From Reuters: U.K. Hometrack House Prices Fall for a Fourth Month.
In London, new home prices are now lower than they were a year ago, according to a report by SmartNewHomes.com published today.
U.K. home prices probably won't pick up until mid-2009, according to Instant Access Group, the country's biggest property investment club.
Try 2013, bee-yatch! At the very earliest.
You can't run an economy on FIRE alone. You need some meat to roast.
Cheerio and pip pip!
Wednesday, January 30, 2008
The Power of Fees
From Fox: Queens Housing Advocates at Front Line of Mortgage Crisis.
Consider one of her clients, a babysitter with a stated income of $10,000, who obtained two mortgages on two properties with a combined value over $1 million. The broker who approved the mortgages told the babysitter the purchases would pay for themselves if she used rent from one property to pay the mortgage on the other.
Foxy lady!
"Stated" income: $10K.
Controlled Property: $1M
Leverage: 100X
Entertainment? PRICELESS!
For everything else, there's credit!
Consider one of her clients, a babysitter with a stated income of $10,000, who obtained two mortgages on two properties with a combined value over $1 million. The broker who approved the mortgages told the babysitter the purchases would pay for themselves if she used rent from one property to pay the mortgage on the other.
Foxy lady!
"Stated" income: $10K.
Controlled Property: $1M
Leverage: 100X
Entertainment? PRICELESS!
For everything else, there's credit!
Snow Job
Reuters gives us: Harsh winter raises specter of "Chinese stagflation".
Freak snow and a global downturn are posing a harsher challenge to China's economy than expected, threatening the country with a spike in inflation just as growth slows.
Economists say inflation, which many thought had peaked late last year, is set to rebound to an 11-year high of at least 7 percent after snow and ice snarled food deliveries.
It couldn't possibly be the currency peg, could it?
How absurd would it be that the Chinese (and the Indians) are increasing the money supply to keep their currency devalued against the dollar?
Naah, that could never happen. Not in this universe anyway. They are all saints.
It must be the snow.
Snow me, baby, snow me!
Freak snow and a global downturn are posing a harsher challenge to China's economy than expected, threatening the country with a spike in inflation just as growth slows.
Economists say inflation, which many thought had peaked late last year, is set to rebound to an 11-year high of at least 7 percent after snow and ice snarled food deliveries.
It couldn't possibly be the currency peg, could it?
How absurd would it be that the Chinese (and the Indians) are increasing the money supply to keep their currency devalued against the dollar?
Naah, that could never happen. Not in this universe anyway. They are all saints.
It must be the snow.
Snow me, baby, snow me!
Thursday, January 24, 2008
Wednesday, January 23, 2008
Bull the other one?
A reader sends in a BBC article: Indian investors despair as shares fall.
No one had expected the impact from falls in regional markets to be so pronounced in India.
Some were even targeting the new statue of a bull placed outside the Exchange - saying it was inauspicious.
"Ever since the authorities here put the bull up outside the exchange, we've had bad luck," said Kaushik Vyas, a day trader in Mumbai.
"The gods are punishing us for our arrogance . We put up a bull and no bear? Did we think we could tempt the fates like this? We have to bring the bull down."
Yeah, maybe they should bring the "bull" down!
No one had expected the impact from falls in regional markets to be so pronounced in India.
Some were even targeting the new statue of a bull placed outside the Exchange - saying it was inauspicious.
"Ever since the authorities here put the bull up outside the exchange, we've had bad luck," said Kaushik Vyas, a day trader in Mumbai.
"The gods are punishing us for our arrogance . We put up a bull and no bear? Did we think we could tempt the fates like this? We have to bring the bull down."
Yeah, maybe they should bring the "bull" down!
Sunday, January 20, 2008
Yeah, Baby!
From the Orange County Business Journal: Closing Costs.
With radio ads still pitching potential borrowers, Wesley Hoaglund, owner of Lenox Financial Mortgage Corp. in Irvine, is hoping to survive a market where the number of home loans being made is about half of what it was a year ago.
Lenox hasn’t seen many foreclosures, Hoaglund said. But it recently foreclosed on a Moreno Valley home for which the borrower didn’t even make the first payment, he said.
Yeah, baby! Now, that's the money shot right there!
The house that initially sold for $460,000 has been declining in value and was last listed at $250,000, he said. After paying real estate agent fees, the house could bring a loss of about $150,000, he said.”
$150K loss on a single transaction within a month. Sweet!
Mortgage brokers—middlemen who generate loans funded by banks and other financiers—have seen a big chunk of their business go away in the past year. Some wonder if they’ll survive the downturn.
With brains like that, how could you possibly not survive?
With radio ads still pitching potential borrowers, Wesley Hoaglund, owner of Lenox Financial Mortgage Corp. in Irvine, is hoping to survive a market where the number of home loans being made is about half of what it was a year ago.
Lenox hasn’t seen many foreclosures, Hoaglund said. But it recently foreclosed on a Moreno Valley home for which the borrower didn’t even make the first payment, he said.
Yeah, baby! Now, that's the money shot right there!
The house that initially sold for $460,000 has been declining in value and was last listed at $250,000, he said. After paying real estate agent fees, the house could bring a loss of about $150,000, he said.”
$150K loss on a single transaction within a month. Sweet!
Mortgage brokers—middlemen who generate loans funded by banks and other financiers—have seen a big chunk of their business go away in the past year. Some wonder if they’ll survive the downturn.
With brains like that, how could you possibly not survive?
Saturday, January 19, 2008
Sweet Sufferin' Suicide
From the AP: Mortgage Company Exec Jumps to Death.
An executive of a collapsed subprime mortgage lender jumped to his death from a bridge Friday, shortly after his wife's body was found inside their New Jersey home, authorities said.
The deaths of Walter Buczynski, 59, and his wife, Marci, 37 — the parents of two boys — were being investigated as a murder-suicide, according to the Burlington County Prosecutor's Office
About 20 minutes after her body was found, officers from the Delaware River and Bay Authority Police Department received reports that a man — later identified as Walter Buczynski — had parked his car on Delaware Memorial Bridge and jumped from the span.
And Forbes reports: Fieldstone Seeks to Pay $1M in Bonuses.
Collapsed subprime lender Fieldstone Mortgage Co. wants to pay a skeleton staff of workers, including its CEO, about $1.1 million in bonuses so the company can wind-down its lending operations and go out of business.
Among the employees receiving biggest bankruptcy bonuses: CEO Michael J. Sonnenfeld; Vice President Walter Buczynski and Chief Information Officer John Camp will each receive $99,999. Another 20 or so employees would divvy up the remaining bonus payments.
Guess $100K wasn't good enough for him. Oh well!
An executive of a collapsed subprime mortgage lender jumped to his death from a bridge Friday, shortly after his wife's body was found inside their New Jersey home, authorities said.
The deaths of Walter Buczynski, 59, and his wife, Marci, 37 — the parents of two boys — were being investigated as a murder-suicide, according to the Burlington County Prosecutor's Office
About 20 minutes after her body was found, officers from the Delaware River and Bay Authority Police Department received reports that a man — later identified as Walter Buczynski — had parked his car on Delaware Memorial Bridge and jumped from the span.
And Forbes reports: Fieldstone Seeks to Pay $1M in Bonuses.
Collapsed subprime lender Fieldstone Mortgage Co. wants to pay a skeleton staff of workers, including its CEO, about $1.1 million in bonuses so the company can wind-down its lending operations and go out of business.
Among the employees receiving biggest bankruptcy bonuses: CEO Michael J. Sonnenfeld; Vice President Walter Buczynski and Chief Information Officer John Camp will each receive $99,999. Another 20 or so employees would divvy up the remaining bonus payments.
Guess $100K wasn't good enough for him. Oh well!
Friday, January 18, 2008
A Short Summary
I offer a short succint summary of our current economic problems (and contrary to common opinion, it's worldwide not US-centric.)
There is too much debt in the system. It cannot be repaid. The Powers-That-Be cannot redirect "fresh money" to the correct channels. Hence, it must be defaulted upon.
Thank you. That will be all!
There is too much debt in the system. It cannot be repaid. The Powers-That-Be cannot redirect "fresh money" to the correct channels. Hence, it must be defaulted upon.
Thank you. That will be all!
Texan Barbecue
From Yahoo!: Texas justice charged in arson case.
A Texas Supreme Court justice was indicted Thursday on suspicion of tampering with evidence in a fire that destroyed his home, a blaze the judge's wife is accused of setting, their attorney said.
Justice David Medina and his wife, Francisca, have denied involvement in the June fire, which caused nearly $1 million in damage, attorney Terry Yates said.
Quis custodiet ipsos custodes?
A Texas Supreme Court justice was indicted Thursday on suspicion of tampering with evidence in a fire that destroyed his home, a blaze the judge's wife is accused of setting, their attorney said.
Justice David Medina and his wife, Francisca, have denied involvement in the June fire, which caused nearly $1 million in damage, attorney Terry Yates said.
Quis custodiet ipsos custodes?
Planetary Misalignment
From the Santa Barbara Independent: Blankenship Stops Building, Blames Loan Crisis and Permit Process.
With some bitterness, condo developer John Blankenship declared to the City of Santa Barbara’s Planning Commission that he would not stand before them again. After 37 years in the business, Blankenship said that he was defeated not only by a declining market and the subprime loan crisis, but by a city permitting process that prevented him from profiting on his projects. It is the city’s loss, he added, because for the past couple of years Blankenship Construction has been one of the few still creating condos in the $600,000-$700,000 range — middle-class workforce housing, just like the city said it needs.
$700,000 is "middle-class" housing?!?
On what planet?
Uranus?
With some bitterness, condo developer John Blankenship declared to the City of Santa Barbara’s Planning Commission that he would not stand before them again. After 37 years in the business, Blankenship said that he was defeated not only by a declining market and the subprime loan crisis, but by a city permitting process that prevented him from profiting on his projects. It is the city’s loss, he added, because for the past couple of years Blankenship Construction has been one of the few still creating condos in the $600,000-$700,000 range — middle-class workforce housing, just like the city said it needs.
$700,000 is "middle-class" housing?!?
On what planet?
Uranus?
Thursday, January 17, 2008
Golden Showers
What do you do when the one of the most-respected Central Bankers (and no, it's not Greenie) pisses all over your parade?
From Reuters: Volcker chides Fed for "bubbles".
Former Federal Reserve Chairman Paul Volcker thinks the U.S. central bank is to blame for allowing bubbles to inflate asset markets, and says that current Fed chief Ben Bernanke is in a tough spot.
"Too many bubbles have been going on for too long ... The Fed is not really in control of the situation," the Times quoted Volcker as saying, in clear criticism of both Bernanke and his predecessor Alan Greenspan.
From Reuters: Volcker chides Fed for "bubbles".
Former Federal Reserve Chairman Paul Volcker thinks the U.S. central bank is to blame for allowing bubbles to inflate asset markets, and says that current Fed chief Ben Bernanke is in a tough spot.
"Too many bubbles have been going on for too long ... The Fed is not really in control of the situation," the Times quoted Volcker as saying, in clear criticism of both Bernanke and his predecessor Alan Greenspan.
Tuesday, January 15, 2008
Glasnost?
From the WSJ: Fed to Show New Openness On Outlook.
Federal Reserve Chairman Ben Bernanke, responding to criticism that the central bank has sent confusing messages about interest rates in recent months, has decided to speak more forcefully and more often about the outlook for the nation's economy.
How about a different kind of openness?
A Hunks of the Federal Reserve calendar, perchance?
Federal Reserve Chairman Ben Bernanke, responding to criticism that the central bank has sent confusing messages about interest rates in recent months, has decided to speak more forcefully and more often about the outlook for the nation's economy.
How about a different kind of openness?
A Hunks of the Federal Reserve calendar, perchance?
Monday, January 14, 2008
Monday Morning Slap-down
From the newspaper equivalent of a triply used toilet-paper, Gretchen Morgenson writes: Cruel Jokes, and No One Is Laughing.
For the record, I like Gretchen Morgenson. To use the vernacular, she's aiiight in my book but sometimes in the interest of intellectual honesty, we have to "slap the bitch around" to put some economic sense in her. At least of the variety that Adam Smith might understand.
WHAT do banks call it when a troubled borrower abandons her home, sending them the keys?
“Jingle mail.”
“As difficult as the rescue prospects are for subprime borrowers, they are even worse for most pay-option A.R.M. borrowers,” said Michael D. Calhoun, president of the Center for Responsible Lending, a consumer advocacy group. “Three-quarters of pay-option borrowers are making the minimum payment based on 2 to 3 percent interest typically. The payment shock is so huge that a refinance is virtually impossible.”
Consider this as more evidence that we are moving into financial waters that we haven’t had to navigate in quite some time — if ever. Because other housing downturns were not national in scope and did not involve mortgages that had been pooled, sliced up and sold to investors around the globe, it is almost impossible to predict how long the turmoil will last or how financiers, regulators, municipalities and homeowners will manage its fallout.
BUT it is possible to get a feel for what is happening on the ground from a new survey of 2,400 real estate agents sponsored by Inside Mortgage Finance Publications. The survey taps into the outlook of people who see troubled borrowers firsthand, when they try to sell their homes before foreclosure occurs.
For example, agents participating in the survey confirmed what many borrowers say: that loan servicers are downright unresponsive. This is especially true when distressed owners try to sell their homes before being put through the trials of foreclosure. When they sell at a price that is lower than the outstanding mortgage debt, that is known as a short sale.
Asked how servicers could streamline such sales, one said: “Allow you to go directly to the loss mitigation department without having to speak or argue with eight people before they finally give in and transfer you.” Another said: “Respond to offers within five business days — they are killing the market by taking upwards of three months to respond to an offer.”
Lady, here's how it works.
All businesses exist to make money. THE END.
If you can't understand this, you should not write for the Business Section.
A bank will take a short sale if it believes that taking a loss "now" is better than running through the full gamut of a legal foreclosure process, and taking a loss "later", or if the loss "now" is smaller than the loss "later".
In other words, there is no God-given right to a short sale. Just a cold-blooded business decision.
Are you still with me, woman?
Now, a "loan origination" department is different from a "loan mitigation" department. Call it bureaucracy, or call it specialization of talent; this is the norm, and it's here to stay.
Charlie Chaplin could get away with criticism in an earlier age, but woman! I knew Charlie Chaplin, and you're no Charlie Chaplin.
Anyhoo, unless there is strong "evidence" of distress, there is no logical evidence for the "loan mitigation" department to conclude that they even need to bother to do a short sale. In fact, it seems to me that there isn't even evidence that they need pick up the phone.
Or in other words that even your peanut-sized brain may understand, a claim of distress is not the same as distress just like a claim of a crime is not the same as a crime.
In order to "claim" that you are distressed, you must actually be not only be distressed but show some evidence of being distressed like missing a payment or something. Losing your job would help. Being freshly divorced would help better. That kinda thing.
In the absence of this evidence, all the bank's poor employees see is some metaphorical hot air coming across the phone, and since they are in the business of "loan mitigation" not mind-reading, there's not a whole lot they can do.
Are you still with me, wise woman?
Now these "loan mitigation" employees, are precisely that. They want to see how much their employer can get back out of the deadbeats who borrowed the money, and you can't argue about the "deadbeats" part since they want to pay back less than owed hence giving the short sale its eponymous name.
Anyway, to that end, they need to look at the collateral.
Since they are specialized in "loan mitigation" and not "house appraisal", and they are not granted your superior intellect on economic matters, they will have to rely on some appraisal of the collateral. Unfortunately, the collateral has declined in value, and may decline further.
Now, not being the Pulitzer-prize winning intellectual giants that you are, they may ask for evidence about the collateral. This brings us back to an appraisal process to see how the collateral looks "now", and the market situations "now" as opposed to when the loan was made so they may need the services of an "appraiser".
Unfortunately, "appraisers" don't work for free which brings us back to point one about whether this cost is worth it or not. Also, if there are thousands of cases involved, it just becomes a business decision to lose the least amount of money, in which case you have to pick and choose your battles.
Are you still with me, my sweet bee-yatch?
Onwards and upwards then!
Lastly, no bank in their right mind is just going to let their lendees walk with a short sale. They are going to sue them for their assets, or garnish their wages; or the least of all leasts, put a ding on their credit scores.
Sometimes all of the above.
After all, borrowing money is not a God-given right contrary to what they taught you in your liberal-arts program.
So they are going to ask more than a few inconvenient questions to the borrowers, and ask for evidence, and work through the legal system, and all of this takes time. Sometimes it may be "upwards of three months" to work through this stuff.
Oh! the shocker!
Don't like it, bee-yatch?
Here's a shocker suggestion that you should write about in your next column:
"Don't borrow money!"
For the record, I like Gretchen Morgenson. To use the vernacular, she's aiiight in my book but sometimes in the interest of intellectual honesty, we have to "slap the bitch around" to put some economic sense in her. At least of the variety that Adam Smith might understand.
WHAT do banks call it when a troubled borrower abandons her home, sending them the keys?
“Jingle mail.”
“As difficult as the rescue prospects are for subprime borrowers, they are even worse for most pay-option A.R.M. borrowers,” said Michael D. Calhoun, president of the Center for Responsible Lending, a consumer advocacy group. “Three-quarters of pay-option borrowers are making the minimum payment based on 2 to 3 percent interest typically. The payment shock is so huge that a refinance is virtually impossible.”
Consider this as more evidence that we are moving into financial waters that we haven’t had to navigate in quite some time — if ever. Because other housing downturns were not national in scope and did not involve mortgages that had been pooled, sliced up and sold to investors around the globe, it is almost impossible to predict how long the turmoil will last or how financiers, regulators, municipalities and homeowners will manage its fallout.
BUT it is possible to get a feel for what is happening on the ground from a new survey of 2,400 real estate agents sponsored by Inside Mortgage Finance Publications. The survey taps into the outlook of people who see troubled borrowers firsthand, when they try to sell their homes before foreclosure occurs.
For example, agents participating in the survey confirmed what many borrowers say: that loan servicers are downright unresponsive. This is especially true when distressed owners try to sell their homes before being put through the trials of foreclosure. When they sell at a price that is lower than the outstanding mortgage debt, that is known as a short sale.
Asked how servicers could streamline such sales, one said: “Allow you to go directly to the loss mitigation department without having to speak or argue with eight people before they finally give in and transfer you.” Another said: “Respond to offers within five business days — they are killing the market by taking upwards of three months to respond to an offer.”
Lady, here's how it works.
All businesses exist to make money. THE END.
If you can't understand this, you should not write for the Business Section.
A bank will take a short sale if it believes that taking a loss "now" is better than running through the full gamut of a legal foreclosure process, and taking a loss "later", or if the loss "now" is smaller than the loss "later".
In other words, there is no God-given right to a short sale. Just a cold-blooded business decision.
Are you still with me, woman?
Now, a "loan origination" department is different from a "loan mitigation" department. Call it bureaucracy, or call it specialization of talent; this is the norm, and it's here to stay.
Charlie Chaplin could get away with criticism in an earlier age, but woman! I knew Charlie Chaplin, and you're no Charlie Chaplin.
Anyhoo, unless there is strong "evidence" of distress, there is no logical evidence for the "loan mitigation" department to conclude that they even need to bother to do a short sale. In fact, it seems to me that there isn't even evidence that they need pick up the phone.
Or in other words that even your peanut-sized brain may understand, a claim of distress is not the same as distress just like a claim of a crime is not the same as a crime.
In order to "claim" that you are distressed, you must actually be not only be distressed but show some evidence of being distressed like missing a payment or something. Losing your job would help. Being freshly divorced would help better. That kinda thing.
In the absence of this evidence, all the bank's poor employees see is some metaphorical hot air coming across the phone, and since they are in the business of "loan mitigation" not mind-reading, there's not a whole lot they can do.
Are you still with me, wise woman?
Now these "loan mitigation" employees, are precisely that. They want to see how much their employer can get back out of the deadbeats who borrowed the money, and you can't argue about the "deadbeats" part since they want to pay back less than owed hence giving the short sale its eponymous name.
Anyway, to that end, they need to look at the collateral.
Since they are specialized in "loan mitigation" and not "house appraisal", and they are not granted your superior intellect on economic matters, they will have to rely on some appraisal of the collateral. Unfortunately, the collateral has declined in value, and may decline further.
Now, not being the Pulitzer-prize winning intellectual giants that you are, they may ask for evidence about the collateral. This brings us back to an appraisal process to see how the collateral looks "now", and the market situations "now" as opposed to when the loan was made so they may need the services of an "appraiser".
Unfortunately, "appraisers" don't work for free which brings us back to point one about whether this cost is worth it or not. Also, if there are thousands of cases involved, it just becomes a business decision to lose the least amount of money, in which case you have to pick and choose your battles.
Are you still with me, my sweet bee-yatch?
Onwards and upwards then!
Lastly, no bank in their right mind is just going to let their lendees walk with a short sale. They are going to sue them for their assets, or garnish their wages; or the least of all leasts, put a ding on their credit scores.
Sometimes all of the above.
After all, borrowing money is not a God-given right contrary to what they taught you in your liberal-arts program.
So they are going to ask more than a few inconvenient questions to the borrowers, and ask for evidence, and work through the legal system, and all of this takes time. Sometimes it may be "upwards of three months" to work through this stuff.
Oh! the shocker!
Don't like it, bee-yatch?
Here's a shocker suggestion that you should write about in your next column:
"Don't borrow money!"
Friday, January 11, 2008
Daily Mash
From the Daily Mash: Estate Agents Will Starve To Death After House Price Crash Says Upbeat Report.
WORRIED homeowners were cheered last night as economists revealed that next year's house price collapse will lead to widespread starvation and prostitution among Britain's estate agents.
The upbeat report says the entire profession will be on the streets begging for food by next August, apart from those who manage to get jobs as sex whores by lying about their previous occupation.
Bill McKay, 56, a homeowner, said: "When I'm looking around a house I don't need some dick in a lilac shirt telling me 'this is the en-suite bathroom'. I can see it's the en-suite bathroom. It's got a great big fucking bath in it.
"I can also tell the difference between a desirable upscale property in a sought after location and a rat-infested bedsit with a brothel on one side and a crack house on the other. Do you think I'm blind, or just stupid?"
Professor Wayne Hayes, the Van Hoogstraten chair of prices at the House Institute, said: "Great news, the pin-striped tit-cockers are all going to starve to death. Slowly."
WORRIED homeowners were cheered last night as economists revealed that next year's house price collapse will lead to widespread starvation and prostitution among Britain's estate agents.
The upbeat report says the entire profession will be on the streets begging for food by next August, apart from those who manage to get jobs as sex whores by lying about their previous occupation.
Bill McKay, 56, a homeowner, said: "When I'm looking around a house I don't need some dick in a lilac shirt telling me 'this is the en-suite bathroom'. I can see it's the en-suite bathroom. It's got a great big fucking bath in it."I can also tell the difference between a desirable upscale property in a sought after location and a rat-infested bedsit with a brothel on one side and a crack house on the other. Do you think I'm blind, or just stupid?"
Professor Wayne Hayes, the Van Hoogstraten chair of prices at the House Institute, said: "Great news, the pin-striped tit-cockers are all going to starve to death. Slowly."
Thursday, January 10, 2008
Amazing Grace
From Merced, we have Foreclosure Story Comes Full Circle.
One man, Mark Gallegos, offered to tell me his whole story on the record. We sat in his living room and he told me how he had taken out several home equity loans to start a new business, the business failed and he couldn't make his mortgage payments.
Apparently the Gallegos' last-minute prayers weren't answered.
Their house was sold at a public auction a couple months after I wrote about them, and they moved out shortly after. They left behind two messages. In the driveway they spray-painted the dates they had lived there: 7/7/73 - 10/10/07 and the phrase "Gallegos Lived Here!". In the kitchen they wrote a small piece of graffiti: "This house was loved and lost by the grace of God by the Gallegos family be kind to it."
Before I go all Richard Dawkins over this sorry punk's ass, let us first observe the word "several home equity loans".
Let's see.
They lived there for 34 years; yet the house was not paid off; and they took out "several" HELOC's. Then they graffiti'd the crap out of the house.
The reporter failed to ask even the most basic of questions.
Who else wants to give them the Joshua Tree Treatment(TM)? We can take turns.
One man, Mark Gallegos, offered to tell me his whole story on the record. We sat in his living room and he told me how he had taken out several home equity loans to start a new business, the business failed and he couldn't make his mortgage payments.
Apparently the Gallegos' last-minute prayers weren't answered.
Their house was sold at a public auction a couple months after I wrote about them, and they moved out shortly after. They left behind two messages. In the driveway they spray-painted the dates they had lived there: 7/7/73 - 10/10/07 and the phrase "Gallegos Lived Here!". In the kitchen they wrote a small piece of graffiti: "This house was loved and lost by the grace of God by the Gallegos family be kind to it."
Before I go all Richard Dawkins over this sorry punk's ass, let us first observe the word "several home equity loans".
Let's see.
They lived there for 34 years; yet the house was not paid off; and they took out "several" HELOC's. Then they graffiti'd the crap out of the house.
The reporter failed to ask even the most basic of questions.
Who else wants to give them the Joshua Tree Treatment(TM)? We can take turns.
Real Insight
From a broker's mouth via Rocky Mountain News: Metro home prices drop 2%.
Beverly Meade, a broker with RE/MAX Avenues, saw a condo near Lowry with structural damage advertised for $11,000.
"If you have money, it is a good time to buy," Meade said. "If you are in foreclosure, you are not in a position to benefit from today's market."
Gee, really?!?
Thanks for the advice, Captain Obvious!
Beverly Meade, a broker with RE/MAX Avenues, saw a condo near Lowry with structural damage advertised for $11,000.
"If you have money, it is a good time to buy," Meade said. "If you are in foreclosure, you are not in a position to benefit from today's market."
Gee, really?!?
Thanks for the advice, Captain Obvious!
Positivitiy
So I was told, instead of being "negative", why don't you say something positive about journalism and economics.
Fine.
I offer you my three rules of how to read any economics story in the press (everything from the Economist to the New York Times.)
Instead of asking if something is true, you should ask:
Is the story even remotely plausible?
If yes, whose interests are being advanced by the story?
Why did the press print this story, and not something else?
The answer to the last question can frequently be reduced to the trivial, "it's in the news". The answer to the second question is rarely trivial, if ever.
For example, when Buffett (whom I admire, and who's as honest as is possible in the business world) calls financial derivatives: "weapons of mass destruction", I don't run around like a headless chicken.
The three answers are:
Yes.
Because fearful people buy insurance, and Buffett is in the business of selling insurance (in this case, "reinsurance", but let's not quibble.)
Because he is well respected.
Please note Mr. Buffett's self-interest. I don't think anyone ever hands out gold nuggets for free.
Fine.
I offer you my three rules of how to read any economics story in the press (everything from the Economist to the New York Times.)
Instead of asking if something is true, you should ask:
The answer to the last question can frequently be reduced to the trivial, "it's in the news". The answer to the second question is rarely trivial, if ever.
For example, when Buffett (whom I admire, and who's as honest as is possible in the business world) calls financial derivatives: "weapons of mass destruction", I don't run around like a headless chicken.
The three answers are:
Please note Mr. Buffett's self-interest. I don't think anyone ever hands out gold nuggets for free.
Tuesday, January 08, 2008
Suckfest in Sacramento
From the Sacramento Bee: Bob Shallit: Midtown loft developer feels confident units priced to sell.
Lots of developers are putting up "loft" housing in the downtown-midtown area. But Jeff Kraft says his 42-unit condo project at 1600 H St. is the real deal.
Prices range from $213,000 for a 395-square-foot studio to $699,000 for a two-bedroom, two-bath, 1,249-square-foot unit.
$700K in Sacramento?!?
For a condo??!!??
Bwahahahahhahahhahahahhahahh!!!!!
Forgive me, I'm trying my level best not to pee while I laugh this hard.
Sometimes a movie line says it best:
Teen 1: Eat me!
Teen 2: Eat me, raw!
Lots of developers are putting up "loft" housing in the downtown-midtown area. But Jeff Kraft says his 42-unit condo project at 1600 H St. is the real deal.
Prices range from $213,000 for a 395-square-foot studio to $699,000 for a two-bedroom, two-bath, 1,249-square-foot unit.
$700K in Sacramento?!?
For a condo??!!??
Bwahahahahhahahhahahahhahahh!!!!!
Forgive me, I'm trying my level best not to pee while I laugh this hard.
Sometimes a movie line says it best:
Teen 1: Eat me!
Teen 2: Eat me, raw!
Monday, January 07, 2008
The Invisible Hand's Invisible Bitch-slap
From the Wall Street Journal: Text of Paulson Remarks.
After years of unsustainable price appreciation and lax lending practices, a housing correction was inevitable and necessary.
Ooh, ooh, ooh, the Spinning Jenny is spinning downwards.
Welcome to Planet Reality(TM), Mr. Paulson!
After years of unsustainable price appreciation and lax lending practices, a housing correction was inevitable and necessary.
Ooh, ooh, ooh, the Spinning Jenny is spinning downwards.
Welcome to Planet Reality(TM), Mr. Paulson!
Equivalency
From the Times Online: UK living standards outstrip US.
LIVING standards in Britain are set to rise above those in America for the first time since the 19th century, according to a report by the respected Oxford Economics consultancy.
The calculations suggest that, measured by gross domestic product per capita, Britain can now hold its head up high in the economic stakes after more than a century of playing second fiddle to the Americans.
It says that GDP per head in Britain will be £23,500 this year, compared with £23,250 in America, reflecting not only the strength of the pound against the dollar but also the UK economy’s record run of growth and rising incomes going back to the early 1990s.
I know that these newspapers exist to go rah-rah-rah now that the Empire has gone bust but these people are morons.
What matters is not GDP/capita but how much that GDP/capita will buy you. In short, purchasing power.
After all, you can't eat pounds any more than you can eat dollars or eat gold. What matters is what you can buy with it, and it is a generally well known fact that things are priced much higher in the UK than they are in the US. Typically, they are somewhere between 1.5X and 2X more expensive, and hence, I'm willing to bet that the average UK family is far worse off than the average US family.
Eat that!
LIVING standards in Britain are set to rise above those in America for the first time since the 19th century, according to a report by the respected Oxford Economics consultancy.
The calculations suggest that, measured by gross domestic product per capita, Britain can now hold its head up high in the economic stakes after more than a century of playing second fiddle to the Americans.
It says that GDP per head in Britain will be £23,500 this year, compared with £23,250 in America, reflecting not only the strength of the pound against the dollar but also the UK economy’s record run of growth and rising incomes going back to the early 1990s.
I know that these newspapers exist to go rah-rah-rah now that the Empire has gone bust but these people are morons.
What matters is not GDP/capita but how much that GDP/capita will buy you. In short, purchasing power.
After all, you can't eat pounds any more than you can eat dollars or eat gold. What matters is what you can buy with it, and it is a generally well known fact that things are priced much higher in the UK than they are in the US. Typically, they are somewhere between 1.5X and 2X more expensive, and hence, I'm willing to bet that the average UK family is far worse off than the average US family.
Eat that!
Saturday, January 05, 2008
How long before hip-hop gets here?
From the AP: `Subprime' Is Linguists' Word of Year.
Even the American Dialect Society knows how risky home mortgages are these days. The group of wordsmiths chose "subprime" as 2007's Word of the Year at its annual convention Friday..
Word, son, word.†
† For 2008, I nominate 'systemic risk'.
Even the American Dialect Society knows how risky home mortgages are these days. The group of wordsmiths chose "subprime" as 2007's Word of the Year at its annual convention Friday..
Word, son, word.†
† For 2008, I nominate 'systemic risk'.
Rapid Revisionism
We've met this chicken-hearted chickenshit before: David Lereah, former Chief Economist of the NAR. He wrote a book. Please note the revisions.
Time for some more revisions, babykins!
Time for some more revisions, babykins!
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