July 31, 2007

I cannot f*cking believe what I'm hearing. Jim Cramer now tells Americans to default on their mortgages and rent. Seriously, it's getting that bad.

(Original youtube video got pulled - go here or housingdoom for the video)

Jim "Walk Away From Your House" Cramer followed up on yesterday's shock video, and is now telling people who "made a bet and lost" to not compound the error, and to simply walk away from the mortgage and default.

He says especially in housing markets that have already fallen 20% to 30% like Phoenix, the Inland Empire, Sacramento, Las Vegas, Denver, Southern California and more, where homebuilders and REIC are hiding the extent of the price crash via the use of incentives.

Why lose money each month he asks - and answers with "you might as well rent".

Dear god I think Cramer is reading HousingPANIC. Hi Jim! Boo-yah!

HP Memo to the Banks, Hedge Funds, Lenders, China and others caught holding the bag: You are completely f*cked now. People aren't gonna be paying back the loans. It's over. The Great Housing Ponzi Scheme is over.

HousingPANIC Stupid Question of the Day (Bump)

For Bubblesitters who sold in the past year or two and then rented:

How would you describe the feeling of relief when the papers got signed and you no longer "owned" a home?

There's something you don't see everyday... American Home Mortgage (AHM) falls 85% after trading resumes


And then Jim Cramer got religion, gave up, and told sheeple to walk away from their homes as housing moves to crisis stage

Home prices crashing

2/28 timebomb about to blow

Housing falling apart nationwide

"Dramatic decline in home values" expected

The end is here. Now panic sets in.

hattip (again!) to housingdoom - great work

I love housing crash amateur youtube videos... Here's another one by Lou Minatti - an instant housing bubble classic!

An instant classic... Four stars!

Foreclosures, Casey Serin, Crisp & Cole, Arizona desperate homedebtor arson, condoflip.com, Donald Trump, this one has it all... and with a very 1929 feel...


Forbes picks "Top 10 Riskiest Housing Markets". They almost got it right.

Here's their Top 10:

1) Miami
2) Orlando
3) Sacramento
4) San Fran
5) San Diego
6) Phoenix
7) KC
8) Cincy
9) Chicago
10) Denver

Here's HP's:

1) Miami
2) Phoenix
3) Las Vegas
4) Tampa
5) San Diego
6) Tucson
7) Boston
8) DC
9) Detroit
10) Naples

What are yours?

Riskiest U.S. Housing Markets

Those looking to spin the real estate roulette wheel might want to steer clear of Miami. It ranks first on our list of the nation's riskiest real estate markets.

There, a high share of adjustable-rate mortgages, high vacancy rates and slumping prices still too elevated for the local populous means should long-term bond yields climb, interest rates jump or the housing crisis linger much longer, things could go from bad to worse.

Our ranking of the country's riskiest markets measures which of the 40 largest metros are most vulnerable to future shocks. We've done this by assessing which have the most strained lending conditions, and which markets are the most overvalued and likely to face downward price pressures.

HP presents "Real Economist (NOT Lawrence Yun) Housing Market Quotes of Brilliance"

"No one is buying into their Kool-Aid; that's why prices are falling"

- Paul Kasriel, chief economist with Northern Trust in Chicago, questioned the Realtors' assessment that this is a good time to enter the market, saying weak sales and prices suggest that potential buyers are smart to be sitting on the sidelines right now.

Alt-A "Liar's Loan" mortgage king IndyMac reports today. Three words you may or may not hear: Mark to Market

Unfortunately the dolt running IndyMac didn't understand Econ 101 (or SEC regulations) when their cancerous loan portfolio starting going bust this spring. They could no longer sell their liar's loans on the open market except at a huge loss, so they held the cancer on their books, but didn't adjust their values ("Mark to Market") or substantially adjust their loan loss reserves.

Here's a pretty ignorant and arrogant statement from their CEO back in May on this. HP's question then was - where were the auditors? HP's question today is - where are the auditors? It really doesn't matter what the CEO thinks the cancer is worth - WHAT MATTERS WHAT THE F*CKING MARKET THINKS THEY'RE WORTH. Geeze, how dense are some people? Kinda like homedebtors thinking their home is worth X, when the market is telling them the home is worth 1/2 of X.

Yes, I'm short IMB. And I'd be shocked if they don't come clean today. Sarbanes-Oxley demands it. Truth or Jail? I'll update on IndyMac throughout the day... and you can listen to their conference call at 11am EST here

Michael Perry, chief executive of IndyMac Bancorp, is stubborn when it comes to delinquent loans.

He refuses to ditch them, even as they expand rapidly on the books of Pasadena-based IndyMac, which has two units based in Irvine and is the largest U.S. lender in a credit category dubbed "Alt-A," which is one level above the risky subprime niche. It turned in a company record of $90 billion in loans last year.

During an April 26 conference call with analysts, Perry said the company didn't sell a single dud loan in the first three months of the year because no one wanted to pay what he thinks they're worth.

"No way is IndyMac selling to a hedge fund for "pennies on the dollar," Perry said.

Aaron Krowne's Mortgage Lender "Implode-o-Meter" blog getting sued by a mortgage lender (go figure). He needs your help!!!!!!!!

A lot of us love ml-implode, where we first got wind of the implosion in the subprime and Alt-A arena like LEND, CFC, IMB, AHM and more. This site is hosted as a labor of love by Aaron Krowne, one man against a corrupt and imploding REIC.

Well, now he's getting sued, in a frivolous lawsuit by a desperate lender, Loan Center of California, who was none too happy to show up on the implode-o-meter even though they were evidently imploding. But now Aaron needs to raise funds to fight these sons-of-bitches, and HP is asking you to give a buck or two. Yes, lawyers are expensive. Hopefully Aaron can counter-sue the bastards, but being a mortgage lender, one would imagine they'll have no assets soon.

So, HP'ers, help defend blogs, help defend the internet, and help defend someone who is simply standing up to the REIC. Let us know here if you contribute and how much.

Donate here. Even $5 would help. Blogging and free speech are on the line.

Lender bastards. If there's a hell, I hope lenders like this have a special area. And a special note to the little boys at Loan Center of California - KISS OUR BLOGGER BUTTS. Yes, this is America, and you can still say kiss my ass. It's called opinion, and it's called free speech. And I hope Aaron raises enough for something called a "counter-suit". Jerks.

HP special message for MSM reporter readers - report on this story.

July 30, 2007

FLASH: American Home Mortgage crashes 35% before trading halted, mortgage meltdown and liquidity crisis spreading

The ratings agencies totally blew it, and now investors in subprime, alt-a liar's loans, jumbo loans and even prime mortgages are getting destroyed.


Because the system got gamed by corrupt mortgage brokers, appraisers, realtors and builders, and the debt holders got left holding the bag.

Oh, what will IndyMac have to say tomorrow? Should be interesting (yes, short IMB)...

American Home Mortgage Investment Corp (AHM.N: Quote, Profile , Research) shares fell sharply on Monday after the company delayed its quarterly dividend, announced "major" write-downs, and said lenders were demanding it put up more cash.

Shares of American Home were down 39 percent, falling in premarket trading to $6.39 from Friday's close of $10.47. Trading was halted for news pending prior to the market open. The shares on Friday hit their lowest level since April 2003.

Late Friday, Melville, New York-based American Home said it was struggling from "unprecedented" disruption in credit markets. The announcement fed investor worries that bad loans are extending beyond "subprime" lenders to providers of home loans to borrowers considered to be good credit risks.

American Home specializes in prime and near-prime loans. It has, however, made many loans that allow borrowers to produce little documentation of income or assets.

"Bankruptcy is not out of the question," said Matt Howlett, an analyst at Fox-Pitt Kelton. "It's clear now we're in a liquidity crisis. Any loans that aren't pure prime are falling in value."

Money Magazine's annual Top 10 Towns America's Best Places to Live (small town version). What do you think?

This year they focused on small towns, which I agree are getting more and more attractive in today's America of over-consumered, over-retailed, housing-bubbled, poorly-planned, illegal-immigration-run-amok big-city shallowness. Now if these small towns can just get rid of Wal-Mart and cookie-cutter homebuilders, they'd be OK.

Here's the Top 10 and full article. Do you agree? What makes a great town? I've added my two favorite books on geo-arbitrage and moving to a small town...

Manias, Panics and Crashes on "Discredit" and the scramble to unload at greater and greater losses

One more time, so you know what's happening, and what's going to happen.

There should be no surprises for HP'ers. None. It hath been foretold.

From the HP Bible "Manias, Panics and Crashes" by Kindleberger:

* Ultimately, the markets stop rising and people who have borrowed heavily find themselves overstretched. This is 'distress', which generates unexpected failures, followed by 'revulsion' or 'discredit'.

* The final phase is a self-feeding panic, where the bubble bursts. People of wealth and credit scramble to unload whatever they have bought at greater and greater losses, and cash becomes king.

HousingPANIC Stupid Question of the Day


Want to see what Miami will look like soon? Just look to Thailand today.

Hat-tip Housingdoom for posting this video. Amazing scenes of condo ghost towns.

Oh, the folly of man.

So, serious question - what will become of all the condos and homes under construction around America today, being built by developers who'll go bankrupt before they're finished?

HP's "Housing Bubble Moments of Brilliance". Here's MSN's "there is no housing bubble" Jim Jubak in 2005

From a million years ago (2005), and a simpler time and a simpler place, when sheeple actually formed lines outside of new housing developments. Here's MSN "financial guru" Jim Jubak, with a really bad call...

Why there is no housing bubble

The sky is not falling. Yes, home prices are sky-high, but we really don't have a housing bubble that is anywhere near bursting. Here's why.

Housing bubble? What housing bubble?

With the 10-year U.S. Treasury bond yielding below 4% and 30-year mortgages available at 5.1%, there isn't a housing bubble

It's just that those who are predicting a housing bubble and its bursting may have much longer to wait than they expect right now.

July 29, 2007

Get your Monday stock market prediction in here

No "anons" allowed. If you want your post to show up on this thread, you have to at least click "other" and call yourself something.

What's Monday gonna look like? For the Dow:

1) Up

2) Down 1 to 199

3) Down 200 to 499

4) Down 500 to 999

5) Down 1000+


Here's my take:

Too bad homedebtors and flippers can't just hit the "sell" button like stock owners, eh? And remember, stocks and bonds are not house prices. Iphones aren't house prices either FYI...

What happened last week in the debt markets, where essentially the engine froze up and exploded, is not fixable. This is the period of "discredit" from Manias, Panics and Crashes that follows all leveraged booms. It will, and it must, run its course. Watch for major LBOs to come apart now.

Since this was the mother of all booms, this period of self-feeding "discredit" will amaze.

However, that said, the impact on stocks on a day by day basis is unknown. Yes, there should be a classic rush to cash and safety, where panicked people sell everything they have to raise cash in a frenzy. But panics take time - look how long the NASDAQ bust took - not just one day.

Meanwhile, the meltdown in the debt markets, coupled with a big drop in stocks last week, means that hedge funds are failing as I type. And there will be forced selling in the market as they unwind. The only way for some funds to survive is to risk everything they've got left Monday to try to defend. We'll see if they have enough ammo.

So, my prediction for Monday is the #1 day in the history of the world for stock trading volume. Wild swings. And a big loss (700 points) at the end. But I honestly don't have confidence in this prediction - stocks can be wild. And that's why I'm happy watching from the sidelines, except for my miners, alt energy, oil and REIC shorts.

HousingPANIC presents "Realtor Quotes of Brilliance"

"It is still a buyer's market - we just need more buyers"

- Tom Campensa, president of the Akron Area Board of Realtors

Open thread to talk about Casey Serin and the death of iamfacingforeclosure.com

Kid, you're the poster boy of mortgage fraud, and we'll miss ya. Good luck at the 2008 Senate housing crash hearings and with the FBI. Two Words: States Evidence.

Funny that iamfacingforeclosure and American Home Mortgage both died on the same day, eh?

There. That should do it.

July 29th, 2007


IamFacingForeclosure.com story is no longer online. Earlier than I thought but for the better.

- Casey Serin

And then desperate homebuilders, who are generally not very bright, brought in a really big bird to I guess crap on a house that wouldn't sell

Thanks to icantsellmyhouse blog for the photos.

And thanks to realtors and homebuilders for being such unbelievably bad marketers. You are the gift that keeps on giving! For the love of god what are you thinking? Just lower the damn price!

FLASH: It all falls apart - Alt-A "Liar's Loan" lender American Home Mortgage one step closer to bankruptcy, pulls dividend at 10:19pm Friday night

Man, it's dot-com all over again. Now it's just dot-lenders. One by one these Alt-A "Liars Loan" and Subprime sweat shops are going tits up.

This one's a shocker though. The dividend was already awarded, declared on June 15 for all stockholders of record as of July 9. And then in the late into the night on Friday, they put out this release and say oops, our bad, all of you expecting your dividend are screwed. I bet it was the auditors who finally made them come to Jesus - note they admitted but didn't document that the credit meltdown "has caused major write-downs of its loan and security portfolios"


The market will react furiously to this on Monday. Watch for AHM to trade to near $0, get delisted, see shareholder lawsuits, announce their layoffs, and then the march to bankruptcy.

Wow. Friday night. 10:19pm. Wow. Thanks Richard for the tip.

IndyMac - you're next (yes, I'm short IMB). Your Mark to Market is going to be a shocker.

American Home Mortgage Investment Corp. Delays Payment of Quarterly Common Stock and Series A and Series B Preferred Stock Dividends

American Home Mortgage Investment Corp. (NYSE: AHM - News) announced today that its Board of Directors has decided to delay payment of its quarterly cash dividend on the Company's common stock and anticipates delaying payment of its quarterly cash dividends on its Series A Cumulative Redeemable Preferred Stock and Series B Cumulative Redeemable Preferred Stock in order to preserve liquidity until it obtains a better understanding of the impact that current market conditions in the mortgage industry and the broader credit market will have on the Company's balance sheet and overall liquidity.

The disruption in the credit markets in the past few weeks has been unprecedented in the Company's experience and has caused major write-downs of its loan and security portfolios and consequently has caused significant margin calls with respect to its credit facilities.

The quarterly cash dividend of $0.70 per share on the Company's common stock had been declared on June 15, 2007 and was to be paid on July 27, 2007 to all shareholders of record as of July 9, 2007. The Series A Preferred Stock dividend and Series B Preferred Stock dividend had been declared on June 15, 2007 and are payable on July 31, 2007, to shareholders of record as of July 9, 2007.

HousingPANIC Stupid Question of the Day

When will you know that housing prices have hit bottom?

Care to predict how many years away that will be?

Should Alan Greenspan be investigated for criminal corruption and fraud?

It's pretty obvious his incompetence caused the housing bubble (note - that quote above was from LAST fall). But like Mike Brown and Alberto Gonzalez, you don't go to jail for being a boob.

But corruption, that's another thing. For Alan Greenspan to call in 2004 for the creation and use of Option ARMs and Liar's Loans, and for Americans to rush into adjustable rate mortgages, right before a record string of interest rate hikes, is beyond incompetence, and most likely $$$ from the Mortgage Brokers Association. And the Fed, who is supposed to oversee banks and lenders, let things spin totally out of control during the bubble. Oversight? Regulations? Guidance? Nah!

You would think something funny was going on behind the scenes. Or payments or promises of future payments (like speaking fees to groups like the the corrupt mortgage bankers) being made. Follow the money.

So, should Alan Greenspan be investigated for criminal corruption?

Alan Greenspan played a major role in the housing boondoggle.

On February 26 2004, he said, "American consumers might benefit if lenders provide greater mortgage product alternatives to the traditional fixed rate mortgage. To the degree that households are driven by fears of payment shocks but willing to manage their own interest-rate risks, the traditional fixed-rate mortgage may be an expensive method of financing a home."

Greenspan tacitly approved the whacky financing
which produced all manner of untested loans - including ARMs, piggyback loans, "no doc" loans, "interest only" loans et cetera. These loans are a break from traditional financing and have contributed to the increase in bankruptcies.

Millions of people who were hoodwinked into buying homes with "interest-only", "no down" loans will now either lose their homes or be shackled to an asset of decreasing value for the next thirty years. They've been tricked into a life of indentured servitude.

A recent article in the Wall Street Journal revealed the extent of Greenspan's involvement in the housing fiasco. Here's an excerpt from the article:

"Edward Gramlich, who was Fed governor from 1997 to 2005, said he proposed to Mr Greenspan in or around 2000, when predatory lending was a growing concern, that the Fed use its discretionary authority to send examiners into the offices of consumer-finance lenders that were units of Fed-regulated bank holding companies.

"I would have liked the Fed to be a leader" in cracking down on predatory lending, Mr Gramlich, now a scholar at the Urban Institute, said in an interview this past week. Knowing it would be controversial with Mr Greenspan, whose deregulatory philosophy is well known, Mr Gramlich broached it to him personally rather than take it to the full board.

"He was opposed to it, so I didn't really pursue it", says Mr Gramlich. Still, Mr Greenspan's views did color the regulatory environment, facilitating growing concentration in banking and a hands-off approach to derivatives and hedge funds. That approach, broadly shared by both the Clinton and Bush administrations, is coming under increased scrutiny." (Wall Street Journal)

July 28, 2007

PIGS FLY ALERT!! TIME-van-winkle magazine FINALLY wakes up and writes about the housing crash

Two years after the infamous goo-goo-for-housing cover, and two years of absolutely no reporting on the mortgage meltdown, the housing crash or what's really happening in America, TIME Magazine FINALLY wakes up, does their job, and runs a story on the crash.


It was also nice to see recurrent HP themes of kudzu in the South and "Ponzi Scheme" show up in the article. Glad we could help.

Hey TIME - What took so long? Next time put it on the cover where it belongs. Here's a few article highlights. Maybe Newsweek will follow with a story (since that's what these two lazy lemmings do)

If Wall Street wants to get even more worried about the real estate market, it need look no further than southern California. There, the culprits aren't just the bad-credit borrowers whom banks and lenders loaded up with ballooning debt to purchase their dream homes. The well-to-do have partaken of those treacherous loans as well. And now everyone is hard pressed to pay as interest rates rise.

The spectacularly bad trend was coupled with news from mega-mortgage lender Countrywide Financial that homeowners with good credit are starting to fall behind on mortgage payments. It has all contributed to a contagiously pessimistic mood. "We thought the upper end of the market was immune," says Steve Johnson, of real estate consulting firm Metrostudy. "But this is now like Kudzu in the South, spreading into all product types in the southern California housing market."

With home values increasing by double digits annually, "people began buying houses they couldn't afford under the theory that the more house you buy, the more wealth you have once it appreciates," he says. "It's kind of a Ponzi scheme on a mass scale. But there has to be an end at some point."

HousingPANIC Stupid Question of the Day

Question for HP'ers: Did HP and the other bubble blogs help save you from doing something really really stupid?

Here's a great and inspiring letter over at the always excellent
housingdoom. Some people ask why I do HP. This is why. I imagine all the other bubble bloggers would say the same. To help our fellow man, and to get the word out about the corrupt REIC (realtors, mortgage brokers, lenders, appraisers, builders) who screwed America.

HousingPANIC has a Special Message for our new landlord and owner, Communist China

China, sitting $414 billion in US treasuries (that won't get paid back) and over $100 billion in US mortgage backed securities (that won't get paid back), and over $1 trillion total in US dollars (that are becoming toilet paper), plus a recent big investor in Blackstone's hilariously failed IPO (man, that's gotta hurt), has gotta be getting PISSED OFF lately. Welcome to American capitalism comrades, where you can get suckered by con-men and lose it all!

Seriously, could the royal screwing of these corrupt communist jackasses, who helped ruin America with their evil cozy partner Wal-Mart, be any more perfect?

A Special HousingPANIC message to the corrupt leaders of Communist China:

Thank you for selling us all that cheap crap these past few years and enabling our housing bubble by artificially surpressing our interest rates.

Thank you for ruining our manufacturing base by manipulating your currency and dumping your goods on unpatriotic and clueless Americans. And thank you for destroying the character of our towns and cites by enabling your evil partner Wal-Mart to destroy its competition with an endless supply of cheap dangerous crap from your sweat shops.

And by the way, you really didn't think we'd ever pay you back, did you?

Sincerely, HousingPANIC (and the Deadbeats of America)

China shying from shaky US mortgage market

While China is eager to invest a portion of its US$1.33 trillion foreign-exchange reserve overseas, it is unlikely to take a chance on buying additional US mortgage-backed securities (MBS) as they are now considered too risky, Chinese economists said.

"The Chinese economy is benefiting from high-yielding, safe investments in US mortgage-backed securities. Here at home, American homeowners are benefiting from lower interest rates on mortgage loans resulting from greater Chinese demand for these securities," Jackson said.

Here's Countrywide Mortgage's Angelo Mozilo trying to defend why he sold $118 million in CFC stock before his company crashed

It's funny reading this on the same day that Qwest's former CEO Joe Nacchio was sentenced to six years in Federal prison and $52 million for insider trading and pumping up his numbers while he bailed out. Deja vu all over again? Hey, nobody saw it coming, right Angelo?

And for a CEO to be desperately selling as the company he runs is doing stock buybacks to prop up the price, man, that stinks to high heaven.

Ronald Redfield - Redfield, Blonsky & Co.: Were there any buybacks during the quarter? Do you find, Angelo, with all respect, you selling a material amount of shares into buybacks? You previously mentioned you own 10 million shares. How many shares do you currently own, not including options?

Angelo Mozilo: I don't know the answer to that question. I own -- including options, I think around -- I think it is around 11, 12 million, something like that. The sales of the stock had nothing to do with buybacks because that 10b5-1 agreement was made well over a year ago.

Ronald Redfield - Redfield, Blonsky & Co.: No, the legality is fine, but
one can think that perhaps the price is being held up the buybacks creating a demand.

Angelo Mozilo: Yes, well, if you think like that it's -- I don't think like that. The buybacks were done because we thought it was in the best interest of shareholders. I have -- as somebody pointed out, I'm 68 years old, I own a lot of shares, and I have 10b5-1 that is in process right now. That is selling into this market when the buybacks are not holding it up.

So it is an independent issue that is not relevant to buybacks or not buybacks. It is a personal situation that I'm selling into a market no matter where the price of the stock is.

Angelo Mozilo: Okay, some final comments. One to the individual who asked about my sale of stock. The decision to buy back stock is a collective decision, really emanates from the financial operations of the Company as to what is the best return for the investment of the shareholders, invested capital for the shareholders.
So it is totally unrelated to any of my issues relative to the sale of stock.

Secondly, as I said, I don't know the exact amount of shares that I have. But the shares that I have, actual stock I have, I have retained for 39 and a half years. Not sold a share of the initial stock that I got when Dave and I started this Company that I got, that I purchased.
The only thing that is being sold under the 10b5-1 are options with expiration dates.

July 27, 2007

Dow down another 200 points today, housing crashing, mortgage market in disarray, debt market in meltdown mode. What's next?

Right on schedule, worst week for the Dow in 5 years.

LBO deals as screwed as Vegas condo owners.

America in a full-on pissed-off negative mood.

The US Dollar getting slaughtered.

Mortgage lenders and homebuilders in total melt-down mode.

Is Monday "Black Monday"?

Will we move from housing denial to housing fear to HOUSINGPANIC in rapid-fire succession?

Are you ready? Did you prepare?

Wall Street extended its steep decline Friday, propelling the Dow Jones industrials down more than 500 points over two days after investors gave in to mounting concerns that borrowing costs would climb for both companies and homeowners. It was the Dow's worst week in nearly five years.

Century21 CEO announces that they're "not going to participate in the pity party" anymore. HP cracks up.

"We've just elected that we're not going to participate in the pity party anymore," Kunz says. "The economists are talking about the United States of America, and we're talking about Hometown, USA."

- Tom Kunz, chief executive officer of Century21 Real Estate

What happens when incomes are too low and interest rates and home prices are too high for new buyers to come into the Great Housing Ponzi Scheme?

Another HousingPANIC quote of the year candidate:

"Everybody now recognizes that the elimination of creative finance in housing leaves us with a problem for new homebuyers"

- Robert Barbera, the chief economist of ITG

HousingPANIC Stupid Question of the Day

Still believe what the government, NAR, ratings agencies, analysts, REIC and MSM tell you now?

Conditions are now ideal for buyers. Interest rates are comparable to 40-year lows, and inventories are higher than they have been in decades. Consumers have exceptional choice. But these conditions may not last. August pending home sales rose 4.5 percent, and prices are expected to rise again next year. Even the vice chairman of the Federal Reserve says that the housing market outlook is improving.

Real estate is an outstanding investment. House values rose 88 percent on a national average over the past decade. The number of U.S. households is expected to increase 15 percent during the next decade, creating a continued high demand for housing.

Conditions are improving for sellers. This year will be the third-best on record, and prices are expected to rise modestly next year.

The campaign opens on Friday, November 3, 2006, with full-page advertisements in the Wall Street Journal and USA Today, and will run Sunday, November 5 in the New York Times, Washington Post, Los Angeles Times, and Chicago Tribune. It will run in the same six newspapers again on the weekend of November 12.

This is the beginning of a campaign that will also include two new network television and radio ads, to begin airing in January 2007 as part of NAR's $40 million Public Awareness Campaign.

Countrywide, IndyMac, First Federal - how bad will the negative-am "Option ARM" and Alt-A "Liar's Loan" mortgage lenders get killed?

Shorting Alt-A "Liar's Loan" and negative-amortization "Option-ARM" giants Countrywide, IndyMac and FirstFed these past few months has been like shooting fish in a barrel.

Do you realize that with Option ARM loans, the lender recognizes the shortfall in monthly payment as immediate income on their books? Even though this money will NEVER get paid back? E-N-R-O-N.

Their business models have gone kaput, none of them have "Marked to Market" yet, meaning there's significantly more trouble to come, and investors have gotten wise to their accounting games despite the spin coming from their IR departments and CEO suites.

So, how much farther will they fall, or have they gotten as low as they will go?

(Note, I'm still short IMB and FED)

Today and Monday should be interesting days in the market. Wild swings. Up, down, and all around. And remember, stock prices do not equal home prices. Mutually exclusive.

And then investors lost trust in the bond ratings agencies, and then the real fireworks started

How did Bear Stearns get burned so bad? I mean, AAA paper should be gold right?


The two ratings agencies are now seen as incompetent and trustworthy as Bush and Cheney. They were rating subprime mortgage tranches far higher than they ever should have been. And Bear Stearns, pension funds, hedge funds and bond investors got their fingers burned.

Here's an interesting take from bond guru Bill Gross on the ratings agencies, the coming crash in the market, and also how high-yield (junk) bond rates are now soaring, since inventors no longer believe the crap coming out of Moodys and S&P.

Gross says private-equity firms and hedge funds were able to borrow money cheaply until about six weeks ago. "But investors no longer trust the rating services to adequately and fairly rate the bonds they're buying," Gross said. "Basically, bond buyers have become frozen in place."

Bond investors have been willing to let speculators take advantage of their inactivity to buy more assets and pile up returns, he added. And that's probably even more the case with investors in riskier corporate issues, Gross says.

He added: "What's going on in the past few weeks should be registering with bond investors as a substantial change in climate."

Ladies and Gentlemen I've found our new Casey Serin. A 24-year old kid with $300,000 in unsecured debt: Introducing "Debt Kid"

Hundreds of years from now when they study this brief period of debt stupidity (2001 - 2007), they might find Debt Kid (along with HousingPANIC of course).


Or on second thought, be afraid. Be very afraid.

my journey to repay over 300K in unsecured debt…I am 24.

I got myself into 300K+ of unsecured debt. I recently avoided foreclosure by short selling my home. I've been trying to build my business income up. This while trying to deal with being over 300K in debt and now living in my office. Let's just say my life ain't boring.

A few things I need to decide this week:

#1. Should I consolidate my office into a “home office”? I’ve been in this building for over 2 years now. My office space is a good deal, but with only 2 full time employees (myself included) and one part-timer, shouldn’t I work from home? I’m looking at a place tomorrow that would be larger than my current office (yet also provide a “real” place to live. ahh….a real mattress!).

#2. Can I file Chapter 7 Bankruptcy? We are getting to crunch time now on the BK filing. If I’m going to do it (I have to at this point, it’s the only thing that makes sense all around) I need to get it all figured out this week. I made more progress on the paperwork today, but it’s difficult finding time when my employees are not around (and I have a friend visiting from out of town! yikes…)

#3. Can I win the contest at DCC? (go here to vote for me, please leave a comment too!) If I can win that contest I may just have enough money to get a place I’m looking at that could hold both myself and my business! (for only $200 more. IE, with no business lease @ $800/month this place would only cost me 1K/month, and allow a place for my business and personal life!). Obviously I’m hoping I can win this contest!

#4. Will I ever be back to my “old self”? I don’t think so. I don’t think I want to be. As I slowly shed every piece of my former life (big house, lots of crap, fake relationships, fancy office?), I’m feeling more and more genuine and real and honest…and it’s wonderful.

#5. Will I ever make it out of this hole? I don’t know. I’m still so right on the edge right now….

What do you think?

Renting is hazardous to your wealth. Oh, really?

Are You Throwing Away Money by Renting? Maybe Not

It’s something we’ve all been told for so long we don’t even question it: if you’re paying a mortgage, you’re making an investment; if you’re paying rent, you’re making a mistake. But is it true? Are you making your landlord rich at the expense of your own wealth? The answer’s not as simple as you might think – for a lot of people, and in a lot of situations, paying rent is the smartest thing you can do.

While housing prices soared, rents merely chugged along.
Between 2004 and 2006 home prices nationwide rose 16%, while rents inched up just 1.2%.

If you can satisfy your needs by renting a house at $1000 a month instead of paying a $2500 a month house payment then that’s $1500 a month you can invest in the stock market or elsewhere. Add the $10,000 or $20,000 you would have put up for a down payment and that investment turns into a healthy nest egg. After a few years if you decide it’s time to buy a house then you have enough saved for a healthy down payment.

July 26, 2007

Housing Speculation - it happened around the world. Now we pay the price.

The US housing market is crashing in such a fantastic and historic way, you'd think nobody could top it.

Just wait. The Brits ("get on the housing ladder!") were even more housing-speculation obsessed than the Americans. And they polluted all of Western and Eastern Europe with their get-rich-quick schemes.

But now, the Great European Housing Crash begins.

It's strange moving from US-housing-bubble-central Arizona to Worldwide-housing-bubble-central England. If only you could see what I've seen.

You live in historic times HP'ers. Tulip Bubble, South Sea Bubble, NASDAQ Bubble, Worldwide Housing Bubble. This one will be studied for thousands of years.

Oh, the folly of man. Will we never learn?

FLASH: Special thread to talk about the wicked stock market selloff underway

I hope some of you had some shorts and puts against REIC stocks during this meltdown. They're selling off now even faster that I imagined possible. And pretty much everything else today as the debt markets collapse.

This is a special thread to talk about the collapse in builder, lender and REIC stocks especially, and anything connected to housing, mortgages and debt. Also use this thread to discuss how to best prepare, even at this late date, for the economic collapse at hand.

(Yes, I'm still short IMB, FED, HD and GM at time of writing, after having covered WCI, CFC and HOV at amazing profits, will be looking for more opportunities today)

It's almost sad to read REALTROLL(TM) and Desperate Homedebtor comments. Sad that there are some people who still just don't get it, and never will.

You know HP'ers, there are some people who either don't want help, who don't want to listen and learn, and who are simply lost. There is nothing we can say or do to help them, they're just going to play out their roles as lambs to the slaughter.

Hey, we tried.

But I sometimes try to delve into their minds, to try to understand how they could be so ignorant and stubborn, ignoring mountains of evidence, and having no desire to understand economics or human behavior.

* Who do they think are going to buy all these unwanted and unneeded houses and condos, at prices detached from the fundamentals?

* Why do they think people would pay significantly more to own than rent, given that the promise of future appreciation is now dead?

* Who do they think will make up the slack, now that the speculators have fled, and new loans are tougher and tougher to get with the subprime and mortgage meltdown?

* Why can't they see that the Late Great Housing Bubble was built on the back of fraud, lies, spin, speculation and greed, and that those days are long over?

* And bottom line, why are they so blind?

Amazing. But hey, iPhones are selling! So home prices should be fine!

HousingPANIC Stupid Question of the Day

Will Bernanke and the Fed try to stop the housing crash?

Can they?

Why haven't Time or Newsweek put the Housing Crash and Mortgage Meltdown on their covers yet?

It makes absolutely no journalistic or business sense why Time and Newsweek haven't addressed in ANY way the Great Housing Crash yet on their covers or in their editorial, since the reckless and mistimed June 2005 infamous time housing cover.

Britney Spears? Sure. Iraq? Of course. The Presidential race? You got it. And pretty much every other topic under the sun. But for some reason, both of these publications have been completely asleep (and completely incompetent) when it comes to the one subject that personally effects the most amount of their readers - the Housing Crash.

Serious question - Why?

Why aren't the two major news magazines covering the AP's 2006 biggest story of the year? Why aren't they covering the most important financial story in the history of humanity? Why aren't they covering the one story dominating water cooler conversations in America today (besides America's Got Talent of course)?

Are they that incompetent? Or is there another reason?

HousingPANIC Stupid Question of the Day

Who do you think regrets their actions during the housing bubble the most?

FLASH (for wonks): Chrysler and Alliance Boots debt deals fail, bankers left holding the bag, housing crash to blame, real trouble starts now

And the long-awaited credit meltdown is here. We have our two big LBO failures, the banks got stuck holding the bag, and now, the real fun starts.

Add these two debt failures to the Countrywide news, the CDO meltdown, the Bear Stearns failures, and the meltdown in Blackstone's IPO, and they all tell a neat and tidy story for those smart enough to listen.

The days of easy credit, CDOs and LBOs are over. The days of passing on the risk are over. The cost of financing some of the recently-announced mega-deals has skyrocketed. New deals won't get done. And it's over. O-V-E-R, over.

How does this relate back to housing? Uh, guess what HP'ers, America's housing crash started this chain of events. Read Manias, Panics and Crashes. After debt parties come the cleanup. And oh, what a mess we have on our hands. Now if the lenders would just Mark to Market and get it over with.

Hat-tip to Calculated for the two links. And yes, I know the car in the photo is a Ferrari, but since that's the car all over my neighborhood, I thought it was appropriate as the debt spigot dries up.

KKR's Banks Fail to Sell $10 Billion of Alliance Boots LBO Debt
July 25 (Bloomberg) -- Deutsche Bank AG, JPMorgan Chase & Co. and six more banks are stuck with 5 billion pounds ($10 billion) of loans for Kohlberg Kravis Roberts & Co.'s purchase of Alliance Boots. The banks will keep the senior loans after failing to find investors to buy them, said four people with direct knowledge of the deal,

``If you're a bank, it's a case of once bitten, twice shy,'' said Willem Sels, head of credit strategy at Dresdner Kleinwort in London. ``The banks won't push so hard for LBOs now. The leveraged loan market will have difficulty recovering.''

Bankers Postpone Chrysler Debt Sale
Bankers raising $20 billion in loans for Chrysler Group have postponed a sale of $12 billion in debt for the auto company and are planning to fund the bulk of that debt from their own pockets for the time being, according to a person familiar with the matter.

Bankers have been unsuccessfully marketing the financing package to major institutional investors since June, but recent turmoil in the mortgage industry has weakened demand for leveraged loans and high-yield debt. With no investor appetite, the seven banks led by JPMorgan Chase & Co. will instead keep the debt on their books.

For buyout shop Cerberus Capital Management, it was one of the few ways to keep its $7.4 billion acquisition on track. But it was a stunning turn of events that indicated investors were not comfortable taking on debt of the troubled automaker, and showed just how cold the U.S. credit market has grown.

July 25, 2007

America, you got taken by conmen, hucksters, get-rich-quick schisters, flim-flam dealers and human scum

In other words, realtors, mortgage brokers, lenders and builders on commission, in addition to a corrupt NAR, an incompetent MSM, and a criminally negligent Fed, Congress and President.

And now you know.

Good luck out there. I hope you don't let it happen again (for awhile)


Profits tumbled yesterday for the nation's largest home mortgage firm - Countrywide Financial - even as its chief Angelo Mozilo was quietly cashing out a $118.2 million options windfall ahead of its new troubles.

The company reported a 33 percent drop in profits, and expects deep losses across the industry in the wake of housing's thundering crash that's sending cracks this summer throughout the financial services landscape.

This quote pretty much speaks for itself

"We are experiencing home price depreciation almost like never before, with the exception of the Great Depression"

-Angelo Mozilo, Countrywide Mortgage CEO, July 2007

It's all over folks (in America). The housing bubble is a distant memory, the housing crash and mortgage meltdown will now go on and on and on and on

Except for Lawrence Yun and the NAR, and their lying deceiving on-commission ramen-eating realtor minions, is ANYONE still pumping housing (in the US)?

It's over. It's so pets.com. It's so tulip bulb.

Manias, Panics and Crashes told everyone everything they needed to know. Yet so many chose to deny the truth. Or just remain ignorant.

Too bad.

They should have listened.

And now, the housing crash goes country by country.

Countrywide Mortgage's Angelo Mozilo, after desperately unloading his stock, says "nobody saw this coming". HousingPANIC calls bullsh*t.

Countrywide Mortgage's Angelo Mozilo had this quote yesterday:

"As I try to walk through what happened there and could a lot of this have been foreseen ... nobody saw this coming," Mozilo said

Angelo, Angelo, Angelo...

Have you never read a bubble blog? Have you missed the thousands and thousands of articles on the housing bubble and crash? Have you or any of your employees never taken an Econ 101 course? Have you never left your office and seen the sea of for sale signs? Have you never seen the countrywideforeclosures page?

Angelo - HP calls bullsh*t. You saw this coming. Your minions saw this coming. And you sold hundreds and hundreds of millions of dollars of your stock as fast as you could.

Why? Because you saw this coming.

And you might want to look outside in the parking lot. That's probably the Securities and Exchange Commission coming too...

When does it really get messy? When existing homedebtors realize they have to Mark to Market, the new prices set by the homebuilders

We all know in places like Phoenix, Las Vegas, San Diego, Miami, Tampa, Washington D.C., Boston, Sacramento and more, that new homebuilders have taken prices down big-time - either posted price or through the use of massive incentives.

Yet in those markets, stubborn existing homedebtors, less in tune with the market or Econ 101, and still under the illusion that 2005 prices are real, haven't adjusted their prices to the new market reality - or Marked to Market (yes, there's those three words again).

So what's happening in those markets and more? New homes are selling moderately well at the new prices as homebuilders take the haircut, slash the prices, and move the inventory, yet existing homes continue to not sell, and pile up like tumbleweed on a windy western day.

Eventually, some existing homedebtors will have to sell - or have the house sold for them via foreclosure. This starts the rush for the exits, the first ones out the door will be best off, then the real mess starts.

Note to existing homedebtors - 2005 prices are a joke. 2006 prices are a joke. 2007 prices are a joke. If you want to sell, just look at what true new home prices are at in your neighborhood (posted price less incentives), and price accordingly.

Here's a quick tidbit on this from CNBC's Diana Olick yesterday. Not only are prices going to come down, but when they do, watch for even more blood in the streets with the lenders.

I spoke to Nishu Sood, an analyst over at Deutsche Bank today, and he makes an interesting point. The big home builders have lowered their prices in the hot markets, like Las Vegas, down 25%, but the existing home owners have not dropped as far.

He expects to see existing home owners start to drop prices more dramatically in the second half of this year. If prices really start to hit the skids in these big markets--which are where all those speculator investors lived and breathed--then you can expect all those adjustable rate mortgages they used to really kick into high gear default.

July 24, 2007

And today was the day when denial ended, and fear set in

Yes, many Americans are so dumb they could sit on an OJ Simpson jury, but for those of us who know that the TV comes with an off button, and who make an effort to follow and understand the news, today was the day HP'ers.

Today was the day.

And Fear is now here.

Thank you Countrywide for showing us the way.

Donna Summer, take us out...

FLASH: And today, for all the world to see (including the SEC), we see why Countrywide Mortgage's Angelo Mozilo was dumping shares like rotten oranges

I hope some of you were short Countrywide. HP'ers saw this car crash coming a mile away. Next up - IndyMac.

Yes, I'm short IMB and CFC, and it was all so obvious now. Mozilo is laughing all the way to the bank, but we all know you can't take your money to jail... Good luck Orange Man with the gotta-be-coming-soon SEC investigation.

Countrywide quarterly profit tumbles; shares off 7%
Subprime problems spread to top-rated mortgages, lender says

NEW YORK (MarketWatch) -- Countrywide Financial Corp. reported a 33% drop in second-quarter net income on Tuesday and signaled that problems in the subprime mortgage market have spread to the highest-quality home loans.

The warning pushed Countrywide shares down more than 7%, to their lowest level in almost two years. It also weighed on the broader stock market because investors have been waiting to see if credit problems in the subprime-mortgage sector would spill over into higher-rated, or "prime" home loans.

"The company incurred increased credit-related costs in the quarter, primarily related to its investments in prime home-equity loans," CEO Angelo Mozilo said in a press release detailing Countrywide's second-quarter financial results.

Countrywide's second-quarter net income fell 33% to $485 million, or 81 cents a share, down from $722 million, or $1.15 a share, earned a year earlier, on softening home prices.

Further dampening enthusiasm, Mozilo commented: "During the quarter, softening home prices continued to affect many areas of the country and delinquencies and defaults continued to rise across all mortgage product categories as a result."

BUBBLETALK - new thread to talk about the housing collapse

What's on your mind? Post housing bubble / housing crash article highlights, use tinyurl, let me know what I missed, and have a good chat

Suzanne and Nicholas Retsinas - the two biggest jokes of the housing bubble and crash

I'm not sure what I like looking back on more, now that we know what we know - the Suzanne video, or Nicholas Retsinas' (of the discredited and corrupt Harvard Joint Center for Housing Studies) hilarious and mistimed diatribe against HP'ers and "Chicken Littles"

Suzanne and Nicholas, well done! HP'ers - any other nominees for biggest joke of the housing bubble & crash? List 'em here.

So here's Suzanne and Nicholas. What a nice couple! Enjoy!

The housing wail

by Nicolas P. Retsinas September 24, 2006

"HOUSING BUST AHEAD." The headline hints of catastrophe: a dot-com repeat, a bubble bursting, an economic apocalypse.

Cassandra, though, can stop wailing: the expected price corrections mark a slowing in the rate of increase -- not a precipitous decline. This will not spark a chain reaction that will devastate home owners, builders, and communities.

Contradicting another gloomy seer, Chicken Little, the sky is not falling. Let me alleviate some fears.

And now here's Suzanne, in all her glory:

Sacramento California crashing home prices and exploding inventory graphs

OK, I'm having a tough time reading these two graphs. Not sure if I see much of a trend. How 'bout you? I guess if you look real hard. Oh, I give up. I guess I'll just go ask a REALTOR to tell me what they mean.

Inventory can't possibly be exploding at such an amazing rate. Prices can't possibly be in such a panicked freefall. Suzanne researched it! Lawrence Yun says this is a normal market. Bernanke says the worst is behind us. Bob Toll says we hit bottom. RealtyTimes reports now is a great time to buy. And we all know that real estate is always a great investment, and that the Property Ladder only goes up and up and up and up.

Or not.

By the way, take this housing data research website for a spin of the bubble cities. You'll be amazed. It's ugly out there.

Psst.. Hey buddy, want a Countrywide Mortgage Foreclosure? There's $2 Billion of 'em and counting! Get 'em while they're hot!

Check out countrywideforeclosures blog, and check out Mozilo's sickening amount of insider transactions.


"Hey, Larry, this is a great new house! It wouldn't be a Countrywide ForeclosureTM would it? You lucky gun!"
Note: I'm short CFC now with put options. And for some weird reason, I have a hankering for an orange.

HousingPANIC Stupid Question of the Day

If you had to vote for any of the announced candidates for President of the United States today, who would get your vote?

Extra Credit: Do you think the housing crash, terrorism or Iraq will be the top concern on Americans' minds in November 2008?

July 23, 2007

A request from the management

Take down the tone a bit folks. No swearing (spelled out). Be more polite to each other, even the trolls and idiots. Stop with the Faux News style of yelling at each other all the time. Have good intelligent conversations and arguments.

We're all in this together, whether we like it or not.

Think that house 20 miles away from everything is depreciating fast today? Just wait. Welcome to a world with not enough oil to meet demand.

Get beyond the "peak oil" argument and freak show, and just look (again, and as always) to basic supply and demand. Long term we know we'll move off of oil and into renewable energy resources, but short term, we're screwed. There isn't enough production capacity to meet demand over the next decade or more, with China, India and the developing world heating up, and the US addicted to the black stuff with absolutely no conservation plan or renewables push.

We're simply gonna run short. And how does the market deal with shortages? You got it - prices will go through the roof. The only way to lower demand, and it will be painful (for consumers) yet oh, so profitable (for oil companies and refiners and alternative fuel producers).

Get ready. And if you haven't already, sell that house out in the exurbs as fast as you can. And the stupid Hummer H2 too.

Oil companies see profits soar … but warn production cannot meet demand

OIL GIANTS BP, Shell and Exxon will heighten fears that petrol prices are set to jump the £1-a-litre barrel barrier this week when they are all expected to admit that their production is failing to keep pace with surging global demand.

Their message will reinforce the recent stark warning from the International Energy Agency that there could be oil industry shortages stretching up to 2012 despite the vast sums now being spent on exploration and development.

For once the disappointing news on output could overshadow the level of profits the companies are earning even though Exxon, for example, is expected to announce second quarter earnings of approaching $11 billion (£5.5bn) which is the highest ever earned by a single company in such a short period.

The oil companies are expected to blame various outside factors for the disappointing production levels, including falling output from the North Sea, terrorism in Nigeria and Iraq and political interference in Venezuela, as well as restrictions by the Organisation of the Petroleum Exporting Countries.