OK, everyone here is sick of this; so am I but this is too funny.
From the Southwest FL Herald Tribune: Realty's summer slowdown hits early.
A condo at Grand Preserve on Lemon Bay looked like a hot deal when Dave Weam picked up the contract in 2005.
"I paid $650,000 for it and I owe less than $300,000 and it is costing me $3,000 a month, with the maintenance fee and property tax and payment (principal and interest)," he said. "I would rent it for $2,200. That is where we are at."
"If I lowered the price to $525,000 or $550,000, I still don't think I'd be able to sell it," Weam said. "And if I am willing to rent it for $2,200 a month, why would somebody want to buy it? It is a lose-lose for me."
Ooooh, it's almost too funny when you see the gears whirling.
Firstly, there's the cost of capital of the first $350K. You could be earning a hefty $1200 or so after taxes. Even after that, the rent is $800 less than the outlay. So he's in the hole for roughly $2000 each month.
You can see that he can see the dots but he can't draw the lines connecting it all up.
The answer, of course, is obvious.
DOH!!!
Tuesday, June 26, 2007
Wednesday, June 20, 2007
Too Honest?
From Reuters, we have Home builders pare down to weather storm.
There is no good news for some the largest home building companies in the United States.
"We do think if you're dumb enough to buy a home builder (share), you ought to buy us," Ryland Group Inc. Chairman and Chief Executive Officer R. Chad Dreier, told an investor audience.
No more commentary is needed.
There is no good news for some the largest home building companies in the United States.
"We do think if you're dumb enough to buy a home builder (share), you ought to buy us," Ryland Group Inc. Chairman and Chief Executive Officer R. Chad Dreier, told an investor audience.
No more commentary is needed.
Wednesday, June 13, 2007
Talk to the hand!
Diana Whorelick on CNBC is surprised that the home builders will no longer talk to the media:
Homebuilder's New Mantra: Don't Talk To The Media!
Apparently, I personally blew up the housing market. Here's what the CEO of Ryland Homes (RYL) said when I asked for a quick interview: "No, you guys make us look like idiots, absolutely not."
Said the CEO of D.R. Horton (DHI) "NO, not now, not after the presentation, NO."
Said the CEO of Standard Pacific Corp. (SPF) "Thanks for asking, uh, I don't think so, no, real busy today, back to back meetings, nope can't do it."
Heh, heh, heh!
Homebuilder's New Mantra: Don't Talk To The Media!
Apparently, I personally blew up the housing market. Here's what the CEO of Ryland Homes (RYL) said when I asked for a quick interview: "No, you guys make us look like idiots, absolutely not."
Said the CEO of D.R. Horton (DHI) "NO, not now, not after the presentation, NO."
Said the CEO of Standard Pacific Corp. (SPF) "Thanks for asking, uh, I don't think so, no, real busy today, back to back meetings, nope can't do it."
Heh, heh, heh!
Strip-tacular
From the Minnesota Star Tribune: 'Straw buyer' deals fuel tidal wave of foreclosures.
She was 22 and tired of exotic dancing for a living. So Irene Thomas bet her future on real estate, hoping that becoming a landlord would be her first step toward exiting the stage.
With the help of Universal Mortgage Inc., a brokerage company in Brooklyn Park, Thomas signed the papers to buy a house early last year. And she kept signing. And signing.
In 90 days, with none of her money down, Thomas had $2.4 million in debt and 10 houses in her name, most in north Minneapolis. Nine belonged to officials of Universal, the same company that handled the transactions for her.
Less than 18 months later, Thomas was losing every property to foreclosure after the monthly payments weren't made. Her credit ruined, she now says she was duped by a group of real estate insiders who sold houses at inflated prices.
Ya can't make this stuff up, ya know!
Haul thee back to thine "cash" business, babe!
She was 22 and tired of exotic dancing for a living. So Irene Thomas bet her future on real estate, hoping that becoming a landlord would be her first step toward exiting the stage.
With the help of Universal Mortgage Inc., a brokerage company in Brooklyn Park, Thomas signed the papers to buy a house early last year. And she kept signing. And signing.
In 90 days, with none of her money down, Thomas had $2.4 million in debt and 10 houses in her name, most in north Minneapolis. Nine belonged to officials of Universal, the same company that handled the transactions for her.
Less than 18 months later, Thomas was losing every property to foreclosure after the monthly payments weren't made. Her credit ruined, she now says she was duped by a group of real estate insiders who sold houses at inflated prices.
Ya can't make this stuff up, ya know!
Haul thee back to thine "cash" business, babe!
California Climbing
The level of manipulation should be obvious. The ad was on the front page of Yahoo! Finance.
Tuesday, June 12, 2007
Hostage Horror
From the Denver Post, we have: Protesters demand Fed mortgage aid.
Melvin and Katie Scott and their 12- year-old son, Alexander, spent Wednesday in front of the Denver branch of the Federal Reserve Bank. If the Scott family cannot raise nearly $6,000 soon, their Green Valley Ranch home will go on sale June 19.
The Scotts and about 12 other demonstrators - in a rally organized by the Association of Community Organizations for Reform Now, also known as ACORN - demanded the Federal Reserve crack down on high-rate mortgages.
ACORN groups across the country gathered in front of Federal Reserve Bank branches with a list of demands, including the elimination of prepayment penalties in subprime loans and a one- year moratorium on foreclosures so borrowers late on their mortgages could set up payment plans.
Oooooh! Banks that issue mortgages (not the Fed) are really scared now. 15 protestors!!!
Shiver, ye, shiver against the wrath of those that can't borrow money.
This is almost as funny as the time a few artists went on strike promising to produce no art in protest of the NEA.
Melvin and Katie Scott and their 12- year-old son, Alexander, spent Wednesday in front of the Denver branch of the Federal Reserve Bank. If the Scott family cannot raise nearly $6,000 soon, their Green Valley Ranch home will go on sale June 19.
The Scotts and about 12 other demonstrators - in a rally organized by the Association of Community Organizations for Reform Now, also known as ACORN - demanded the Federal Reserve crack down on high-rate mortgages.
ACORN groups across the country gathered in front of Federal Reserve Bank branches with a list of demands, including the elimination of prepayment penalties in subprime loans and a one- year moratorium on foreclosures so borrowers late on their mortgages could set up payment plans.
Oooooh! Banks that issue mortgages (not the Fed) are really scared now. 15 protestors!!!
Shiver, ye, shiver against the wrath of those that can't borrow money.
This is almost as funny as the time a few artists went on strike promising to produce no art in protest of the NEA.
Blinding Flash of the Obvious
From the Chicago Tribune, we have: Banking on home dangerous.
First the byline: Americans spend too much money on houses and too little on retirement savings
No shit!
When Eva Polydoris looks back at the four decades before she retired, she recalls everything that stood in the way of amassing a comfortable level of retirement savings: At first, it was the usual struggles of life, like raising three children and putting them through college.
Then came financial setbacks, such as her husband's early death, substantial medical expenses that drained savings, caring for an ill mother, Kmart stock that went bad when the company went into bankruptcy and losing a job at age 66 and not being able to find another one that paid adequately.
"Things turn out very strange in life; you never know what will happen," she said.
Still, through the emotional hardships and financial disruptions, she—like many Americans—drew comfort from her home. Over the years, she watched its value rise, and subconsciously it provided a sense that she would be fine—even if other forms of saving lagged.
Now that retirement has arrived—earlier than she expected because of the job loss—she is discovering that tapping your home to cover basic living expenses is easier said than done. She is starting to envision her 70s and 80s, and wondering where cash will come from when her nest egg is locked into countertops, walls and floors that can't easily be turned into grocery money.
Aside from their homes, half of households within 10 years of retirement age have accumulated no more than $88,000 in retirement savings, according to the Congressional Research Service. That could translate into $653 a month for living expenses, if converted into an annuity.
After all, Polydoris says she still needs a place to live. And she would like to stay close to the area where she's spent most of her life and has family and friends. Consequently, even if she sells her home, she would need to use a significant portion of the proceeds to buy a replacement residence. She has looked around enough to know it won't be cheap. A multiyear housing boom has pushed home and condo prices to still-lofty levels.
On the face of it, she said, Baby Boomers are better prepared for retirement than generations before them because they have a higher net worth. But when she subtracted housing equity, she found that the median household has lower wealth than the previous generation.
When asked in surveys to think about their financial future, "people think of their wealth in housing," said Nicola Fuchs-Schundeln, a Harvard University professor of economics. But when they are asked about accessing that wealth for retirement, most say there is zero chance that they will sell their home.
"It's interesting," Fuchs-Schundeln noted, that people feel security from an asset, but also have no plan to tap it.
There is so much stupidity here that even I am overwhelmed.
Firstly, let me state flat out that this magical notion that Americans have had that somehow the home is going to pay for retirement has always seemed a little mysterious to me. Nobody expects a depreciating asset like a car to pay for retirement. So why a house?
The answer is leverage.
With leverage, you are magnifying gains (and also losses,) and it is true that a rising population and huge monetary inflation has worked out so far. But it is by no means a sure thing (as we have witnessed twice in the last 30 years, and are soon to witness again.)
Secondly, you still have to live somewhere so a home should be seen for what it is. A place to live, not a magic ATM that spits out $100 bills.
Thirdly, the notion that after living all your life in a certain place, you're going to move away to a different (cheaper) location seems, well, silly. What about your friends and family? What about your lifestyle? I can understand if you're forced to do it for fiscal reasons but for everyone else, well, this seems more than a little absurd.
Fourth, what happens if styles for houses change dramatically? Or that people have more or fewer kids? They may not like your house design, or they may demand far more energy-efficient houses. Fashions change; styles evolve. Anyone remember those godawful avocado kitchen instruments from the 70's that were all the rage? The granite countertops and stainless steel appliances are doomed to be the avocado kitchen instruments of 2017.
Fifth, what happens if that area is hit by a massive recession? Think Detroit or Rochester. Both were one industry towns, the former driven by automobiles, the latter by Kodak. To whom exactly are you going to sell your house when there are no jobs to be had?
Sixth, as we have pointed out, something ain't worth shit until you actually sell it. The fancy term is that you must "monetize" something otherwise its worth might as well be zero, or a "zillion bazillion" dollars. Without the monetization, you can claim anything for its worth but it's irrelevant.
Seventh, and this is one of the most subtle points.
The notion that all the Boomers can sell their houses and move to cheaper locations is absurd. If everyone does something, that something must fail. This is just elementary demand/supply in motion. Everyone in Chicago cannot sell and move to Florida. If they do, prices in Chicago must fall, and Florida rise. You can only make money by doing something that somebody else is NOT doing.
The corollary to the last two statements above is that stated prices are fictitious. Everyone cannot monetize at the same time. The supply would overwhelm demand. It has to be spread out in time, and time is the one luxury that retirees don't have. Normally, this doesn't matter because you roughly have a small fraction of people retiring each year, but the Boomer wave is larger than historical fractions, and they are singularly ill prepared for retirement (read the median savings above.)
Add to that the fact that median wages are falling in real terms (because of competition, offshoring, etc.) and you realize that prices must fall even further because the average worker cannot afford these absurd prices. And no amount of "financial engineering" can change this basic affordability equation.
In other words, if most homes are unaffordable for most people, what is the mechanism by which they can be "monetized"?
Until somebody answers that basic question, the above strategy is doomed.
Lastly, the reason this sorta kinda worked out for most people was that buying a house was a form of forced savings. Most people are singularly bad at saving. Given a choice, they will piss every cent away. By buying a house, they were forced to pay down the principal, and at the end of the term, many owned an asset free and clear. With the rise of "liberate your home equity", and "interest-only" loans, even this minimal amount of fiscal responsibility has vanished. They are now debt serfs, plain and simple, and they face a bleak future. A really bleak future!
Someday, this is going to be recognized for what it is. One of the stupidest ideas ever!
First the byline: Americans spend too much money on houses and too little on retirement savings
No shit!
When Eva Polydoris looks back at the four decades before she retired, she recalls everything that stood in the way of amassing a comfortable level of retirement savings: At first, it was the usual struggles of life, like raising three children and putting them through college.
Then came financial setbacks, such as her husband's early death, substantial medical expenses that drained savings, caring for an ill mother, Kmart stock that went bad when the company went into bankruptcy and losing a job at age 66 and not being able to find another one that paid adequately.
"Things turn out very strange in life; you never know what will happen," she said.
Still, through the emotional hardships and financial disruptions, she—like many Americans—drew comfort from her home. Over the years, she watched its value rise, and subconsciously it provided a sense that she would be fine—even if other forms of saving lagged.
Now that retirement has arrived—earlier than she expected because of the job loss—she is discovering that tapping your home to cover basic living expenses is easier said than done. She is starting to envision her 70s and 80s, and wondering where cash will come from when her nest egg is locked into countertops, walls and floors that can't easily be turned into grocery money.
Aside from their homes, half of households within 10 years of retirement age have accumulated no more than $88,000 in retirement savings, according to the Congressional Research Service. That could translate into $653 a month for living expenses, if converted into an annuity.
After all, Polydoris says she still needs a place to live. And she would like to stay close to the area where she's spent most of her life and has family and friends. Consequently, even if she sells her home, she would need to use a significant portion of the proceeds to buy a replacement residence. She has looked around enough to know it won't be cheap. A multiyear housing boom has pushed home and condo prices to still-lofty levels.
On the face of it, she said, Baby Boomers are better prepared for retirement than generations before them because they have a higher net worth. But when she subtracted housing equity, she found that the median household has lower wealth than the previous generation.
When asked in surveys to think about their financial future, "people think of their wealth in housing," said Nicola Fuchs-Schundeln, a Harvard University professor of economics. But when they are asked about accessing that wealth for retirement, most say there is zero chance that they will sell their home.
"It's interesting," Fuchs-Schundeln noted, that people feel security from an asset, but also have no plan to tap it.
There is so much stupidity here that even I am overwhelmed.
Firstly, let me state flat out that this magical notion that Americans have had that somehow the home is going to pay for retirement has always seemed a little mysterious to me. Nobody expects a depreciating asset like a car to pay for retirement. So why a house?
The answer is leverage.
With leverage, you are magnifying gains (and also losses,) and it is true that a rising population and huge monetary inflation has worked out so far. But it is by no means a sure thing (as we have witnessed twice in the last 30 years, and are soon to witness again.)
Secondly, you still have to live somewhere so a home should be seen for what it is. A place to live, not a magic ATM that spits out $100 bills.
Thirdly, the notion that after living all your life in a certain place, you're going to move away to a different (cheaper) location seems, well, silly. What about your friends and family? What about your lifestyle? I can understand if you're forced to do it for fiscal reasons but for everyone else, well, this seems more than a little absurd.
Fourth, what happens if styles for houses change dramatically? Or that people have more or fewer kids? They may not like your house design, or they may demand far more energy-efficient houses. Fashions change; styles evolve. Anyone remember those godawful avocado kitchen instruments from the 70's that were all the rage? The granite countertops and stainless steel appliances are doomed to be the avocado kitchen instruments of 2017.
Fifth, what happens if that area is hit by a massive recession? Think Detroit or Rochester. Both were one industry towns, the former driven by automobiles, the latter by Kodak. To whom exactly are you going to sell your house when there are no jobs to be had?
Sixth, as we have pointed out, something ain't worth shit until you actually sell it. The fancy term is that you must "monetize" something otherwise its worth might as well be zero, or a "zillion bazillion" dollars. Without the monetization, you can claim anything for its worth but it's irrelevant.
Seventh, and this is one of the most subtle points.
The notion that all the Boomers can sell their houses and move to cheaper locations is absurd. If everyone does something, that something must fail. This is just elementary demand/supply in motion. Everyone in Chicago cannot sell and move to Florida. If they do, prices in Chicago must fall, and Florida rise. You can only make money by doing something that somebody else is NOT doing.
The corollary to the last two statements above is that stated prices are fictitious. Everyone cannot monetize at the same time. The supply would overwhelm demand. It has to be spread out in time, and time is the one luxury that retirees don't have. Normally, this doesn't matter because you roughly have a small fraction of people retiring each year, but the Boomer wave is larger than historical fractions, and they are singularly ill prepared for retirement (read the median savings above.)
Add to that the fact that median wages are falling in real terms (because of competition, offshoring, etc.) and you realize that prices must fall even further because the average worker cannot afford these absurd prices. And no amount of "financial engineering" can change this basic affordability equation.
In other words, if most homes are unaffordable for most people, what is the mechanism by which they can be "monetized"?
Until somebody answers that basic question, the above strategy is doomed.
Lastly, the reason this sorta kinda worked out for most people was that buying a house was a form of forced savings. Most people are singularly bad at saving. Given a choice, they will piss every cent away. By buying a house, they were forced to pay down the principal, and at the end of the term, many owned an asset free and clear. With the rise of "liberate your home equity", and "interest-only" loans, even this minimal amount of fiscal responsibility has vanished. They are now debt serfs, plain and simple, and they face a bleak future. A really bleak future!
Someday, this is going to be recognized for what it is. One of the stupidest ideas ever!
Monday, June 11, 2007
Skooling
From the venerable and venereal New York Times, we have Private Loans Deepen a Crisis in Student Debt.
As the first in her immigrant family to attend college, Lucia DiPoi said she had few clues about financing her college education. So when financial aid and low-interest government loans did not stretch far enough, Ms. DiPoi applied for $49,000 in private loans, too. “How bad could it be?” she recalls thinking.
When Ms. DiPoi graduated from Tufts University in Boston, she found out. With interest, her private loans had reached $65,000 and she owed an additional $19,000 in federal loans. Her monthly tab is $900, with interest rates topping 13 percent on the private loans.
Ms. DiPoi, now 24, quickly gave up her dream to work in an overseas refugee camp. The pay, she said, “would have been enough for me but not for Sallie Mae,” her lender.
And while federal loans come with safeguards against students’ overextending themselves, private loans have no such limits. Students are piling up debts as high as $100,000.
Did someone put a gun to this kid's head to sign the loan?
If you're going to pay top dollar for your education at an expensive school like Tufts, you better have a way to pay it back (unless the "Bank of Mom & Pop" is financing you.)
Nobody made you go to Tufts, and nobody made you be a missionary at $19K a year. These are choices you have made, and these are choices that you have to live with. If you can't, go make real money, pay back the loans, and then go be a missionary.
Screw you, kid! You're going to have to learn economics the hard way.
“It’s a huge problem,” said Barmak Nassirian, associate executive director of the American Association of Collegiate Registrars and Admissions Officers. “When a student signs the paper for these loans, they are basically signing an indenture,” Mr. Nassirian said. “We’re indebting these kids for life.”
No, they are indebting themselves. It's "their" problem.
As the first in her immigrant family to attend college, Lucia DiPoi said she had few clues about financing her college education. So when financial aid and low-interest government loans did not stretch far enough, Ms. DiPoi applied for $49,000 in private loans, too. “How bad could it be?” she recalls thinking.
When Ms. DiPoi graduated from Tufts University in Boston, she found out. With interest, her private loans had reached $65,000 and she owed an additional $19,000 in federal loans. Her monthly tab is $900, with interest rates topping 13 percent on the private loans.
Ms. DiPoi, now 24, quickly gave up her dream to work in an overseas refugee camp. The pay, she said, “would have been enough for me but not for Sallie Mae,” her lender.
And while federal loans come with safeguards against students’ overextending themselves, private loans have no such limits. Students are piling up debts as high as $100,000.
Did someone put a gun to this kid's head to sign the loan?
If you're going to pay top dollar for your education at an expensive school like Tufts, you better have a way to pay it back (unless the "Bank of Mom & Pop" is financing you.)
Nobody made you go to Tufts, and nobody made you be a missionary at $19K a year. These are choices you have made, and these are choices that you have to live with. If you can't, go make real money, pay back the loans, and then go be a missionary.
Screw you, kid! You're going to have to learn economics the hard way.
“It’s a huge problem,” said Barmak Nassirian, associate executive director of the American Association of Collegiate Registrars and Admissions Officers. “When a student signs the paper for these loans, they are basically signing an indenture,” Mr. Nassirian said. “We’re indebting these kids for life.”
No, they are indebting themselves. It's "their" problem.
Thursday, June 07, 2007
The Big Duh!
From Business Week, we have Foreclosure's Filthy Aftermath.
The article even comes with pictures. (Do not miss this!!!)
The mortgage mess is getting even messier. Literally.
Malnourished and flea-ridden animals, feces-covered floors and urine-soaked furniture, piles of rotting garbage, swarms of diseased mosquitoes—these are the horrors that may await the ill-fated sheriff, property inspector, Realtor, or passerby making that first visit to a deserted home.
"They know they are going to lose their house, so they have no pride of ownership anymore," Mitchell says. "They'll leave the water on so there's flooding and mold everywhere, they'll tear the chandelier or the ceiling fan out of the ceiling, kick the doors and walls in. Then the critters start taking over—ants, scorpions, and Black Widow spiders."
Sometimes, frustrated homeowners get creative. A man in Eagle Creek, Ore., recently put three 200-pound pigs in his repossessed home. They quickly tore up the place, ripping away the foundation and reducing the back porch to rubble. When police found the pigs, the animals were unharmed, if a little cranky.
In the month of May alone, authorities found 23 abandoned animals in a house in Lake Carmel, N.Y.; three pigs trapped in an Oregon home; 20 birds in a Lorain (Ohio) house; 24 horses on a Bixby (Okla.) property; and more than 60 cats in a home in Cincinnati.
Well, like DUHHHHHHHH!
In the last housing collapse of the early 90's people stuffed cheap fish between the walls, and under the flooring, stinking up the place. The dominant response was, "let the freakin' bank deal with that."
And so it was, and so it will be again...
The article even comes with pictures. (Do not miss this!!!)
The mortgage mess is getting even messier. Literally.
Malnourished and flea-ridden animals, feces-covered floors and urine-soaked furniture, piles of rotting garbage, swarms of diseased mosquitoes—these are the horrors that may await the ill-fated sheriff, property inspector, Realtor, or passerby making that first visit to a deserted home.
"They know they are going to lose their house, so they have no pride of ownership anymore," Mitchell says. "They'll leave the water on so there's flooding and mold everywhere, they'll tear the chandelier or the ceiling fan out of the ceiling, kick the doors and walls in. Then the critters start taking over—ants, scorpions, and Black Widow spiders."
Sometimes, frustrated homeowners get creative. A man in Eagle Creek, Ore., recently put three 200-pound pigs in his repossessed home. They quickly tore up the place, ripping away the foundation and reducing the back porch to rubble. When police found the pigs, the animals were unharmed, if a little cranky.
In the month of May alone, authorities found 23 abandoned animals in a house in Lake Carmel, N.Y.; three pigs trapped in an Oregon home; 20 birds in a Lorain (Ohio) house; 24 horses on a Bixby (Okla.) property; and more than 60 cats in a home in Cincinnati.
Well, like DUHHHHHHHH!
In the last housing collapse of the early 90's people stuffed cheap fish between the walls, and under the flooring, stinking up the place. The dominant response was, "let the freakin' bank deal with that."
And so it was, and so it will be again...
Wednesday, June 06, 2007
Global Voodoo Finance
From Bloomberg, we have Ghost Towns Appear in Spain as Decade-Long Boom Ends.
Javier Usua and Ruth Graneda never got out of the car when they visited Sanchinarro and Las Tablas, two of Madrid's biggest new suburban developments. The concrete-block buildings and empty streets were all they needed to see.
``We came to look at apartments but found ghost towns,'' said Usua, a 27-year-old taxi driver. ``You'd need to drive miles for a loaf of bread or cigarettes and my girlfriend found it creepy and unsafe so we turned around and left.''
``We live in a country where everybody understands that appraisals are poetry,'' said Jesus Encinar, chief executive officer and founder of Idealista.com, a property Web site that tracks existing home prices in Madrid, Barcelona and Valencia. ``Bankers have said to me, `Why do you care if the appraisal is fake? It will be true in the future.'''
Appraisals are poetry?
WTF?!?
And why bother if the appraisal is fake? It will be true in the future!!!
In Sanchinarro and Las Tablas, Esperanza Aguirre, president of the regional government of Madrid, opened the first light railway stop last month. No passengers descended from or boarded the bright red-and-blue train this week when it stopped at the station during lunch time. Spaniards traditionally go home for lunch.
``Not even God lives here,'' Usua said.
God's on holiday, babe!
Javier Usua and Ruth Graneda never got out of the car when they visited Sanchinarro and Las Tablas, two of Madrid's biggest new suburban developments. The concrete-block buildings and empty streets were all they needed to see.
``We came to look at apartments but found ghost towns,'' said Usua, a 27-year-old taxi driver. ``You'd need to drive miles for a loaf of bread or cigarettes and my girlfriend found it creepy and unsafe so we turned around and left.''
``We live in a country where everybody understands that appraisals are poetry,'' said Jesus Encinar, chief executive officer and founder of Idealista.com, a property Web site that tracks existing home prices in Madrid, Barcelona and Valencia. ``Bankers have said to me, `Why do you care if the appraisal is fake? It will be true in the future.'''
Appraisals are poetry?
WTF?!?
And why bother if the appraisal is fake? It will be true in the future!!!
In Sanchinarro and Las Tablas, Esperanza Aguirre, president of the regional government of Madrid, opened the first light railway stop last month. No passengers descended from or boarded the bright red-and-blue train this week when it stopped at the station during lunch time. Spaniards traditionally go home for lunch.
``Not even God lives here,'' Usua said.
God's on holiday, babe!
Monday, June 04, 2007
The Retard's 'Rong 'Rithmetic
From the paper which has the widest circulation in the US, USA Today, we have Matt Krantz writing on: S&P's run leaves Wal-Mart, other big caps behind.
For a quarter of the stock market, the celebration about the Standard & Poor's 500's charge back to record levels for the first time in more than seven years is an example of history being written by the victors.
Even though the benchmark S&P index last week finally took out its old high from March 2000, investors who own 23% of its stocks have completely missed out. A total of 115 stocks in the S&P 500-stock index are still below where they were in March 2000, according to data from Bridge Information and S&P.
Oh my fuckin' god! This is by far the stoopidest thing I have seen in the MSM, and this blog has seen some spectacularly stoopid things.
The S&P 500 is an index; hence it's a weighted average of the prices of 500 stocks.
The main property of an average (either weighted or unweighted) is that some of the values must be greater than or equal to it, and some of them must be less than or equal to it.
Quite specifically, the largest value must be greater than or equal to the average, and the smallest value must be less than or equal to the average.
Hence, some of the stocks of the index must lead the index, and some must lag the index (unless all 500 have exactly the same return in which case they will be equal to the index.)
That's what makes the average the fuckin' average!
So the statement that "first time in seven years ... history written by victors" is completely ridiculous.
The point is that the "victors lead the index" is always true at all points in time because it's a mathematical tautology. And forget the S&P because it is true of all indices that are averages (stocks, bonds, currencies, whatever!)
This is the most content-free article I have seen in a long time, and speaks volumes about the quality of mathematics education in this country, and it speaks even larger volumes about the intended audience because they are too stoopid to read a paper critically.
They are truly sheeple!
For a quarter of the stock market, the celebration about the Standard & Poor's 500's charge back to record levels for the first time in more than seven years is an example of history being written by the victors.
Even though the benchmark S&P index last week finally took out its old high from March 2000, investors who own 23% of its stocks have completely missed out. A total of 115 stocks in the S&P 500-stock index are still below where they were in March 2000, according to data from Bridge Information and S&P.
Oh my fuckin' god! This is by far the stoopidest thing I have seen in the MSM, and this blog has seen some spectacularly stoopid things.
The S&P 500 is an index; hence it's a weighted average of the prices of 500 stocks.
The main property of an average (either weighted or unweighted) is that some of the values must be greater than or equal to it, and some of them must be less than or equal to it.
Quite specifically, the largest value must be greater than or equal to the average, and the smallest value must be less than or equal to the average.
Hence, some of the stocks of the index must lead the index, and some must lag the index (unless all 500 have exactly the same return in which case they will be equal to the index.)
That's what makes the average the fuckin' average!
So the statement that "first time in seven years ... history written by victors" is completely ridiculous.
The point is that the "victors lead the index" is always true at all points in time because it's a mathematical tautology. And forget the S&P because it is true of all indices that are averages (stocks, bonds, currencies, whatever!)
This is the most content-free article I have seen in a long time, and speaks volumes about the quality of mathematics education in this country, and it speaks even larger volumes about the intended audience because they are too stoopid to read a paper critically.
They are truly sheeple!
Roll over, Baden Powell
From the Oregon Mail Tribune, we have House might put Scout council into debt.
A well-intentioned attempt to cash in on a red-hot real estate market has turned sour as the unsold home's mortgage now gobbles up a big chunk of the regional Boy Scout council's budget.
The "Scout house" at 1653 Kentucky Court was built to raise funds for the organization's Crater Lake Council, headquartered in Central Point. But rather than selling quickly for a profit, the house has sat vacant for about a year. If it doesn't sell soon, Boy Scout officials fear the project may end up costing them money, said Scout Executive Rick Burr.
The Crater Lake Council already has made about $30,000 in interest payments to South Valley Bank & Trust, Burr said. The council co-signed a $426,000 loan with local contractor Brian Monroe, an Eagle Scout and former Scout master. Monroe said he is not going to see any profit because he agreed to donate labor and solicited about $125,000 in materials, all to benefit the Scouts.
"There was too many houses on the market," he said.
After paying $140,000 for the lot in Blue Grass Downs subdivision, Monroe started building the house in summer 2005 and finished it a year ago. Listed with Coldwell Banker Pro West before completion, the two-story home is priced at $499,900, a figure that's been reduced several times.
"Every month, it's going down," Monroe said.
Guess the Boy Scouts were caught with their pants down, and the expression is being used in a figurative sense (which is quite rare when talking about the Boy Scouts.)
Shall we give them a "Housing Bubble Merit Badge", or a "Financial Foolery Merit Badge"?
A well-intentioned attempt to cash in on a red-hot real estate market has turned sour as the unsold home's mortgage now gobbles up a big chunk of the regional Boy Scout council's budget.
The "Scout house" at 1653 Kentucky Court was built to raise funds for the organization's Crater Lake Council, headquartered in Central Point. But rather than selling quickly for a profit, the house has sat vacant for about a year. If it doesn't sell soon, Boy Scout officials fear the project may end up costing them money, said Scout Executive Rick Burr.
The Crater Lake Council already has made about $30,000 in interest payments to South Valley Bank & Trust, Burr said. The council co-signed a $426,000 loan with local contractor Brian Monroe, an Eagle Scout and former Scout master. Monroe said he is not going to see any profit because he agreed to donate labor and solicited about $125,000 in materials, all to benefit the Scouts.
"There was too many houses on the market," he said.
After paying $140,000 for the lot in Blue Grass Downs subdivision, Monroe started building the house in summer 2005 and finished it a year ago. Listed with Coldwell Banker Pro West before completion, the two-story home is priced at $499,900, a figure that's been reduced several times.
"Every month, it's going down," Monroe said.
Guess the Boy Scouts were caught with their pants down, and the expression is being used in a figurative sense (which is quite rare when talking about the Boy Scouts.)
Shall we give them a "Housing Bubble Merit Badge", or a "Financial Foolery Merit Badge"?
Saturday, June 02, 2007
Bungee jumping in Beantown
The home of the bean and the cod,
Where the Lowells talk to the Cabots,
And the Cabots talk only to God.
Here's a lovely article on Boston (from the Sacramento Bee!!!): Neighborhood swayed by 'liar's loans'.
Upstairs at Victory Chapel Church - a cinderblock bunker converted from a long-ago Ford dealership - the pews are reserved for praising heaven. But downstairs, in a basement rental hall, a pair of women preached of worldly wonders.
At 11 a.m. on alternating Saturdays, they set out rows of folding chairs and spread tables with urns of coffee and boxes of Dunkin' Donuts. And they offered testimony to the bounty of real estate, encouraging their growing flock to buy the wood-frame walk-ups and rowhouses surrounding this workaday stretch of Columbia Road, just down from the OJ Car Wash.
The key was trust, they told the faithful, as the voices of the practicing choir rang through the building.
Do I hear a Halleluia?!?
Still, Valerie Hayes was a little skeptical.
"I really was thinking it would be at least a year before I'd get a mortgage," says Hayes, an executive secretary and mother of two. She was wary of borrowing because she was saddled with her own student loans.
But "on Saturday I went to the seminar," she says. By Sunday, she was preapproved to buy.
Soon after, Hayes did buy. The problem, prosecutors say, is that the women put Hayes and others into homes they couldn't possible afford. They did so by filling their loan applications with details of jobs, paychecks and bank accounts that were all so much fiction.
God wants you to be happy, sister!
Frances Darden dreamed of buying a house. And not just any house.
It would be in Boston, because this was home now. But it would look and feel like her grandparents' place in the South Carolina of her childhood, because that's what home meant.
It would have a backyard for barbecues and a front porch for conversation. Its French doors would usher visitors from living room to dining room. It would not be a grand place, mind you, but thinking about it made Darden feel just grand.
It only took a few weeks for Frances Darden to find her dream house - a two-family set on a corner of Harvard Street with pale yellow siding, a small front porch and another on the back. But could she afford it?
Darden says Roberta Robinson calmly reassured her.
"I have always been about educating the consumer regarding real estate since I hit the scene," Robinson wrote of herself in an advertising directory. "I feel the first step in homeownership is working with an informed client."
Robinson did not return calls and her attorney declined to comment.
When another bidder pulled out of a deal for the house, Darden says Robinson called with more good news.
"She said, 'You have some good credit, girl, because you got approved for two houses,'" Darden recalls.
It only took a few weeks for Frances Darden to find her dream house - a two-family set on a corner of Harvard Street with pale yellow siding, a small front porch and another on the back. But could she afford it?
Darden says Roberta Robinson calmly reassured her.
"I have always been about educating the consumer regarding real estate since I hit the scene," Robinson wrote of herself in an advertising directory. "I feel the first step in homeownership is working with an informed client."
Robinson did not return calls and her attorney declined to comment.
When another bidder pulled out of a deal for the house, Darden says Robinson called with more good news.
"She said, 'You have some good credit, girl, because you got approved for two houses,'" Darden recalls.
God wants you to have two houses, girl!
"How is that possible?" wondered Darden, who says she first told the agents she could afford only $1,500 to $2,000 a month in payments.
It would cost her $7,194 a month.
God will provide, sister!
Mortgage fraud is most visible in the spectacular cases that draw prosecutorial muscle, involving fake buyers, property flipping, vast amounts of money. But that overlooks smaller-scale foul play now costing many subprime borrowers their homes, experts say.
Often it's not considered fraud. It's pushing the envelope. It's a dollop of distortion topped with a measure of creative exaggeration. It's doing whatever it takes.
God wants you to push the envelope. After that, he'll push the foreclosure button.
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