Merrill Lynch: House Prices May Fall 30%
Submitted by
CalculatedRisk on Tue, 01/22/2008 - 8:24pm (165 comments)
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$6 Trilliom om top of how much lost in stocks and other Iraq related madness?
First?
We're saving for a house down payment. So as long as house prices fall faster than the market, I think we'll be ok eventually. In the meantime, renting seems good.
That Bum THain....
Talkin the book for the golden slacks crew...
and he sold the NYSE to the public, so the pension can't eat shi* stew with that also....
I don't get it. They are predicting "the worst consumer recession since 1980," and also 0.8% growth for the year?
Nobody has suggested a scenario that gets us out of this mess. Nothing but chaos ahead.
Every Major U.S. Bank Was Profitable Last Year: John Berry reporting for Bloomberg (the healthy bank propaganda machine is alive & well)
Every Major U.S. Bank Was Profitable Last Year: John M. Berry - Bloomberg.com
Wake me up when there's no more traffic jams on the 405 or the 101 because everyone's lost their jobs and are staying home and moping.
Frankly, I don't see that happening.
Are Countrywide Financial Bonds Bankruptcy Remote?
Are Countrywide Financial Bonds Bankruptcy Remote? -- Seeking Alpha
Im first but dont have anything intelligent to add.
Damn.
And who will willingly stay underwater and keep paying?
So far Rosenberg's record is "good predictions earlier than the rest".
I know we've all been saying 30% declines is normal but that comes from looking at past local bubbles. This time it's nationwide.
Finally someone started talking about the retiring baby bombers, er boomers.
The housing supply and demand equation is changing.
And no I am not part of that cohort.
Apparently the market needs to have this point hammered home. The 100 times it has already been said weren't quite so blunt.
Good thing I doubled down on my shorts after today's afternoon bounce.
Dear Dick and George
I think we should blow up Iran, you know just to blow off some steam. We saved the chinese market for a week so lets take advantage of it and occupy another country while we have the political capital.
BTW I think Irag will make a great 51st state, they have the 3rd largest oil reserves in world, could be a good boost to GDP and bail out Detroit.
Call it the NeoCon economic stimulus program
Thanks for your careful consideration
P. Wolfowitz
What wrecked Japan's economy:
1) Xenophobia coupled with a declining natural population
2) A mortgage serf population that was unable to move from town to town in search of that better job because of the mortgage nooses around their necks.
3) A belief that low interest rates would prime the pump and create jobs in an otherwise stagnant environment, coupled with labor arbitrage from neighboring countries.
Being uber-bearish is going to lose it's cutting edge appeal if everyone keeps agreeing with us.
Seriously, it does appear that the seriousness of the situation and its ultimate consequences are beginning to be realized by more than just those of us here. Which brings me right back to my oft-stated assertion: The odds of a recession are 100%, only people's awareness of it is rising.
Futures heading down again!
Stock Futures on Bloomberg
Hmmm, so what were they predicting three years ago? We should trust them why?
I can't be the only one to notice the haloscan ad for an online payday loan.
And who will willingly stay underwater and keep paying?
People make payments on cars that are far underwater pricewise all the time. The problem with housing looks to be that the banks rather foolishly seem to have made a lot of loans that the borrowers can't maintain payments on even if they want to. So the borrowers, unable to sell and engulfed in debts denominated in astronomical numbers are -- suprise -- defaulting.
I think when things settle out we'll start to see folks look coldly and calculatingly at housing prices, payments, rent, transaction costs of selling, and whether their loan is non-recourse and walk away. I doubt that is happening much now. I'm far from sure the banks don't deserve that behavior if/when it starts.
wjb, That looks like a lotta cash you can get with a payday loan. You gotta go for that, right?
The big problem with this country is that payday is too far away.
Ravi - "We're saving for a house down payment. So as long as house prices fall faster than the market, I think we'll be ok eventually. In the meantime, renting seems good."
Dude, if you got plans for that money for anytime in the near future (
crap - here's the rest
(
?
( < 2-5 years) you should be REALLY careful about putting it into stocks. Just sayin's all. Stocks can fall for decades and disappoint quickly.
cant use that less than sign here Weatherman. It will act as a stop on your comment.
House prices are not coming down any more here in Kansas City. A realtor told me so.
wjb, That looks like a lotta cash you can get with a payday loan. You gotta go for that, right?
Even better, I'm going to list it as income on my mortgage app. It's still not too late to get in on the RE investment boom!
I just needed to put a space. Great way to ruin a point! All typed with a child in my left hand, BTW!
First?
I keep hearing the talking heads saying that we'll be in "what feels like a recession", even if isn't technically a "real recession".
I think they need a new word.
"clusterf**k" comes to mind.
Paul Kangas:
Government officials announced today that the US has avoided recession. On a more alarming note, the economy has officially entered an unforeseeable clusterf**k...
I keep hearing the talking heads saying that we'll be in "what feels like a recession", even if isn't technically a "real recession".
I think they need a new word.
I think it was Alfred Kahn, an advisor in the Ford Administration, who wanted to use the word "banana" to avoid using the word "recession".
Were are so much in debt and I think this come from all those banks suchas meryll Lynch putting all there assets in manged funds such that had Reits
"House prices are not coming down any more here in Kansas City. A realtor told me so."
Priceless..
i think the fed should announce other 75 basis points drop just before the NYSE opening tomorrow...
and give all the specialists more cowbell
that kansas city realtor has already received too much cowbell
So, is it possible to use the 'less than' sign in a functional way?
CR came up with the $6trillion potential loss in housing value number some weeks ago. I think Merrill just plagarized it. Didn't someone say the war would be over soon?
Banc of America Funding Corp · FWP · Banc of America Funding 2007-8 Trust · On 9/10/07
Loan Prospector(R) is an automated underwriting system developed by Freddie
Mac for conventional conforming loans. Loan Prospector(R) indicates the minimum
income and asset verification, credit-related documentation and other
requirements necessary to complete processing of the loan file. These
requirements are based on the specific risk factors present in each mortgage
application.
officially entered an unforeseeable clusterf**k...
Marcus Aurelius | 01.23.08 - 12:41 am | #
James Kunstler (google) has been using that term for awhile. Take your Prozac first
"I think they need a new word."
Depression?
What does a 30% across the board haircut really mean?
To MBO's, SIV's and ALL the financialized instruments based on... 2nd mortgages -- BANKRUPTCY.
1st mortgages -- SOME UNFACTORED BK'S.
And that's the end of the economic expansion, the impossibility of economic stability, and the assurance of Depression.
What the heck do we need here? If you're waiting for God to deliver an extra tablet with one more Commandment, you're on the short bus.
ML says 30%. In many areas like FL, CA, AZ, and those following in the crash, the losses will be 50%.
As Joe M likes to say, "You can book it!"
This Rip Van Winkle will hit the hay for about 4 years, and then see how things are coming along. I don't think gold will deteriorate over that time period, unless I too sleep in the acid cloud the world's population seems to be stunning under for the past multi-years.
No, no, no... they gotta put a positive spin on this now...
How about an economic "right-sizing"?
Last Update of Conjure Bag's
Global Economic Meltdown Clock
11:59:30
Why the last update? If you don't know by now what time it is, Conjure can't help you.
11:59:30??? WTF?!?
Last I read it was 11:59:06 -- where the heck did that last 24 seconds go?!?!?
Ben's rate cut.
Hmmm, well... at that rate it looks like conjure's clock will run out of seconds about the same time Ben's FFR runs out of basis points.
"...at that rate it looks like conjure's clock will run out of seconds about the same time Ben's FFR runs out of basis points."
Good observation. He did precisely the right thing at precisely the wrong time.
Bernanke is no longer controlling events. They are controlling him.
Think we'll get any idea of where things are headed in the short-term tomorrow?
IMHO I'm expecting a pretty big rally, then the grind down last seen in Showgirls.
The Fed's action has stopped the panic, but markets are still 3-5% below Friday's close. They will be flat for a few days until people realize every other bit of news is bad.
I noticed a reply to my request last night to sum up market losses, its over at WSJ: The 2008 Global Market Losses - MarketBeat - WSJ
anuary 22, 2008, 3:36 pm
The 2008 Global Market Losses
Posted by David Gaffen
... since the beginning of the year, the MSCI Barra World Index (ex-U.S.) was off by 14%
Thanks!!! Now work on GDP and global growth impact charts!!
It's reasonable to expect a rally tomorrow, but it's likely to be short-lived as there's growing sentiment that the rate cut's purpose was to shore up the markets, which is correct.
Conjure and I felt a cut to be likely based on Monday's futures, but we didn't think it would be this large. We figured 50 points. The Fed used up a lot of ammunition, only to see the Dow 30 down 128 points. Very sad.
The rate cut has also spooked the commodities markets, which is bad. Conjure, as you may be aware, is bearish on commodities and bullish on the euro.
The rate cut also upstaged a possible capitulation in equities today, which means it's going to take more time to find the bottom.
If the bulls fail to hold Dow 12,000 today, which is likely, one can expect more fear leading to yet another panic. The markets will expect yet another rate cut. What would the Fed do then?
The China scenario, which Conjure addressed here a couple of days ago, has come to pass. Bernanke is now in extremely dangerous territory, and it could have been avoid seven months ago.
I hope everyone has thick rugs. They're going to need them.
Word
dwindling
*
Re: " could have been avoid seven months ago. "???
Are you crazy, this could have been avoided back when Greenspan was chatting with the press about a little froth in housing; these fools kept rates too low for way too long and pumped this bubble into multiple bubbles that are now exploding in multiple directions!
**
Testimony of Chairman Alan Greenspan
The economic outlook
Before the Joint Economic Committee, U.S. Congress
June 9, 2005
FRB: Testimony, Greenspan--The economic outlook--June 9, 2005
Although a "bubble" in home prices for the nation as a whole does not appear likely, there do appear to be, at a minimum, signs of froth in some local markets where home prices seem to have risen to unsustainable levels.
Anonymous, I do not own a time machine. I am simply saying that Conjure and I warned here seven months ago that, if the Fed didn't work the problem, they could easily end up with a global meltdown. They could have worked the problem.
Here we are.
Conjure, your scaring me. Got any happy bedtime stories...
The markets will expect yet another rate cut. What would the Fed do then?
It was bad enough for the Fed to hit the panic button today. A second time? shudder
I hope everyone has thick rugs.
Thick rugs? Are we supposed to sit on them and mediatate the pain from our portfolios away?
Sorry, I call it as I see it, and agree with Volcker.
Many devout Christians use prayer rugs.
As far as portfolios are concerned, I'm afraid I don't understand. The bear case for the homebuilders and investment banks was laid out on this site extremely well.
The only information contained in this prediction is that Merrill Lynch has finally managed to build itself a net short position versus the housing market.
"The only information contained in this prediction is that Merrill Lynch has finally managed to build itself a net short position versus the housing market."
Huh?
I happen to agree with Rosenberg's forecast based on my own research and the research presented on this site.
Frankly, Rosenberg is a little late to the table and, as far as Merrill is concerned, I don't care what their position is.
Re: I don't care what their position is
You and a billion others share that same thought, in regard to the idiots that are called analysts. What I wonder about, is how these people will continue to be needed or to hold jobs? Why would the profession of financial analyst have value?
I can't be the only one to notice the haloscan ad for an online payday loan.
Your not the only one; I think I saw a porno link to the other day, but maybe that was for WebEx; they may be one in the same? Business yah know!
"What wrecked Japan's economy:
1) Xenophobia coupled with a declining natural population"
Talking about xenophobia, are you americans still going to build that great wall next to mexicos border or are the sentiments changing?
Well, everyone is entitled to an opinion, aren't they? Even financial analysts. Some are honest opinions, some aren't. Most analysts I know are honest, hard working people. Some aren't, just like most cops are honest, hard working people, but some aren't.
This mess was created by a bunch of extremely ambitious quants, who sold the idea to the big boys, the dealmakers. Frankly, most of the big boys, by the time they reach the top, have forgotten more than they ever learned about economics and finance. They heard the idea, liked PowerPoint presentation, and bought into it.
One screw-up begets another. It's humanity's age-old story.
"...are you americans still going to build that great wall next to mexicos border or are the sentiments changing?"
Pastorn, I don't give a hootin' hell what they decide to do, so long as they decide to do something about anything and there's money in it.
Conjure and I are very practical. We leave our ideology at the door.
Rosenberg and lots of i-bank folks are late, Roach was clear on this for a long time
Looking at the DQ stats... The number of NoD sent out to Los Angeles county residents last quarter was greater than the number of sales.
Roach is a good macro economist, but his timing is just as miserable as Rosenberg's.
"I don't give a hootin' hell what they decide to do, so long as they decide to do something about anything and there's money in it."
The problem as i see it, are that there is money in that great wall. As the babyboomers retire you will need a lot of folks who take over their jobs. We have the same problem here in Sweden where i live, and i fear the trouble is only going to get worse if we the swedes block our borders but in particular if you americans contiunue on what i belive is a xenophoic path.
This is particulary worrysome since my country has a lot of exports to your country, what im trying to say. If your economy halts, so does the economy in my country. This is why i am interested in your countrys immigration policy, with that knowledge i can try to plan ahead.
So at what direction is the wind blowing regarding this wall?
Pastorn, I have absolutely no idea. If I had to guess, I would say that its chances are slight. Why? Money.
Pastorn -
There is no consensus on immmigration, there probably won't be a consensus, therefore no change of importance will happen.
Regards to all of you, and good hunting.
European markets are moving into the red now. I had all greens except one, did a refresh and now all red except 4. DAX down 1.21% now, but Asian markets are all green.
That latest hit of heroin is sure wearing off quick.
http://money.cnn.com/.../index.html
Pastorn - as economy deteriorates and unemployment goes up anti-immigrant fervor will increase. Somebody has to be blamed and the illegal immigrants are high on the hit-list of the right-wing blogs.
pastorn,
I would not worry about the anti-mexican bullcr8p. If we build a wall or don't it's not important. The only thing the American economy has going for it is a growing population (from the mexicans) and a large natural resource base. In other words we NEED the mexicans. Many people haven't figured it out yet.
Downey Financial results coming out. Loss of $ 3.9 per share for Q4.
$ 218m in extra credit provisions is what one might expect, more interesting detail is the $ 41m drop in interest income and increased costs due to 'the operation of real estate acquired in settlement of loans'.
Well, sending in the keys is techincally a way to settle a loan.
downey results came in. completely f&$ked. npls are 1bn, equity is 1.4bn and provisions are 200mn. i don't know what is it FDIC is waiting for.
I don't know that the markets can rally again until the NASDQ 100 settles down. Apple gets a good hit today and its brothers are probably coming down. All of those people who thought that Google was overpriced may get their chance to see it fall back to earth.
"I think they need a new word."
Depression?
awgee | 01.23.08 - 1:57 am | #
How about the Great Economic Unwind of 2008?
rich-
more of the same this morning, the great hedge unwind, the nastiness in commodities is just beginning and this is indicative of the across the board selling to "find liquidity".
mp,
The markets would expect yet another rate cut. What would the Fed. do then?
Don't the markets already have a "non-emergency" 50bps baked in for next week's FOMC meeting.
italics off???
Testing.
Unnecessary, I see.
One thing Holoscan does right.
FFDIC, that article on BAC/CFC is mighty interesting and answers quite a few questions. My takeaway is that BAC is trying to distance itself from the legal liability of CFC by keeping the non-bank pieces a separate entity ... which makes sense for BoA, but CFC bondholders are going to be left holding a flaming bag of doo-doo.
central-
there is no doubt in my mind now, the word of the year for 2008 will be "counterparty".
If the DOW falls 150 pts every day this week, vs. a 600pt drop yesterday, just what exactly did the Fed accomplish ? Other than setting the EFF to match what the bond market was already telling us, I'm not sure.
Off to earn a living ...
CR you need to quote/follow Rosenberg more often. He is much futher ahead (which means he's early some of the time) of this then anyone, especially Goldman.
rich-more of the same this morning, the great hedge unwind, the nastiness in commodities is just beginning and this is indicative of the across the board selling to "find liquidity".
risk capital.
I talked to a friend yesterday and told him to lighten up stocks in his 401(k). At first, he was reluctant but then he agreed to do it.
He called me back later and said: "I had no idea but one of my funds was already down 25% from October." It was a mid-cap U.S. fund.
A lot of people haven't yet come to grips with the need for liquidity and safety. But the word is spreading pretty fast around the globe.
We are a looooooooong ways away from a depression. No one is going hungry and most people have a job earning enough so they can at least eat.
One other thing that is surely to grab attention and I would assume that the fed may already have the data, is the annual revision to the employment data.
This should prove the case that many here have been discussing for qquite some time, that the economy was never as strong as the data suggested.
LOL @ "xenophobia"
Yes, Japan should import 3rd world garbage just like the Germany does Turks and the US does Mexicans and blacks before that. Japan needs to destroy its race, culture and civilization for a short-term economic benefit.
3rd world garbage?
you don't belong on this thread/planet
"Roach is a good macro economist, but his timing is just as miserable as Rosenberg's."
I would say Roach's timimg was perfect. He looked foolish three years ago but was absolutely right.
The trade and budget deficits should have been considered 8 years ago.
Nobody was ready to listen. Too busy on our prayer rugs.
Very interesting comment and interest rate chart on macro-man this AM:
Macro Man: What next?
LOL @ "xenophobia"
Yes, Japan should import 3rd world garbage just like the Germany does Turks and the US does Mexicans and blacks before that. Japan needs to destroy its race, culture and civilization for a short-term economic benefit.
isamu
Gee, no xenophobia here....
Talk about illustrating a point.
Well, 30% is the minimum across the board cut needed (even from today's prices, which are already down 5 to 10%) for prices to be inline with incomes. Factor in run-away inflation in needs: energy, food, medical care, and people will have even less money to spend on housing, putting even more downward pressure on prices.
It still blows my mind how so many came to accept the notion that housing "should" be unaffordable, and can only grow more unaffordable as the years go by "just because that's the way it is." Unreal!
"In other words we NEED the mexicans. Many people haven't figured it out yet."
-michael
I have to disagree on that one. What we DO need is continued immigration of individuals that increase the knowledge and skills base of this country. We do not need people who are so lacking in character that their first act is to break an immigration law entering the country. I believe we have enough people lacking character in this country already. A good deal of them got us into the mess this thread is addressing.
I agree with Anonymous (please pick a damn name, it sounds ridiculous to agree with Anonymous.)
What fooled Roach was the willingness of the American consumer to take on more debt than they could manage, and that banks would be foolish enough to give it to them.
His critics in the U.S. may have been right 4-5 years ago, but the joke is on them: Roach is now chairman of Morgan Stanley Asia, and they are watching their assets take a severe haircut.
I'm watching the Citrus Heights, CA market (outside Sacramento). Admittedly, it was a bubble market, but prices have already fallen 30 - 40%. Maybe it's a buying opportunity...
I can't believe that no one ever points out that the vast majority of illegal immigrants are coming here only because we had a bloated and unrealistic wonky-loan and home-ATM-based economy.
Many of them, I hear, are now telling their friends and family to stay home.
I also think you're going to see a fair amount of return traffic over the Rio Grande.
isamu's all-too-common shortsightedness has fucked japan good, and fucked the south before that. we must love one another or die.
i kept one share of aapl, cuz wtf, why not. beyond that i'm waiting for house prices to drop about 30 percent, and seeing whether the democrats have any decent ideas for stimulous packages... then i'm buying a first house. maybe.
Looks like it's a race to the bottom-
HK follows Fed to cut its Base Rate by 75 basis points
404 Not Found
As for illegals, I'll give you this: I have nothing against hard-workers from other nations. I grew up next to a family of LEGAL Mexican immigrants, and they were some of the nicest and hardest working folks I've have ever met. Ironically, we ended up talking about the illegal situation one day, and I don't think I've met anyone angrier AT the illegals than them: they went through the process, learned the language, follow the laws, and "got with the program" only to have hordes of people - many of "questionable morality" slink across the border just to make a buck.
All the illegals do is give another way for the large companies to deny honest Americans jobs at a living wage. "They'll do the work American's won't do" - yeah, "won't do for $4.00 an hour" is more like it! Aside from trashing our job base, they also bring poverty and disease with them, they refuse to learn the language, resulting in fortunes wasted on all-Spanish education, they clog up the hospitals with emergancies making it so legal American citizens no longer get needed care, and so on.
I have nothing against them coming here LEGALLY if they want to work, but we must: ID them - many are criminals who float back and forth between the 2 nations while committing crimes all the way, force employers to document them and pay them a living wage legally to stop undercutting our own workers and salaries, and force them to "get with it" and stop expecting our nation to become a province of Mexico, complete with everything in Spanish, dozens of unrelated people living in the same house and trashing it, etc.
I think they need a new word. "clusterf**k" comes to mind.
I myself quite like the one Jon Stewart coined (albeit for a different purpose):
"Catastroph**k."
I can has tax break? Sorry wrong blog...
Did they mention that most boomers have not saved a cent?
And the beast keeps coming....
WOW...75bps buys a one day reprieve...talk about pushing on a string. What will they do now?
Kett82,
No, and they also forgot that the economy has received a $9 trillion stimulus package in the form of deficit spending. This means every boomer (and all other Americans) owes $30,000 on top of the mortgage, car loan and credit cards.
reinvestor | 01.23.08 - 8:18 am | #
As somebody that has parents who own a bunch of rentals we had this discussion last wekend. Areas of SW Fl are already down 30-50% on rental properties. I firmly believe that prices WILL fall further. Even if they don't fall,do you believe they will shoot back up within 6-8 months?? Honestly it can't hurt to really wait. It's not like all the deals are going to disappear in 6 months to a year.
Something I noticed here. Prices drop. Homes/duplexes/apts disappear of mls. More pile up at that price point. Someone cuts,more racing down.
When I see price drops stabilizing and FC's falling I will start looking again. In the meantime we hoard cash for the deals that will come. I am making a guess the best deals will be in 2010-2012...
Chris
P.S. - Our county had more FC's than sales in Dec. As of today we have had 22 sales vs 300 to this point in Dec...Yikes !!!
Pondering the Mess,
Thank you for demonstrating how much racism there is behind the anti-immigration rants.
conjure clock, thanks for helping us figure out what time it is. Hope conjure bag is still shakin -- and still holding some hope...
Today's immigration controversy has a lot in common with the free-labor/slave-power controversy of the 19th century.
I agree with the idea that we could use more legal immigrants and that people with education and technical skills would be best. One unfortunate aspect of "the war on terror" is that we now have far fewer foreign students at our universities. I am getting ready to teach a big class and it's really noticable.
I would be willing to pay more for food, hotel rooms etc. with fewer illegals and better pay for low skilled citizens and legal residents. The only way to solve the illegal immigration problem is to crack down on employers and to make sure that they don't discriminate against people just because they "look different."
Am I going to be the first to point out the US futures at this moment ?
Including Fair value:
DOW - 256
S&P -39
Nasdaq -65
-K
Pondering the Mess,
I absolutely agree with your thoughts on immigration. Accept it, make it work and it will be a good thing for everybody.
Oops I meant to add:
I reckon the Fed should so ANOTHER emergency cut, say 1% with a statement saying: "nothing to do with the equity market, cross my heart hope to die etc.. inflation is contained...deteriorating economic conditions since yesterday".
This is humorous, it really is.
-K
My house is under water, but that's okay, I got my sweet cash back, and besides, I never had any intention of paying it back anyway.
Bill has a good point about discriminating against people who look different. I, a ruddy Irish-heritage lass, have an adopted Hispanic brother.
The discrimination is unbelievable, and only heating up.
Last summer he came to visit and as soon as he left the little neighbor boy came over to ask why we had "mexicans" at our house. I looked befuddled and said I had a bunch of Americans over for brunch.
He never got it.
"I think they need a new word."
Depression?
awgee | 01.23.08 - 1:57 am | #
How about the Great Economic Unwind of 2008?
Did we forget about the "Great Mid-Cycle Slowdown"?
Front page of today's FT screams:
"Fed slashes rates to halt sell-off"
Nobody buys the "deteriorating economic conditions" crap.
I think they need a new word."
Depression?
awgee | 01.23.08 - 1:57 am | #
How about the Great Economic Unwind of 2008?
Did we forget about the "Great Mid-Cycle Slowdown"?
ac | 01.23.08 - 9:09 am | #
The Big One?
Stocks are down - did I miss the rate cut?
As of a minute or so ago.
% CHANGE
DJStoxx 600 -3.29
FTSE 100 -2.79
DAX 30 -4.64
CAC 40 -3.36
S&P/MIB -4.11
Pastorn,
Sweden has a 10% non-Swedish minority?
America,
Well, I think it will be a moot issue except for those who are fearful of losing cultural supremacy which I think is already happening.
I do know that my nephews are 1/2 Mexican and blond. Since they are bi-lingul they have heard some comments that if they were darker they never would have - from both sides.
I think my great grandkids will be brown complected and maybe have blue-eyes. California, Arizona, New Mexico, Texas, Florida etc. are no longer white majority states. So to answer your question the wall will go nowhere.
The question for America is whether it can transmit a shared cultural heritage that is not color based. Bushs reelection was driven by fear.
Myself, I just picture a native american smirking in the corner as she listens to this discussion.
"How about the Great Economic Unwind of 2008?"
How 'bout "The Great ReCoupling"?
good morning guys. so what's happenin?
Dow futures down big (-218). Europe markets tanking at 5 percent down. Hmmm. Better look out for a surprise .75 basis cut by the Fed.
Oh, wait. They tried that one yesterday.
OK, Fed, whatcha got today?
(crickets chirping ...)
-- Judge Smales
"You'll get nothing and like it"
Funny how the ECB has held firm despite Ben's panic move yesterday. Maybe they have more balls in Europe.
Pretty sad how little respect the Fed and Paulson have for the sagging USD.
Sorry, I call it as I see it, and agree with Volcker.
mp | 01.23.08 - 3:27 am | #
I have to admit: I was only a young teen when he did his magic, so I don't really have an appreciation of the popular sentiment among investors at the time about Volcker. However, when I learned about who he was and what he did for the fiat currency, he struck me as a hero. I am bummed that he's not holding the levers now.
so what's our coke hit for the day?
i did a daytrade yesterday and took a chunk out of GGP. today its already down 9.47% in pre mkt. this is a telling sign for CRE. not to mention SRS is already up 6.52%.
don't we get an emergency rate cut today, Ben?
Thanks for the SRS and EEV suggestions. I owe someone a beer.
i scaled back in to my of my shorts yesterday. i actually had a difficult time sleeping thinking we could possibly start a multiday rally in financials. much happier.
if dow plunges below 11640- look for new lows
I love looking at the glum, puzzled faces on CNBC when the markets are falling. Bob Pisani looked like he was going to cry when the futures tanked an hour or so ago.
Even lovely Eric Burnett isn't starting every interview with her usual question: "Can you find any bright spot/silver lining about the market?"
As if it's CNBC's job to soothe their viewers or keep them from panicking, as Cramer said yesterday. How about, you know, just reporting the news for once?
-- Judge Smales
"You'll get nothing and like it"
Immigration to the US roughly tracks US job creation activity. It did, however rise far over its long term trend after NAFTA was implemented. The agreement sort of destroyed Mex farmers and small businesses.
Anyway, it's peaked. Remittances to Mexico from the US have been down five months out of seven, I think. Border arrests are down. That said, historically during serious recessions, anti immigrant fever peaks, even though the problem (it really IS an issue) is already correcting itself.
If the markets perform today as the futures suggest, than Bernanke has made a complete assclown of himself and the Fed.
"You're doing a heck of a job, Ben."
Calling someone a "Mexican" isn't racist. What are you supposed to call someone from Mexico?
People in the US are way too quick to label racism. Trying to keep illegal immigrants out of the US isn't racist. It's law enforcement. If we had a lot of Canadians illegally entering the US and causing problems they would be treated the same way.
I heard a O'bama supporter on the radio this morning talk about how the unemployment rate among black men being much higher than white men a sign of racism in the US. Did it ever occur to her that maybe this has more to do with higher high school drop out rates among black men and has nothing to do with the color of their skin? Of course not. It's easier to blame something that's out of their control.
" Wake me up when there's no more traffic jams on the 405 or the 101 because everyone's lost their jobs and are staying home and moping.
Frankly, I don't see that happening."
Um, well, it happened before in the 90's...my commute to Downtown LA really became a drag once everyone got a job again...
But let's hope it does not get that bad.
Guest,
I'll assume you are responding to my anecdote.
Calling someone a Mexican just because they have brown skin IS racist. My brother's as American as I am.
It's funny that when I tell freinds that i expect housing to fall 30%, they look at me like I'm a crazy loon.
From now on I'll just quote Merrill
It's not the "Mexican." It's the "a".
Someone may well be Mexican, but when you term them "a Mexican" that's a little dehumanizing, no matter how much you want to bandy semantics.
Yossarian,
What is your source for remittances to south of the border? The only sources I have found are the following.
International Forum on Remittances 2009
Remittances to Central America to rise to $12.1 billion in 2007, says IDB Fund - Inter-American Development Bank - Inter-American Development Bank - Inter-American Development Bank
Thanks,
More like they will fall another 30%...we are already at or below 30%..value wise...sale wise..not yet the sheep are still holding out for a payday....but don't hold your breath to long...you might pass out.
So at what direction is the wind blowing regarding this wall?
Pastorn | 01.23.08 - 4:22 am
It all depends on the election, if the GOP wins, the wall will be as fortified as the Berlin wall was (heck I think Tancreto wants it equiped with Machine gun towers). If the Dems win, something along the lines of Bush's comprehensive immigration policy is more likely. Of course the third and most likely option is that political gridlock on the issue occurs and nothing happens. Also judging by the remittance levels being reported by the Mexican gov't, it looks like the "problem" is curing itself as all the laid off undocumented construction workers flee back to Tobasco and Mexico City.
I have to non-concur on federal deficit spending-fretting. We had a balanced budget based on what? The wealth effect (and the resulting taxes paid thereon) from an asset bubble. The stock market crashed and interest rates rose in a time of "budget balance." Yeah, I know, it's more complicated than that, and that the budget was arguably never really balanced, but what if the Social Security Trust Fund (SS Wealth Fund?) had been invested? In what?
As a consumer of macro-economic data/reporting/analysis, I see very little truth (like none, but for which I do care greatly), just opportunities.
I heard Suze Orman say on the Today Show this morning that housing is not a good deal unless you can get it for 30% to 50% below the asking price.
Today's immigration controversy has a lot in common with the free-labor/slave-power controversy of the 19th century.
mal | 01.23.08 - 8:59 am | #
Interesting potential point Mal, care to flesh it out a bit.
Just FYI, the wall is already under construction. I guess the only question is whether it will be finished.
The racism mostly is coming from the illegal immigrants.
Have you heard of La Raza?
Difficult issue - I wouldnt normally comment on it on this blog - but it was a topic in this thread already.
First!
No, wait.
rich:
You ignorantly accuse me of "racism" without having any clue. The illegals are basically used as a way to keep our wages too low to support life in America. That is not racist - it is fact: you can't live on $4.00 an hour in America.
Their refusal to integrate into our culture is also a fact: the Spanish-only educations, the stolen social security numbers, the La Raza and Reconquistadors, and general poverty, chaos, and dissent that follows around the worst of the group are also facts. There is NO logical reason to allow anyone of any nationality to basically wander around flaunting the laws, working under the table, and basically doing as they please with no respect for our laws or society.
If you love the law-breakers so much and feel that they deserve respect just "because they are different" then good luck with that. Maybe someday you'll lose your job to some guy who'll make $4 an hour under the table. Enjoy!
I heard Suze Orman say on the Today Show this morning that housing is not a good deal unless you can get it for 30% to 50% below the asking price.
norma | 01.23.08 - 10:52 am
Totally agree! I would consider once it goes below 50%, also believe it's gonna take till 2010/2011
I'm watching the Citrus Heights, CA market (outside Sacramento). Admittedly, it was a bubble market, but prices have already fallen 30 - 40%. Maybe it's a buying opportunity...
A very risky one. There were far more luxury suburban housing developments built than there will ever be a market for. There's just not that many people who need and can pay for a 3000 sq ft home with a hour commute. Many developments will end up slums or even ghost towns.
Anyway, estimates for the Inland Empire in SoCal are for an eventual 50-60% drop and I expect things will be similar in Sacramento, which is a NoCal analogue.
I live in Southern California, surrounded by undocumented immigrants*. They are perfectly normal people and far less racist than my family's friends back in the South. I would be delighted to see minimum wage, OSHA, etc. laws enforced for them, which isn't going to happen as long as they're demonized.
*I'll call them "illegal immigrants" when people call speeders "illegal drivers".
The Mexicans with a good education and skills generally prefer to stay in Mexico.
The illegal migrants are a policy of the Mexican government to minimize their social costs. Legislators from Sonora just came to Tucson to attempt to reverse the law that puts heavy penalties on people that employ illegals, claiming that Mexico can not afford the expense of their returning citizens.
They expect us to pay for it. LOL.
I would be more then happy if we just applied Mexican immigration law to Mexicans in the US.
The Rainbow Coalition Evaporates by Steven Malanga, City Journal Winter 2008
Simply hilarious...
"House prices are not coming down any more here in Kansas City. A realtor told me so." ~ Average Citize
When I see price drops stabilizing and FC's falling I will start looking again. In the meantime we hoard cash for the deals that will come. Tactical Flashlights
r c helicopter
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