered $525k in July and turned it down. SInce then he's had to lower the price twice and now has it going for $515k with no takers.
Wednesday, November 22, 2006 5:25:42 PM
Mammoth said...
Another sign of the true state of the economy - last weekend I was a vendor at a craft fair in Edmonds, WA - a fairly affluent community just north of Seattle.
My observation was that there were much fewer people coming through, than in previous years. All of the other vendors also commented that both traffic and sales were down this year. One vendor remarked that the number of credit card purchases was way down from last year as well.
In my best year I sold over $800; this time around it was $460. What I sell are hand-painted miniature lacquer boxes which I buy directly from the craftspeople in Russia. (To view samples, you may perform a Google search on “Russian Lacquer box” and follow the link of your choice. You would not believe the huge markup over what the crafts people receive for their products!)
What I was selling spans the range from very simple designs to incredibly detailed paintings, and my prices ranged from $9 to $59.
Most customers first made a beeline for the finest boxes, and then purchased something more towards the lower end of the price range, often making comments like “Wish that I could afford that other one...it looks so nice but I don’t have much to spend this year.”
So those recent forecasts saying this is going to be a yawner of a holiday shopping season are likely spot-on. With food prices, energy prices, and the cost of everything else increasing as well, people are squeezed.
So no, I do not believe that the economy, nor housing has yet hit the bottom.
-Mammoth
Wednesday, November 22, 2006 6:05:55 PM
keith said...
I looked at lofts in Denver 2 years ago and knew for certain we were in the mother of all bubbles. Renting so much cheaper than buying.
$550,000 becomes $200,000 really quick... just read some Denver papers from 1990.
Wednesday, November 22, 2006 7:17:44 PM
Jay said...
Yet another gutless anonymous poster said:
"At the rate listings are selling, there is at least 3 years worth of inventory."
He's in Scottsdale. Don't know where he gets his stats, but 3 years is laughable. The actual absorption rate in Phoenix Valley wide is about six
Vfrmonkey:
You ahve a VFR ??? what year. Love the 91 was it to 96 750's. They maye a beauty in white in 91 or 92. perfect match for my 89 white GS. They also made a eyepopping ferrari red other years.
Anyway - I see your frustration as well. If your area didn't have a price run up for no reason other than loose money, that is a reason they will fall. In Charlotte NC (where I am from) 98-02 prices fell and by quite a bit. From 100 a sqft to like ~60. We have always had new construction, cranking it out like cars really. We are barely ahead of inflation. I am going to be shocked to see us fall. Of course we also have 100 and up a sqft in sections of charlotte, and I do anticipate those to take a bath.
Secondly - incentives. Prices have fallen because of heavy incentives, but not reflected in the stats, and the Idiots pay the taxes on the larger amount.
Cool.
Cow_tipping.
GOOD NEWS, THE WORST OF THE BUBBLE IS OVER, BUY BUY BUY , FLIP FLIP FLIP, HAPPY DAYS!!!!!
Tuesday, November 21, 2006 9:59:33 PM
AndyMiamiBeach said...
Without a doubt, the main stream media has started a campaign to alleviate the worried consumer/citizen. Check out the analysis in the link below. This will give you a sense of what may potentially happen in the next five years:
http://www.safehaven.com/article-6329.htm
Tuesday, November 21, 2006 10:02:21 PM
beebs said...
Only one of the four homes for sale around my block has sold this year.
I guess they are waiting for spring.
Tuesday, November 21, 2006 10:08:47 PM
foxwoodlief said...
Here in Austin things are selling well and in most neighborhoods there are very few for sale signs. I drive around getting the feel for the area and drive up and down streets and am lucky to see one for sale sign every 30-50 blocks. New home sales seems to have slowed as people worry about the national market or maybe it is the season? My realtor says November is one of her busiest months and she has quite a few showings and six closings this month. She says Jan-March is the hungry season for her, which she budgets for.
I was shocked to see one of the houses I sold in Phoenix and the guy refinanced it in December for $230,000 (he bought in 2000 from me for $139,00) sold it in one week. The house is only 1025 sq ft in a historic district in central Phoenix. Zillow had showed the price go down to $198,000 before rising to $205,000, up and down, up and down, but he sold and covered all his expenses. One of our best friends lives next door and keeps us updated.
With Google going over $500 I guess there is still a lot of capital seeking havens and real estate still seems to be a haven for now. I think as people see interest rates continue down, they've dropped almost 3/8% here and people sense they are not over paying they are still buying.
Tuesday, November 21, 2006 10:39:01 PM
kilobar said...
Economists only look at supply, demand and interest rates. They aren't taking the mortgage derivatives into consideration. I don't think I've seen any bullish or neutral housing projections that took the re-setting ARMs as a contibuting factor in projecting future prices.
Tuesday, November 21, 2006 11:08:38 PM
The Thinker said...
The economists are responding to the fact that in many areas, the inventory levels are beginning to plateau or even come down a bit. The fact that inventory is plateauing is probably attributable to frustrated and defeated would-be sellers pulling their homes off the market for the holidays with the intention of having them come online as new listings in the spring.
Tuesday, November 21, 2006 11:21:13 PM
Richard said...
Oil Director Gunnar Berge fears that the
Norwegian oil production may fall
dramatically in a few years, unless new finds are
made within a few years.
http://www.norwaypost.no/cgi-bin/norwaypost/imaker?id=30466
Wednesday, November 22, 2006 12:12:53 AM
Anonymous said...
Subprime Loans Doing Badly
Wednesday, November 22, 2006 3:51:54 AM
Stuck in So Pa said...
With the liquidity spigot still wide open for easy (free) money, the Fed can make the 'good times roll’ (or at least the appearance) for a few more years. That, along with the MSM’s : the bubble is over B.S., should get the old consumer juices flowing in time for Black Friday!
Wednesday, November 22, 2006 4:40:31 AM
Anonymous said...
"The latest blog news"
Wednesday, November 22, 2006 6:04:59 AM
Anonymous said...
"With the liquidity spigot still wide open for easy (free) money, the Fed can make the 'good times roll’ (or at least the appearance) for a few more years."
Sorry, they cannot do that anymore. Consumers have already borrowed to the max and everybody with a pulse is already in the game.
FED will only cause dollar crash combined with skyhigh interest rates if they continue printing more and more money.
Wednesday, November 22, 2006 1:45:35 PM
Anonymous said...
Things couldn't be worse in North Scottsdale. In my development of 150 homes there are 22 homes for sale. Most all of them are investors. The builder recent reduced their last spec. $200K the homeowners are irrate. Nothing seems to be moving. Several developments nearby are in the same position. At the rate listings are selling, there is at least 3 years worth of inventory. Toll Brothers just cleared a development for 600+ homes. I'm worried that land is going to be sitting empty for a while.
Thankfully we cashed out of a house we bought in 2004 for $815K and sold this June for $1.535. We were able to take the cash and buy our current house for $817K. So happy to have downsized and to be living without a mortgage. So many of our neighbors are living beyond their means. They think we are crazy to be living in our current house. But I'll have the last laugh because I know they can't even pay their real estate taxes. Now many with adjusting mortgages are trying to get out, but they can't sell.
Things are going to get much worse before they get better here.
Wednesday, November 22, 2006 2:35:00 PM
Mammoth said...
Last week I posted:
“Edmonds, WA is a quiet bedroom community nestled alongside Puget Sound, just north of Seattle. It is fairly affluent with lots of retirees, and cute knick-knack shops lining its downtown streets.
There was a condo for sale there; every day I walked past it on the way to work. It started out at $460K back in June. I’d thought about contacting the agent, evaluating the place and then offering her ½ the asking price, but never had the time for this.
The price stayed there for a long while, then dropped to $410K. Still no takers. Then the price dropped to $399K, then to $395K. One day last month, surprise surprise, the sign was gone! Usually RE is posted with a “SOLD” sign attached to the “for sale” sign, but not in this case.
So either the place finally sold, or the seller just took the condo off the market. In other words, either the buyer got (at least) 14% shaved off the asking price, OR a 14% price cut still didn’t move this condo.
Looks like housing in the Seattle area has passed it’s peak.”
-----------------------
On Monday 11/20, the “For Sale” sign was back up, this time by Remax (the one with the bubble...er, the balloon image), with the asking price dropped again to $389K. This is a classic case of chasing a declining value.
-Mammoth
Wednesday, November 22, 2006 3:27:46 PM
Anonymous said...
Mammouth -
They should drop it $325, then maybe they would have some takers. Its funny we made offers on two houses before we purchased this one. Neither would come down enough. They are still on the market, one listed for our previous offer and the other list $50K under what we offered in June. When will these sellers learn? They are all so full of greed. You would think they had their heads stuck in the sand, unaware what a 180 the market has made.
Wednesday, November 22, 2006 4:33:03 PM
Anonymous said...
Sorry Mammoth not "Mammouth"
Wednesday, November 22, 2006 4:34:24 PM
foxwoodlief said...
I don't know. Last night read in the Economist that prices on homes went up 9.5% in nine Australian cities and up 47% in Perth this year to the third quarter.
Last year there was talk of how over-heated their market was and then the fear the bubble would burst, a contraction and draw back in sales, a slight decrease in prices and now this?
I had posted some stats from the Economist from June 2005 that showed Five major countries outside the USA that showed the increase in price in other countries from over 112% to 221% where the USA was only 73% and Australia was in the top four and now this? If gauging markets and potential outcomes by these countries I think the USA has a long way to go before a "historic meltdown."
I am beginning to believe that the past year has been a "touch and go" and ready for another slight take-off in the spring barring a major calamity or war.
With the stock market booming I think they money game isn't over yet. I do believe a correction will have to come and the sooner the better but I'm beginning to doubt it has arrived.
Wednesday, November 22, 2006 4:44:39 PM
kilobar said...
The market is soft here in Denver as well. A friend of mine had a downtown loft on the market for $550k. He got offered $525k in July and turned it down. SInce then he's had to lower the price twice and now has it going for $515k with no takers.
Wednesday, November 22, 2006 5:25:42 PM
Mammoth said...
Another sign of the true state of the economy - last weekend I was a vendor at a craft fair in Edmonds, WA - a fairly affluent community just north of Seattle.
My observation was that there were much fewer people coming through, than in previous years. All of the other vendors also commented that both traffic and sales were down this year. One vendor remarked that the number of credit card purchases was way down from last year as well.
In my best year I sold over $800; this time around it was $460. What I sell are hand-painted miniature lacquer boxes which I buy directly from the craftspeople in Russia. (To view samples, you may perform a Google search on “Russian Lacquer box” and follow the link of your choice. You would not believe the huge markup over what the crafts people receive for their products!)
What I was selling spans the range from very simple designs to incredibly detailed paintings, and my prices ranged from $9 to $59.
Most customers first made a beeline for the finest boxes, and then purchased something more towards the lower end of the price range, often making comments like “Wish that I could afford that other one...it looks so nice but I don’t have much to spend this year.”
So those recent forecasts saying this is going to be a yawner of a holiday shopping season are likely spot-on. With food prices, energy prices, and the cost of everything else increasing as well, people are squeezed.
So no, I do not believe that the economy, nor housing has yet hit the bottom.
-Mammoth
Wednesday, November 22, 2006 6:05:55 PM
keith said...
I looked at lofts in Denver 2 years ago and knew for certain we were in the mother of all bubbles. Renting so much cheaper than buying.
$550,000 becomes $200,000 really quick... just read some Denver papers from 1990.
Wednesday, November 22, 2006 7:17:44 PM
Jay said...
Yet another gutless anonymous poster said:
"At the rate listings are selling, there is at least 3 years worth of inventory."
He's in Scottsdale. Don't know where he gets his stats, but 3 years is laughable. The actual absorption rate in Phoenix Valley wide is about six months. Sure there are pockets where it's worse. But three years? That's just asinine.
Wednesday, November 22, 2006 7:48:44 PM
Anonymous said...
Jay -
He would be a she...
In DC Ranch (North Scottsdale) there have been 100 sales in 2006 so far. Currenty there are 182 properties for sale (resales). This number doesn't include new construction. The rest of Phoenix/Scottsdale hasn't been hit as hard. But trust me now that Toll Brothers is ready to put in another 600+ homes at Windgate Pass. It will be years until the inventory is worked out.
Happy Turkey day Jay!
Wednesday, November 22, 2006 8:32:54 PM
foxwoodlief said...
I don't know. Last night read in the Economist that prices on homes went up 9.5% in nine Australian cities and up 47% in Perth this year to the third quarter.
Last year there was talk of how over-heated their market was and then the fear the bubble would burst, a contraction and draw back in sales, a slight decrease in prices and now this?
I had posted some stats from the Economist from June 2005 that showed Five major countries outside the USA that showed the increase in price in other countries from over 112% to 221% where the USA was only 73% and Australia was in the top four and now this? If gauging markets and potential outcomes by these countries I think the USA has a long way to go before a "historic meltdown."
I am beginning to believe that the past year has been a "touch and go" and ready for another slight take-off in the spring barring a major calamity or war.
With the stock market booming I think they money game isn't over yet. I do believe a correction will have to come and the sooner the better but I'm beginning to doubt it has arrived.
What do you think of what has happened so far in those markets that are way higher than ours?
Wednesday, November 22, 2006 10:22:39 PM
Benvolio Montague said...
Canadian RE cheerleaders heap fuel on fire:
http://tinyurl.com/ye3dsd
In the land of the blind, the one eyed man is king.
Wednesday, November 22, 2006 11:05:33 PM
Anonymous said...
benvolio:
From the article: "However, a recent study by CIBC World Markets found that non-conventional mortgages make up about 5 per cent of the Canadian market, a small amount when compared with about 20 per cent in the U.S."
I've never seen non-conventional mortgages specified as a percentage of the entire US mortgage market - only varying percentages by state and only over the last couple of years. It's hard to believe that 20% of ALL US mortgages are non-conventional. Unless their definition of non-conventional is different from ours.
Also, "Over the last six months the median price of all existing U.S. homes dropped 11.5 per cent to $200,000 (U.S.) from $223,000, according to the U.S. National Association of Realtors."
That sure isn't getting much play here in the US.
Thursday, November 23, 2006 12:34:56 AM
Anonymous said...
"Is the dollar FREE FALLING?"
Thursday, November 23, 2006 4:56:42 AM
Anonymous said...
One factor putting pressure on the dollar was a cut in US growth forecasts from the Council of Economic Advisers, George W. Bush's economic advisors.
The CEA blamed the downturn in the US housing market for its revisions. Tim Fox at Dresdner Kleinwort said the news had increased market speculation that the Federal Reserve would start cutting US interest rates in March.
Thursday, November 23, 2006 5:41:13 AM
Anonymous said...
I recall an old article "ANALYSIS-FX reserve shift out of dollars can be costly"
However, with the housing market tanking, and rumors of the Fed lowering interest rate in 2007 - it seems Cheng Siwei recommendation is making more sense for central banks to diversify their US assets if the Dollar sell-off intensify?
But the Federal Reserve's 15 interest rate hikes since June 2004 has taken U.S. interest rates to 4.75 percent from historic lows of 1 percent in 2003, which makes ditching dollars less attractive from the yield point of view.
"The story of central banks shifting out of dollars has been a problem for the dollar. But the Fed has been aggressive and U.S. interest rates are rapidly going up. So the cost is getting high to shift out of dollars," said Johan Javeus, currency strategist at SEB in Stockholm.
Speculation of central bank reserves diversification was partly behind the dollar's tumble in the three years to late 2004 which took it to record lows against the euro.
Central banks worldwide, which hold more than $4 trillion in total reserves, are increasingly important players in the $1.9-trillion-a-day FX market.
Asia and Russia hold more than 70 percent of the world's reserves.
Talk of central bank diversification intensified on Tuesday after vice chief of China's national parliament Cheng Siwei said the country, which has the world's largest reserves, should trim its holdings of U.S. debt and could stop buying dollar bonds.
China's central bank said however Cheng was expressing his personal views.
However, these conditions have changed allot since that old article was written.
Thursday, November 23, 2006 6:40:40 AM
Anonymous said...
Carry-Trade Craze
During the past decade, the yen-carry trade has become a staple for many punters. A popular form of the strategy exploits the gap between U.S. and Japanese yields. Anyone borrowing for next to nothing in yen and parking the funds in U.S. Treasuries received a twofold payoff: the 3-plus percentage-point yield difference and the dollar's rise versus the yen. The latter dynamic boosts profits by the time they're converted back to yen.
Yet as the BOJ raises rates and more investors buy into Japan's revival, the yen is sure to rise, much to the chagrin of carry-trade aficionados. Realization the trade is moving against investors may send shockwaves through global markets.
Perhaps BOJ won't raise interest rate, but with a slowing US housing market and the US Federal Reserve looking at dropping interest rate it seems like the dollar has no where to go but down.
It would start slowly with speculators suddenly closing positions that are becoming more expensive: dumping Treasuries, gold, Shanghai real estate, shares in Google Inc. or whatever else they used yen borrowings to bet on. The chain reaction would accelerate once the mainstream media jumped on the story.
If all this sounds far-fetched, think back to late 1998, which offers an example of the damage a panic among carry-traders can do.
Remember 1998
Thursday, November 23, 2006 8:25:36 AM
Anonymous said...
Yen surges
At the same time, the yen soared across the board, shrugging off the government's downgrade of its economic assessment and weak trade and industry activity data.
Chandler said the yen rallied as bearish sentiment towards the dollar sparked an unwinding of long dollar and euro positions.
Meanwhile, market talk that the Japanese authorities had encouraged exporters to buy yen has provided an excuse to trim back yen carry trade positions, he said.
Carry trades refer to the practice of speculators making profits by borrowing the yen and the Swiss franc at very low costs and reinvesting in higher-yielding currencies and assets, such as the Australian dollar and the New Zealand dollar.
Will the unwinding of Yen carry trade have an impact to the $370 Trillion global market for derivatives?
Thursday, November 23, 2006 8:40:52 AM
Anonymous said...
US SWAPS-Spreads widen on light, pre-holiday trade
Spreads on U.S. interest rate swaps widened on Wednesday, the first time in seven sessions, on light trade ahead of the U.S. Thanksgiving holiday.
Short-dated spreads moved out as much as 0.75 basis point on the day, as short-dated swaps lagged Eurodollar futures, analysts said.
Thursday, November 23, 2006 9:33:22 AM
Geronimo said...
Lou Dobbs - The War on the Middle Class
Book Introduction, pp. 1 - 12
"Whether the issue is a total lack of border security, an illegal immigration crisis, taxation, education, or jobs, big business and big government are unchecked in their attacks on the common good. Most of our elected officials, whether Democrat or Republican, have been bought and paid for through campaign donations from corporate lobbyists and other special interest groups. We've reached a stage where lobbyists no longer merely influence legislation but write the actual language of what becomes law."
Thursday, November 23, 2006 2:40:50 PM
Anonymous said...
geronimo: "We've reached a stage where lobbyists no longer merely influence legislation but write the actual language of what becomes law."
Do you know of any place on the web where legislation is spelled out with Congressional names attached indicating how they've voted? If there is no such place, maybe there should be so we can finally start shining a spotlight on just how little the "common good" is being protected by those WE entrust to protect it.
Thursday, November 23, 2006 8:49:43 PM
Anonymous said...
The euro touched its highest against the dollar since June as business confidence in Germany, Europe's largest economy, unexpectedly advanced to a 15-year high.
Thursday, November 23, 2006 9:05:16 PM
Anonymous said...
More Bad News for the Dollar
European government bonds took a knock from news of a pick up in business optimism in the area's biggest economy.
The Ifo index, which measures confidence in Germany, jumped from 105.3 in October to 106.8 in November, equalling the 15-year high reached in June. Economists had been looking for a slight decline in the index to 105.2.
The data strengthened European Central Bank rate hike expectations and bond prices at the shorter end took the brunt of the selling.
Thursday, November 23, 2006 9:14:31 PM
Anonymous said...
Can there be more bad news for the Dollar?
The U.K. pound rose for a fifth day versus the dollar, its longest winning run in three weeks, on speculation the Bank of England will keep raising interest rates into 2007.
The U.K. currency rose the most in three months against its U.S. counterpart yesterday after minutes from the central bank's latest rate-setting meeting showed the nine-member committee, led by Governor Mervyn King, voted 7-2 in favor of raising the key rate by a quarter point to a five-year high of 5 percent.
Thursday, November 23, 2006 9:20:17 PM
Anonymous said...
The common currency clambered up to 1.2967 dollars in European trading after the Munich-based ifo institute said its key business confidence survey returned in November to the 15-year high that it hit in June.
"The fundamental picture corresponds to a stronger euro,"
The stronger euro follows a raft of economists' forecasts that the common currency would be able to gain ground against the US dollar as evidence that growth in the world's biggest economy would turn down in the run up to the new year.
Indeed, ECB chief Jean-Claude Trichet has already flagged the bank's sixth rate rise since December with analysts expecting the Frankfurt-based bank to hike rates by another 25 basis points to 3.50 per cent at its meeting next month.
Adding to the downbeat economic picture facing the US economy, President George W Bush's economic panel of advisers this week cut their 2007 growth forecasts.
Signs that US economic growth might be losing strength have also led to a divergence in interest rate expectations for the eurozone and the US.
Thursday, November 23, 2006 9:25:59 PM
Anonymous said...
Paulson and the Plunge Protection gang discuss the problems that might occur with hedge funds and derivatives, plus the "government's ability to respond to a financial crisis,"
Pualson must have given the Plunge Protection Team - a. k. a. Working Group - a half day on Wednesday, because the Team allow the dollar free fall the day before Thanksgiving.
Thursday, November 23, 2006 9:40:59 PM
Anonymous said...
World oil prices have staged a modest rally on market speculation that the OPEC cartel could announce further crude production cuts, dealers said.
If the Organization of the Petroleum Exporting Countries cut production to raise the price of crude oil it could put more pressure on the current US economic conditions further weakening the dollar.
Thursday, November 23, 2006 10:00:43 PM
Anonymous said...
A quiet night turned into a bloodbath for the USD as it plummeted against the majors
Thursday, November 23, 2006 10:12:53 PM
Anonymous said...
Canada dollar jumps versus US Dollar after Canadian Core inflation raced ahead at 2.3 percent in October.
The Canadian dollar shot higher versus the greenback on Wednesday, as data showing a sharp rise in core Canadian consumer prices prompted heavy buying versus a weak U.S. currency.
Canadian bond prices rose slightly, as the inflation data did not alter expectations that interest rates will be steady for the next several months.
Thursday, November 23, 2006 10:18:52 PM
Richard said...
The OPEC reduction in production of oil - is not voluntary.
IMO of course.
Thursday, November 23, 2006 10:22:27 PM
Anonymous said...
The ruble is likely to continue its advance against the dollar at the next UTS session.
Dollar continues to slide vs. euro and ruble
Thursday, November 23, 2006 10:59:33 PM
Anonymous said...
Russia Gold and foreign currency reserves up $1.9bn
So, Russia has slightly reduced the huge gap from China and Japan, which have the largest gold and foreign currency reserves in the world. China’s reserves top $1 trillion, and Japan has more than $900 billion.
Alexei Ulyukayev, the Bank of Russia's first deputy chairman, on October 16 said he may lift holdings of yen to "several percent" of the nation's US$273 billion of reserves, from almost zero percent.
Thursday, November 23, 2006 11:13:59 PM
Anonymous said...
Yesterday morning, the battle between the BoJ and the government continued expanding.
The government downgraded the outlook for the economy. This was the first downgrade since 2004. This was widely anticipated and is seen as a warning shot to the Bank of Japan not to hike rates too fast.
The BoJ’s Iwata immediately (within minutes!) reacted with a statement that the Bank will use its (own) outlook for setting rates. The message to the government is clear: ‘do not try to meddle’…
But the reality of Japan in our view is still that the pressure of the government may be a factor to take into account when setting rates or having expectations for it going forward. The reluctance of the government is enough for us to see a December rate hike very difficult. The politically acceptable Q1 ’07 is now very likely, just ahead of the start of a new fiscal year on April 1, ’07.
Friday, November 24, 2006 12:48:42 AM
Anonymous said...
Dollar Drops to 19-Month Low Versus Euro, Breaches $1.30 Level.
People's Bank of China Vice-Governor Wu Xiaoling said East Asia needs to reduce its reliance on dollar inflows because of the risk of a further slump in the currency. China's foreign- exchange reserves exceed $1 trillion, the world's largest.
Wu's comments were released today in an article circulated during a press conference in Beijing.
``China holds most of its reserves in the dollar and these comments may lead to speculation they will sell,''
Friday, November 24, 2006 7:00:30 PM
Anonymous said...
U.S. Treasury debt prices rose in thin trade on Friday, pushing benchmark yields to nine-month lows, as a plunge in the dollar caused some investors to switch from stocks into government bonds.
But traders said the flight-to-safety flows of money could be temporary as sustained dollar weakness would make Treasuries less attractive to foreigners over time.
Friday, November 24, 2006 7:04:14 PM
Anonymous said...
“If you are in the foreign-exchange world and you took a few days off for U.S. Thanksgiving, and ‘forgot' your Blackberry at the office, you will be forgiven if you are left slack-jawed when you return to work on Monday,”
“It seems that all the warts and blemishes that were apparent on the U.S. dollar have suddenly come to the attention of the market,”
The Canadian dollar rose more than half a cent against the greenback Friday as global currency traders shed the U.S. currency
Friday, November 24, 2006 7:27:03 PM
Anonymous said...
The DOLLAR falls below the must defend 85 mark, the Plunge Protection Team got some work to do on Monday
Friday, November 24, 2006 7:38:20 PM
Anonymous said...
The euro shot above $1.31 on Friday for the first time since April 2005.
Investors are wary that China, which holds the world's biggest foreign exchange reserves of above $1 trillion, might diversify out of dollar assets.
Friday, November 24, 2006 8:09:42 PM
Anonymous said...
Can weak data on Durable Goods and New Home Sells bring the DOLLAR down further next week?
On Tuesday, US data includes October durable goods orders, which are forecast to fall 5.1% after a surprising 8.3% gain in September.
And US existing home sales figures an indicator to see how fast the US economy is contracting are forecast to be down slightly from the previous month, at 6.14 million versus 6.18 million.
Friday, November 24, 2006 8:24:24 PM
Anonymous said...
THE MOVE ABOVE $1.30 is DECISIVE and ON HEAVY VOLUME
The euro's surge this week above $1.30 after months of rangebound trading augurs a re-run, albeit a milder version, of the late 2004 rally when it reached its all time high.
Renewed talk of central bank diversification out of dollars, expectations of higher euro zone interest rates and signs of unwinding in overstretched carry trades have combined to lift the euro and send the dollar lower across the board.
The spike up in the euro and implied volatility on Friday suggest momentum is strong enough to push the euro back up toward its high at $1.3667.
Friday, November 24, 2006 9:55:27 PM
Anonymous said...
Did European Hedge Funds bid up the Euro?
Friday, November 24, 2006 10:14:38 PM
Anonymous said...
Hedge funds take sides on LSE bid battle
Friday, November 24, 2006 10:16:12 PM
Anonymous said...
Home loan demand falls even though mortgage rates were lower. Does not look good for the DOLLAR.
Friday, November 24, 2006 10:27:34 PM
Anonymous said...
What to Expect for the US Dollar on Monday
The US dollar has completely melted down with the Euro and British pound hitting a yearly high
Friday, November 24, 2006 10:34:47 PM
Anonymous said...
As GCC approach 2010 with its goal of a single currency, is it for certain that the single currency will be peg to the Dollar.
UAE central bank chief Sultan Nasser Al Suweidi, whose central bank is shifting 10 per cent of its $25 billion reserves out of the dollar and largely into euros, said he expected the single currency to overtake the dollar by 2015.
'Even when you see Japanese trade transactions they are in US dollars. It's not a currency. It's very much controlled by the central bank of Japan and it's lost some of its ground. I would say it's lost confidence,' he said.
Friday, November 24, 2006 10:57:16 PM
Anonymous said...
Foreign holders of U.S. Treasury bonds appeared unfazed by the dollar's plunge on Friday, but should the decline prove more than a one-day event, bond investors could find their nerves put to a test.
Friday, November 24, 2006 11:06:39 PM
Anonymous said...
Why the dollar is falling so fast
Saturday, November 25, 2006 12:45:05 AM
Anonymous said...
Euro zone M3 money supply is released on Tuesday and is seen rising 8.7 percent, economists polled by Reuters say.
M3 – a mix of cash, short-term bank deposits and money market instruments – is closely watched by the ECB.
France and Germany report unemployment data on Wednesday, euro zone November harmonised inflation on Thursday is seen up 0.2 percent on the month.
“We have a raft of data and expect it to support the case for further (euro zone) rate increases beyond those which we see in December,” said UBS' Teather.
Saturday, November 25, 2006 1:28:29 AM
Anonymous said...
does any one have data on when these ARMs are comming due?
Keith?
Saturday, November 25, 2006 6:17:30 AM
Anonymous said...
The ARMS are coming due shortly before the end of the world. Or is it the world is ending when the ARMS come due? I forget, it's so confusing.
Woe is me.
Saturday, November 25, 2006 10:13:23 AM
Enorah said...
RealtyTrac
Does anyone here use it? Does anyone have feedback? Does anyone know the fee? I can not seem to locate the fee after the 7 day free trial expires. Thanks!
Saturday, November 25, 2006 6:49:23 PM
Anonymous said...
The dollar fell sharply Friday against major currencies raising fresh concerns about the U.S. economy and inflation.
The U.S. currency hit a 23-month low against the pound and 20-month low against the euro. The pound rose as high as $1.9336 while the euro hit $1.3085, exceeding its previous high this year by more than a cent and the Japanese currency also benefited sharply.
Saturday, November 25, 2006 8:35:04 PM
Anonymous said...
Will China dump dollar-denominated assets?
The risk of a sell-off of U.S. securities by China has been a persistent concern for Wall Street in recent years.
The sell-off in the currency highlights risks in the U.S. budget and trade deficits.
A major threat to the U.S. economy from a tumbling dollar would be higher inflation, because a weaker currency could drive up prices of the imported goods that consumers relish
Saturday, November 25, 2006 8:53:12 PM
Anonymous said...
Slumping Dollar Boosts T-Bond Prices; 10-Year Note Yield Hits A 9-Month Low
Traders said while foreign investors could seek a safe haven in Treasuries for now, prolonged dollar weakness would erode their appeal over time as it reduced their monetary value.
"They may be safer buying Treasuries than stocks, but they are not safer from a currency perspective. A dollar, whether it is invested in Treasuries or stocks, is still a dollar," said Adam Brown, co-head of U.S. Treasury trading at Barclays Capital in New York.
Saturday, November 25, 2006 9:07:17 PM
Anonymous said...
Gold Falls From Highest in Nine Days on Concern IMF May Sell
Will Foreign Institutional Investors use this as an opportunity to diversify out of US Treasury?
Saturday, November 25, 2006 9:36:19 PM
Anonymous said...
What is the chances one of the Federal Reserve governor will make a statement like this next week to slow down the Dollar free fall?
"The financial markets perceive that the Fed is now done with the tightening cycle and now expect an easing at some point in 2007. Although we expect core inflation to moderate going forward, we believe that the currently elevated rate will keep the Fed from lowering interest rates despite signs of slowing economic activity. We expect that the Fed will keep the fed funds rate steady at the current 5.25 percent through 2008.
Saturday, November 25, 2006 9:56:58 PM
FlyingMonkeyWarrior said...
Found This Richard, Thought of you.
Russia Proves 'Peak Oil' is a Misleading Zionist Scam
http://tinyurl.com/64vzs
and this.
The Myth Of Peak Oil
http://tinyurl.com/bd8q4
found them here www.rense.com and
http://byronw.www1host.com/
Saturday, November 25, 2006 10:26:34 PM
Anonymous said...
Lol! Is your toilet clogged??
It's all the fault International Zionist Plumber Conspiracy.
So Batman, riddle me this---if them evil Jews were so powerful, why didn't they make lots of oil under Israel?
Saturday, November 25, 2006 10:33:08 PM
tom said...
The propaganda machines are starting to ratchet up the BS.
Her are some well known facts from the Mogambo Guru
"And China's demand for oil? Soaring! In fact, oil imports literally jumped off the charts in 2005 - up 45%! More than 3 billion people in China and across Asia are coming out of the dark ages ... joining Western society ... building homes ... installing modern plumbing ... buying cars ... tasting new foods ... having their desires awakened ... and consuming natural resources like never before! Believe me: When almost half the total population of the entire world suddenly begins demanding a scarce natural resource, you can count on prices shooting for the moon. Here's a little hint: In only ten years, with demand increasing at 45% a year, China will be using 41 times more oil than it does now right now! Hahaha! Ten years!"
Saturday, November 25, 2006 10:40:44 PM
FlyingMonkeyWarrior said...
HEY,
I DID NOT WRITE THE ARTICLE!!!! I JUST POSTED IT FOR RICHARD TO SEE.
PA LEAZZZZE, TAKE A VALIUM.
Saturday, November 25, 2006 10:41:48 PM
Anonymous said...
A financial crisis in China would harm its economy, decrease China's purchase of U.S. exports, and reduce China's ability to fund U.S. borrowing, particularly to cover the U.S. budget deficit.
An economic crisis in China has the potential to raise U.S. interest rates, thereby placing major additional cost on U.S. businesses and individual consumers and producing dislocation in the U.S. economy.
It also could exacerbate Chinese domestic political tension in an unpredictable fashion. This is why the condition of China's financial system is of concern to the United States.
Saturday, November 25, 2006 10:50:25 PM
Anonymous said...
China has never revealed the exact composition of its foreign currency reserves, but market speculation suggests at least 70% is in dollars. With Chinese reserves having recently topped $1 trillion, a move away from the dollar could have significant implications.
Saturday, November 25, 2006 11:11:32 PM
uknowwhoiyam said...
See: http://tinyurl.com/yjwswo
Looks like Keith got all bent out of shape (I have to admit that lubricant comment was ROTF hilarious) and threatened to have his flying monkeys attack another blogger's blog.
Shame on you, Keith.
Sunday, November 26, 2006 2:07:53 AM
bubble_watcher said...
The "Family Guy"!
:P
Sunday, November 26, 2006 2:20:16 AM
Anonymous said...
Here is something from Serin's inlaws:
http://tinyurl.com/yffzov
Sunday, November 26, 2006 3:03:43 AM
kilobar said...
Wow! Greg Swann is talking serious trash about this blog and Keith. It's practically libelous.
Sunday, November 26, 2006 3:40:25 AM
Erion Shehaj said...
The majority of the bubble talk usually refers to areas that in the last five or six years have had insane appreciation like certain cities in California, Phoenix etc. These areas were appreciating at a steady rate of 25% per year, EVERY YEAR! At that rate, it has to deflate at some point. No one wants to buy a San Francisco Apartment for 13 million dollars! One thing that the bubble talk on TV has done however, is to change the psyche of the buyers that have gotten picky and sometimes arrogant since CNN has been telling them it is a buyer's market.
Check me out at http://signaturehouston.blogspot.com
or
http://www.signaturehouston.com
Sunday, November 26, 2006 7:20:56 AM
Anonymous said...
From http://www.boiseblog.com/
Top 10 Reasons Why Realtors Aren't Viewed As Professionals
They hand out refrigerator magnets and calendars.
They don’t put flyers in their flyer boxes.
They bulk-mail ghost-written newsletters with recipes.
They have “Million Dollar Producer” license frames on their fancy cars.
They brag about being “#1” and having the biggest “team”.
They don’t have a website/you can’t find their website/their website requires registration.
They focus on “closing the sale” instead of informing and advising.
They have memorized "scripts" to overcome objections.
They spew “think positive” talk as though that will cause a buyer to pay more or a seller to take less.
They often have less training than your barber, cosmetologist, hairdresser, or esthetician.
Sunday, November 26, 2006 7:49:19 AM
Anonymous said...
The central bank has set the yuan central parity rate at a record of 7.8526 to the dollar, according to the National Foreign Exchange Center.
The rate, published on the official Chinamoney website, compares with the midpoint of 7.8596 set the previous trading day.
Sunday, November 26, 2006 9:31:28 AM
Anonymous said...
Global Insight predicts that the euro will rise to $1.40 during 2007, implying that sterling will break through $2 and stay there.
Sunday, November 26, 2006 9:52:38 AM
keith said...
uknow - see my post on the disgusting and creepy greg swann.
it's war.
Sunday, November 26, 2006 11:50:33 AM
beebs said...
Fox and Friends Sunday Nov 26th. Some real estate bimbo named Kendra? stated that the demand for second homes and vacation homes was going to explode due to the demand from the thirty eight million baby boomers, who will be paying cash for the homes.
Jeebus wept.
beebs
Sunday, November 26, 2006 2:12:01 PM
Comment Deleted
This post has been removed by the author.
Sunday, November 26, 2006 3:05:49 PM
Richard said...
"uknow - see my post on the disgusting and creepy greg swann.
it's war. "
Not because I like you Keith - but because I fight the good fight...
I posted on your defense on that thread.
Sunday, November 26, 2006 3:39:10 PM
Anonymous said...
test
test
Sunday, November 26, 2006 4:14:03 PM
Anonymous said...
that kendra propaganda is from the trump apprentice realtor girl
what a dumb bitch
Sunday, November 26, 2006 4:27:29 PM
Anonymous said...
Richard you must have gotten deleted over at greg swanns blog
Sunday, November 26, 2006 4:27:51 PM
Richard said...
Bork you gotta c this!!!
http://www.freeonlinegames.com/play/1390.html
http://tinyurl.com/yxvwog
Sunday, November 26, 2006 8:23:36 PM
Anonymous said...
Fisher said that an inflation gauge relied on by the Fed (the index for core personal consumption expenditures) was malfunctioning four years ago.
This moved then Fed governor Ben S. Bernanke (now chairman) to deliver a dense and noteworthy speech, "Deflation: Making Sure 'It' Doesn't Happen Here," on Nov. 21, 2002.
Greenspan and party managed to work the Fed funds rate down to 1%, providing considerable fuel to the inflation in commodity and home prices over the past four years.
Fisher concluded that this looseness in the money supply was a mistake and that it was caused by faulty statistics. The Fed's favorite measure was underreporting inflation.
If nothing else, Fisher's diagnosis of the recent past is yet another good reason to dust off the works of economists from the Austrian School, particularly Friedrich Hayek's
He demonstrated that it was the divergent movements of different market prices during the business cycle that counted. Even a casual review of prices for different commodities, goods and services, as well as assets and the value of the dollar, would have enabled the Fed to avoid its mistake.
This, of course, doesn't provide much comfort for those who are now trying to unload real estate after being enveloped in the Fed's liquidity-driven housing bubble.
Sunday, November 26, 2006 9:33:16 PM
Richard said...
November 26, 2006
Death Knell of the US Dollar...
by Clive Maund
The dollar plunged with startling ferocity late last week, driven by heavy selling. This was very bearish action that signals panic, and the probable onset of a severe downtrend. A break below the crucial support at 80 on the dollar index is expected to mark the transition from a clandestine unloading of dollar assets to an all-out stampede to "get what you can for them" before it's too late.
Sunday, November 26, 2006 10:14:04 PM
Anonymous said...
``Hong Kong is so integrated with China that if there's a significant upward movement in the yuan, then the Hong Kong dollar would have to follow,''
Hong Kong Dollar Link to U.S. Shows Strain as Rate Gap Widens.
After gaining 5 percent since July, 2005, China's currency now trades at 7.8525 per dollar, closing in on the Hong Kong dollar rate of HK$7.7800.
Sunday, November 26, 2006 10:20:02 PM
beebs said...
Host Jonathan Bellusa is a Partner of Diablo Funding Group, Inc. in San Ramon Ca. He has been in the mortgage Lending Industry helping people buy homes, establish equity and save money.
I was listening to them today. They warned sellers NOT TO CUT the asking price because that would destroy the housing market. Wowser!
Sunday, November 26, 2006 10:28:42 PM
Anonymous said...
"One Country, One Currency"
Will a Stronger Yuan and Stronger Hong Kong dollar lead to a Weaker US DOLLAR?
On November 13th the yuan hit a new high of 7.864 to the dollar, putting it within a whisker of the Hong Kong dollar's trading band of HK$7.75-7.85 against its American counterpart. This has prompted some market speculation that as the yuan approaches parity with its traditionally stronger neighbour, which looks possible by the end of the year, Hong Kong will abandon its dollar peg and instead tie itself to the yuan.
Some say that such a marriage would be one made in hell.
However Hong Kong has paid a high price to maintain its dollar peg. Because interest-rate arbitrage takes place under a dollar peg, Hong Kong’s monetary policy is in reality left up to the Federal Reserve Board of the United States.
This is not a huge problem if there is strong synchronization between the business cycles of Hong Kong and the U.S., but unfortunately, in recent years, this condition has not been met.
Hence, in the long term, if ties between Hong Kong and the Chinese economy strengthen further and the international position of the yuan enhances in line with the rise in China’s power, it would be more natural to peg the Hong Kong dollar to the yuan, and finally unify the two'
In fact, Mr. Donald Tsang, Hong Kong Special Administrative Region Chief Executive, said for the first time during a radio interview in May this year that on the condition that the yuan’s convertibility is realized, the Hong Kong dollar may be pegged to the yuan instead of the dollar in the future.
If the Chinese economy continues to grow at the pace that it has over the past quarter century, the unification of the two currencies may be realized sooner.
Sunday, November 26, 2006 11:47:44 PM
Anonymous said...
THE strengthening yuan passed a new landmark yesterday when it became more expensive than the Hong Kong dollar in the Chinese mainland banks' foreign-currency exchange system.
Traders said it was a sign the yuan would soon surpass the Hong Kong dollar in value on the currency market.
Sunday, November 26, 2006 11:51:07 PM
Anonymous said...
The Fed Bank Goal; One World Currency.
USD is going down. That is the plan.
Sunday, November 26, 2006 11:54:45 PM
keith said...
Anon with the currency updates - I hear you but don't post every article you see
hit the censor button. You're hogging the blog
Monday, November 27, 2006 12:00:36 AM
Richard said...
Very possibly why Bush is headed to Jordan in the next few days: to meet King Abdullah and Washington's Iraqi puppet Maliki. When the King of Jordan warns to THREE civil wars in the region next year, it is something that one doesn't ignore. Good for gold, and oil, bad for the USD at the very least.
Monday, November 27, 2006 12:59:08 AM
Anonymous said...
A lot of real estate bulls have placed their hopes for a spring rebound on the expectation that interest rates will start to come down again. If the dollar continues to fall, as it did on Friday, the chances that the Fed would lower rates will continue to diminish. If the Fed is given a choice to save housing by lowering rates or saving the dollar by raising rates, it will pick the latter, always.
Monday, November 27, 2006 2:42:40 AM
Richard said...
http://www.financia lsense.com/ editorials/ conrad/2006/ 1122.html
"So in conclusion, the trade deficit is very serious, especially in the long term. It is part of the hollowing out of American production and wealth creation. As a consequence of borrowing to buy those foreign goods, we have sold off some of our future profits as we have to pay interest on Treasuries and dividends on stock holdings, with the result that the dollar will weaken. Foreigners have continued with the deadly embrace of extending more credit to us, so we appear wealthier than we are. But should they try to extricate themselves from their dollar holdings, the consequence will be a devaluing dollar. Even if we head toward a massive economic slowdown 1929-style, a serious deflation is unlikely because of the negative position of our trade deficit. A weakening dollar will be supportive to gold and precious metals in the long term."
Monday, November 27, 2006 3:30:09 AM
Anonymous said...
GOLD BABY!
Look at me now!
Monday, November 27, 2006 5:30:48 AM
Anonymous said...
Any good foreclosure websites out there?
thanks.
Monday, November 27, 2006 6:15:58 AM
Eric said...
Housing is a market plain and simple just like other markets- just like there was overbullishness in some ares where there where there was a large amt of land waiting to be developed and many amateur undercapitalized "investors" and an unrealistic income/housing price ratio in working areas (ie phoenix fitted the bill on all of this), right now there is the opposite going on, over bearishness- the housing market is not going to simply fall apart in other areas- not everyplace has been like some areas of arizona, nevada, or florida- and of course even in those areas some properties are always over or even underpriced..
When the stock market was around 9000 everyone was overbearish saying it wont come back, now its at new highs
Many compare housing to the internet bust, there is a major difference, just before the internet bust everyone including grandma was thinking these stocks that never made any money would go up forever, now in housing everyone is saying it can never go up again, all the news articles are incredibly bearish, so in this regard it feels more like a bottom then a top (of course there are individually overpriced houses down the block in arizona etc, thats not what im talking about)
One example of the overbearishness is the statistic that all the media had hyped , median prices down about 10%- very few looked at the numbers in depth, actually the mix of properties sold over the last year was skewed more towards the south then the west and northeast bringing down the actuall median price deceivingly, in reality, no region as a whole was down that much, just brought this up as an example of dont believe the hype in any situation on face value..
Oh and not everyone in an arm or who owns there house is on there last dollar and will simply sell it 25% lower...not gonna happen..
I remember when oil prices were under 10$ a barrel , there was such bearishness in the oil futures market, similar to housing market now, food for thought.. there are many capitalized smart people that are very happy to be buying a plce to live now when it is more favorable to the buyer.. you must see through your own bias to see market reality, in my opinion right now , the market is overly bearish nationally and time will indicate that this wasnt such a bad time to buy an attractively priced home now (No im not talking about buying a 90% investor occupied condo on the outskirts of vegas- that would never be my first choice anyway, and has little to dfo with buying a home in Chicago or austin or wherever...
Monday, November 27, 2006 1:37:32 PM
Anonymous said...
chicago ?
the prices are still way ahead of wages and rents here. inventory is high, sales are slow and the building continues.
the spring sales will reveal the true state of the market in chicago.
Monday, November 27, 2006 2:54:05 PM
kilobar said...
"Oh and not everyone in an arm or who owns there house is on there last dollar and will simply sell it 25% lower...not gonna happen.."
Foreclosues are making new highs and increasing in my state. Economists are expecting the trend to continue higher. When the ARMs reset, it will only accelerate the problem. The issue isn't whether people with ARMs are going to SELL at a price thats 25% below what they purchased it at. The issue is that many will be FORECLOSED.
Monday, November 27, 2006 2:57:43 PM
Anonymous said...
BTW i am talking about the city of chicago not chicagoland. chicagoland stretches noth to wisconsin, south to I 80 and west to the fox river.
if you could see the numbers for just the city of chicago it would look bubbleishious.
Monday, November 27, 2006 2:59:32 PM
Anonymous said...
Hi All,
As to Arms, yes some will foreclose of course, some people did get over there heads and thats true in any market- but anecdotes arent the issue, the fact is that I think i read that one in 1000 or so homes is in foreclosure (just from memory so correct me if im wrong) so even if that double snationally is that going to crash the market in Iowa or wherever? Just food for thought
And as for chicago , thats one area Im very familiar with having owned homes and investments there for over twenty years- my view is that in general (note is say in general) the market there was much more slow and steady then in nevada etc, there was GENERALLY no big bubble to begin with .. of course there were some overpriced cheaply built homes in bucktown etc sold to yups with no construction experience that were overpriced to begin with and wont go for 900,000 anymore... but on the other hand our gold coast condos have been going up at 5 or 6 % or so a year and continue to be flat to slightl higher even now.. it depends on the property location, all comes down to supply and demand, and these things never went up 25% a year like in las vegas, totally different situation ( and also rents pay the mortgage cost 100%) wheres the bublle there... on the other hand when you had cookie cutter condos selling in west humboldt park for the same price as astor street, well, they became more vulnerable, id certainly agree, but long term thgat area has well been a great palce to buy, we sold our multi unit for over 4 times we bought it over 12 years time.. of course we bought in a gentrifying area (ukraniian village) maintaned the property and had positive cash flow and very nice happy well treated tenats over the years, so again , it all comes down to supply/demand and proper property selection...
Even in florida I would guess there are individual proplerties that are a good deal now if you know where to llook and buy, that goes in any market..
Im only speaking from my 20 years plus experience, and am just trying to have an even keeled opinion about things... I d be the frist to agree with many here that Phoenix for example had been a risky place to buy over the last few years due to overspeculation by ubndercapitalized amateurs, a housing price / income ratio way out of whack to0- statistically phoenix was NOT a high income area...
Now contrast phoenix with Aspen.. housing is still booming, guess what, its all supply vs. wordwide demand , and most people there have NO mortgage at all, just trying to make the point that unemotionally you have to consider that all regional markets are not the same, and the supply demand picture and income /housing picture is totally different in ausitn then in phoenix or las vegas... and if you look at the inventory trends recently in areas outside some of the newsworthy markets like fl, az , or ca, it just isnt all doom and gloom, as much as some would hope for for whatever reason- I personally dont care either way, just calling it unemotionally as i see it ( and I was an institutionally trader for ten plus years so thats my particular trainining in how to look at markets) thanks for the thoughtful discussion,
Monday, November 27, 2006 3:25:55 PM
Anonymous said...
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Monday, November 27, 2006 4:34:20 PM
Mammoth said...
So the news is that housing inventories are down. Does this really mean that housing has already hit bottom, as the MSM is promoting?
I do not think so, but being rational HP’ers, we should not jump to conclusions.
Does anybody here have the time to do some research and provide a chart of the average monthly rate of sellers putting their homes on the market?
Without the facts, one may assume that the declining inventory of home listings has more to do with the season - i.e. people are now deciding to wait until after the holidays before putting their home on the market - then with a market rebound. If this is indeed the case, then inventory will spike in the spring, possibly causing a housing panic.
Can anyone dig up this data?
Thanks,
-Mammoth
Monday, November 27, 2006 4:43:59 PM
Mammoth said...
Since September I have written some posts here about the new supervisor at work who just moved up here (Seattle area) from Florida. Bought a ~$400K home, and luckily managed to sell his old one back in Coral Gables.
Well, we got a rare November snow here yesterday & last night; less than 4” though, and this shmuck couldn’t even make it into work!
WTF - paying $400,000 for a home that you are stuck in every time it snows?
Everybody but this guy managed to make it in today - Ha ha ha LMAO!
-Mammoth
Monday, November 27, 2006 5:05:06 PM
eric said...
Hi Mammoth,
Its nice to hear someone saying "well see" etc to the housing market rather then the sky is falling all over the US forever cause housing turned in Fla., its refreshing to hear some reason and rationality
On that not check out www.housingtracker.net... it gives the actual week to week change of inventory and median price over many metro areas and its free w/o ads or anything
On that note , youll see that most of the areas are showing declining ivnetories now, this wasn the case about a month or so ago, its changed since then, the question is as you say the spring, some feel ivenetories vs. sales will go higher, im personally thinking more likely inventories will generally continue to shrink with the nice yield drop on the 10 yr note recently and the fact that many in areas other than florida etc will finally realize that prices probably are bottoming out where they are, of course I might be wrong but thats my educated guess..
I hope you find that site useful and one basis for reasoned thought...
Monday, November 27, 2006 5:30:23 PM
kilobar said...
We need to look at the trend longer term. A short-term bump lower in inventories doesn't tell us anything until we get several consecutive months of data. Also, we don't know if those homes were simply taken off of the market because they weren't selling. We also don't know if any of the current sales are short-sales before they are about to go into foreclosure. IMO, distressed sales are important.
That's the problem with analyzing the RE market. The data is fairly vague and mostly is sourced from the MLS or NAR, which is biased.
Monday, November 27, 2006 6:44:58 PM
eric said...
Kilobar,
I generally agree with what you say, however, supply is supply and if people are taking homes off the market rather then sell them at a lower price that is still supply demand at work and is still shrinking supply
Also I agree that you have to be careful of bias with numbers, I dont particularly think that MLS is bias one way or another , simply a tracking system for the most part.. there was some bias however i think in the constant media headlines shouting median home prices off about 10% nationally , when most reporters hadnt the objectivity time or intelligence to dig into those numbers to see that most homes sales last year were skewed more to the south rather then the west or northeast , thus bringing down the median number (homes are typically cheaper in the south) on average when no individual region was down that much at all..
Finally , note the bearishness of builders in general, the fact that they are cutting back on projects nationally actually will reduce potential supply, and is therefore a support of housing prices when many people are saying this is doom and gloom as well...
Finally my main point all along is that you cant look at the fact that some investor occupied bldg in las vegas or some overbuilt area like phoenix where there is rampant specualtion and medicore income comopared to price is and indication that the sky is going to fall in any hometown usa, thats not likely..
I would agree that we must look at long term trends rationally, and remember that the prevailing crowd bias is usaually wrong in any market, so those who are looking at a recent one or two year horizon of housing without the benefit of long term experience or analysis to say that thats it for housing have no greater chance of being right in my opinion then those who say we are bottoming out now in general...
Monday, November 27, 2006 7:10:26 PM
kilobar said...
I think this RE bubble is very different from the others in that the variable rate financing will have a much more significant impact on future prices. Supply and demand analysis just doesn't take into account the resetting ARMs and we've only seen the tip of the iceburg with those.
Considering most people (this is an assumption, but I think its accurate) bought with an ARM because they couldn't afford a fixed, then the adjusted ARM rate will be comparable with the then initial fixed rate they couldn't afford in the first place. Many people will easily be paying 20% to 50% more than they can afford when the rates adjust. Even if we assume they can afford it and stay afloat, new buyers are priced out since they can't afford to buy because the low ARM rates are no more.
I just don't think traditional supply and demand analysis is enough to predict this market. There has been an enormous amount of irresponsible and predatory lending around and it will inevitably affect market prices.
Monday, November 27, 2006 9:20:30 PM
foxwoodlief said...
So do many HPers think the Pope's visit to Turkey will end badly? What do you think of this quote, "Members of the Lashkar-e-Toiba movement in Pakistan called for the pope to be killed unless he recognised that Islam was a religion of peace." Kind of contradictory when you call for someone to be killed because they think you are violent and you say you are for peace.
Still, was it the third Fatima prophecy that predicts a pope and his enterage will be killed by soldiers. Is this the catylst that will spark all the bad things predicted for 2007? Will this make the price of a house irelevant?
Tuesday, November 28, 2006 12:14:21 AM
AnalysisGuy said...
I just released my report on Orange County
Daily Home Price Analysis
Tuesday, November 28, 2006 12:30:07 AM
Professor said...
Folks, the economy is likely already in recession, although with hedonic productivity figures and dubious price deflators, we might never see an "official" statistical recession, i.e., two consecutive quarters of negative real growth. Instead, I will not be surprised if we see many "non-consecutive" real negative GDP quarters for years to come, as the post-bubble real GDP growth trend slows from 3.5% in '00 to 2.5% today and eventually to 2% and below by late decade and through the early to mid-'10s.
We have already seen a full 100 bps of slower growth since '00, and I expect that another 50 to 100 bps of slower growth is on the way for the foreseeable future, reducing overall real growth of the US economy by 4-5% to 9-10% over the next 8-9 years. This sounds benign but is more like a "slow-motion depression".
Roubini is one of a handful of economists who "gets it".
Gary Shilling is another.
Tuesday, November 28, 2006 1:30:31 AM
eric said...
kilobar,
yes the arm issue is the million dollar question- of course many savvy and capitalized buyers have used arms too, the question is what is the price shock risk to overleveraged people and how many are there that will simply go belly up- my opinion is that it wont be as dramatic as you may think especially with fixed rates on the long end coming down, but who knows you may be right?
And to the next poster who mentions slower economic growth there are two sides to that, the positive side being generally lower interest rates...
Tuesday, November 28, 2006 1:39:32 AM
Anonymous said...
chicago is a diverse market for sure and i think the gold coast is a no lose but the majority of chicagoans can no longer afford to purchase a home....or live & pay taxes in the one they allready have.
Tuesday, November 28, 2006 1:43:27 AM
Anonymous said...
Keith and Borka,What do you think is the best investment now ? Gold Stocks ? or physical gold bars :)? Just plain ol' CD's ?
Tuesday, November 28, 2006 2:16:13 AM
Anonymous said...
in nevada etc, there was GENERALLY no big bubble to begin with .. of course there were some overpriced cheaply built homes in bucktown etc sold to yups with no
*** Try looking in Eddison Park. What a joke $400,000 gets you 1,000 sq ft ranch and a one car garage! That's not overpriced?
thgat area has well been a great palce to buy, we sold our multi unit for over 4 times we bought it over 12 years time..
*** Right, no bubble in Chicago..................
Tuesday, November 28, 2006 2:25:56 AM
eric said...
Anonymous,
Youre making an assumption without all the facts- the reason we made that moneyon our multi unit was because we bought into what was considered a very dangerous area and maintained it for over 10 years (we even lived there ourselves the firs 6 years until things changed- we got paid for our RISK- again not all properties and or situations are equal- you took my sentences out of context- i aslo said our gold coast condos went up about 5% a year in the same post (ie less risk) and THATS what i meant when i said wheres the bubble ie 5% a year and rental income pays 100% of the mortgage cost is no bubble vs 25% a year in Phoenix with half being sold to investors where rents dont cover half the mortgage..
so please dont let your bias about a bust all over the place effect reasonable discussion thanks...
Tuesday, November 28, 2006 2:45:26 AM
eric said...
PS I also mentioned that cookie cutter condos bought recently in west humboldt park recently for the same price as astor street WERE vulnerable, again you took my posting out of context which is why its difficult to have a reasonable discussion sometimes in a forum like this... cheers
Tuesday, November 28, 2006 2:47:53 AM
Anonymous said...
none of them dogs worth more than 125,000 cash, some depression to splice giganticism and rapid growth genes into the food supply system and bacterium splices into the sewer water to methanolic gasolines productions, no problems at all, but for the fusion smelting common dirts into synthetic papers, plastics,glass, and composite bulding products,cloth, more stuff?? what dollar value?
Tuesday, November 28, 2006 4:05:20 AM
Anonymous said...
forgot the methods of life span average increases must be thousands of them
Tuesday, November 28, 2006 4:07:37 AM
Anonymous said...
eric said...
PS I also mentioned that cookie cutter condos bought recently in west humboldt park recently for
---------
Again, come back to look around Edison Park, Mayfair, Norwood Park, Big Oaks. You'll see teh bubble.
When working clas houses in working class neighborhoods can no longer be bought by the working class, there is a serious problem.
I called on a ranch in Big Oaks 3 days ago. I knew it was going to be on the high side, maybe $450,000, maybe more. The agent told me the price $695,900! I busted out laughing. She started laughing too.
We are all happy you make some money. I just want a nice home in a nice hood without spending 50% of my salary. That is considered a bubble.
Tuesday, November 28, 2006 5:37:18 AM
Anonymous said...
The Chicago Suntimes editorial section claims that the average Chicagoland SFR is $250,000. The Chicagoland area is Chicago-Napperville-Joliet and all in between. My work forces me to live in Chicago. Here is what I can get for $250,000.
Any Chi-towners tell them which one you want to raise kids in?
Realtor.com Chi $250,
Tuesday, November 28, 2006 5:42:39 AM
beebs said...
Reno is Supremo!
Check it: http://tinyurl.com/y4d868
beebs
Tuesday, November 28, 2006 6:28:44 AM
Anonymous said...
held NEW YORK LAND THAT WOULD NOT SELL AT A QUARTER ITS TAX ASSESSED VALUE FOR 14 YEARS, FINALY TOOK A THIRD OF ITS TAX ASSESSED VALUE, TO AVOID THE COMPOUNDING YEARLY TAXES THAT WOUND UP BEING 20% OF THE FINAL SALES PRICE, DUE OUT YEARLY. THE NEW OWNER PAYS LESS TAXES, NOW, DUE TO ITS REASSESSED VALUE, MORE MONEY IN CDS BUT THAT SCREW JOB RATES GO DOWN IN GOOD YEARS AND DOWN IN BAD YEARS, WHY DO YOU THINK THEY INVEST IN REAL ESTATE, TO AVOID THE LOW RETURN, FROM GOV,SAFE MONEY INVESTMENTS, OR THE SCREW THE SAVERS COMPANY!!!,
Tuesday, November 28, 2006 8:24:02 AM
Anonymous said...
A HOUSE IS A HOME, EVERYONE NEEDS ONE, AND OUT COME THE VULTURES
Tuesday, November 28, 2006 8:26:38 AM
Anonymous said...
SCREW YOU TO
Tuesday, November 28, 2006 8:27:39 AM
Anonymous said...
talk about putting the boot on the neck of the Chicago RE bubble!
Get ready to pay
If you own a home or property in Chicago, it's probably worth more -- maybe two or three times more -- than it was three years ago, according to the Cook County assessor. And you'll be taxed accordingly.
Tuesday, November 28, 2006 12:25:07 PM
eric said...
Hi anonymous,
I hear what your saying about affordability- Im not trying to be heartless about that just looking at major cities as a whole to see if that means compared to elsewhere things will collapse from here, and i just wouldnt bet on that, as i think chicago is somewhere in the middle as to price/incomes if i recall..
you bring up an interesting point about where you can buy is less desirable.. thats exactly what we did 20 plus years ago we bought west of western ave cause thats what we could afford, so yes we made some money, but there was no silver spoon in my mouth- i fixed toilets and dealt with gangs for 10 or more years when most of my friends were renting downtown and spending there money on more expensive dinners then i could afford at the time
I dont know much about edison park etc, but we dont set prices supply and demand does, and theres often someone richer then you or me, look at nyc a condo averages over a million and people said it was unaffordable at 500k...
all im saying is that over time if at all possible, it is most likely statistically probable that your situation will be much better if you own then rent, thats always been the case, and i would hesitate to listen to johnny come lately housing doom and gloom people to tell you otherwise who dont have a long enough experience time frame to see the long term probabilities.. if you had bought in manhatten az or fl for 10 or 20 years youre net worth is fine, the same case will exist 10 years from now in chicago id bet..
good luck
ps i do agree with the taxation issue.. cook county is very wasteful and hosing us all with high taxes - that could definitely depress things if anything can..
Tuesday, November 28, 2006 12:52:22 PM
Richard said...
Sun Nov 26, 5:32 AM ET
http://news.yahoo.com/s/afp/20061126/bs_afp/australiachinaindiaeconomygrowth
&printer=1
Western nations must prepare for a future
dominated by China and India,
whose rapid economic rise will soon fundamentally
alter the balance of
power, former World Bank chief James Wolfensohn
has warned.
Wealthy countries were failing to understand the
impact of the
invevitable growth of the two Asian powerhouses,
Wolfensohn said in the
2006 Wallace Wurth Memorial Lecture at the
University of New South Wales
at the weekend.
"It's a world that is going to be in the hands of
these countries which
we now call developing," said Australian-born
Wolfensohn, who held the
top job at the global development bank for a
decade until last year.
Tuesday, November 28, 2006 12:56:34 PM
Hmmm said...
Housing median prices down avg 3.5% while sales unexpectedly rise in october..
This latest info doesnt lead me for one to think that housing collapses nationally from here, price is a lagging indicator while sales/ inventory is aleading indicator
bearishness/bullishness is always peaking at the top or bottom of a market, ie internet stocks can only rise (at the top of that market) or run for the hills housing will keep going down it cant ever do well again (now)
Lets see, alan greenspan has mentioned that he feels the worst is over for housing, the new fed chairman says today in a speech that he sees signs of stabilizing housing, builders are super bearish(actually cutting back on new projects which actually lowers new supply coming over the next couple of years) and supply in most areas is starting to come down (the country is bigger then ca or fl or nv) while the moving average of mortgage applications over the last month or so is heading up (both refi AND new home), and finally there is a constant stream of bad news touted about the coming collapse in housing from here ( but mostly not by those whove actually made money over many years and recessions in housing)...grandma is saying to stay away from housing now just as she was the last buyer of internet stocks a few years ago..
In my humble opinion, the smart play for housing nationwide to collapse has alredady mostly come and gone along with the play of rising interest rates ( futures actually predict a 70% or so chance for a fed rate cut in MArch, and the 10 year has gone down well over 1/2 percent in yield recently with unemployment near lows)
So why should we all panic about housing in general ( with the exception of those who made the risky move to but into non revenue generating investor owned areas at the top of the market in scottsdale or las vegas or wherever)
Im sure many here will point to the anecdotes of those who bought places they couldnt afford with teaser arms etc, yes there are people like that but they truly are a significant minority of homeowners out ther (excluding california etc which often goes boom /bust) so if one in 500 homes goes into foreclosure nationally how will that collapse thw whole market , dont see it ...
Tuesday, November 28, 2006 6:21:05 PM
Anonymous said...
Was this one posted from the NYT?
http://tinyurl.com/tax7q
Tuesday, November 28, 2006 9:39:38 PM
FlyingMonkeyWarrior said...
Jihadists Attack Vatican Web Site
'Electronic Jihad' Declared in Cyberattack on Vatican
Andrea Kirk Assaf reports this story exclusively for NewsMax.com.
As thousands of Turks took to the streets to protest the ongoing visit of Pope Benedict XVI to their country, the Church was already dealing with another threat from angry Muslims – a cyberattack on the Vatican Web site.
An appeal to Jihadist hackers was sent out through Web forums linked to al-Qaida and was posted on two of the Web sites that publish messages from the terrorist organization.
"The leadership of the electronic Jihad has decided to undertake a grand attack against the official Vatican site following the insults by the Pope against our Prophet," the statement read in Arabic, referring to remarks the Pope made in a September 12 speech.
"With Allah's blessing, the attack will succeed thanks to the help of our brothers if we all attack simultaneously. We ask all our brothers to be present at the hour of the attack for a joint action, because they (Catholics) have struck our religion. They must be fought and deserve to be attacked and not only on their Internet site.”
Threats against the Vatican Web site and the Catholic Church in general began shortly after the Pope’s speech, in which he quoted a 14th century emperor’s description of Islam as a religion spread by the sword.
url;
http://tinyurl.com/un5ht
Tuesday, November 28, 2006 10:53:14 PM
foobeca said...
The economy is crashing
http://tinyurl.com/y3m3wb
Tuesday, November 28, 2006 10:53:56 PM
Anonymous said...
I decided to play a joke. I called up the local C'''ex development that isn't selling.
I told them that my name was Juan Valdez with the best "Spanglish accent". Rick Ricardo would be proud. I told them I wanted to buy one of their places. The guy said great. I asked him if I could put 3 families in the place. He said that's up to you. He said it might be a little tight, and I told him I want to make triple bunk beds for my "family". Then, I told him that I could pay in cash if he wanted me to bring by a couple of duffle bags in $10 and $20's. He said "Can't you just take the money to the bank and get the escrow company a check?" I answered "Sure".
I then asked him if the other people buying were white. He said he couldn't talk about race due to the real estate rules. Then, I told him I liked big breasted white women, and I didn't care if they had fake "chit". He started to laugh, and told me I would be the hit at the community pool.
I closed by telling him that I would be stopping by later. He sounded happy, like he was finally going to make a sale. He told me he needed a cerified check for the deposit. I told him I could pay in cash, and he said it had to be a check
"No. If you continue to wait, you may never be able to afford to get into the housing market"
= Buy Now or Be Forever Priced Out!
>> I thought after a dead calm summer, things would change - I am baffled.
I think builders are being coached by business coaches, who first and foremost espouse the mantra "NEVER give up!". Apparently neither has had the term "beating a dead horse."
So, being a potential first time buyer , if I buy a starter home now, keep it for about 5 years and then try to sell it, who will buy it from me? That is, according to the NAHB there will be no one left because they were priced out 5 years prior.
Quite perplexing.
BREAKING NEWS!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! CASEY SERIN IS ON CNBC....8AM PACIFIC TIME.... INTERVIEWED BY JANE WELLS
Casey Serin is on CNBC right now!!! God! I hope this guy doesn't get rich from this.
*****FLASH*****
CNBC's Jane Wells just did a feature story on Casey Serin: yes THE Casey Serin.
Coming up later on will be another story by Jane Wells on foreclosure auctions held at courthouse steps.
*****END FLASH*****
So, now that CNBC has found Casey and foreclosure auctions, the time to buy has arrived, right?
opinion right now , the market is overly bearish nationally and time will indicate that this wasnt such a bad time to buy an attractively priced home now (No im not talking about buying a 90% investor occupied condo on the outskirts of vegas- that would never be my first choice anyway, and has little to dfo with buying a home in Chicago or austin or wherever...
Monday, November 27, 2006 1:37:32 PM
Anonymous said...
chicago ?
the prices are still way ahead of wages and rents here. inventory is high, sales are slow and the building continues.
the spring sales will reveal the true state of the market in chicago.
Monday, November 27, 2006 2:54:05 PM
kilobar said...
"Oh and not everyone in an arm or who owns there house is on there last dollar and will simply sell it 25% lower...not gonna happen.."
Foreclosues are making new highs and increasing in my state. Economists are expecting the trend to continue higher. When the ARMs reset, it will only accelerate the problem. The issue isn't whether people with ARMs are going to SELL at a price thats 25% below what they purchased it at. The issue is that many will be FORECLOSED.
Monday, November 27, 2006 2:57:43 PM
Anonymous said...
BTW i am talking about the city of chicago not chicagoland. chicagoland stretches noth to wisconsin, south to I 80 and west to the fox river.
if you could see the numbers for just the city of chicago it would look bubbleishious.
Monday, November 27, 2006 2:59:32 PM
Anonymous said...
Hi All,
As to Arms, yes some will foreclose of course, some people did get over there heads and thats true in any market- but anecdotes arent the issue, the fact is that I think i read that one in 1000 or so homes is in foreclosure (just from memory so correct me if im wrong) so even if that double snationally is that going to crash the market in Iowa or wherever? Just food for thought
And as for chicago , thats one area Im very familiar with having owned homes and investments there for over twenty years- my view is that in general (note is say in general) the market there was much more slow and steady then in nevada etc, there was GENERALLY no big bubble to begin with .. of course there were some overpriced cheaply built homes in b
The people of southern california have experienced a bubble before and I can confirm that they are not over in a year. So all the "this is the bottom" quoted are just the REIC trying to manipulate the market psychology, so they do not lose business. Wake up people! Why would you believe anyone "in the business" This is absolutely not the bottom, it will last for years....at least a few 3-5.
will i get f'cked if i follow all of the above? YES!
Advice: Buy a home NOW! Before the price of pizza goes up!
You know what's funny (or sad maybe) about all this? A lot of people are stupid enough to believe, and act upon this "advice".
More than we think!
HA HA HA HA HA HA HA HA HA HA HA HA!
(catching breath)
HA HA HA HA HA HA HA HA HA HA HA HA!
I have lived in San Diego since '72
believe me...it ain't over!
Actually Nothing has happened yet!
The ocassional 5k reduction (big deal) the place was overvalued by 300k...or more!
Pool or landscaping allowance...nice, but not enough!
Tons of denial here!
I've seen it all before!
It's Deja Vu all over again!!!!
did casey serin write that?
what soes crazy california have to do with the rest of the country.. its always gone boom bust there...
so perhaps it is deja vu--- although that may mean that prices may double or triple there over the NEXT 15 years, as thats what happend after previous busts, or do you know the furue better then others do??????
More Kool-Aid please!
Yes!!!! Bliss!!!!!
Here's my prediction HP weasels -- inflation in '07 is going to average 10% due to the falling USD and oil prices heading back to $80/bbl. Interest rates are going to start heading higher as well, so the NAR advice to "buy now" may not be as dumb as you think.
Please keep these gems coming Keith!
I never tire of "advice" from these bastards.
Nice troll tactic anon. See Keith, I told you they were turds. Every thread has that pasted into it now.
Anonymous Dumbass worte :
Here's my prediction HP weasels -- inflation in '07 is going to average 10% due to the falling USD and oil prices heading back to $80/bbl. Interest rates are going to start heading higher as well, so the NAR advice to "buy now" may not be as dumb as you think.
Guess what dumbass ...
If This happens ...
Prices of houses will drop to 1/2 their current price and that is after the bubblicious gains are removed.
That is one fact totally ignored by the RE whores. Why - Better investments elsewhere with that kind of inflation. Interest = inflation in case you haven't realised that.
It would be the best time to buy, only thing that will prevent me from buying, is if it looks like interest will become 20%.
Oil at 80 a barrel - wonderful, houses in new suburbia 40 miles out from centers of employment are now worth 1/2 from the current 60 a barrel.
NAR's advice was that "Now is a great time to buy or sell a home" That might be the stupidest thing I have ever heard. talk about an oxymoron. Worse yet - why even talk about selling - not like there is any shortage of sellers.
Cool.
Cow_tipping.
Face it, they are trying to take advantage of the young and stupid buyer. Of course it is possible to time the market. Top = not the time to buy. Top = now. Translation: Now is not the time to buy. Greedy a-holes.
Buy a f*ckin' home so my home builder stock goes up and I can cash out my $100 million in stock options before the stock/stock market/dollar implodes.
I need to have at least $50 million in silver and gold to see myself through the Greater Depression.
Basically, they are saying, "F-U, buy a god-damned home!"
Question: Tell me Mr. drug dealer, I hear crack is bad for you, should I smoke crack?
Answer: Yes, now is an excellent time to be smoking crack.
I looked into my local market to see what the headlines were and what the industry folks said during the last crash. The results are quite eye-opening!
What did Realtors say during the last bust?
Soft landing more likely.
Australia and japan and whatever else may have had a 221% run up but we only went 73% ... 2 questions -
National average is 73, that has areas that went down 10% (michigan I believe) and areas that went up 300% FL and CA. Averages dont count for much with that spread. The 300% will crash much more than the 73%.
Next - US has a negative savings rate, japan and europe does not. That defined the soft landing in japan for the last 15 years. So your correlation is irrelevant.
Cool.
Cow_tipping.
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Are there any real comments here or is it all just some annoying a-hole copying and pasting a bunch of crap that's too long to read?
Does priced out forever mean that at some point the price of a house will be so high that no one will be able to afford a house no matter how exotic the loan. And, if, at that point in time you don't have a house you will never have a house. What will all the new families do? Live in card board box hovels under bridges? Priced out forever seems a bit of a stretch. Forver is a long time.
A real estate agent came my door (that was a sign for sure of bad times) and said, "It's a great time to buy a house!" I couldn't contain myself. I said, "It's a terrible time to buy a house!" and I listed the reasons. I then assured the agent that this problem was not of her making and I was not angry with her, then I sent her on her way. My husband looked at me and said, "You are my hero."
anon 12:38:56,
in the future, maybe we should hang a sign at the door that reads:
"an hp'er lives here"
You are my hero too.
Someone needs to find out what Charlatan Cheats is buying or selling.
Cool.
Cow_tipping
"GOOD NEWS, THE WORST OF THE BUBBLE IS OVER, BUY BUY BUY , FLIP FLIP FLIP, HAPPY DAYS!!!!!
Tuesday, November 21, 2006 9:59:33 PM"
Damn dude, stop spamming already!!! We get it, you are a Realtwhore shill, stop, enough!!
Freakin' loser...
The previous blog comment approximates 500+ doc pages. Could these comments please be moderated? And, would someone please start their own blog to data dump?
It's a new paradigm, and everybody who doesn't buy, now, will be priced out forever. Anybody who does buy will be rewarded with a lifetime of riches, as their property will continue its 30% yearly price increase.
Renters, and anybody born in a future generation, will not be able to afford a $10,000,000 starter home in 15 years. They will live in tent cities, and Hondas.
This asset bubble is different than all of the others - it will never slow down, or pop. The gains are permanent.
Maybe I'll go do the same spam attack on Greg's site. Maybe he'll stop then.
The market is remaining irrational longer than I'm remaining solvent. I have January put options on house builders and mortgage lenders but they keep going higher.
I hope the housing market breaks for failing to bend.
January would ahve been too agressive to short Homebuilders stocks anyway. I'd aim at mid next year. Maybe KB and KHovninian might pan out in Jan depending on your strike price. if you're looking at the ones that are in better shape like centex or shea, pulte etc you may look at 07 july-Sept. Anyway just a hunch - no real research behind it.
Gold is a good one to be long in as you have mentioned and its good for the next year or 2 in fact, hope that makes up for any HB puts for you.
In the mean time, I have had houses in Sac drop in value for far more than my house is worth, and a heck of a lot more than I owe on it. How is that for a move up ... I just cannot wait till the barket bottoms out - Interest rate at 10+ for 3+ months is what I will even think of as a bottom. Back to 1995.
Cool.
Cow_tipping.
Oh BTW the arm resets, my neighborhood homeowners are defaulting left right and center, not just on the loans, but on the HOA dues as well. Quintuple (is that really a word) whammy, prop taxes went up, arms reset, values fell, volume dropped, and we had to bump up dues due to delinquents last year, and the delinquencies skyrocketed.
Cool.
Cow_tipping.
Sure gets old having people post annoymous and claim such and such is happening in their neighborhood without identifying themselves or their neighborhood. I could say anything and claim anything under those conditions and never be proved wrong.
I could say I saw Keith in an undisclosed bar in Chelsea frequented by transvestites and if I leave myself and the bar and date blank how valid would that claim be?
If your going to put info down give more specific data so we can verify it or at least get a sense of WHERE.
Of course most people here ignore facts. We've tried to discuss Australia and how it may mimic price trends here, or England, both with home price ratios double to triple ours, and last week the Economist printed that prices rose in 9 Australian cities and went up 47% in Perth in the last three quarters after their sluggish slowdown and prices corrections in Sydney last year.
Data please, places, and use a name/id to claim your data.
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