Getting ugly out there now...
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October 12, 2007
BUBBLETALK - Open thread to talk about the housing collapse, dollar downfall and mortgage meltdown
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379 comments:
1 – 200 of 379 Newer› Newest»I just returned from a two day siminar in San Jose. While having lunch with a good friend who is a consultant, who mentioned that she is trying to get her clients (small business) to pay off their bills and get out of debt. The three others we were dining with looked like they saw a ghost...and made no comment whatsoever.
Saving money and paying off debt is something people dont want to think about. Now... that is scary.
In a small California town, located between Berkeley and San Jose, there is a tract house for sale with an asking price of $1 million.
This is a typical two story McMansion, packed together with several more just like it. After sitting for months on the market for $999,980, the sign now reads "Price Reduced."
The reduced price is $988,000. Considering that this house is across the street from a trailer park, it seems that the 2005 Zillow estimated price might be a little bit high.
It is bewildering to see how home debtors and Realtwhores can be deluded into thinking that houses will sell when they are priced hundreds of thousands of dollars more than they are worth.
V.L.
You really should by food and guns while your dollars are worth something.
If you want to know why they created this housing bubble just watch this (while it is still a free video). Set aside 45 minutes and bring popcorn and a friend.
http://tinyurl.com/yr554g
You can thank me with a cold one later. It is interesting that if everyone went debt free, bot physical PMs with their extra cash, quit blowing money on crap (except good guns and lots of ammo), the whole chirade would collapse. enjoy!
The Great Inflation Fraud
Why does the government pretend prices aren't rising?
Imagine that a cardiologist told you that aside from the irregular heartbeat, the stratospheric cholesterol count, and a little blockage in your aorta, your core heart functions are just fine. That's precisely what the government's cardiologist—Ben Bernanke, chairman of the Federal Reserve—has just done. The central bank is supposed to make sure the economy grows fast enough to create jobs and make everybody richer, but not so fast that it produces inflation, which makes everybody poorer. "Readings on core inflation have improved modestly this year," the Federal Open Market Committee said in justifying its 50-basis-point interest-rate cut last month, while conceding that "some inflation risks remain."
Catch that bit about "core inflation"? That's Fedspeak for: Inflation is under control, unless you look at the costs of things that are going up. The core rate excludes the prices of food and energy, which can be volatile from month to month. Factor them in, and inflation is about as moderate as Newt Gingrich. In the first eight months of 2007, the consumer price index—the main gauge of inflation—rose at a 3.7 percent annual rate. That's more than 50 percent higher than the mild 2.3 percent core rate. The prices of energy and food are soaring, at 12.7 percent and 5.6 percent annual rates, respectively, and have been doing so for years. As a result, the CPI—including food and energy—has risen 12.6 percent since July 2003, for a compound rate of about 3 percent.
Signs of inflation are evident throughout the economy.
http://www.slate.com/id/2174867/
For those who recall the 1970s, the signs of inflationary pressure in the air these days are too stark to ignore:
- Oil above $83 a barrel, surpassing all records, amid predictions it could hit $100.
- Gold pushing toward $800 an ounce, a level not seen since the Carter administration, with gold bugs saying it will surpass $1,000.
- Wheat prices topping $9.60 a bushel, boosting the price of bread amid a surge in global demand for food. Some say it will soon surpass $10.
- Steak selling for $10 a pound or more, forcing us to eat hamburger.
- And the dollar at an all-time low against several currencies, and near a 30-year low against others, driving up prices for all imported goods.
In such an atmosphere of price pressures, reminiscent of 1978, the seemingly riskiest move the Federal Reserve could make would be to further reduce interest rates, making money cheaper to borrow. But numerous economists believe the central bank will do exactly that at its next scheduled meeting, Oct. 31, to head off any possibility of a recession and to quell global financial turmoil.
http://www.chicagotribune.com/
business/chi-sat_inflationsep29,
0,3509289.story?track=rss
not sure who tiny url works, but here is a great article from Fortune re the Fed bailout:
http://money.cnn.com/2007/09/28/news/economy/sloan_bernanke.fortune/index.htm?postversion=2007092814
Unsold homes in the U.S. may rise 27 percent to an "eye-popping" 6.5 million because of rising foreclosures and the number of canceled contracts on new houses, CreditSights Inc. analysts said in a report Friday.
About 940,000 homes could go on the market within the next year as a result of subprime foreclosures, delaying a recovery in demand until 2009 or later, the New York-based credit and market research company said.
http://www.tennessean.com/apps/
pbcs.dll/article?AID=/20070929/
BUSINESS01/709290316/1436/BUSINESS
My grandma used to live with us when I was a kid. We had a guest house and it was all hers. I remember once poking through the cupboards. It was amazing. She saved everything. Stacked very neatly were anything free she could get her hands on (like sugar packets from Denny's) or that could possibly ever be reused (like the twist ties for bread sacks). I thought she was crazy and told my mom. That's when my mom told me about the Great Depression and what my granda and her family had to do to survive. My Grandma was the only one in her family working and she had to support her parents, her siblings, and then some. There was no safety net.
Question: Do you think this bubble explosion is gonna "depression-ize" the good American folk?
- Steak selling for $10 a pound or more, forcing us to eat hamburger.
==========
Speak for yourself renter. I eat steak whether $10 or $1 a pound. You see unlike you I can afford the finer things in life. I don't live paycheck to paycheck. I don't even know what steak costs since I don't look at prices. If I want a steak, I will buy steak. I won't price shop while in the meat aisle.
This is where the fundamental flaw is for all you HP fools. You assume everyone is a piss poor slob like you. Well sorry partner, some of us are successful enough where we don't worry about pesky things like the price of wheat, milk or steak.
Subprime lead generation software company might lose $900,000 of their bank account deposits with failed bank NetBank Inc.
http://tinyurl.com/362sqw
This is a good link:
http://vancouvercondo.info/
It's a blog about the insane prices in Vancouver, BC, Canada, for condos and houses.
sympathy for him? $5700 a month mortgage? sorry dude, I appreciate what you've done for the country, but $5700 a month on a $100K salary...
http://news.yahoo.com/s/ap/20070929
/ap_on_he_me/coming_home_wounded_th
e_price
greg swan pushing for sellers to submit multiple low ball offers
Bank runs and bank failures, scary stuff!:
http://economicdisconnect.blogspot.com/2007/09/disconnect-will-be-televised.html
Here's a great blog title...
HousingPANIC...we'll pay you double what you paid for your house...If you bought in 1994 that is!
I copied
http://www.tennessean.com/apps/
pbcs.dll/article?AID=/20070929/
BUSINESS01/709290316/1436/BUSINESS
into the box at www.tinyurl.com
and got http://tinyurl.com/2fdyhh
Just copy, paste, and copy back.
I skimmed the article, and noted
that they tried to include
cancelled contracts as an issue
for unsold inventory.
I don't think the cancellations
should count. And the core
stats are bad enough.
"Well sorry partner, some of us are successful enough where we don't worry about pesky things like the price of wheat, milk or steak."
Yet...
September 29, 2007 9:02 PM
errrr. OK, I clicked on the link. Greg Swan is still talking about buying rental income property's!!!
I am aggravated at my computer because Swan is such a creep.
In Florida, if the seller/s accept/s your offer/s, it would be binding.
What he is proposing would be illegal in Florida, unless one intended to buy multiple homes per the multiple offers.
disclaimer; I am not a lawyer or a REIC Member, just an REIC hater.
Remember the Reichsbanknote.
Pesky things like the price of wheat, milk, or steak got very expensive from 1920 to 1923.
http://www.joelscoins.com/
exhibger2.htm
Auction by Ryland Homes in Fair Lakes Virginia (D.C. suburb) and no takers:
http://tinyurl.com/28fg9f
link is to video clip at Fox5News
Here's my headline for the HP blog:
GOLD TO DA MOON ALICE!!!!!
oh, no...
"Cash is King" is becoming the new "mantra".
Get yours (if you have any) at a bank near you, and be King, or...
wait until the F.D.I.C. sorts things out (in a year or two) to get your acceptance to KINGdomhood.
China no longer exporting deflation / Rising prices expected to pose inflationary danger for world economy
China's rapid economic growth is a major factor in the rising crude oil prices, which means that the country is now suffering the consequences of its own success.
The People's Bank of China, the country's central bank, expressed strong concern over inflation in its first-half monetary policy report, released on Aug. 8.
"Soaring prices for grain, meat and eggs are spreading to the food-processing and restaurant industries. It is necessary to prevent an across-the-board price increase," the report said.
Rising labor costs are another factor that contributed to commodity price rises.
Average labor costs in 2006 were 21,001 yuan (2,797 dollars) per worker per year, an increase of 14.4 percent from the previous year. As a result of the rising incomes, the country's index of personal spending increased 15.4 percent in the first half of this year from the same period a year ago.
In other words, strong demand is stoking the rise in consumer prices.
There are already indications that the economic climate in China may be affecting the Japanese economy.
A Beijing trading firm specializing in clothes raised the prices of its exports in July. Prices of work uniforms for the Japanese market were raised from 6.50 dollars to 7 dollars a piece.
A strengthening currency is also feeding inflation. The yuan has gained about 9.5 percent against the dollar since its revaluation in July 2005 and, since most Chinese exports are denominated in dollars, a stronger yuan means higher costs for exporters.
http://www.yomiuri.co.jp/dy/
business/20070927TDY08005.htm
I started to learn about my fellow
Americans during a '72 tour in VN.
Since then, every rock I've turned
over exposes vermin. Most would
not believe what goes on in our
legal systems.
(You know about mortgages.)
One small example of our sick
system is Jiffylube:
www.youtube.com/watch?v=wiCAJ8ULnaI
Please bookmark www.tinyurl.com
The way it works is: just paste
the long url into the box, and it
cranks out a short one.
The reason it works is that it
assigns a 6-character code for
each url it receives, and stores
both in its database.
There are 36 possible values for
each character, and if I remember
the math, this gives (36!)exp6
possible codes, which is a long
way toward a googleplex.
You are right about everything except the dollar weakness because flight to safety will be a very strong support beneath the greenback. In fact the dollar would already have cratered much more without it. Not everyone wants to hold gold only.
Godormammon.blogspot.com
A copy of the comment I left over at Swannies:
Bad advice numb nuts. If they wait five years they'll be giving houses in Phoenix away with the purchase of a #3 @ Mickey Dees. Does anyone actually listen to you?
.
Gotta luv this,
Watching a McMansion recently with an asking price of $1,000,000.oo
after months,
They finally reduced the price...
to $999,999.oo
no kidding
Are they kidding?
I have to believe cnnmoney.com is a wholly owned subsidiary of the NAR.
They have been coming up with some outrageous pieces lately about "cool" young and hip "smart" investors taking advantage of the rock bottom of the RE market.
Videos complete with funky scratch-track music. It is absurd and sickening.
Final words from an interviewee on this video?
"Now is a great time to buy...."
http://tinyurl.com/28xy5h
lol @ edgar.
I am certain swan edited your wisdom.
he he
Looking to be the next Casey Serin or David Crisp?
Looking to get in on the next RE bubble and make a killing?
Then here is your next hero, Peter Zalewski. (are all these guys from former Soviet bloc countries?)
Look no further than cnnmoney.com, the leader in business news and RE speculation, bubble re-inflation and generally keeping denial healthy and strong.....
Check it out.......
http://tinyurl.com/22x5l3
some of us are successful enough where we don't worry about pesky things like the price of ...
Pay careful attention folks, this is foolishness distilled to purity.
Anon, 9:02 PM
You're showing some serious character flaws here with this ranting. Your greed and pettiness shining thru to reveal the real you, and it ain't pretty.
And you're going on about your steak sandwich again just to add comic value. Damn you're a joker.
you do not mention that fed workers get colas that include the raise in taxes, while joe 6 pack slob does not....or land grab scheme.....
Checkout today's (9/30) LA Times - main section, for a quarter page ad (in Blue) from Countrywide. Check out the content of the ad.
Unlike every other bank ad I've seen that advertises features like rates, customer service, ATMs, etc., this ad's line is that if you have deposits in Countrywide the FDIC can guarantee your money even above 100K if you split up your accounts. Basically: Hey, if we fail, you still get your money.
Don't see BofA or Wamu running this type of ad.
What impact will the privatization of Japan's Postal Offices have on US Treasury?
With the weakening US Dollar does it make sense for a private company to hold so much US Treasury and still be profitable?
http://nation.ittefaq.com/issues/
2007/10/01/news0310.htm
The privatization of Japan's Postal Offices, which begins on Monday, is expected to be a tricky task requiring the development of new revenue sources.
A slumbering banking behemoth stirs this week with the start of the long process of privatizing Japan's sprawling post office -- a piggy bank for profligate politicians to its critics but a social lifeline for rural areas.
Japan's commercial banks, emerging from a decade-long bad debt crisis, have been vocal critics of the state-run postal system, which they argue enjoys an unfair competitive advantage in savings and insurance products.
Delivering the country's mail is only part of what it does. The post office also sits atop some three trillion dollars in savings and life insurance policies, making it in effect the world's biggest bank.
The assets are largely invested in government bonds, helping Japan to maintain huge public debts.
"Stupidity is the only universal capital crime; the sentence is death, there is no appeal, and execution is carried out automatically and without pity."
- Robert A. Heinlein
http://imnotsayin.blogspot.com/2007/09/breaking-northside-piers-tower-on-fire.html
"Speak for yourself renter. I eat steak whether $10 or $1 a pound."
Dumbass!
"This is where the fundamental flaw is for all you HP fools. You assume everyone is a piss poor slob like you."
Actually, most of the HP people make well above average income, you dumbass Nazi.
"Well sorry partner, some of us are successful enough where we don't worry about pesky things like the price of wheat, milk or steak"
Inflation affects everyone, especially those will a lot of money in the bank, you stupid, uneducated, asshole!
The housing collapse isn't affecting all cities, luckily. I live in Charlotte which is experiencing the second largest appreciation rate in the country behind Seattle. Actually, even though the rest of the country is experiencing hardships, it's a great time to invest in Charlotte because of the job and population growth.
You can see more in a blog that I've started reading about the Charlote market below:
http://charlotterealestateinvesting.blogspot.com/
Cheers
The housing market have not even began to really fall yet and people are already talking about recovery.
http://www.reuters.com/article/
bondsNews/idUSN3047024420070930
U.S. housing prices may not start recovering until 2010 or 2011, according to a Barron's report that quotes bond fund manager Jeffrey Gundlach.
Keep an eye on CitiBank reserve they are trying to build it up.
Anyone wonder if FDIC had a talk with CitiBank recently after talking to NetBank.
http://www.citibank.com/us/index.htm
CitiBank are offering 6 months CD at 5% APY with no minimum balance
Seems like CitiBank are doing anything to bring up earning.
http://www.allheadlinenews.com/
articles/7008672093
Citi, the nation's largest bank, is issuing approximately 3.5 million credit cards to department store customers who did not request them, a move that could expose consumers to identify theft and other privacy concerns.
CNN reported that the bank is sending MasterCards to Macy's customers with inactive accounts for more than two years. Citi bought these credit card accounts last year.
According to federal law, banks can only issue credit cards when customers request them or they replace existing cards. Thus, consumer group said the customers' personal information was put at risk either in the account-creation process or because the customers, not knowing they were being sent a pre-approved card, would not know if it had been stolen in transit.
Countrywide has a 5.5% APY 12 months CD with $10,000 minimum, but everyone why they are building up their reserve.
http://my.countrywide.com/
With tighter money market it is your money at play.
NetBank Files for Bankruptcy After Regulators Take Over Unit
The parent of NetBank, a pioneer in Internet banking, filed for bankruptcy protection after the savings-and-loan became the first in three years to fail.
The filing in U.S. Bankruptcy Court by NetBank Inc. in Jacksonville, Florida listed assets of $87.2 million and debt totaling $42.4 million.
The bankrupt holding company plans to sell real estate it owns in Columbia, South Carolina and its captive reinsurance subsidiary M.G. Reinsurance Inc. The Chapter 11 filing occurred after a sale of the savings-and-loan fell through and it was taken over by the Federal Deposit Insurance Corp. following a shutdown of the unit by U.S. regulators.
http://www.bloomberg.com/apps/
news?pid=20601087&sid=
ajOPHuXaoV3c&refer=home
Does it really make sense for foreigners to hold so much US Treasury?
Foreigners know comes maturity date there is a good chance they will loss their investment if they have to use that money.
With a weakening US Dollar if they have to convert money back into their own currency they could not only lose the interest rate gained but also their principle.
http://www.reuters.com/article/
marketsNews/
idUKPEK22220920070921?rpc=44
China will set monetary policy according to the needs of its economy and will not let itself be boxed in by a narrowing gap between Chinese and U.S. interest rates, central bank governor Zhou Xiaochuan said on Friday.
His comments were fresh confirmation that the People's Bank of China (PBOC), in order to curb inflation and get real deposit rates back into positive territory, is prepared to run the risk of attracting capital inflows betting on a stronger yuan.
"China has a large-sized economy and we would very much emphasise the domestic economic situation, such as domestic CPI, investment and consumption, in considering our interest rate policy," Zhou told a conference in Hong Kong.
The Federal Reserve cut interest rates by half a point on Tuesday and is expected to reduce them further.
The PBOC, by contrast, has raised rates five times so far this year -- most recently a week ago -- and economists confidently expect one more increase before the end of the year.
In the process, the premium of U.S. rates over Chinese rates has shrunk to about 1.5 percentage points.
Russia has no intention of using its huge currency reserves to infiltrate Western economies or to invest improperly in Western equities, President Putin has told American and European Russia-watchers.
He said that Moscow would use its vast gold and foreign currency surpluses to rebuild Russia’s roads, ports, railways and infrastructure, to construct energy pipelines, raise pensions and give a vital economic boost to small business.
Western governments have become increasingly nervous that Russia will use its huge reserves, now the third-largest in the world after Japan and China, to buy up strategic Western assets such as aerospace industries and energy companies and run these in its own national interest.
http://business.timesonline.co.uk/
tol/business/markets/russia/
article2563096.ece
So where will China diversify their massive foreign exchange reserves if not in the US equities or US Treasury?
After the credit crunch crisis of August 6 to 9, many Hedge Funds are going back into the strategy of managed futures will China join them.
This strategy invests in listed financial and commodity futures markets and currency markets around the world.
http://www.channelnewsasia.com/
stories/afp_asiapacific_business/
view/302845/1/.html
China on Saturday launched its long-awaited state investment company which is intended to manage around 200 billion dollars of its massive foreign exchange reserves.
The China Investment Corp. will be headed by Lou Jiwei, a former vice finance minister, according to a statement issued by the new company.
China's reserves, the world's largest, surpassed 1.33 trillion dollars at the end of June, with about 70 percent generally believed to be held in US dollar denominated paper, principally US government bonds.
The new agency is tasked with diversifying and maximizing returns on part of the country's huge Forex reserves.
It has already invested three billion dollars of foreign exchange reserves in US private equity group Blackstone in May despite not yet being formally launched.
The newly-launched China Investment Corporation will help reduce the pressure on the currency supply caused by a rise in foreign exchange reserves. And analysts also say it will increase the investment returns of China's foreign reserves.
The launching of China's state investment company, China Investment Corporation, is regarded as a milestone in the reform of the management of the nation's foreign reserves.
Li Yang, Dean of Financial Research Institute of CASS said "The new company aims to solve two problems. One is that the state will have an additional foreign reserve holder and reduce the pressure on the money supply caused by increased foreign reserves. The second is that a state investment body will represent the nation's will and seek its interests."
Li also noted that China Investment Corporation will select investment products similarly to the average individual investor, with a focus on long-term investments and gains. Other insiders say the new company will help increase the returns of China's foreign reserves.
http://www.cctv.com/program/
bizchina/20070930/102256.shtml
http://hartford.craigslist.org/rfs/436546767.html
looks like a middle finger huh. Flipping off houses haha
Hey Keith, and HPer's... check this out... http://www.tiny.cc/FqCc4
People in the D.C. metro area who are making six figures in income remain in PUBLIC HOUSING and choose not to move out because they cannot AFFORD to purchase a house in Fairfax, Virginia!
Portion of the article quoted below...
Hundreds of families living in housing subsidized by Fairfax County taxpayers exceed income caps designed to ensure that only the neediest receive assistance, a review of county records shows.
In the most extreme cases, Fairfax is underwriting rents for families making well into six figures: One household getting help makes more than $216,000 a year; another, $184,000. Dozens of others -- making $60,000, $70,000, $90,000 -- exceed eligibility caps. And they do so with the tacit approval of county housing administrators, who do little to encourage occupants to move on when their fortunes improve.
These tenants live in housing intended for families at the bottom of the county's economic spectrum. They are in the federally subsidized public housing program, the Fairfax rental program and the county's senior housing program. The county's Department of Housing and Community Development will spend about $4.5 million this year running these programs.
The fact that higher-income families choose to remain in subsidized housing illustrates the critical lack of affordable housing in Fairfax, named the nation's most affluent county last month by the Census Bureau. The median new-home price in the region's largest jurisdiction is $960,000, and the average monthly rent for a two-bedroom apartment is $1,306, according to county data.
The incomes also reflect, critics say, a disconnect between county practices and its housing policies, which aim in most cases to help families making less than half of Fairfax's median annual household income of $94,500 for a family of four. Fairfax leaders have long put affordable housing at the tops of their priority lists: Board of Supervisors Chairman Gerald E. Connolly (D) helped establish an initiative in 2005 to funnel more than $20 million a year toward the preservation of lower-cost housing.
But that mission should not include subsidizing the rents of families making more than $100,000 a year, Connolly said.
"Clearly this housing was not designed for that," he said. "It's good that these folks have reached a point where they are now successful in their income level. But they need to move into market-rate housing and allow these units to be used for the people they are intended to benefit."
County housing officials emphasize -- and a review of county and federal housing rules confirms -- that they have broken no rules by letting tenants remain after their incomes rise. They say every household met eligibility caps when they entered the program. Officials also say that to turn families out would punish them for attaining self-sufficiency. And they note -- correctly, according to records -- that most tenants in the county's housing programs have low incomes.
"We are definitely fulfilling our mission here," said Paula C. Sampson, director of the housing department. "You have to look at all the numbers. The vast majority of the people we are serving are very low income."
Still, some housing experts say even a smattering of such high incomes is unheard of in most subsidized housing nationwide. This is particularly true of public housing, a program regulated and funded by the U.S. Department of Housing and Urban Development and intended for the country's poorest families.
While many housing agencies allow families to stay after their incomes surpass initial eligibility requirements, many also impose income ceilings that require tenants to seek market-rate housing after their earnings cross a particular threshold.
HUD has allowed agencies to impose such a threshold for more than five years. The Fairfax County Redevelopment and Housing Authority adopted a policy last month to begin doing so. And its new ceiling is the area's median income -- $94,500 for a family of four -- meaning families fairly high up the economic ladder will be able to remain in taxpayer-funded housing.
HPers
Keep an eye on this one folks this could be Bubble II. Student Loans!!!
http://www.businessweek.com/ap/financialnews/D8S073L00.htm
Enron’s Second Coming?
By PAUL KRUGMAN
http://tinyurl.com/2ajyr6
Joe in WH said...
not sure who (sic) tiny url works,
Take a look at tinyurl.com . If you can't figure it out, consider taking a noncredit, introductory jr. college course on the World Wide Web.
Yen edges up vs dollar in Tokyo morning trade after Tankan survey
http://www.forbes.com/markets/
feeds/afx/2007/09/30/
afx4170980.html
Japan Central Bank's Tankan survey suggests that the worst of the turmoil on financial markets are behind the World second largest economy.
Aside from inflationary pressure due to higher wage, Japan is in relatively good shape.
The Tankan survey figure beat expectations. Overall, the tankan figures support a BOJ rate hike.
The BOJ policy board meets next on Oct. 10-11. For the past six months investors expectation were for BOJ to rate hike in August or September after the election. That did not happen due to the August credit crunch.
The central bank's Tankan survey of business confidence released today showed Japan's largest companies expect the worst worker shortages in 15 years.
The Tankan also showed that companies have tweaked upward their forecasts for profit for the fiscal year ending March and increased capital spending budgets.
That suggests that the turmoil on financial markets, the stronger yen and concerns about the credit market crisis have not constrained planners as they continue to look to rapid economic growth in the rest of the world, including China, India and Russia.
The survey followed a mixed batch of economic indicators released last week that showed a solid rebound in production and rising exports.
Japan's wages climbed for the first time in nine months.
Monthly wages, including overtime pay and bonuses rose.
Japan's unemployment rate is 3.8 percent, near a nine year low of 3.6 percent set in July, and job offers have exceeded applicants every month.
The Tankan Survey is supporting Bank of Japan policy-maker Miyako Suda view on Thursday that Japan's economy runs the risk of overheating if the central bank postpones interest-rate hikes for too long.
Keep in mind although allot of medium size hedge funds lost money from August 7 to August 9, many large hedge funds who have the capital to ride through the liquidity squeeze made most of those lost back on August 10.
In fact in the past few weeks many economic data show that inflation is more of a concern, then quick subprime triggered liquidity crisis that most people have probably forgotten that happen between August 7 to August 9 of 2007.
Yes, the same liquidity crisis that trigger the Federal Reserve to lower interest rate by 0.5%
Many speculators and Hedge Funds knew the Ben Bernanke made a mistake by lowing interest rate, that why the US Dollar has fallen so much since.
http://paul.kedrosky.com/archives/
2007/09/30/andrew_lo_on_th.html
U.S. home prices have fallen further since mid-2006 than during the 1990-91 recession and professional traders bet they'll plunge up to 10 percent more the next year.
If the speculative traders making big-money bets on where housing prices are headed are right, the question is not whether a U.S. recession is ahead but when it will start.
Sizable drops in home prices in a year likely would curtail consumer spending sharply. Yale University economist Robert Shiller, who has long warned of inflated home prices, says a big hit to U.S. housing assets, worth about $23 trillion, would shock the broader economy.
"It will upset balance sheets, it will upset lots of our economic institutions," said Shiller, who argues that prices were driven higher by greed, not people looking to buy a place to live.
http://savannahnow.com/node/367759
New Zealand Dollar Moving Up Against US Currency
Extending last week's session gains, the New Zealand dollar trended up against its US counterpart in the early Asian deals on Monday.
Compared to Friday's intra-day high of 0.7592, the pair hit 0.7624 by about 9:25 pm Eastern Time.
As of 10:00 pm, the kiwi was quoted at 0.7610 against the greenback.
The US September ISM manufacturing data is expected later in the morning.
http://www.rttnews.com/forex/
Currency_Mkt.asp?date=
9/30/2007&item=7
The Australian dollar is picking up steam following the opening of trade Sunday in New York.
The Australian dollar continues to make gains on the U.S. dollar, cracking the .8900 plateau to trade at .8904 at 8:30 p.m. ET.
The Aussie also is making progress against the Canadian dollar, trading at 0.8833 for its highest value since Friday.
http://www.rttnews.com/forex/
Currency_Mkt.asp?date=9/30/
2007&item=8
On the Record: John Stumpf, president and CEO, Wells Fargo & Co.
Q: In 2006, Wells Fargo made $83 billion in subprime loans. Are they coming back to roost now?
A: We are the servicer of those loans and we did not originate those. We're about the seventh-, eighth- or ninth-largest originator of subprime mortgages, so we are not the lead in that category.
Q: So half a percent of all your subprime loans are in foreclosure now?
A: One-half of 1 percent of all of our loans. There are about $1.4 trillion of mortgages that we service. That's about 10 million households and a little over 90 percent of those are prime. We have a very small subprime portfolio.
Q: Well, 10 percent of $1.4 trillion is still a pretty significant number.
A: Yes. Some of those we bought and others we service.
Q: How amenable are the investors to work out problems?
A: For an investor, it's an economic decision. Was it more valuable to keep the customer in the home versus taking it back?
Q: What's the cost of foreclosure versus the cost of loan modification?
A: That's a tricky thing. Every deal is different. There are different sizes, there are different situations, there are different products. There is no one size that fits all.
Q: How hard is it to get investors to consent to modifying loan terms?
A: Part of the difficulty is just getting everybody to agree on common language.
Q: Can you keep the mortgages instead of selling them to investors?
A: We're keeping jumbo mortgages (those larger than $417,000) in our portfolio. We hope that over time the market goes back to normal and we can sell these loans in the secondary market.
Q: Who is responsible for the crazy loans made in the last five to 10 years?
A: There's a shared responsibility here. The Federal Reserve reduced rates to 40- and 50-year lows. Real estate became a very hot asset class. People started buying homes.
Because of such low rates, new people came into the marketplace. People bid up prices and everybody wanted to be in the game.
Certain mortgage lenders - especially those that were not regulated - helped fill the investor market for mortgage paper. And people who purchased homes in 2001 and 2002 and then sold them in 2005 or 2006 made a lot of money, which fueled this whole thing.
Q: Did you do 2/28 mortgages (which have low introductory rates and higher permanent rates)?
A: Yes. Principally, in our finance company
Q: What's that?
A: That's where we have $21 billion in subprime mortgages.
http://www.sfgate.com/cgi-bin/
article.cgi?file=/c/a/2007/09/30/
BU8BSA903.DTL&type=business
Switzerland's largest bank, UBS is expected to warn on Monday that it has written off billions of dollars on fixed-income assets, making it one of the biggest casualties so far of turmoil in world credit markets, the Financial Times and Wall Street Journal reported.
Citing people familiar with the matter, the FT said UBS was expected to say it has written down its fixed-income portfolio by more than 3 billion Swiss francs ($2.6 billion), triggering a third-quarter loss of at least 600 million Swiss francs.
http://www.zeenews.com/znnew/
articles.asp?aid=398307&sid=
BUS&ssid=52&news=UBS%20to%20
write%20off%20billions%20amid
%20credit%20woes:%20Reports
The number of all adjustable-rate mortgages resetting to higher rates has risen steadily this year and will peak in March.
Billions of dollars' worth of adjustable-rate mortgages -- many of them subprime loans that have rocked the housing industry -- will be resetting in coming months.
This means higher monthly payments for a growing number of homeowners.
More than $50 billion worth of adjustable-rate mortgages will reset for the first time in October, financial-services giant Credit Suisse predicts, the peak for this year. That compares with $30 billion per month in recent months.
http://www.dispatch.com/live/
content/business/stories/2007/
09/30/MORTGAGE_RESET.ART_ART_
09-30-07_D1_OI81JAJ.html?sid=101
Why save your money when the Federal Reserve is telling you to spend it all, before interest rate goes to zero.
Bernanke is telling everyone through his rate cut that if you want to save do not do it with the US Dollar.
http://money.cnn.com/2007/09/28/
news/economy/
sloan_bernanke.fortune/
index.htm?section=money_latest
Investors to Fed: Thanks for nothing
The reckless are getting relief from Bernanke while the prudent are paying the price, argues Fortune's Allan Sloan.
Even though the Fed has cut short-term rates, long-term rates, which it doesn't control, have risen in reaction to the cut. So whatever economic benefits may flow from lower shortterm rates will be partly offset by the rise in long rates, which are at least as important to the economy as short rates.
Even though Bernanke's cut may mean that some junk mortgages will reset at lower rates, the cost of large, high-quality fixed-rate mortgages, which are tied to long rates, will be higher than they'd otherwise be. (Yeah, penalize the people who are prudent - way to go!)
When I talk about prudent people being penalized, I don't mean just the decline in their wealth in terms of anything other than the dollar. I'm also talking about the price paid by investors who wouldn't play the subprime mortgage game and thus got lower returns than players who took bigger risks.
The folks who didn't get carried away (and avoided huge losses) look smart today - but they looked prudish and foolish until the housing bubble finally popped.
Did the Federal Reserve reacted to quickly in cutting interest rate?
The currency market seems to think so.
http://economictimes.indiatimes.
com/International_Business/
US_job_market_data_is_all_clouded/
articleshow/2417748.cms
As the economy winds through housing troubles and turmoil in credit markets, the picture emerging from data measuring the health of the job market is clouded.
Firms are showing a reluctance to lay off workers at the same time they are apprehensive about hiring new ones, creating a puzzling picture, economists say. Usually, low layoffs coincide with robust hiring.
“What they are doing is freezing job conditions for the moment. They are not letting anyone go, (and) they are not necessarily hiring anyone until they get a clear picture of where the economy is headed,” said Bernard Baumohl, managing director of The Economic Outlook Group in Princeton Junction, New Jersey.
The mixed signals have left analysts pondering whether the economy is simply slowing or headed toward a recession.
A government report on Thursday showed the number of US workers filing new claims for unemployment aid fell by 15,000 last week, the second straight weekly decline. Analysts had expected the number to rise.
That report was out of step with the government’s main measure of employment released earlier this month, which showed the economy shed 4,000 non-farm jobs in August, the first drop in four years. “On the surface it looks like an inconsistency, doesn’t it? We have great unemployment claims numbers, and yet we’ve got rather depressing numbers on employment,” Baumohl said.
anon 5:37:
I've been touting the student loan bubble for some time.
Two points to consider:
1. College tuition has gone up for the same reason house prices went up - unrestricted lending. Inflation is an inflating of the money supply. We have inflated the money supply in sectors. Housing and tuition are the two sectors that have seen the biggest increases. Colleges and universities have been able to raise prices with impunity because students could always borrow the money to pay the price.
2. Student loan debt is generally not dischargeable in bankruptcy. People on this blog talk about homedebtors becoming identured servants. Mortgage debt is dischargeable. There may be tax consequences in forgiveness of mortgage debt, but those consequences usually can be avoided by careful planning. Student loan debtors are in a much worse position.
The DOW is above 14,000 again. I've been buying put options and I don't regret it (yet) - most of the options expire March 2008 or later. The worse the economic news gets, the more the stock market goes up (based on an expectation of further FED rate cuts). It's not going to work. At some point people will realize that lowering short term rates is just going to make things worse, and that bad news is not good news after all.
Anonymous said...
Enron’s Second Coming?
By PAUL KRUGMAN
http://tinyurl.com/2ajyr6
October 01, 2007 6:09 AM
========
Krugman is an fool. He predicted a recession in 2002, 2003, 2004, 2005 and 2006.
Why anyone listens to him is beyond me.
Ha ha:
Under current law, when a person files for Ch. 13 bankruptcy, judges can not reduce mortgage debt owed on a person's primary residence, although they may modify mortgages on investment property or second homes.
Under the House bill, the bankruptcy judge would have the option of reducing what the homeowner owes the lender. Say a homeowner's property is worth less than what he owes. The judge could reduce the principal to match the home's current market value as well as reduce the loan's interest rate.
The rest of the original principal would then be treated as unsecured. That means it becomes a lower priority for repayment than the borrower's secured debt, such as the newly reduced principal on his home. Unsecured debts may be discharged...
[link]
Our society is going over the edge. I love it!
Oops, NetBank went belly up because of subprime losses. First bank failure since the S&L fiasco.
I posted in my blog a story in the Washington Post about how the foreclosure mess has destroyed Cleveland's Slavic Village & how this lead to the death of a little girl.
http://dcfred.blogspot.com/
http://fredericksburg.com/News/FLS/2007/092007/09282007/320915
home first offered at $658,900 going for as little as $369,000.
Nice....
Oops, NetBank went belly up because of subprime losses. First bank failure since the S&L fiasco.
-----------------------------------
Try again. There have been about 25 banks that failed since 2000 alone. About 100 failed in the 90s as well.
http://www.fdic.gov/bank/individual
/failed/banklist.html
Oh and whatdayaknow, the end of the world didn't occur. There are tens of thousands of banks in the US. A few failures a year is bound to happen.
Bank failures from 1991 on...
http://www.fdic.gov/bank/historical
/bank/2004/index.html
Happens quite often. It is not different this time.
American Home Mortgage Investment bounced 564 property tax checks in Maryland but blamed other financial institutions for the problem, the state's commissioner of financial regulation said yesterday.
WHOOPS!
Paul Krugman on the subject of Countrywide
http://tinyurl.com/2gopjb
For years I watched those Countrywide commercials on TV knowing that when they were in trouble, it would be time to start looking at real estate. I was wrong. I won't go looking till next year. Still, not bad for an amateur. ;)
This is a long video about the evils of debt.
It will play on your emotions and you can relate to the topic on a personal level.
http://video.google.com
/videoplay?docid=
-4840432044369494646&hl
=en
Citigroup Inc., the biggest U.S. bank, said third-quarter profit fell 60 percent after $5.9 billion of credit and trading losses on loans and mortgage- backed securities.
Earnings may drop to the lowest since the second quarter of 2004 because Citigroup will write down loans for leveraged buyouts by $1.4 billion before taxes, the New York-based company said in a statement today.
It lost $1.3 billion on subprime assets and about $600 million in fixed-income trading, while higher loan-loss reserves contributed to $2.6 billion in credit costs in the consumer-banking business.
http://www.bloomberg.com/apps/
news?pid=20601103&sid=
atxkxlxKjWzU&refer=us
Summary of the all encompasing bullish arguments:
http://economicdisconnect.blogspot.com/2007/10/anywhich-way-but-loose.html
Yen carry trade came back with a vengeance today as speculator and hedge funds hear the all clear from Alan Greenspan.
Not even Citigroup missing third quarter earning by 60%, UBS AG issued third-quarter profit warnings, or ISM manufacturing index coming below expectations matter today.
With New Zealand and Australian dollar surging against US Dollar, speculator and hedge funds are more willing to take on risk again.
http://www.gracecheng.com/blog/
547/High-Yield%20Currencies%
20Benefit.html
Former Federal Reserve Chairman Alan Greenspan said the credit slump may be ending. This current development brings about positive sentiment to yen crosses, high-yielding currencies and stocks.
http://www.bloomberg.com/apps/
news?pid=20601080&sid=
a4rGkvNoAwro&refer=asia
The yen may fall for a sixth day versus the euro, its longest slide since January, as rallying stocks encourage carry-trade investors to borrow in Japan to buy higher-yielding assets elsewhere.
Since the Federal Reserve cut its benchmark overnight rate on Sept. 18, Japan's currency has lost 4.9 percent versus the New Zealand dollar and 4.4 percent against the Australian dollar, both beneficiaries of the carry trade.
The Dow Jones Industrial Average rose to a record yesterday as investors speculated the global economy will continue to expand.
``Risk appetite is obviously coming back to the market,'' said Michael Malpede, a senior currency analyst in Chicago at Man Global Research. ``The stabilization in the global stock market provided a shot in the arm for carry trades.''
Metro Phoenix Inventory (Sales)
Tracking Maricopa & Pinal Counties, Arizona
Population 2006: 4 million
1/30/2006 Listing per population ratio 1:123
9/30/2006 Listing per population ratio 1:73
01/2006: 32,512 (5,260)___01/2005: (9,360)
02/2006: 36,176 (5,460)___02/2005: (7,935)
03/2006: 39,852 (7,265)___03/2005: (10,035)
04/2006: 44,290 (5,980)___04/2005: (8,735)
05/2006: 47,187 (6,870)___05/2005: (10,425)
06/2006: 50,974 (5,460)___06/2005: (11,545)
07/2006: 52,662 (5,545)___07/2005: 11,656 (10,200)
08/2006: 53,253 (5,685)___08/2005: 15,042 (10,700)
09/2006: 54,731 (4,875)___09/2005: 18,799 (9,815)
10/2006: 54,629 (4,985)___10/2005: 23,770 (8,420)
11/2006: 53,264 (5,040)___11/2005: 26,811 (7,195)
12/2006: 50,477 (4,620)___12/2005: 27,455 (6,480)
Population 2007: 4.1 million
01/01/2007 Listing per population ratio 1:85
06/10/2007 Listing per population ratio 1:67
01/01: 48,213
01/31: 51,913 (4,520)___01/2006: 32,512 (5,260)
02/28: 53,598 (4,280)___02/2006: 36,176 (5,460)
03/31: 57,615 (5,385)___03/2006: 39,852 (7,265)
04/30: 59,616 (4,855)___04/2006: 44,290 (5,980)
05/31: 60,800 (5,220)___05/2006: 47,187 (6,870)
06/30: 61,876 (4,910)___06/2006: 50,974 (5,460)
07/31: 61,877 (4,330)___07/2006: 52,662 (5,545)
08/31: 63,655 (4,240)___08/2006: 53,253 (5,685)
09/10: 63,639
09/20: 64,267
09/30: 64,552
Previous Record high inventory: 54,731 homes, Sept 2006.
Previous Record high inventory: 43,000 homes, ~1995.
Arizona Republic 6/10/06
Population 1995: 2.7 million
Listing per population 1995 1:63
Population adjusted record high inventory: 65,079
So Ben Bernanke is going to lower interest rate again when the market is at an all time high.
Make allot of sense.
http://www.forbes.com/feeds/
ap/2007/10/01/ap4175512.html
Dow Jones Passes 14,000 for Record High
Wall Street began the fourth quarter with a huge rally Monday, sending the Dow Jones industrial average to a record close. Stocks were buoyed by a growing belief that the worst of the credit crisis has passed.
The Dow rose 191.92, or 1.38 percent, to 14,087.55, surpassing its closing record of 14,000.41 set in mid-July. The blue chip index rose as high as 14,115.51 to eclipse its previous intraday high of 14,021.95 set July 17.
While the beginning of the new quarter was an incentive for institutional investors to buy, they also seemed to be motivated by a sense that banks and other financial companies generally weathered the recent credit market upheaval.
You assume everyone is a piss poor slob like you. Well sorry partner, some of us are successful enough where we don't worry about pesky things like the price of wheat, milk or steak.
What will you do if things get really bad and your big beautiful house is suddenly surrounded by "piss poor slobs" who are REALLY PISSED? Think it can't happen? Read about the French Revolution.
{Speak for yourself renter...unlike you I can afford the finer things in life...I don't look at prices...
...piss poor slob like you...}
WANK WANK WANK {splooge}
LOOKS REAL BAD HERE IN RIVERSIDE CA. THE MOST FOR SALE SIGNS AND VACANT HOMES I HAVE EVER SEEN. THE BUSINESS DISTRICTS SEEM VERY SLOW. THE LOCAL PAPER HAS BEEN PRINTING ADS FOR GOING OUT OF BUSINESS SALES FOR MANY FURNITURE, PATIO & BARBEQUE OUTLETS.
THE REO LISTINGS HAVE JUMPED DRASTICALLY. I AM SEEING SOME PRICES AS LOW AS $185000 (1000 S.F.) MEDIAN SUPPOSEDLY $380,000 (OUCH) LOW PRICES ARE MYSTERIOUSLY ON SIGN CALL IN BASIS ONLY. THIS WILL BE VERY UGLY AND DRASTIC FALL HERE $140,000 MEDIAN NEXT DECEMBER OR SPRING 2009.
WE DO NOT HAVE HIGH PAYING JOBS HERE TO SUSTAIN PRICES. FACTORIES (TARGET, JC PENNY, ETC.) HAVE BEEN REDUCING LABOR COSTS. BROTHER (WELLS FARGO REP)ATTENDED MEETING FRIDAY AND WAS ANNOUNCED THAT GOLDMAN SACHS IS SAYING 1/2% TO 1%
FURTHER CUT BY DEC.
I.E. IS A DEAD REAL ESTATE MARKET AND GETS WORSE BY THE WEEK. WE WILL PROBABLY KEEP OUR #1 RANKING. CITY OF SAN BERNARDINO PROJECT HAS ALSO BEEN PUT ON HOLD AS ARE SEVERAL DEVELOPMENTS IN RIVERSIDE COUNTY. WE ARE IN A RECESSION HERE. CAR LOTS HAVE ALSO LOOKED EMPTY ON THE WEEKENDS. THERE ARE ALSO ALOT OF FOR LEASE SIGNS IN THE BUSINESS DISTRICTS. I WONDER HOW MANY SMALL BUSINESSES HAVE BEEN AFFECTED?
EVERYONE HERE I TALK WITH SEEMS DUMBFOUNDED WITH EVERYTHING I TELL THEM. PEOPLE ARE LIVING IN DENIAL BUT PANIC IS STARTING TO SET IN. MOST OF RIVERSIDES HOUSEHOLD INCOMES ARE VERY LOW YET WE HAVE AN EXTREME AMOUNT OF CRAPPY LOANS OUT HERE.
WE ALSO HAVE A TREMENDOUS AMOUNT OF SPECULATIVE COMMERCIAL,INDUSTRIAL BUILDINGS AVAILABLE WHICH WILL CREATE ANOTHER PROBLEM OUT HERE. CONSTRUCTION IS STILL HOLDING UP WELL (MINUS RESIDENTIAL) BUT THESE PROJECTS WILL DRY UP IN 1 YEAR AND A HALF. I FEEL LIKE ANDERSON COOPER REPORTING FROM BAGHDAD. I WILL KEEP YOU GUYS POSTED.
Dow is at all time high, Apartment price are still going up, and the Federal Reserve want to low interest rate.
Make allot of sense.
http://www.bloomberg.com/apps/
news?pid=20602058&sid=akY0mm.
pr2Mc&refer=movers_by_index
Manhattan apartment prices rose 2.3 percent in the third quarter to a median of $864,400 as wealthy buyers swept up large, multimillion-dollar luxury condominiums.
The median price of a condo in the nation's most expensive urban market jumped 5.2 percent from a year earlier to $1.12 million.
"You should do a poll on the education status of all your readers for cross-referencing. :) It'd be fun to see what % have more than a BA/BS, if that. :D"
First, earning potential in many fields actually goes down as one accumulates graduate degrees. Employers assume that anyone who doesn't go into the workforce after a BA/BS would rather putz around in academia than work for pay. Even if this is not the case, one must balance additional expected future earnings versus the cost of additional schooling.
Second, academia is generally the source of ridiculous financial hogwash like Efficient Market Theory. Learn about money from people who make billions, not from professors who don't.
Last, nice try at insinuating that we're all ignorant hicks. If you're insulting people, adding a smiley just makes you look like even more of a jerk.
NEVER EVER BITE THE HAND THAT FEEDS YOU.
Check it out:
http://tinyurl.com/2qnxdy
Would you extend credit to this balance sheet? I'm not sure I would. Here are some estimates:
Balance Sheet
The United States of America
Assets.....................................Liabilities
..............................................Social Security.....$11,000,000,000,000
..............................................Medicare................ 66,000,000,000,000
..............................................Treasury Debt..........9,000,000,000,000
..............................................Total Liabilities...$86,000,000,000,000
Against these known liabilities, the government has the ability to tax:
The whole stock market.........................~$17,000,000,000,000
All of the privately owned real estate.....~35,000,000,000,000
(basically, that's the net worth of everybody in the whole country)
Now comes the $64,000 question: is the U.S. solvent? The answer is: yes, of course- the government can print money. The only problem with printing money is that when the government chooses that alternative, it automatically creates inflation. That's the choice Weimar Germany made- look how well that worked out! So, if the government decided not to print money, where else can it get it? Well, the ugly answer is that it might be forced to tax away the entire net worth of all its citizens. That's right folks- even if you took away ALL of Bill Gates' money and all of Warren Buffett's money and all the money of all the rich people, there still isn't enough to pay for all the promises the politicians have made. Taking all the rich people's money (and everybody else's for that matter), of course, begs the question of why anyone would bother working if the government decides that it's simply going to take away everything anyone earns.
The politicians in this country may not have invented the concept of "something for nothing," but they sure as hell have perfected the art and science of it by promising everything to everybody.
If we put Ron Paul in the executive, he wouldn't sign raising the debt ceiling into law. The Congress would need to hit the books, freeze the budget at the current level, and - god forbid - only roll over existing treasury notes and not issue new ones in addition.
If you lack background on fiscal policy, we spend about $2.9 trillion a year and take in $2.6T. The resulting $300 billion deficit is rolled into the national debt in the form of treasury bonds. We currently have $8.999999 trillion in outstanding treasury bills. When they mature (expire), we simply issue new ones in the same amount at the prevailing rate for terms of 1 year to 30 years. When we need to borrow more like to finance this year's deficit, we offer more new ones. China and Japan are the largest holders of US Treasury notes. Our own government estimates our total future liabilities (from the laws and acts on the books) total $50 trillion dollars, the lions share going to social security and medicare.
And if you think that raising it from $9T to $9.8T is going to last us a long time, think again. In March 2006 we raised it from $8.2T to $9.0T. Last lasted a whole 18 months....
Anon 7:07 sounds like he got rejected from grad school. A BA is the equivalent of a high school diploma 20 years ago. Any illiterate can go to college these days.
Without an advanced degree you will be a cube dweller for life. If that makes you happy, all the power to you. If you want more out of life than that, get your ass back to school.
I rejoice when I read in the WSJ that we've trimmed our budget deficit from an estimated $500B to $333B, or $300B to $2xxB more recently. And I usually brush off the supplemental spending bills that aren't counted in the budget. But now it's come full circle for me. In March 2006 we raised the debt ceiling from $8.2T to $9.0T. Fast forward to September 2007 and we're at $8.99999T looking for Congress to raise to $9.8T. I'm no Alan Turing, but it would seem to me that we've blown through (run a deficit of) $800B in exactly 18 months. Huh? What happened to $333B, 3% of GDP, small deficit. Is it that they actually meant $533B?
@ Riverside,
So it begins.
Before all you socialists jump in bed with Hillary read this. Looks like old Hillary is Wall St and Big Bidness's best new pal. I might be tempted to vote for her as well.
http://online.wsj.com/article/SB119
127620102645595.html?
mod=hpp_us_whats_news
Hey goldbugs?
Down 2.2% today.....
How's that equity crash going for ya?
DOLTS!
From Marketwatch regarding the sales
of existing homes...
"Yun said he expected home sales would better reflect the fundamentals by the end of the year."
Yes, Larry, they certainly will won't they...
So are DOLTS! and DOPES the same person? Or are there two of them now?
DINGALINGS!
Does anyone know where I can get sales tax information by state. The federal numbers lie I want info for the cities.
Hey keith, check out this powerful article I found it on Peter Schiff web site
The Con That Turned the World Against America
http://www.thetrumpet.com/index.php?q=4288.2525.0.0
Hey goldbugs?
Down 2.2% today.....
How's that equity crash going for ya?
DOLTS!
____
Don't need no equity crash. Got a full-blown dollar crash and a commodities boom.
Remember, you stock-holding twit, stocks are priced in US DOLLARS.
If you think you're gettin' rich from stocks, YOU AIN'T.
You lose.
Dow at an all-time high? Sure.
But the US Dollar is at an all-time low against the Euro.
If you think this is meaningless to you and your everyday life, think again.
By all means, buy tons of stocks if you think that's the way to go.
You'll learn what it truly means to lose.
"Man, am I ever rich.
I don't have to worry about the prices of anything, unlike these pathetic fools who don't understand finance or economics"
- self-absorbed, blinkered dolt, 1927 through September 1929
43% of you want Ron Paul.
27% of you want Obama.
This means 70% of you are out of your fucking minds.
Whiners at 20/20.. Please educate them..
http://tinyurl.com/ywqwnf
My take on the property flipping shows:
http://economicdisconnect.blogspot.com/2007/10/house-hunters-that-flip-this-property.html
Just found this satirical gem on the internet:
RECORD 75 MILLION AMERICANS NOW
PRETENDING THEY OWN THEIR OWN HOMES
Low Interest Rates Help Many Fulfill The American (Banker's) Dream
Minneapolis, Minn. (SatireWire.com) — Showing no ill effects from a weak economy, housing numbers released by the National Association of Realtors today showed that a record 75 million Americans are now participating in the mass self-delusion that they, and not their banks, actually own their homes.
"Home ownership is the fulfillment of the American (banking industry's) dream, and we are proud to announce that more Americans than ever have been able to (help lending institutions) achieve that dream," said NAR President Richard Schicter.
After putting 20 percent down on a $235,000 house yesterday morning, Minneapolis pediatric nurse Stephanie Doogan officially became the 75 millionth American to take part in the widely accepted fantasy.
"Ever since I was a little girl, I've wanted to (deceive myself into believing I could) be a homeowner," said Doogan, 35. "Well, look at me now! Me, little Stephanie Doogan, I actually have a place I can call 100 percent (minus 80 percent) my own!"
Across the country, other (people in denial concerning their status as) property owners expressed similar satisfaction.
"There's nothing like taking a walk around your (bank-owned) house, then going outside and kneeling down in your (bank-owned) lawn and grabbing a handful of (the bank's) dirt to make you realize how precious (their) land is," said 28-year-old Matt Jackson, who('s bank) bought a $210,000 home on New York's Long Island last year. "It makes me feel as though I really have something that no one can take away from me (unless I miss so much as one mortgage payment)."
Added Devon Knight, who recently thinks he purchased a condominium in Baltimore's Inner Harbor: "When I was renting an apartment, if the furnace went out, I had to get the landlord to fix it. But now, if the furnace goes out, I have to fix it!... hold on, I'm losing the illusion here... why is that good again?"
"Equity," said Jay Harrington, Knight's mortgage broker at First Union. "Just remember, you have equity. And next to the right of every single American (major corporation) to have a say in who gets elected, that's the most sacred thing you can (pretend you) have."
Copyright © 2001-2002, SatireWire.
I wonder how many homes are listed because people can’t refinance? Read my article about the looming disaster in prime lending for bubble markets:
100% Home Purchase after 04 can’t refi!
http://thegreatloanblog.blogspot.com
20/20 comments are funny. Typical of the mindset. I know someone whose wife is a realtor. Nice enough woman but man you'd think she's out curing cancer the way she goes on about what a service she provides her clients. I can see her on there saying NOW IS THE BEST TIME TO BUY.
I sold a house recently in Las Vegas before moving to Georgia. I tried FSBO and nothing happened. I then got a realtor and agreed to 4% commission.
House was on the market 7 months before finally selling. I dropped the price 3 times. But my realtor did encourage me to lower the price for the get go. Should have listened to him. He knew what was happening and was very honest with me about the state of the market.
There are good ones and bad ones like with any other group of people (notice I didn't say profession).
Weak dollar? No Problem! I will have to switch from Heineken to Samuel Adams and drink more California wine rather than swilling from France or Spain. Oh my am I going to be put off if I can’t visit Paris and let myself be treated like a piece of shit because I’m an American. Oh yeah, and I'm going to have to be content on driving an American car from now on because I won't be able to afford a European or a Japanese car. Does that sound like more jobs for Detroit? The big losers in this game are the European, Chinese and Japanese manufacturers that depend heavily on Exports to America. Good luck BMW, Mercedes, Jaguar, Maserati, Ferrari and Lamborghini. Have fun exporting this expensive shit to developing economies like China or India. And hey China and India aren’t your goods getting more expensive in America now too? Maybe we see some of these jobs coming back? I hope the dollar falls to 2:1 against the Euro. I want to wish China, India, France, Germany, Italy, Sweden and Spain all the best of luck in exporting their stuff to America. And for all of you that believe America is going down. If we go down so will the rest of the world, we still have enough nukes to blow the planet into smithereens. I’m bullish on America. So invest all your cash into Gold just to loose your ass after it deflates again. This is the next thing where people will get screwed big time and I hope you all are sent home with your assholes bleeding. You HP’ers are all a bunch of sorry ass renting imbecile pussies!
Re: Blowfly said
"Weak dollar? No Problem! I will have to switch from Heineken to Samuel Adams.....
....hope you all are sent home with your assholes bleeding. You HP’ers are all a bunch of sorry ass renting imbecile pussies!"
Yes, I agree that, if the USA 'goes down,' it will likely cause recessions in many other parts of the world, too. So what? What does that have to do with the fact that real estate prices are unsustainably high and that there are lots of mortgages doomed for foreclosure?
I also agree that the USA "still has enough nukes to blow the planet into smithereens." So what? So do multiple other countries. How is this going to help the dire economic situation, and, again, what does this have to do witht he fact that real estate prices are unsustainably high and that there are lots of mortgages doomed for foreclosure?
When the US dollar weakens, gold always goes up. So you sell your gold before it strengthens again. I doubt that anyone bullish on gold is planning to buy and hold for the long term; the point, I think, is to buy it before it spikes and to sell it when you've made a good return on it.
Same as real estate: buy it, and then later sell it when you've made a good return.
Countrywide PR blitz.
I'd like to see a housingpanic question of day like this:
"How far will existing home sales fall from the 7M a year peak?"
The latest projections show we're heading for 5M a year in the next reporting period. I think inventory will stay flat into the winter (a bad sign as it usually goes down). Then sales will continue falling from winter into spring. Then inventory will mushroom.
You can't "seasonally adjust" your way out of that one. Or blame it on an entire year of "bad weather".
It's about as laughable and predictable as Ford car sales being down 39% YOY in September. You can't blame that on one less sales day that month. The sad part is this stock market doesn't take that out on their share price. The even sadder part is that Ford loses money on every car they sell, so selling fewer cars means they lose less money. What world do we live in where that is OK?
State of Massachusetts sues CFC in class action lawsuit for "misrepresenting its financial condition to investors."
http://tinyurl.com/ynvwxa
43% of you want Ron Paul.
27% of you want Obama.
This means 70% of you are out of your fucking minds.
____
So, you like Hillary then?
I thought some of you might want to know: Ron Paul raised 5.08 million in the 3rd Quarter more than doubling his 2nd Quarter totals.
Wow, great article. Particularly:
Foreign willingness to purchase U.S. debt has kept interest rates low in America—thereby creating millions of jobs in real estate, home construction, remodeling and other associated industries. America has become so dependent on foreign money that if foreigners stop lending to America, the America you know today would not survive.
As Jim Willie warns, we “might be in the early stages of … a boycott of U.S.-dollar-based financial assets.”
If I had to bet on what could cause a stock market crash, it would be a morning where the US Treasury has an auction and there are NO bids. Just like 1987 where there were NO orders (for stocks) before the bell and the futures markets fell off a cliff.
> ApleAnee said...
> NEVER EVER BITE THE HAND THAT FEEDS YOU.
> Check it out:
> http://tinyurl.com/2qnxdy
bryce in canada(Vncvr&Clgry bubbls) said...
Blame Canada. Canada their not evan a real country!
about this supposed housing "crash" you all speak of
In the past 3 weeks, 4 homes have sold in my Las Vegas subdivision. Prices were $350K, $395K and $379K. Homes that sold for $175K in 2001 and 2002.
Yeah that's quite a credit cruch there Keith. Nobody's buying anymore. Prices will fall to 1995 levels.
Keep dreaming.
here are the parcel numbers, look it up if you don't believe me
177-31-512-098
177-31-516-058
177-31-516-014
Well, that's 4.....
How many houses are in Las Vegas, anyway?
"Anonymous said...
about this supposed housing "crash" you all speak of..."
Some now-alcoholic, now-destitute Japanese person once said something similar:
"So, you think there is supposed housing crash, HAHA to you! Houses still selling for way more than even just in 1985 and 1986! Dream on!!"
- a self-absorbed, blinkered dolt, 1992 through 1996, Japan.
I am looking to collect thoughts from folks on whether the economic disconnect we are witnessing can keep going on? Anyone interested in adding to the debate:
http://economicdisconnect.blogspot.com/2007/10/permanent-disconnect.html
this guy supports the Fed:
http://finance.yahoo.com/expert/article/futureinvest/47033;_ylt=AghP0OuoaRBLXhzhg_jdJPy7YWsA
we all know the buyers and everyone else at the bottom of the pyramid gets hosed, it's the people at the top who get bailed out
Las Vegas Inventory (Sales)
Tracking Clark County, Nevada
Population 2006: 1.89 million
1/30/2006 Listing per population ratio 1:120
9/30/2006 Listing per population ratio 1:77
01/2006: 15,744 (2,233)___01/2005: (2,426)
02/2006: 16,978 (2,271)___02/2005: (2,508)
03/2006: 18,418 (3,167)___03/2005: (3,864)
04/2006: 19,871 (2,807)___04/2005: (3,649)
05/2006: 21,168 (3,161)___05/2005: (3,847)
06/2006: 22,479 (3,097)___06/2005: (4,079)
07/2006: 23,221 (2,501)___07/2005: 13,276 (3,937)
08/2006: 23,957 (2,609)___08/2005: 13,722 (4,145)
09/2006: 24,300 (2,177)___09/2005: 14,289 (3,654)
10/2006: 24,103 (2,046)___10/2005: 14,925 (3,226)
11/2006: 23,634 (1,871)___11/2005: 14,784 (3,042)
12/2006: 22,208 (2,016)___12/2005: 14,368 (3,024)
Population 2007: 1.9 million
01/01/2007 Listing per population ratio 1:86
09/30/2007 Listing per population ratio 1:61
01/01: 22,040
01/31: 22,748 (1,715)___01/2006: 15,744 (2,233)
02/28: 24,068 (1,684)___02/2006: 16,978 (2,271)
03/31: 26,794 (1,946)___03/2006: 18,418 (3,167)
04/30: 27,620 (1,677)___04/2006: 19,871 (2,807)
05/31: 28,577 (1,941)___05/2006: 21,168 (3,161)
06/30: 29,646 (1,820)___06/2006: 22,479 (3,097)
07/31: 30,445 (1,621)___07/2006: 23,221 (2,501)
08/31: 31,178 (1,601)___08/2006: 23,957 (2,609)
09/10: 30,881
09/20: 31,197
09/28: 31,279
All time Record high inventory: 31,334 homes, Sept 2007.
Previous Record high inventory: 20,217 homes, June 1995.
www.realestatedecline.com
Population 1995: 1.32 million
Listing per population ratio 6/1995 1:65
Population adjusted record high inventory: 29,230 homes.
------------------------------------------
And the hits keep coming for Orangelo.
http://tinyurl.com/ynvwxa
Massachusetts Suing Countrywide Financial.
Couldn't happen to a nicer citrus-fruit-coloured egomaniac.
Have you heard of Countrywide's bracelets for loyalty program?
Unbelievable!
Are they really a bargain or a sell promotion to drum up business.
Foreclosure Auction in the San Francisco Bay Area.
In the early stage of a housing slump most auction home get nearly the asking price, and many time Auctioneers use half price starting bid as a teaser to get more people to go to the auction to bid.
Don't fall for it. It too soon to get the bargain unless, you are connected or extremely lucky.
http://www.mercurynews.com/
business/ci_7069484
San Jose resident and real estate investor Sean Cervantes plans to attend and bid on a four-bedroom San Jose house he previously tried to buy from the lender-owner for $675,000 several weeks ago. Cervantes said it appeared the lender would agree, but then he was told the house would be sold at auction instead.
He's curious to see whether he'll be able to get the home for less at auction than he offered previously, and whether other properties get sold at a discount.
"If it's really going to be a legit thing where they're going to cut them loose, I'll be ready" to buy more at auction in the future, he said.
Does Donald Trump still want to build a PGA golf course around a high crime area of Fresno?
http://abclocal.go.com/kfsn/
story?section=local&id=5680014
A federal judge ordered a trial to determine if the property can be sold at a foreclosure auction.
It's a move many investors are still fighting to avoid.
Billionaire Donald Trump offered to buy the unfinished 500 acre golf course and housing development for $30m.
The owners wouldn't meet his terms, but it now looks like their efforts to find another buyer have failed, and Trump could pay much less.
After a hearing in Federal Court, it seems likely the effort to find a buyer to rescue Running Horse and its investors has fallen short.
Everyone is waiting for Friday nonfarm payrolls report.
http://www.businessweek.com/
investor/content/oct2007/
pi2007103_719991.htm?chan=
top+news_top+news+index_investing
Action Economics expects nonfarm payrolls to post a 120,000 September gain, vs. a 4,000 decrease in August, while the average workweek holds at 33.8 hours, and average hourly earnings increase by another solid 0.3%. However, the unemployment rate is expected to tick higher to 4.7% from 4.6% in the preceding month.
Government payrolls should bounce by at least 45,000, with potential for upward revisions in the last two months, given the odd 82,000 drop over the last three months that likely reflected seasonal distortions in education employment. Meanwhile, a modest 75,000 gain in private payrolls should allow for a 120,000 rise in the headline nonfarm payrolls figure.
Forecast Indicators
Following are some of the key indicators that factored into forecast:
The September ADP employment survey revealed a 58,000 gain that translates to a 123,000 nonfarm payroll gain, if you assume a 45,000 September bounce in government payrolls following the massive June-July-August shortfall in teacher employment, and a 20,000 downward bias in the ADP figures relative to private payrolls. The figures are almost exactly in line with our 120,000 payroll forecast.
Looking at other labor market indicators, the weekly jobless claims data have moved back to surprisingly lean levels in September, consistent with a healthy labor market. Initial claims are tracking a month-average for September of 311,000, compared to 324,000 in August; 307,000 in July; 319,000 in June; 306,000 in May; and 327,000 in April. Initial claims reached a 313,000 level during the Bureau of Labor Statistics' survey week for September—during which the data for the jobs report is compiled—compared with survey-week readings of 325,000 in August; a lean 303,000 reading in July; 326,000 in June; 296,000 for May; and 341,000 for April.
http://tinyurl.com/2fs3f2
State of Texas now offering BELOW market rate loans!
What you jackasses don't realize is the devaluation of the US dollar is the single greatest thing that could happen to this country.
I won't bother to explain, as your 1/2 horse-1/2 mule brains could not comprehend.....
Just keep praying for cheap Chinese crap you can buy.
JACKASSES!
Back in 1989 at the housing peak, homes in California were 6 times salary...
What do think it is now?
http://www.fdic.gov/bank/historical/history/vol1.html
OH MY GOD!!!!
.
.
.
VIET NAM IS REDUCING THEIR US DOLLAR PURCHASES!
For heaven's sake please, all of you, get out of the US dollar NOW!
Can you imagine? Viet Nam, of all countries!
Don't you know what this means??
Are you friggen blind? Oh...my...God! For the love of god!
Holy jesus christ, now my tilapia fish is gonna go through the friggen roof! I am pissed! No really, I am hella pissed!
And you can FORGET any vacations to VIET NAM anymore!
DAMN IT! DAMN IT!
Vote the damn Republicans OUT! Damn those selfish a**holes, they have completely ruined the dollar.
And it serves us right being propped up by the commie Viet Cong!
That's it,
end of the world,
it's all over....
I hereby declare all my dollars are going to be converted into the dong.
In other words, I am long dong........
Congratulations to Keith for making the "25 most influential bloggers" list!
http://tinyurl.com/3bj4j9
i say that since they treated housing like a stock to flip, let them take secular bear market returns of being nickled and dined down for 17 years before an uptick. having had a mother tat owned the same house for 60 years planted and built and created community....not raised taxes by flippings for profits from the neighbors...giving to the local people, that were the cdc hands for times of troubles, not more to those that will/would retirn nothing bycause they are not. will not be the local community..ditto to which govt is just another taker,,,,
pardon the spellings, but as it is, seem to be talking another language, and i have not installed language translators or spell check...
i can tell you that it takes 10 years to get a fruit orchard in frd grade gramma school...oke garlic, potatoes ect that if kepp cool will start to reproduce, enjoyable.. . and interesting thirm seeds started above the kitchen sink..perhaps you should plant some yearlys also, as a lot of store bought fruits and vegetables work also as do root plants interesting 3rd grade gramma school...for lifetime learning..forgotten...
if there is a depression coming i want my million dollar manhattan apartment condoplex to be raising chickens, ducks (yummy) and turkeys... odd???? gotta start today while im rich??? odd???, on the roof....jed... moved away from there????
Oh-oh, I think someone is making an orange smoothie in his pants right about now.
http://tinyurl.com/38ngzt
Countrywide Financial Corp (NYSE:CFC - News) was ordered to give confidential information about its stock-grant practices to a pension fund that claims it gave executive stock rights at "unusually suspicious and lucrative times," the Los Angeles Times reported on its Web site.
hey the "bum" who sleeps under the dozen fruiting lemon trees my bank planted a few years back is back, just seemed a little close to main street...but walkable from here....warm in winter, yoo hot. hot in summer....surprised he did not bring walkable to potatoes... remember the guy who died under Reagans avacodo tree from frostbite
10 years to get a fruit orchard in from seeds grown in pots and plates above the kitchen sink, with yearly plantings until second generation seed seed cropings, ala gramma school lifetime learnings... forgot...
I forgot to mention- go to this link, and under the heading Part 2 Sectional & Regional Crises - scroll down to #11 Banking Crises in California.
This is a great article about CA economy and the housing market's ups and downs.
It appears the mantra "It's different in CA" has been echoed during all decade booms in CA.
After reading this article, I'm convinced this housing bust is the biggest in history...
http://www.fdic.gov/bank/historical/history/vol1.html
Jeez lauravella, could you narrow it down a bit?
Give me the "Exact" location please.
What are you trying to say?
Dumb Amunals said...
What you jackasses don't realize is the devaluation of the US dollar is the single greatest thing that could happen to this country.
You and Blowfly are obviously in lala land. Can you explain to me how a devaluated dollar can be good for this country. With the exception of advance weapons systems and airplanes this country produces little that is exportable. Of course I can see all the Europeans starting to drink Budweiser now because it's cheaper. You're a bunch of dimwits, both of you!
cashcow:
you are a tool if you think only planes and weapons are exported.
you must be part of the 60% on this blog that supports Ron Paul given you lack of economic understanding
Anyone who thinks for a second that prices around the DC area are not insane, let me submit this example of extreme egregiousness:
http://www.homesdatabase.com/MC6551506
This little house, at 19321 Jerusalem Road in Poolesville, MD, was bought for $225K in late December of 2002. The current owners made a few modifications (like stainless-steel appliances) and are now trying to sell this house for $689K!! That is insane, no matter how you look at it--asking for more than triple the value from late 2002 until mid-late 2007.
If they sell for anywhere close to their asking price, this will be a great example of extreme idiocy on the buyer's part.
Where was I when everyone's salary tripled in the last 5 years? Oh wait, THAT NEVER HAPPENED!
REAL ESTATE CONNECTION
So much for the housing bubble having a soft landing. Feel more like a thousand pound gorilla sat on my kids ballon.
www.realestateconnectusa.com
Cashcow:
I thought about explaining, but decided instead to let you wallow in ignorance......
But you are *sort-of* on the right track....
Nice article about Captain Bernanke. I think you will all like this one.
http://tinyurl.com/2pfc47
http://delmar.typepad.com/brianbrad
y/2007/09/jumbo-loans-are.html
Jumbo loans, no docs are back boys and girls. Say buh-bye to the so-called housing crash and so-called credit crunch.
Jumbo loans, no docs are back boys and girls. Say buh-bye to the so-called housing crash and so-called credit crunch.
Ha ha ha ha! How stupid!
Before you get all excited about that, read this:
http://tinyurl.com/2vkbu3
With the exception of advance weapons systems and airplanes this country produces little that is exportable.
_____
Well heck, let's sell THAT stuff and just make sure we stay a few steps ahead with our own versions of it.
Say buh-bye to the so-called housing crash and so-called credit crunch.
______
On what planet of inbred REEEEEtards are they thinking the housing crash and credit crunch are over???
Ha ha ha ha ha ha ha ha ha ha ha ha ha ha!!!!!!!!
Saving money and paying off debt is something people dont want to think about. Now... that is scary.
_______
And when they DO muster the courage to consider saving money and paying off debt for a moment, they realize they are in a hole so deep they will never be able to climb out.
I would like to use the same approach to funding my checking account that the US govt uses to create total Fed credit.
I'd just say, "There's plenty of 'money' in that account, because I say there is...so every check I write is backed by the 'money' I have have decreed exists there...so leave me alone, all of you debt collectors! The checks is in the mail!"
my new favorite reporter
http://media.newsbusters.org/storie
s/cnn-meteorologist-definitely-
some-inaccuracies-gore-film.html
Finally someone speaks the truth about ALGORE's lies.
Bailout plans covered:
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=af7qgVXCOx5o
Worthy nugget from Mrs. Blair:
"Let's be honest about it: Hybrid ARMs were never made on the assumption that borrowers could continue to pay them back once the loans reset"
She propose fixing the initial teaser rate forever. Shouldn't we all get 3% fixed mnortgages then?
Check my site for a prediction on tomorrows action.
http://economicdisconnect.blogspot.com/
Just talking to a friend of mine about the art of negotiating the deal. He says to me, "You know who are the rottenest at negotiating a deal?" I shrug, "RE agents" They do not give a damn about getting the best deal for their clients. He talks about how he worked for a Title Firm and how they would demand that the deal go through so they could be paid, threaten to take their business elsewhere, demand that the number be hit etc., etc. He says he never once saw an agent challenge a line item charge on a HUD-1, be able to answer questions/surprises at the settle table etc. They would always just do what they had to do to get the deal done so they could be paid. He saw alot of terrible deals go down at the settlement table, always due to niave sheeple not questioning anything. He said he saw a few tough cookies but they usually did not have an agent!! FYI, this was back in the 80's before any of this bubble BS so you just know its gotten worse since then.
Therefore I'd like to say Nothing but scum, but I know they are lower than that now!!!
So I get my copy of Business 2.0 today. First, it's wrapped in a "this is your last issue" piece of cardboard. Then, the cover says "How to profit from the housing bounce back". Then, the 2nd page is a letter from the staff saying that Time Warner bought the magazine and they are all quitting.
I threw it right in the garbage. Maybe the housing article was a joke? An editorial gaffe? A satire?
http://tinyurl.com/26k72p
.
The Hypocracy of Al Gore is astounding!
.
So exactly how does this bail out Bill help MBS investors?
http://news.moneycentral.msn.com/
provider/providerarticle.aspx?
Feed=AP&Date=20071004&ID=7489465
House has approved legislation to help financially strapped homeowners, passing a bill that would give financial relief for homeowners facing foreclosure or in bankruptcy.
One bill which passed by a 386-to-27 vote would give a tax break to homeowners who have mortgage debt forgiven as part of a foreclosure or a reworking of a loan. Another measure that was approved would allow judges to order mortgage lenders to ease terms for homeowners in bankruptcy proceedings.
The House votes are the latest congressional reaction to a mortgage crisis touched off this spring by a blowup in high-priced home loans for risky borrowers. An estimated 2 million to 2.5 million adjustable-rate mortgages will jump from low initial "teaser" rates to higher rates this year and next. Steep pre-payment penalties have made it difficult for some to get out of their mortgages, and some overstretched homeowners can't afford to refinance or sell their homes.
San Francisco Countrywide employees get a memo from Mozilo.
Video: FatCat Real Estate vs. First Magnus
http://tinyurl.com/24znoq
Summary: The slime calling the ooze black.
Another bank failure:
http://www.fdic.gov/bank/individual/failed/miamivalley.html
Don't know if this has been posted yet, just letting all HP'ers know a bank just went belly up in Lakeview, Oh. Posted tonight on The Drudge Report.
http://www.fdic.gov/bank/individual/failed/miamivalley.html
.
QUESTION?
Just met a guy who in short mentioned he had 400oz of gold and several bags of junk silver!
Now my question,
If you really had that much would tell anyone about it?
Especially a stranger.
Or is this guy blowin smoke to try to impress?
Does joe average have that much?
Just curious?
im not buying that house in maryland on jeruslem road till it hits 80 thousand...hows that for irrational
From Oct. 3 USA Today
Allentown Pennsylvania:
A 15-week strike at Tama Manufacturing is over. Previously, employees of the garment maker paid nothing toward health insurance.
The union says workers will now pay $12 per week, still less than a third of what the company sought.
In exchange, workers are forgoing a pay raise in the first year. They’ll get 2% raises in the second and third years.
------------------
With the high costs of medical care, I suppose it is reasonable for a firm to expect its employees to contribute.
But no pay raises for a year, and then a paltry 2% raise for each of the next two years?
You have to feel for these people – they probably get paid less than $15/hr, and their living expenses are going up as inflation rages; in the meantime their wages are stagnant. Hopefully none of them are too deep in debt…
Meanwhile, their employer is probably trying to figure out how to offshore these people’s jobs.
Multiply this by a few thousand and it gives you a clearer picture of what is happening in this country.
-Mammoth
I don't care what they do freeze ARMs, restructure mortgages lower, forgive debt, give houses away. The flippers aren't going to pay their mortgage, taxes and insurance if there's no hope of a quick profit. Ho hum, CONgressional follies at their best.
Who said we're at the bottom?
Homebuilders Liquidate Assets in Desperation Sales (Update2)
By Bob Ivry
Oct. 5 (Bloomberg) -- When D.R. Horton Inc., the second- biggest U.S. homebuilder, couldn't sell the one-bedroom condominium in San Diego it listed for $349,800, the property was auctioned as a last resort for 37 percent less.
D.R. Horton, with annual revenue of about $11 billion, and Hovnanian Enterprises Inc. now face the worst choice in the worst residential real estate slump since the 1930s. They're selling homes at any price they can get.
``It's desperation time and some companies may not make it,'' said Alex Barron, an industry analyst at Agency Trading Group Inc. in Wayzata, Minnesota. ``At this point in the housing cycle, if you have too much debt, it's hard to get out from under it.''
Homebuilder profits depend on the cost of land, said John Burns, president of John Burns Real Estate Consulting in Irvine, California. Companies can still make money building on land purchased before the 2005 peak of the five-year U.S. housing boom, though price declines of as little as 10 percent might wipe out those profits, he said.
``They are all losing money,'' Burns said. ``They'll talk in terms of gross margin and it sounds like they made money, but they actually lost money because they didn't make their costs.''
`Really Stinks'
The average cost to build a 3,340-square-foot home in the U.S. is $403,925, according to the National Association of Home Builders in Washington. That includes $219,015 for construction costs, $45,507 for the price of undeveloped land, $65,969 to prepare the land for building, marketing expenses of $11,258 and a sales commission of $19,499.
During Hovnanian's ``Deal of the Century'' promotion last month, the company sold a 2,900-square foot five-bedroom, three- bathroom house at the Greenwood Manor development in Royal Palm Beach, Florida, for $525,000, said Kathy Bell, who bought a house with the same floor plan down the street for $575,000 in March 2006.
``It really stinks,'' said Bell, 50, a medical billing specialist. ``We were here in the beginning and we didn't get any deals. It's very upsetting.''
Construction costs alone for a house that size would be about $435,000, according to the Florida Home Builders Association. That doesn't include the cost of land, or preparing the lot.
Debt Load
Hovnanian's Web site said that model was available ``starting from $530,000s.'' Hovnanian spokesman Jeff O'Keefe said the company offered discounts as high as 30 percent. O'Keefe said he wouldn't comment on the prices paid for properties sold during the promotion, which ran from Sept. 14 to Sept. 16. Chief Executive Officer Ara Hovnanian had said the company sold 2,100 homes in the three days, more than double expectations.
The 15 largest homebuilders are saddled with $7.75 billion in debt due to be repaid through 2009 and the companies' bonds trade as if they were junk, according to credit-default swap data.
Most homebuilders have generated cash from sources they won't be able to sustain, Moody's Investors Service said in a report issued today.
They have sold mortgages that their home-loan units have originated and reduced the amount of land they have purchased, giving their cash flow a bump this year, said Tom Marshella, head of homebuilder research for the New York-based bond-rating company.
Smaller Businesses
``For the near term many of them will have to operate as smaller businesses,'' Marshella said in an interview.
At least five of the top 15 homebuilders by revenue are burdened with too much debt, Agency Trading's Barron said. They are Hovnanian in Red Bank, New Jersey; Irvine, California-based Standard Pacific; WCI Communities Inc. of Bonita Springs, Florida; Atlanta-based Beazer Homes USA Inc.; and TOUSA Inc. in Hollywood, Florida.
WCI will reduce its debt with the completion this year of a luxury condominium tower in Bal Harbour, Florida, said Chief Financial Officer Jim Dietz.
``We might discount a home 20 percent if the profit margin was 30 percent, but we haven't discounted any properties 40 percent, which some homebuilders are doing to raise cash,'' Dietz said.
Officials from Standard Pacific and Beazer didn't return calls seeking comment.
`Focused on Today'
``We're not focused on growth,'' Ian McCarthy, Beazer's chief executive officer, said at a homebuilding conference in New York on Sept. 18. ``We're very much focused on today and getting through this downturn.''
Beazer has conducted three national sales since June, the latest called ``Smart Homes Savings Event.''
TOUSA withdrew its forecasts for 2007 and 2008 on Wednesday, blaming what it called worsening market conditions, the company said in a statement.
The company will focus on generating cash to pay down debt, CEO Antonio Mon said in the statement.
Shouldn't Marketwatch issue another article that states that the Federal Reserve smoking gun was nothing more then "smoke and mirror" and that the Federal Reserve should have waited to get conclusive evidents before lowing rate.
http://www.marketwatch.com/news/
story/commentary-fed-has-smoking-gun/
story.aspx?guid=%7B722D20CC-6E25-
4211-8E98-6BDD98ECDC47%7D
With payrolls falling in August, the Federal Reserve has the smoking gun -- the hard evidence of a weaker economy -- that it would need to cut interest rates.
When Wall Street stared down Federal Reserve Chairman Ben Bernanke last month, it was the central banker who blinked and lowered interest rates. The risk of recession, in the financial services industry, at least, trumped the threat of inflation to Main Street.
The argument for a cut as large as the Fed made--half a percentage point in the Fed Funds rate--was that it would send a sufficiently powerful stimulus into the economy to offset any impact from the slowing U.S. housing market. But as we noted at the time, when the time comes to judge whether 50 basis points was the right cut, the test it would have to pass is this: Did it breathe air into dying embers or blast pure oxygen into a fire of inflation?
Today's employment figures suggest the latter. The U.S. Labor Department offered up a September jobs report that not only suggests that the economy is not screeching to a halt, but may not even have been threatening to do so as the previous month's dismal data was taken to indicate. The 110,000 jobs added in September, plus a revision in the August figures to an 89,000 job gain from a 4,000 job loss are not the numbers of which recessions are made, even with all the usual caveats of judging on one month's figures.
http://www.forbes.com/opinions/
2007/10/05/inflation-fed-
bernanke-oped-cx_pm_1005notes.html
Was the August job number report a honest mistake by government officials or a bigger cover up to show that the Federal Reserve was a true independent agency which did not cut rate based on political pressure but based on sound facts.
If it is a cover up then could it be said the the CPI report is another cover up to show that there is no inflation when in fact people are seeing rising prices every day.
http://www.forbes.com/opinions/
2007/10/05/inflation-fed-bernanke
-oped-cx_pm_1005notes.html
Core inflation, that is consumer prices with volatile energy and food prices stripped out, is the inflation indicator that that Fed watches. It is still constrained and falling to 2.1% from 2.7% in January. But on Main Street people still eat and consume energy. By that barometer, prices are rising. Crude oil futures are near their all-time high. Food prices from wheat to milk have jumped.
Commodity prices are a leading indicator of inflation. On world markets, prices of raw materials are up--agricultural products are only the latest to the party--and the value of the dollar is going the opposite way. That combination does not make for cheaper imports at either the gas pump or the grocery store shelf.
Elsewhere in the world, six central banks from Switzerland to Taiwan raised rates over the past month, fearing the threat of inflation more than the risk of recession. Of the seven central banks that cut rates, only Hong Kong did so as dramatically.
Maybe the Fed sees something in the U.S. economy that the rest of us don't, or fears a financial firm meltdown still to come. But a 10% rise in the S&P 500 since August makes a pretty good case that Bernanke did bend too far in Wall Street's direction.
Looking back did Saudi Arabia get advance information from US government that the August job report was not real when Saudi Arabia made their decision to not to lower rate last?
If the Federal Reverse does not want to support the US Dollar then who should?
It is getting real obvious that speculators and hedge funds have witnessed the Bernanke's PUT.
Dollar Index back down after investors digested the Friday job report.
http://quotes.ino.com/chart/
?s=NYBOT_DX&v=s
Yields are up across the board as traders question the validity of the non-farm payrolls report.
If investors can not trust US government reports then what can they trust?
http://www.ameinfo.com/133954.html
The non-farm payrolls report is generally the most market moving indicator for the US dollar. Yet despite sharp intraday volatility, the dollar ended the US trading session not far from where hovered prior to the payrolls release.
Although some could argue that this may be due to the lack of a surprise in the headline number, this observation is incorrect because the revision to the August number was substantial.
Having originally reported that the US economy gave back 4k jobs, we now learned that 89k jobs were actually created during the month of August.
In September 110k jobs were added to corporate payrolls. This revision highlights the inaccuracy of the monthly payrolls report which was further confirmed by the fact that the Labor Market plans to revise down payrolls for the 12 months ended in March 2007 by 297k.
With the validity of the report in question, the price action in the dollar suggests confusion amongst traders.
The US dollar was weaker against major currencies in midmorning trade Friday, as traders question validity the of August Non-Farm Payrolls report.
Gold bounces toward $740, tracks dollar after traders realize that the Federal Reserve move to cut interest rate based on August Non-Farm Payrolls report was a deception.
Speculators and Hedge Funds know now that the Federal Reserve lowered interest rate due to political pressure.
Going forward the market is all about the Bernanke's PUT.
Has the Federal Reserve lost all credibility?
http://quotes.ino.com/chart/
?s=FOREX_XAUUSDO&v=s
S&P 500 hits record and Dow back to record high territory on US jobs data.
http://ap.google.com/article/
ALeqM5gHs5OM3gFG_DytQQZFbWfg
PT08MAD8S398V80
Stocks jumped sharply and bond prices tumbled in the final hour of trading Friday after the government reported strong September job growth and revised August's weak data upward, cooling fears of a recession.
The Dow Jones industrials rose more than 130 points and along with the Standard & Poor's 500 index broke into record territory.
Bond prices fell sharply as investors interpreted the jobs data as evidence against a rate cut.
Part of the financial upheaval that has hurt some financial houses has also pulled the dollar down sharply in recent weeks along with the Fed's last rate cut.
Since it works for dopes...
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To those following Ron Paul, check this out...
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At the Americans for Prosperity "Defending the American Dream Summit" conference in Washington, D.C. on Friday, six GOP candidates took their turns addressing the crowd. Rudy Guiliani was given around 25 minutes to speak. Ron Paul, after speaking for only 10 minutes, was cut off by stage music.
Read about it here
The archenemy of bond investors is inflation as Federal Reserve tells bond investors they don't care.
Federal Reserve rather lower interest rate then to face up to political pressure.
It is a sad sad thing for bond investors as they come to realize holding safest of havens - government securities - have become quite expensive.
http://www.telegraph.co.uk/
money/main.jhtml?xml=/money/
2007/10/06/cnfed106.xml
Fed based rate cut on false jobs data
The 12 members of the Federal Reserve may be rethinking their 0.5pc interest rate cut last month after key jobs data that their decision was partly based on was revised.
August's non-farm payroll numbers were changed by the US Labor Department to show 89,000 jobs were created, rather than 4,000 lost as it first predicted.
The predicted fall, the first decline in four years, forced global markets sharply lower and was seen as one of the major reasons why the Fed, led by chairman Ben Bernanke, cut rates, in order to stimulate economic growth.
Yesterday's September figures estimated that 110,000 new jobs were added last month, some 10,000 higher than consensus estimates, and implying that the economy will keep growing moderately.
Good News bond investors - NOT.
Federal Reserve Bank of Dallas President Richard Fisher said a weaker US Dollar is a good thing.
In order words, INFLATION is going to grow because the Federal Reserve are saying they don't care.
http://news.yahoo.com/s/nm/
20071004/bs_nm/usa_fed_fisher_
dc_2
"Economic growth in other countries has not been derailed, which has kept demand for our exports at healthy levels. A weakening dollar has not hurt other countries' demand for our products, or their appetite for oil, which is priced in dollars," he said in the speech.
Oil prices hit a fresh record above $80 a barrel last month, but Fisher noted the U.S. had weathered rising oil prices in the past and the recent episode was not denting the global economy.
How long can Asian countries fight inflation and still keep export price low for US goods?
It will be sooner then later that US will start importing INFLATION from oversea.
http://www.chinapost.com.tw/
business/2007/10/06/125484/
Inflation-accelerates.htm
Inflation accelerates to fastest in two years
Taiwan's inflation accelerated to a two-year high in September on food costs, adding pressure for another interest-rate increase. Consumer prices advanced 3.08 percent from a year earlier, the state statistics bureau said yesterday in Taipei.
That was more than the 2.06 percent median estimate in a Bloomberg News survey of 18 economists. Prices rose a revised 1.6 percent in August.
Merrill reports $5bn write-down
Markets hate uncertainty, so though it looks perverse, it should come as no surprise that shares in Merrill Lynch actually rose yesterday in response to news of a $5bn write-down of collateralised debt obligations, subprime mortgages and leveraged finance obligations. This is by far the largest such write-down so far declared by the big Wall Street investment banks and will have the effect of tipping Merrill into loss for the third quarter.
Earlier this week, the "thundering herd", as Merrill is sometimes know, dismissed a number of senior executives, so markets were primed for bad news. Whether anyone expected anything quite as bad as this doesn't really matter. The full extent of the damage has been exposed, providing the markets with a reasonable degree of certainty about the future. Or does it?
The write-downs are one thing, and presumably do indeed draw a line for Merrill under the direct losses attributable to the summer's debt crisis. Yet in finance there is no such thing as absolute certainty.
http://news.independent.co.uk/
business/comment/
article3033463.ece
The big unknown for banks remains the state of revenues and profits going forward.
Markets hate uncertainty, if the Federal Reserve can lowering interest rate based on a false report then at lest the cost of money is something banks don't have to worry about.
So with the Bernanke's Put banks do not have to worry about the cost of money then what do banks have to worry about - Credit Worthiness.
Credit Worthiness is an important business because it is an asset which could make or break business relationships. It is based upon the history of borrowing and repayment, as well as the availability of assets and extent of liabilities.
http://www.libn.com/
article.htm?articleID=40175
Efforts by the Federal Reserve to stimulate the economy by cutting rates and injecting liquidity into the marketplace fell flat as banks started to worry about their balance sheets. This week alone, Citigroup Inc. said it would see a 60 percent drop in profit as a result of bad mortgage investments, and Swiss banking giant UBS said it will take a $3.4 billion hit from subprime exposure.
NetBank, the oldest Internet bank in the Unites States, plunged into bankruptcy on Sept. 28 on mortgage-related losses.
“The banks are less concerned about the cost of money than they are with the credit worthiness of borrowers,” said Martin Cantor, director of the Long Island Economic and Social Policy Institute at Dowling College.
Countrywide's Mozilo Selling More Stock
By TSC Staff
10/5/2007 6:02 PM EDT
Countrywide Chairman and CEO Angelo Mozilo will unload an unspecified number of his struggling company's shares next week as part of a pre-arranged trading plan.
The plan, entered into last October, provides for Mozilo to sell a pre-determined amount of stock on a monthly basis. The stock sales didn't take place in August and September because Countrywide's stock was below a designated floor price.
Countrywide, the nation's largest lender, has been slammed as a spike in defaults of subprime mortgages left investors scared of buying its loans on the secondary market. Its stock has been cut by more than half since reaching a 52-week high of $45.26 in late January.
Shares plunged to a low of $15 in August, but have since rebounded somewhat and closed Friday at $20.25.
For his part, Mozilo has been criticized for selling hundreds of millions of dollars' worth of stock over the past three years, when his company was thriving.
The trading plan, known as a 10b5-1 plan, allows for a company executive to set up automatic stock sales regardless of company events, so as to eliminate any appearance of insider trading.
"The upcoming sales are driven by rules within the 10b5-1 Plan that were established long ago, and should in no way be viewed as any indication of my future outlook for Countrywide," Mozilo said in a statement. "As one of Countrywide's largest individual shareholders, my interests are firmly aligned with those of our other investors. I recognize that the Company's stock is currently under pressure. However, the terms of the 10b5-1 Plan that I established in October 2006 require that these sales be executed."
Canadian dollar breaks above US $1.02 as jobless rate tumbles to 5.9 per cent.
The Bank of Canada has kept its key overnight rate steady at 4.50 percent, but with today Canadian job report so high will Canada interest rate be higher then the US interest rate.
What should a bond investors do?
http://www.ctv.ca/servlet/
ArticleNews/story/CTVNews/
20071005/canada_jobs_071005/
20071005?hub=CTVNewsAt11
Red hot economy leads to Canadian job boom
Canada appears to be in the midst of a job boom that has hit almost every region and sector. From education to agriculture, from New Brunswick to B.C., workers are in demand.
The result: the country's unemployment rate has dipped below six per cent for the first time in more than three decades.
"Our unemployment rate is now at its lowest level since November 1974," Royal Bank economist Dawn Desjardins told CTV News.
"It blew away all of the estimates that were out there and it has pushed the loonie up to a 31-year high."
At one point on Friday, the Canadian dollar rose to US$1.02.
Great news for Hedge Fund managers: just ask for your wage in gold coins.
http://www.rense.com/
general78/defeat.htm
IRS Suffers Staggering Defeat
Tax Questions Raised Regarding Gold and Silver Coins Used to Pay Wages
Around noon on Monday, September 17th, a Las Vegas federal jury returned its verdict refusing to convict nine defendants of any of the 161 federal tax crimes they had been charged with. The charges included income tax evasion, willful failure to file and conspiracy to evade taxes.
The four-month trial centered around the family businesses of Robert Kahre who paid numerous workers for their labor with circulating gold and silver U.S. coins, and did not report the wages. The payments took place over several years, allegedly totaling at least $114 million dollars.
The Government argued that the payments in solid gold and silver U.S. coins must be considered at their bullion (i.e., intrinsic full-market) value when considering the worth of the wages for purposes of the internal revenue code.
Attorney Hansen cited two Supreme Court cases bolstering Defendant's monetary argument at the heart of the defendants "willfulness" defense.
The essence of the argument is that under the Constitution Congress is obligated by law to mint and circulate such coins as demand requires, and must establish the value of coins as they are used as legal tender, but the coins' market value, arising as valuable personal "property," is a distinct, separate attribute of such coins, and is of no legal consequence if the coins are used as legal tender.
In other words, if a worker is paid with such coins, his taxable "income" (if any) can only be the face value indicated upon the coin money paid -- i.e., $1.00 for a circulating silver dollar or $50 for a circulating gold U.S. coin. Not surprisingly, the IRS has never issued any public guidance regarding this significant issue. The first case, Ling Su Fan v. U.S., 218 US 302 (1910) establishes the legal distinction of a coin bearing the "impress" of the sovereign:
"These limitations are due to the fact that public law gives to such coinage a value which does not attach as a mere consequence of intrinsic value.
Hello FDIC, anybody home!
Most subprime borrowers barely qualify to get into teaser ARM when FDIC allow mortgage standards to get out of control.
If the subprime borrowers did not qualify for a fixed rate mortgage when rate was at an all time low how are those subprime borrowers going to qualify now when fixed rate are higher.
http://www.journalstar.com/
articles/2007/10/05/news/business/
doc4706b0c7c4d78296941430.txt
One of the country’s top bank regulators wants loan servicers to consider broadly converting certain adjustable-rate subprime loans into fixed-rate products to prevent major housing problems from escalating.
“We have a huge problem on our hands,” Federal Deposit Insurance Corp. Chairman Sheila Bair said at a conference in New York, according to prepared remarks. “We can’t just sit here doing this kind of case-by-case, laborious restructuring process with all these millions of subprime hybrid” adjustable-rate mortgages.
Bair’s comments are significant because they reflect the heightened pressure that policy makers are trying to convey to a fragmented and slow-moving mortgage industry.
Moody’s Investor Services released a study last month that showed that most servicers had modified only 1 percent of a sample of loans that reset into higher monthly payments this year. It also found that subprime servicers weren’t aggressively reaching out to borrowers in an attempt to rework loan terms.
Close to $600 billion in subprime adjustable-rate mortgages are expected to reset into higher monthly payments by the end of next year, according to some estimates.
California tightens rules for mortgage lenders and prohibits real estate agents from pressuring appraisers to inflate property values.
http://www.mercurynews.com/news/
ci_7097847
A bill signed today by Governor Schwarzenegger requires mortgage companies to do a better job of warning prospective California home buyers about the kind of risky loans that have led to tens of thousands of defaults and foreclosures.
Schwarzenegger also signed a second Machado bill that prohibits real estate agents from pressuring appraisers to inflate property values. That law takes effect immediately.
"California is facing levels of default and foreclosure not seen since the early 1990s, and experts expect the situation to get worse before it improves," said the bill's author, Senate banking committee chairman Mike Machado, D-Linden.
The new law will not help those currently having trouble with mortgages they can't pay, but it will help prevent similar problems in the future, Machado said in a statement.
The law applies federal lending guidelines to state-licensed financial institutions, mortgage brokers and real estate agents.
The guidelines require lenders to clearly disclose the risks and evaluate borrowers' ability to pay based on the long-term cost of the mortgage, not just the introductory rate.
Could a financial H-bomb be ticking? If so, the "h" is for hedge, as in hedge funds. And the explosive ingredients include: an absence of regulation; large amounts of debt with relatively little cash leveraged into securing many multiples of assets; the demand for returns and profits well above market averages; and the size of the securitization market in which mortgages, credit-card and other derivative forms of debt are bought and sold in the form of asset-backed collateral paper in part as a means of reducing risk.
We know the history of crashes from 1929, 1987 and the dot-com meltdown to the savings-and-loan crisis of the 1980s, which forced a hugely expensive government rescue. Today, alarm bells are sounding. The collapse of the sub-prime mortgage markets is one sign of potential danger.
http://www.washingtontimes.com/
article/20071003/EDITORIAL09/
110030019/1013/EDITORIAL
In two weeks, the "Black Monday" stock market crash of 1987 will mark its 20th anniversary.
As that date draws near, leading financial advisors are cautioning U.S. investors against giving in to the fears and trepidations that such a milestone can trigger, particularly in the wake of the rollercoaster stock market ride of this past July and August.
Major Differences Seen Between 1987 and 2007 Markets - Some for Better, Others for Worse; Need Now Greater Than Ever for Investors to Focus on Strategy and Avoid 'Distractions'
http://www.prnewswire.com/cgi-bin/
stories.pl?ACCT=109&STORY=/www/
story/10-04-2007/0004676231&EDATE=
Today the equity market rally like it's 1999 because speculators and hedge funds realized that US jobs figure that triggered Fed's rate cut was a mistake.
But it was not great news for Bond Investors as they realized the only mistake was that they were the fool.
http://www.fool.com/investing/
general/2007/10/05/
quick-take-hair-trigger-ben-
and-the-pointless-rate.aspx
Hair-Trigger Ben and the Pointless Rate Cut
It was the economy, stupid! That's what we were led to believe, at least, when Ben Bernanke and the Fed cut rates by half a point last month. They didn't do it to bail out Wall Street crybabies like Jim Cramer. Of course not. They did it because the jobs picture was so bad! A negative 4,000 for the month of August.
Today, we know that was wrong. The Labor Department's latest figures add up to an 89,000-job gain for the month. Knuckleheads are looking at the September job number (up 110,000) and already speculating that the Fed was "threading the needle" with that cut, something I suggested -- completely in jest -- a couple weeks back.
Now, the new job report shows clearly that there was no needle to thread. And Wall Street rallies again. Bad news is good news (because it'll mean a rate cut!) and good news is good news, because it means consumers aren't heading into the poorhouse.
A major subprime lender is now facing a class action lawsuit filed by Massachusetts Attorney General Martha Coakley.
Coakley's office filed the suit against Fremont General Corp., the parent company of Fremont Investment and Loan, claiming the mortgage lender engaged in unfair and deceptive lending practices. The suit says those practices include the selling of risky loan products and the lender's subsequent failure to monitor brokers who received incentives for selling those products.
The suit also claims Fremont is at least partially responsible for the Massachusetts foreclosure crises.
“Unfair and deceptive lending practices by companies like Fremont have substantially contributed to the escalating foreclosure crises. Fremont's behavior not only continues to harm Fremont borrowers, but also the Massachusetts citizens who suffer from the secondary impacts of foreclosure—the potentially destabilizing impact on our neighborhoods,” said Coakley.
http://www.dsnews.com/
view_story.cfm?id=1617
Local Realtors are seeing a spike in "short sales" from sellers trying to avoid the head-on impact of foreclosure.
They expect to see more use of the sales method in coming months because it presents an advantage to distressed sellers and buyers or investors shopping for good deals in a tightening market.
In a short sale, the lender allows the property to be sold for less than the total amount due on the loan. In some cases, the lender forgives the remaining debt.
http://nashville.bizjournals.com/
nashville/stories/2007/10/08/
story11.html?jst=cn_cn_lk
Homebuilder profits depend on the cost of land
http://www.bloomberg.com/apps/
news?pid=20601109&sid=
adFsGVxspArw&refer=exclusive
When D.R. Horton Inc., the second- biggest U.S. homebuilder, couldn't sell the one-bedroom condominium in San Diego it listed for $349,800, the property was auctioned as a last resort for 37 percent less.
D.R. Horton, with annual revenue of about $11 billion, and Hovnanian Enterprises Inc. now face the worst choice in the worst residential real estate slump since the 1930s. They're selling homes at any price they can get.
``It's desperation time and some companies may not make it,'' said Alex Barron, an industry analyst at Agency Trading Group Inc. in Wayzata, Minnesota.
Q: Why isn't Santa Clara holding up like SF??
A: Home appraisers pushed to inflate values
EXAGGERATED NUMBERS SOUGHT TO HELP DESPERATE HOMEOWNERS
Pushed to exaggerate home values during Silicon Valley's real estate run-up, appraisers say agents and homeowners are now pressuring them to prop up those values as prices decline.
People "are trying to refinance to get their butts out of trouble, and the values aren't there,"said Mike Terry of MK Terry Appraisals, who appraises homes in San Mateo County.
http://forums.craigslist.org/
?ID=73773476
Uncle Benny will carry you.
The yen- carry trade is being replaced by the Ben-carry trade.
http://www.bloomberg.com/apps/
news?pid=20601039&sid=aIqeHLr_
BNvU&refer=home
Ben-Carry Trade
That's a longer-term view, but one many investors don't seem to be considering.
You know something's amiss when bad news is a sign to buy more stocks. In more rational times, news that UBS AG, Deutsche Bank AG and others are taking significant writedowns amid global credit-market turmoil would be a warning signal. The same is true of more troubles in the U.S. housing market. Instead, such disclosures are considered bullish.
And why not, when you have the ``Bernanke Put'' on which to rely? It used to be the ``Greenspan Put,'' a reference to former Fed Chairman Alan Greenspan's weakness for bailing out markets and investors when things get dicey.
Forget the global credit crunch; Bernanke is ready to cut rates again. U.S. consumers drowning in debt? No problem. Subprime fallout? The Fed is on it. What about the dollar's slide unnerving all those investors who borrowed cheaply in yen and invested the money overseas?
Rekindled credit fears hit dollar
The dollar fell on Friday as fears about credit market casualties were rekindled after a profit warning from Merrill Lynch.
Having spiked 0.7 per cent following stronger than expected US jobs growth data, the US currency erased the day’s gains after Merrill said a $4.5bn write-down related to structured and subprime-backed debt would cause third-quarter losses.
http://www.ft.com/cms/s/0/
f43bf9de-7328-11dc-abf0-
0000779fd2ac.html
Countrywide Financial Corporation announced today that in accordance with the terms of a pre-arranged stock trading plan for Angelo R. Mozilo, chairman and chief executive officer, established pursuant to Rule 10b5-1 of the Securities Exchange Act of 1934, stock sales will occur starting on October 8, 2007 and ending on October 12, 2007.
A stock trading plan entered into pursuant to Rule 10b5-1 ("10b5-1 Plan") allows corporate officers, directors, and other designated insiders to increase their company stock holdings, diversify their investment portfolios, spread company stock trades out over a period of time to reduce market impact, and avoid concerns about material nonpublic information they may have when their 10b5-1 Plan purchases or sells stock. Mr. Mozilo has exclusively utilized 10b5-1 Plans for Company stock sales since 2004 and currently has two Plans in effect.
One of these 10b5-1 Plans, which was entered into almost a year ago on October 27, 2006, is set to expire this month and covers stock options previously granted to Mr. Mozilo. It provides that a pre-determined amount of Countrywide's common stock issued upon exercise of these options is to be sold on a monthly basis in specified increments. The 10b5-1 Plan also includes a provision that sales trades cannot take place if the Company's stock falls below a designated floor price. During the months of August and September, 2007, the stock price declined below the designated floor price and no trades were executed. Another provision in the 10b5-1 Plan stipulates that if any shares subject to the Plan remain unsold on October 8, 2007, then those shares will not be subject to any price floor and will be sold in 20 percent increments, commencing on October 8, 2007 and ending on October 12, 2007.
"The 10b5-1 Plan was put in place as part of my financial planning and in recognition of advice I received to diversify my stock holdings," Mozilo said. "The sales that are about to occur under my 10b5-1 Plan are strictly in accordance with the stipulations originally set forth in the Plan. The 10b5-1 Plan is designed to comply with Rule 10b5-1 and remove me from active participation in the trading of the Countrywide shares that I own."
"The upcoming sales are driven by rules within the 10b5-1 Plan that were established long ago, and should in no way be viewed as any indication of my future outlook for Countrywide," Mozilo said. "As one of Countrywide's largest individual shareholders, my interests are firmly aligned with those of our other investors. I recognize that the Company's stock is currently under pressure. However, the terms of the 10b5-1 Plan that I established in October 2006 require that these sales be executed."
http://money.cnn.com/news/
newsfeeds/articles/prnewswire/
LAF07005102007-1.htm
30 percent of East Bay homes on market more than 90 days
More than 30 percent of homes listed for sale in Contra Costa and Solano counties had been on the market more than 90 days in September, according to a survey of multiple-listing service information compiled by Movoto LLC.
Of the 7,100 listed homes in Alameda County as of Sept. 30, which had an average list price of $631,019, 25 percent had been on the market less than 30 days, another 25 percent had been listed 30-60 days, 19 percent had been listed 60-90 days, and 27 percent had been listed more than 90 days, according to the report.
Among the 8,329 listed Contra Costa County homes, with an average price of $620,222, 23 percent had been listed less than 30 days, 23 percent were listed 30-60 days, 18 percent were listed 60-90 days, and 36 percent had been listed more than 90 days.
The days-on-market breakdown for Solano County, which had 3,103 listed homes with an average list price of $499,265, was 20 percent listed less than 30 days, 20 percent 30-60 days, 16 percent 60-90 days, and 46 percent more than 90 days.
The number of total days on the market has been increasing across Northern and Southern California, Movoto reported. In the counties of Monterey, San Benito and Santa Cruz, at least 60 percent of the inventory has been on the market more than 60 days, and in Sacramento County and Southern California 50 percent to 60 percent of the inventory has been listed more than 60 days.
http://eastbay.bizjournals.com/
eastbay/stories/2007/10/01/
daily46.html
If jobs go down so will housing
http://www.portfolio.com/
news-markets/local-news/
sacramento/2007/10/04/
economists-see-south-bay-east
-bay-downturn-likely
Economists see South Bay, East Bay downturn likely
A recession is nearly certain in the South Bay in the next year, economists warned at a regional forecast conference in San Jose on Thursday.
"We're headed for a bad economic situation," Jon Haveman, a principal at Beacon Economics in San Rafael said, although he said it won't be a repeat of the tech-driven downturn earlier in the decade.
Haveman and Beacon colleague Christopher Thornberg rate the likelihood of a recession in Santa Clara, San Mateo and San Benito counties at 3-to-1.
A housing downturn that isn't likely to end until early 2009 and an anticipated drop in consumer spending are key factors contributing to the situation, they said.
"Defaults are likely to rise to an all-time high and price declines of 10 to 15 percent are likely, hitting hardest at the low end of the market where the subprime mortgage effect has been the strongest," Haveman said.
The fact that President Bush is saying "Raising taxes during the housing downturn could further damage the US economy" should start raising red flags.
Like the former President Bush who said "Read my lip - no new taxes", Bush senior legacy is finally catching up to President Bush.
Congress has two choice either let the US Dollar get weaker or raise taxes
http://www.forbes.com/afxnewslimited/
feeds/afx/2007/10/03/afx4182950.html
Raising taxes during the housing downturn could further damage the US economy, President George W. Bush warned today.
'Taking money out of the economy when the housing market is adjusting could exacerbate economic difficulties,' Bush said in explaining his veto
Keith on Ron Paul:
"Even though he doesn't even show up in the
polls today, and apparently has zero chance
of winning, is it Ron Paul or Bust for the GOP?”
In 2000, Ralph Nader, one of
Lebanon's gifts to America, was
a moral choice, but he put a
stupid child in the White House.
If Ron Paul is a moral choice,
will the votes he gets for
his "zero chance" mess up
history again ?
If the August - 4000 smoking gun non-farm payroll report was a fake, what to say that the September 110,000 non-farm payroll report was not a fake also.
http://www.thestreet.com/s/
jobs-report-looms/markets/
marketfeatures/
10382920.html?puc=googlefi
When the government said last month that the economy lost 4,000 jobs in August, the Federal Reserve heaved a massive sigh of relief. The unexpected contraction gave the Fed cover to cut interest rates at its Sept. 18 meeting.
With the report on the September employment situation due Friday morning, there's an assumption in the market that another weak number will mean another cut.
But this time around, it's not clear that that's what investors want.
A rate cut, in some eyes, would amount to additional dollars dropped from Helicopter Ben.
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