sippin, "wait time hadn't changed much at the restuarants" lmao.

Well, how about the lines at the soup kitchens? Has BB checked to see if reservations are required now?

Seriously, I have been wondering how long it will take before MEW declines reflect in economic activity and a correlation gets recognized. 2008?

TASHA YAR:
\t
We're losing containment! I can't stop it, it's going to --

STAR TREK: "All Good Things... " - 03/10/94 - ACT TEN

Tanta and CR, would love to hear your comments on the $1.2 trillion that shows up in a new line item on the Federal Reserve 7/20 report H.8, page 13, line 34., Securitized Real Estate Loans, for domestically chartered banks.

They broke it out of another line item, and thus it sits now, exposed.

This is in addition to the MBS line item.

California is the 9th largest economy IN THE WORLD. If this region goes in recession the broader economy will follow.
MEW MEW said the cow.

Did BB say no more MEoW?

Hey Savoca, in case you didn't notice, this is not a I Hate Bush political blog. Take it somewhere else.

Also, if you want intelligent people to take you seriously, then learn the difference between loose and lose.

to Jwm in SD

i am encouraged that that you chose to jump on a misspelled word in attacking my ideas rather than criticizing the ideas ...or even taking the time to read the articles about the argument i propose.

I don't hate the president. I am terrified of his notion of the unitary presidency and the threat that poses to our bill of rights.

I am a constitutional conservative. I fear this president seeks the destruction of the bill of rights.

Off the housingbubbleblog

The Orange County Register reports from California. “Homes in Capistrano Beach and Irvine’s Northwood areas may have been hit hardest this year by speculators buying properties, only to bail out when the housing slump hit. Median prices there fell about 15 percent, DataQuick reported. Overall, median home prices fell in almost 70 percent of Orange County’s ZIP codes during the first half of the year, DataQuick reported.”

“And while median prices increased in 23 ZIP codes, they accounted for about 28 percent of Orange County’s 83 postal zones. But some agents questioned whether other neighborhoods with the highest price gains really saw home values go up. Irvine sales agent Mac Mackenzie, who sells homes throughout Orange County, said many are areas where more expensive houses are selling for less, pulling medians artificially up.”

“‘Those 23 ZIP codes where prices are up doesn’t take into account price reductions (made to get) a sale,’ Mackenzie said. ‘Higher cost houses are selling for less. I think that’s skewing the numbers.’”

“The biggest price drops occurred in areas with high numbers of new-home sales, such as Newport Coast and an area near The Block in Orange (92868), said Hahn. In addition, areas such as Capistrano Beach (Dana Point’s 92624) and Northwood (Irvine’s 92620) are pricy neighborhoods where a lot of speculators invested, then bailed out when the slump hit, putting homes back on the market for whatever they could get.”

“‘Capo Beach is really hit hard,’ Mackenzie said. ‘There were so many speculators who tried to flip houses (there).’”

“Bob Chapman, who oversees a Prudential California chain in south Orange County, said that more higher-priced homes are selling now, making the median price look better than it is. ‘I don’t think it indicates an increase in value in very many places at all,’ Chapman said.”

Yal- thanks for the link, interesting show

I'm with Jwm. This is an economy/housing blog. A good one. Perhaps the best and most thoughtful. i dislike Bush as much as the next guy, but unless there's some economics relevence to the subject matter here, it doesn't belong. Hijacking is punishable by the moderator but in my opinion... take it to politico.com.

Yal, Ken Fisher is a disgusting shill.

From Ken on 7-3-07
The longer this goes on, the more CFOs and CEOs learn to do what private equity firms are trying to teach them, which is to borrow long-term money at approximately 6%, which would cost something like 3.6% after taxes.

Later, one could buy back his own stock with a price-to-earnings ratio of 15 and an earnings yield of 6.7% after taxes, and pick up the 3% spread as free money that makes his own earnings-per-share go up.

Gee, I'm not sure...are private equity firms placing any debt with those yields? Today? Tomorrow? Next Week?

And if consumption declines, and earnings go down, the spread he claims is even more suspect. At 7.5% and P/E of 22, you're losing money. Didn't Chrysler need 750bps over LIBOR? Did you notice that KB Homes P/E went from 9 to N/A? How does that fit into the Ken Fisher theory? I'll tell you how: badly!

Something about the true clever mind who figures out ways of pulling money out of markets: they don't post it for free on forbes blogs. They utilize their proprietary models for their clients (he does have his own investment company). Quite the method to tell your brilliant insights for free while you make your clients pay you for the same service.

Beware of the forked tongue slickster who is guaranteeing you easy riches.

dryfly,

Every month or so we take the short trip down from LA to SD. To us it generally doesn't look any different than last year, or the year before. Same goes for here in LA.

p.s.: Can't get over all the tower cranes in SD, though. They're everywhere!

San Diego had the wildest run-up among major California cities, with prices tripling since the mid-1990s.

Where I live, prices are now 4 times higher than they were in 1996. Does that mean that my market is better than that of San Diego?

Welcome to Daily Kos II, Jwm. Best not to feed the beast.

Will beg some (somewhat) OT weekend indulgence for some amateur musings here.

"Ben Bernanke would like to boost rates to support the dollar and help American tourists, but faced with a liquidity crisis in the $500 trillion derivatives market, he'll have to think thrice before doing so. But rates are going up with or without him. Lenders are finally growing wary." says Bill Bonner on 7/21/07.

Then I thought:

-- I saw a chart recently showing how Fed Funds Rate follows (not leads) whatever rate the market sets for treasuries ( I forget what duration treasury ).

-- Many ARMs set their interest rates from LIBOR, not Fed.

-- When a 2-28 or IO kicks in to full payments and home-owner [sic] is barely able to pay teaser rates it's not going to much matter what interest rate is, i.e., it won't really matter whether payments double or triple because they will loose house either way since (a) can't refi and (b) can't sell for enough to pay mortgage.

-- RE trauma seems baked in the pie regardless of any rate BB might choose.

-- Liquidity tremors are registering on mainstream seismographs, credit spreads are widening, etc.

So . . .

Seems like BB has (a) some cover to raise rates, which he'll (b) do anyway since Fed follows market.

Thoughts?

OT
Interesting article in the NY Times(behind the paywall) by G. Morgenson about Ellington Financial LLC-

Asked Friday whether the offering is a way to dump poorly performing securities onto investors for a higher-than-market price, Mr. Vranos first said that I should not have obtained a copy of the prospectus because it is a private placement. All he would say about the New Century residuals is: “I don’t know if they’ve declined. I’m not responsible for pricing them — we use third-party pricing. That’s obviously a question that potential limiteds ask all the time. Obviously we have an answer.”

Now coming to a city near you-partially completed buildings where the current developer goes out midway through construction.

Canary in the MEW coal mine, BC

[BB&T Capital Markets analyst Laura Richardson said Brunswick may be falling victim to "broad consumer malaise" more than anything else, as categories including boating, restaurants, fitness equipment and footwear are all experiencing softness.]

Expired

YAL SAID :

"can't buy any fish anymore b/c they're selling it in Europe b/c of the stronger euro"

This sounds like a fish story to me. They can raise prices instead of shipping fish to Europe....

maybe there are less fish in the sea being caught. That is a global phenomena"

Pricing Power? Gas down another 5 cents today here in Napa Valley, down 5+% in the last two-months. Business down Y over Y 10-15%.

I sold my condo at 4th/Market in '06-thank you God!

but I miss Petco and trolley rides to T.J.

Alan Gin usually gets it right.

Don't know how close we really are to the edge, but when I hear conversations in the local stores, people are definitely concerned about their spending. And real estate here is really dead. Everyone is renting instead of buying or selling - rentals go in a day or two.

Been here 22 years, and this feels like the start of the 80s housing slump to me.

Sebastian, if the fed lowers the long term rates should shoot higher as the dollar weakens further. Those treasuries will need to shoot much higher as foreign investors rethink keeping their assets in dollars and will need the pot sweetened considerably. Unless you think the fed doesn't need to attract foreign money to finance the deficit? Think negative domestic savings rate.

Lower short term rates are likely IMO. The outcome won't be pretty, with inflation shooting to the moon and then a forced raise to put us firmly into a severe recession...

"Don't be misled by arguments about the Fed "defending" the dollar by raising rates. The Fed's primary concern is the domestic economy."

Thats my question, when exactly does the dollar come into play. If the dollar weakens further then the negative aspects of a weak dollar begin to outweigh the positive aspects of a weak dollar. I keep reading the dollar is under pressure due to subprime and a slowing US economy. so if BB actually lowers the over night rate won't the dollar fall more and if it does won't we experience inflation due to the price of imports rising especially oil. And won't we experience higher interest rates due to foreign buyers pulling out of US assets. I don't get where the FED has room to ease in the face of a weak dollar. The US Dollar index is sitting right at 80.

The Yuan and the yen are the only major currencies in the world where the dollar is strong and those currencies are basically manipulated to be that way, China, well we all know the story there and Yen to support the carry trade, although the yen is strengthening.

So the argument for the weak dollar in the face of strong global demand is that it will help US exports and trim the US trade deficit. So far we haven't been too impacted by foreign invesotrs appetite for US securities and the stock market is rallying to date this year.

I guess we are at a point if the dollar goes any lower foreign investors will lose their appetite for US securities which will result in higher interest rates and we will be paying more for oil and commodities which are inflationary, that will put more pressure on the consumer which would offset the economic gains in exports. It would also making this housing correction EPOCH, more so than it is now. Hmmm I'm not a big fan of the weaker dollar strategy.

dryfly-of course changes in money supply are conducted digitally these days. "printing money" is just used figuratively. the thing about gold being precious or the emotions about it. of course it can't be used to transact. its that it represents "rules" and restrictions on gov'ts unabashedly increasingly money supply with a few keystrokes as they have for decades since going off the gold std just a mere 35 yr ago. i have seen what appear to be viable methods of going back to that std that don't necessarily involve throwing the world into a severe depression. would probably take an ounze of gold =$10,000 though but hey no problem...

We are in a recession. I am a software consultant looking for a new job and am having trouble getting even nibbles. 8 months ago recruiters were emailing me left and right (but I wasnt ready to leave yet). Declining jobs in volatile tech is a pretty good indicator. Tech Companies still smarting from the last downturn are already getting cautious. Not a good sign. The housing slump is hitting business. Like someone else said above, CA by itself is one of the biggest economies in the world. When the housing slump pulls us under the rest will follow.

Then Bernanke will lower rates later this year to try and save us. The dollar then drops even more in value.

Stagflation.

I think one of the best signs on the strength of the Diego economy is at to corner of the Ted Willams and the 56. Its two new buildings about half way built. The telling part of the story is that they are sitting next to two other buildings that adorn the logo of "New Century Financial" and appear to be largely empty...

(There is about a dozen buildings half way completed with in the given area...)