Spent Sunday driving through forclosed developer housing projects. WOW! Three in particular were amazing. The weeds are taller than the former models. With zero security to protect the homes.
Have to agree...I
I've never seen so many CRE/Retail signs advertising space available. I've lived in SD county for 8 years and they have reached the level of, and surpassed in some cases, the level of the same in the Bay area in the late 80's'early 90's.
That's saying something since this area doesn't have the huge tech base the bay area enjoys.
The fear of the members of the La Jolla Country Club must be affecting their golf games. Good time to go play some skins over there as long as they put down their gold watches as security before you start.
I posted this OT this morning in another thread. But here it is on topic, so I'll post again.
"The July issue of the Moodys/REAL Commercial Property Price Index (CPPI), based on data through the end of May, experienced a 3.5% decline from the month before. This is the third consecutive month the index has shown a negative return.
· The CPPI shows a 5.7% decrease in prices year-over-year. The index now stands 8.8% below its peak in October 2007.
· Although both the number and dollar value of repeat sales has fallen over the last few months, transaction volume is still almost nine times the level needed to calculate the monthly index.
· The average transaction price is steadily falling as transaction activity shifts to lower priced assets."
In the West region, over the last quarter, Office declined 5.1% and Retail declined 3.6%. CRE values are declining faster in the West than in the nation as a whole or in any other region.
Yeah, there are several CRE retail/com strip malls and buildings empty around here. It seems that buisinesses went to newer space, leaving older strip malls empty.
It's a commercial rental space savings glutt! We need those hoarders to release the captive space so the efficiencies of the free-market can be realized.
Forgive my ignorance, but is the office vacancy rate a leading or lagging indicator? I'm an armchair economist/seer/prognosticaor-in-training and this site teaches me more than any other.
ac,
Why live in self-storage when you can live in an REO for free?
I agree.
I don't understand why anybody pays their mortgage anymore when defaulting comes with so many benefits and incentives.
I like Denninger's idea of a nationwide mortgage strike.
Maybe people will start to understand why credit is such serious business and why taking debt obligations lightly is simply going to lead to a system so rife with mistrust that our most important financial tool will be effectively useless.
crispy&cole writes:
Spent Sunday driving through forclosed developer housing projects. WOW! Three in particular were amazing. The weeds are taller than the former models. With zero security to protect the homes.
crispy&cole | 07.21.08 - 12:35 pm | #
With all the folks being forced out of their homes (creating pressure on the rental housing makret), perhaps some of the developers should convert their multi-story (non-strip mall) commercial buildings into affordable rental housing mixed with consumer non-discretionary business (markets, restaurants, etc.).
This would appear to be especially attractive to near-urban-core areas, where people could conceivably commute to work less expensively (since urban core housing rentals are not decreasing - in Portland they are spiking upwards).
In Santa Cruz, central coast CA, we haven't seen a lot of vacancies yet, because we're not overbuilt. But....
the old-time local landowners, the ones who manage 20 or 30 or 40 properties that they picked up cheap over the last 50 years, are putting many of their commercial properties on the market. Not the residential ones, just commercial.
Mind you, these guys paid off the mortgages on most of these things years ago. They just don't expect it to be worth their while to hold so many commercial properties in the upcoming economy, and they're dropping their marginal ones.
cd-
I do not....I have not succumbed to the
"notice me" generation as yet.
I'd be very careful with PM's....I've thought about playing the silver ETF however it's just as "wacked" as most other ETF's as to say the relationships to the spot prices are to far out of touch. Just look at USO for example....someone is making money there and I gather it's not the people who hold it.
MS,
I didn't want to upset CR and Tanta on market talk..the play is a miner beaten up alot with some zinc and copper hedges working against it on last earnings but proven reserves working for it..It looks like it's now in bullish pattern..take a look at sil, is it a fake breakout?
And yet they keep building... A new office (13 floors) construction near me in downtown (Gaslamp) breaking ground now. Financed by Taiwan owned banking holding company flush with Chinese money.... Residential towers all over too - lots of cranes still up here!
I post this because Seattle seems determined to follow San Diego, but with a two-year delay. We have lots of condos going up, too, but a few years behind the San Diego condo explosion.
There's an ongoing debate on the Seattle Housing Bubble site on how similar the two cities actually are in terms of size, demographics, etc.
a friend of mine just got a home, and he bragged that he got something much bigger and much cheaper (Sylmar, CA ) then the other mutual friend couple of years ago...
do those people ever learn?
p.s. I project his loans to be at least 75% more his former rent, (the best case scenario).
Nope. The FDIC is an insurance operation. They make an educated guess as to how many banks will fail and what the total exposure is, then they collect insurance premiums from them. They've got $51 billion and Indymac alone sucked up 10% of that. If a big one lets go, like Washington Mutual or Wachovia, then the FDIC will look just like FEMA did facing down hurricane Katrina. Don't go and look at the scoreboard on the Bank Implode-O-Meter unless you've got a very strong stomach. Oh, and do note that a good bit of those write downs are investment banks - the FDIC does not cover their activities.
I'd just say that we are not in a "normal" market as to say the rules I've used in chart reading are not as "workable" IMO.
I'd keep an eye on it and short it if it fails to take out the 50DMA...that's about all I can offer on that one. Risk V reward is not that great either way. Hasn't been above the 50DMA since last Nov......that tells me alot.
The next time you hear a politician use the word 'billion' in a casual manner, think about whether you want the 'politicians' spending YOUR tax money.
A billion is a difficult number to comprehend, but one advertising agency did a good job of putting that figure into some perspective in
one of it's releases.
A. A billion seconds ago it was 1959.
B. A billion minutes ago Jesus was alive.
C. A billion hours ago our ancestors were living in the Stone Age.
D. A billion days ago no-one walked on the earth on two feet.
E. A billion dollars ago was only 8 hours and 20 minutes, at the rate our government is spending it.
While this thought is still fresh in our brain...let's take a look at New Orleans ...It's amazing what you can learn with some simple division.
Louisiana Senator, Mary Landrieu (D)
is presently asking Congress for 250 BILLION DOLLARS to rebuild New Orleans .
Interesting number...what does it mean?
A. Well... if you are one of the 484,674 residents of New Orleans
(every man, woman, and child)
you each get $516,528.
B. Or... if you have one of the 188,251 homes in New Orleans , your home gets $1,329,787.
C. Or... if you are a family of four...your family gets $2,066,012.
Washington, D. C HELLO!
Are all your calculators broken??
Seemingly oblivious to the fact that they could drive otherwise healthy banks to fail and push troubled institutions away from potential solutions toward ruin, TV reporters staked out banks on these rogue lists, interviewed customers and stoked public fears. In a time when consumer confidence is already flagging and the general public is skittish and understandably concerned about what their financial futures will hold, this behavior goes beyond irresponsible, Reich said. Its reprehensible.
the FDIC is not a bottomless pit......why do people suddenly believe that they are???
Because they haven't balked at a bailout yet. People Expect GM to get bailed out and their pensions too. We could print money but that would drive up inflation and pull consumers deeper into debt. There is no exit strategy. The US/GS treasury will try to preserve as many bankers as possible.
argento: He and Bill Gross and all the Goldman Sachs guys and the the IB Heads definitely "grasp" the global economy, but I don't think this is the way to go. Unless somehow we can make their activities completely transparent. Plus we don't know if he picks up after his dog.
MiTurn - vacancy should lead rent rate changes (from an academic perspective). In practice vacancy change is followed by rent change perhaps 60 percent of the time.
Well I realize that but would the FDIC ever cop to it publicly???
I think not...they let IMB keep going months after it was clear they would not survive. Same with the next few to go....who that will be is a point of speculation however they KNOW who and WHEN but can't let the cat out of the bag until it has all but failed. That's not a strategy or refusing a bailout that's just plain stupid mgmt. on the part of the FDIC.
Why that should be rewarded-in the form of bank mgmt. keeping jobs and the account holders getting money back when all the obvious signs were there- is the bigger question.
Widening spreads damped investor appetite for high-yield debt, Brady said.
You've seen some real ugliness in the high-yield market in the last couple of weeks,'' he said.It's really hard to get people to focus on new issues, on putting new risk in their portfolios, when they've already got a lot of the old risk.''
I just got laid off from Starbucks! After having been an exemplary barista for 6 months, how could they do this to me?! Ha! to them. I'm sure that with my skills, there are other companies that will hire me.
McDonald's is hiring and they're making a big push into coffee. Your tremendous job skills are needed there and you'll get a chance to expand into burgers and fries!
I thought the job market to be robust or something like that; Bush just said the other day, employment is good, so will we not need this extra office place for this surge?
Speed,
True FDIC did guarantee interest in the IndyMac takeover but that is their discretion. They are not obligated to honor the interest rates contracted.
The WSJ reports that Fortress' triple-A MBS vulture fund is down 30%. And in the details we find out it is only down 30% because Fortress repurchased $200m of the originally $7.4b outstanding.
Bank of America beat earnings estimate.
Gee, what a surpirse. Are there any areas of the US financial industry that
do run without fraudulent ruse and hype?
DOLLY MOVING QUICKLY NORTHWESTWARD OVER THE SOUTHERN GULF...
A HURRICANE WATCH IS IN EFFECT FROM RIO SAN FERNANDO MEXICO
NORTHWARD...ACROSS THE BORDER BETWEEN MEXICO AND THE UNITED
STATES...AND ALONG THE TEXAS COAST TO PORT O'CONNOR.
U.S. Treasury Secretary Henry Paulson's plan to pump equity into Fannie Mae and Freddie Mac if needed, potentially diluting shareholder value, added to concerns in the new issues market, said Jason Brady, a portfolio manager at Thornburg Investment Management Inc. in Santa Fe, New Mexico.
Overall corporate sales compare with a weekly average this year of $21.2 billion. Investment-grade companies sold $3.8 billion of bonds, compared with $11.3 billion last week.
Danke. What's your take on the entire area? I presume that it's suffering along with the rest of CA, but I'd have wagered the slowdown wouldn't be as ugly due to the petro industries and such.
Office vacancy rates are headed up and by the end of 2009 may be close to an all-time high.
Cutbacks in key industries such as information technology, finance and professional services have led to more than a quarter-million layoffs during the first half of 2008, which has emptied an estimated 38 million square feet of office space.
The result? According to a report issued today by commercial real estate advisory firm Grubb & Ellis, the percentage of U.S. offices that are empty could hit 17% by the end of next year.
Thats a startling figure, and not far off the numbers seen in the prior two recessionary cycles. The vacancy rate hit 17.9% in the first quarter of 2004; during the third quarter of 1991, it topped 18.0%.
i think markets are back to reality, so mid summer rally is over; also it could have been driven by people covering their shorts...
and i was hopping of getting your hyped SKF @ under 100..
Some oil companies began evacuating offshore personnel ahead of Dolly, which is expected to become a hurricane after it enters the Gulf of Mexico. It currently is projected to come ashore near the Texas-Mexico border late July 23 or early July 24. Shell Oil Co. said it evacuated 125 people from the western gulf July 20 and plans to evacuate another 60 July 21. However, Shell officials said, "Based on current information and forecast, we do not expect any impact on Shell-operated production in the Gulf of Mexico." Dolly's projected path would take it north of Campeche Bay, where Petroleos Mexicanos produces about 1 million b/d of oil.
Meanwhile, the Centre for Global Energy Studies (CGES), London, said, "The world has been short of oil since the middle of 2006 and remains short now, although demand destruction is gathering pace and prices have fallen." CGES analysts charged, "Saudi Arabia, the one country that could supply significant additional volumes quickly, refuses to widen the discounts against benchmark grades for its heavy oil, while the Organization of Petroleum Exporting Countries continues to assert that the world is well supplied with crude and refuses to accept that production needs to rise. In the absence of additional supply, only a global recession, destroying enough demand to reduce the need for OPEC oil, can set prices on a downward path."
Meanwhile, Tropical Storm Cristobal, which formed Friday, strengthened and was 190 miles northeast of Cape Hatteras, N.C., moving northeast at 13 mph with 65 mph winds and 75 mph gusts, forecasters said.
Heavy swells were reported along the U.S. eastern seaboard and the storm's projected path showed it nearing Nova Scotia, Canada, Tuesday. The Canadian Hurricane Center issued an advisory Monday saying it was also monitoring Cristobal.
Let us not forget that CRE was not as overbuilt as RRE, right CR?
I've been riding CR pretty hard myself but collegially. I "suspected" that CRE was massively overbuilt because of changing demographics and demand destruction for gross square footage. Could be but regardless we are about to find out. CR took the other side of the bet and used past basal trends and population and other hard facts to project forward a moderate overbuilding. Equally a defensible position. I still think I'm right but that doesn't make the excellent work CR does "wrong."
Joseph Mason, the fella that wrote the paper on how the ratings agencies were all fooling us. Well, in addition to still being quoted in the media, he's added his touch of doom to the Roubini website. If that guy's is so credible, how come no reputable university will touch him? It looks like he just got tenure at a University in Baton Rouge. Who endowed his chair? Hog-Looking Banker. Now that Rosner character... who's paying his bills???
"JP writes:
and close in VA, absorbtion rate is positive and rents are spiking.
I'm in Alexandria, and rents are plummeting. Many signs up for free rent for new renters. There's even a "Rooms for rent" sign."
See attached article. Marcus & Millchap is reporting the same thing expect about a 5% increase for close in areas like Alexandria.
It makes sense if you think about it. The exurban rental market is collapsing as the most price sensitive renters seek closer in environs, driving up rental rates.
First.
This credit crisis is a long way from being over. I had several arguments this weekend with family and friends...the sheeple have been feed some bs
The same story will be played out all across the country. Euphoric building to broke builders.
Pent-up demand must be reaching historical levels.
Just like the residential housing market there.
What is the inverse of "follow the rooftops?"
What was the peak of vacancy? I assume it was in 91-92 (in Ca).
Local business news publications are claiming we've built too many storage units (e.g. Public Storage).
I disagree as I think there'll be a big pickup in demand for these things as "alternate living accommodations" as foreclosures pick up.
The matter/anti-matter pods can't take it much longer, Captain!
Spent Sunday driving through forclosed developer housing projects. WOW! Three in particular were amazing. The weeds are taller than the former models. With zero security to protect the homes.
Have to agree...I
I've never seen so many CRE/Retail signs advertising space available. I've lived in SD county for 8 years and they have reached the level of, and surpassed in some cases, the level of the same in the Bay area in the late 80's'early 90's.
That's saying something since this area doesn't have the huge tech base the bay area enjoys.
Ciao
MS
ac,
Why live in self-storage when you can live in an REO for free?
Also drove by 4 CRE developments 25 to 60,000 sq feet. All four were 100% empty.
My company has us crammed into some crappy low-rise buildings off the 163. Maybe we'll be able to move to the swanky new Sunroad tower.
The fear of the members of the La Jolla Country Club must be affecting their golf games. Good time to go play some skins over there as long as they put down their gold watches as security before you start.
Not the best fundamentals for the office market
Don't worry.
It's backstopped by the FedGov.
I posted this OT this morning in another thread. But here it is on topic, so I'll post again.
"The July issue of the Moodys/REAL Commercial Property Price Index (CPPI), based on data through the end of May, experienced a 3.5% decline from the month before. This is the third consecutive month the index has shown a negative return.
· The CPPI shows a 5.7% decrease in prices year-over-year. The index now stands 8.8% below its peak in October 2007.
· Although both the number and dollar value of repeat sales has fallen over the last few months, transaction volume is still almost nine times the level needed to calculate the monthly index.
· The average transaction price is steadily falling as transaction activity shifts to lower priced assets."
National change from prior quarter:
Apartment + 2.7%
Industrial -1.3%
Office -1.2%
Retail -2.2%
In the West region, over the last quarter, Office declined 5.1% and Retail declined 3.6%. CRE values are declining faster in the West than in the nation as a whole or in any other region.
Yeah, there are several CRE retail/com strip malls and buildings empty around here. It seems that buisinesses went to newer space, leaving older strip malls empty.
Cheers,
"My company has us crammed into some crappy low-rise buildings off the 163."
Are you also shankled to a sewing machine?
It's a commercial rental space savings glutt! We need those hoarders to release the captive space so the efficiencies of the free-market can be realized.
eff
"Dude, what happened to all that money we made on real estate while we were out surfing?"
"I don't know, dude."
Forgive my ignorance, but is the office vacancy rate a leading or lagging indicator? I'm an armchair economist/seer/prognosticaor-in-training and this site teaches me more than any other.
Both
ac,
Why live in self-storage when you can live in an REO for free?
I agree.
I don't understand why anybody pays their mortgage anymore when defaulting comes with so many benefits and incentives.
I like Denninger's idea of a nationwide mortgage strike.
Maybe people will start to understand why credit is such serious business and why taking debt obligations lightly is simply going to lead to a system so rife with mistrust that our most important financial tool will be effectively useless.
Are you also shankled to a sewing machine?
No. Why, what have you heard?
ationwide mortgage strike -
"Bank of America Walk-A-Thon"
crispy&cole writes:
Spent Sunday driving through forclosed developer housing projects. WOW! Three in particular were amazing. The weeds are taller than the former models. With zero security to protect the homes.
crispy&cole | 07.21.08 - 12:35 pm | #
In preparation for 'fire season'...
It makes sense...san diego's unemployment is the highest in 16 years! First to rise and first to far hard, just ask JtR
JtR?
Jack the Ripper? Why does killing prostitutes have anything to do with office vacancy in San Diego?
With all the folks being forced out of their homes (creating pressure on the rental housing makret), perhaps some of the developers should convert their multi-story (non-strip mall) commercial buildings into affordable rental housing mixed with consumer non-discretionary business (markets, restaurants, etc.).
This would appear to be especially attractive to near-urban-core areas, where people could conceivably commute to work less expensively (since urban core housing rentals are not decreasing - in Portland they are spiking upwards).
MS-
I have a ? for ya on a certain silver play..U seem to have a good grasp of this crazy market..do you have a blog that I can post it on?
cheers
In Santa Cruz, central coast CA, we haven't seen a lot of vacancies yet, because we're not overbuilt. But....
the old-time local landowners, the ones who manage 20 or 30 or 40 properties that they picked up cheap over the last 50 years, are putting many of their commercial properties on the market. Not the residential ones, just commercial.
Mind you, these guys paid off the mortgages on most of these things years ago. They just don't expect it to be worth their while to hold so many commercial properties in the upcoming economy, and they're dropping their marginal ones.
Public Storage is one of the larger holdings in IYR.
cd-
I do not....I have not succumbed to the
"notice me" generation as yet.
I'd be very careful with PM's....I've thought about playing the silver ETF however it's just as "wacked" as most other ETF's as to say the relationships to the spot prices are to far out of touch. Just look at USO for example....someone is making money there and I gather it's not the people who hold it.
Ciao
MS
Ha!! Give me the zoning laws and a really big eraser and I'll create some "walkable communities" for you!!!
A 60K sq ft building is roughly how close to a midwestern "Main Street", circa 1950, do you think?
You won't even have to go outdoors, ever if you don't like it.
and for the record I know that the USO tracks the % gains not the actuals....
It's just a bit too precious for me.
Ciao
MS
hmm, seems JimInPortland beat me to it... damn no wonder I can never get rich....
And the logical end of that particular "market activity" will be the taxpayers bailing out the insurance companies.
I think the office buildings could be converted to giant ethanol plants. Fuel of the future.
MS,
I didn't want to upset CR and Tanta on market talk..the play is a miner beaten up alot with some zinc and copper hedges working against it on last earnings but proven reserves working for it..It looks like it's now in bullish pattern..take a look at sil, is it a fake breakout?
Good trading to ya and thank for any feedback...
is there anymore evidence of the bank runs?
p.s. thank you guys, you make the mornings @ work so much brighter...
And yet they keep building... A new office (13 floors) construction near me in downtown (Gaslamp) breaking ground now. Financed by Taiwan owned banking holding company flush with Chinese money.... Residential towers all over too - lots of cranes still up here!
O/T - Food prices might rise abother 20%...but, there is no inflation.
FT.com / Retail & Consumer - US food groups plan hefty price rises
Lehman Cuts Global Stocks Forecast, Still Sees Rally (Update2) - Bloomberg.com
what kind of .. those guys are smocking?
Seattle looks set to have its own dramatic rise in office vacancies.
Business & Technology | Seattle office market could turn in tenants' favor next year | Seattle Times Newspaper
I post this because Seattle seems determined to follow San Diego, but with a two-year delay. We have lots of condos going up, too, but a few years behind the San Diego condo explosion.
There's an ongoing debate on the Seattle Housing Bubble site on how similar the two cities actually are in terms of size, demographics, etc.
about RE
a friend of mine just got a home, and he bragged that he got something much bigger and much cheaper (Sylmar, CA
) then the other mutual friend couple of years ago...
do those people ever learn?
p.s. I project his loans to be at least 75% more his former rent, (the best case scenario).
It's not inflation until your wages catch up.
When I look at people driving on the roads and freeways now, no one has that relaxed commuter look anymore. Frantic, panicked, worried.
So who's going to be left standing, the insurance companies that got into commercial lending in a big way?
Anonymous writes:
It's not inflation until your wages catch up.
Anonymous | 07.21.08 - 1:20 pm | #
Not that crap again...
What do you think of this:
All accounts are insured to $100,000!
Nope. The FDIC is an insurance operation. They make an educated guess as to how many banks will fail and what the total exposure is, then they collect insurance premiums from them. They've got $51 billion and Indymac alone sucked up 10% of that. If a big one lets go, like Washington Mutual or Wachovia, then the FDIC will look just like FEMA did facing down hurricane Katrina. Don't go and look at the scoreboard on the Bank Implode-O-Meter unless you've got a very strong stomach. Oh, and do note that a good bit of those write downs are investment banks - the FDIC does not cover their activities.
What do you think of this:
All accounts are insured to $100,000!
The gov't will back stop FDIC to the penny. There is zero chance they won't do it.
cd-
StockCharts.com
I'd just say that we are not in a "normal" market as to say the rules I've used in chart reading are not as "workable" IMO.
I'd keep an eye on it and short it if it fails to take out the 50DMA...that's about all I can offer on that one. Risk V reward is not that great either way. Hasn't been above the 50DMA since last Nov......that tells me alot.
Ciao
MS
Can we do something proactive for a moment? Can we start vetting the people that we're going to need to manage the rebuilding of the financial system?
Two that I have a great deal of trust in and haven't disappointed us over the years (well, one a little bit) are
Jack Gutentag, aka the mortgage professor
Elizabeth Warren, aka Toaster Safety Czar
Oh yes, Naomi Klein seems promising as well.
Nothing funny going on here:
The euro was buying 169.58 yen, up 0.1%. It earlier rose as high as 169.89, its highest level since the euro began trading in January 1999...
"Each time the U.S. manufacturing sector contracted, euro/yen rallied,"
Euro rises to new record against yen
the FDIC is not a bottomless pit......why do people suddenly believe that they are???
Ciao
MS
Anonymous: they don't have to be. All these institutions need to operate are trust, and that's what we're lacking at the moment.
Isn't Naomi Klein Canadian?
Canadian American Huma
My vote is for Mohamed El-Erian.
Evil Pimcoman?
C&C,
Spent Sunday driving through forclosed developer housing projects. WOW! Three in particular were amazing.
Where at, pray tell?
Not too evil; he actually has a grasp of how the global economy works, contra Ben Bernanke.
thanks ms!
OT-
The next time you hear a politician use the word 'billion' in a casual manner, think about whether you want the 'politicians' spending YOUR tax money.
A billion is a difficult number to comprehend, but one advertising agency did a good job of putting that figure into some perspective in
one of it's releases.
A. A billion seconds ago it was 1959.
B. A billion minutes ago Jesus was alive.
C. A billion hours ago our ancestors were living in the Stone Age.
D. A billion days ago no-one walked on the earth on two feet.
E. A billion dollars ago was only 8 hours and 20 minutes, at the rate our government is spending it.
While this thought is still fresh in our brain...let's take a look at New Orleans ...It's amazing what you can learn with some simple division.
Louisiana Senator, Mary Landrieu (D)
is presently asking Congress for 250 BILLION DOLLARS to rebuild New Orleans .
Interesting number...what does it mean?
A. Well... if you are one of the 484,674 residents of New Orleans
(every man, woman, and child)
you each get $516,528.
B. Or... if you have one of the 188,251 homes in New Orleans , your home gets $1,329,787.
C. Or... if you are a family of four...your family gets $2,066,012.
Washington, D. C HELLO!
Are all your calculators broken??
Thrift Oversight Chief Wants More Loss Provisions, Fewer TV Stakeouts
Seemingly oblivious to the fact that they could drive otherwise healthy banks to fail and push troubled institutions away from potential solutions toward ruin, TV reporters staked out banks on these rogue lists, interviewed customers and stoked public fears. In a time when consumer confidence is already flagging and the general public is skittish and understandably concerned about what their financial futures will hold, this behavior goes beyond irresponsible, Reich said. Its reprehensible.
As I posted here last week, Wachovia is out of the wholesale business at 1:00 pm today.
the FDIC is not a bottomless pit......why do people suddenly believe that they are???
Because they haven't balked at a bailout yet. People Expect GM to get bailed out and their pensions too. We could print money but that would drive up inflation and pull consumers deeper into debt. There is no exit strategy. The US/GS treasury will try to preserve as many bankers as possible.
argento: He and Bill Gross and all the Goldman Sachs guys and the the IB Heads definitely "grasp" the global economy, but I don't think this is the way to go. Unless somehow we can make their activities completely transparent. Plus we don't know if he picks up after his dog.
Wachovia is out of the wholesale business at 1:00 pm today?????
Elaborate
MiTurn - vacancy should lead rent rate changes (from an academic perspective). In practice vacancy change is followed by rent change perhaps 60 percent of the time.
Nemo the TV stations are providing a public service.
Mary Landrieu (D)
is presently asking Congress for 250 BILLION DOLLARS
She's only trying to keep up with the Swarzeneggers.
The economy's just bumbing along: subprime-ouch, alt A-ouch, CRE-OUCH!~
Per the posters at Brokers Outpost last week and a few other sites. They are shutting down their wholesale residential lending business.
This is what Indymac did a few weeks ago as part of their "survival" plan - didnt work for them though
Hmm... maybe we could throw in Paul Volker (he's a verified good guy, right?) and create a very vetted council of economic elders?
I know, Richard Branson had this idea too, but I came up with it first.
Bg - Bakersfield, Ca
Well I realize that but would the FDIC ever cop to it publicly???
I think not...they let IMB keep going months after it was clear they would not survive. Same with the next few to go....who that will be is a point of speculation however they KNOW who and WHEN but can't let the cat out of the bag until it has all but failed. That's not a strategy or refusing a bailout that's just plain stupid mgmt. on the part of the FDIC.
Why that should be rewarded-in the form of bank mgmt. keeping jobs and the account holders getting money back when all the obvious signs were there- is the bigger question.
Ciao
MS
More information on wachovia:
Imminent Implosion: Wachovia Wholesale
The Mortgage Lender Implode-O-Meter News Pick-ups: Ailing/Watch: Wachovia Mortgage, FSB - Wholesale
crispy&cole
Didn't WaMu do the same thing mostly a few months ago. I think they close almost all of the residential mortgage offices.
Great quote from Bloomberg:
Widening spreads damped investor appetite for high-yield debt, Brady said.
You've seen some real ugliness in the high-yield market in the last couple of weeks,'' he said.It's really hard to get people to focus on new issues, on putting new risk in their portfolios, when they've already got a lot of the old risk.''
HAHAHAHA!!! You think?
I just got laid off from Starbucks! After having been an exemplary barista for 6 months, how could they do this to me?! Ha! to them. I'm sure that with my skills, there are other companies that will hire me.
This is what Indymac did a few weeks ago as part of their "survival" plan - didnt work for them though
"Doc, it hurts when I breathe."
"Well then, don't breathe."
WaMu 12mo CD: 4.25%
FDIC insured - includes interest, if I've read correctly.
I just got laid off from Starbucks!
McDonald's is hiring and they're making a big push into coffee. Your tremendous job skills are needed there and you'll get a chance to expand into burgers and fries!
I thought the job market to be robust or something like that; Bush just said the other day, employment is good, so will we not need this extra office place for this surge?
Speed,
True FDIC did guarantee interest in the IndyMac takeover but that is their discretion. They are not obligated to honor the interest rates contracted.
Speaking of widening spreads:
Fortress Looks for the Bottom, Again - WSJ.com
The WSJ reports that Fortress' triple-A MBS vulture fund is down 30%. And in the details we find out it is only down 30% because Fortress repurchased $200m of the originally $7.4b outstanding.
Thanks Will. Helpful stuff.
Starbucks Sucks
Where did you work, sweetie?
Bank of America beat earnings estimate.
Gee, what a surpirse. Are there any areas of the US financial industry that
do run without fraudulent ruse and hype?
Oil could harm market bulls over next cple days..
Exxon Mobil eyes foul weather from Tropical Storm Dolly - MarketWatch
YouTube - Louis Armstrong - Hello Dolly Live
"Didn't WaMu do the same thing mostly a few months ago"
I think so.
2008 Atlantic Tropical Storm and Hurricane Season | Artemis.bm
DOLLY MOVING QUICKLY NORTHWESTWARD OVER THE SOUTHERN GULF...
A HURRICANE WATCH IS IN EFFECT FROM RIO SAN FERNANDO MEXICO
NORTHWARD...ACROSS THE BORDER BETWEEN MEXICO AND THE UNITED
STATES...AND ALONG THE TEXAS COAST TO PORT O'CONNOR.
crispy&cole writes:
"Didn't WaMu do the same thing mostly a few months ago"
I think so.
crispy&cole | 07.21.08 - 2:09 pm | #
If the knuckleheads are going to do a 'run-off' they better decide to do it before they run out of gas and are climbing a big hill.
Or make sure they have a rich uncle back stopping them - well an uncle with a really big line of credit from clueless creditors.
Yup. CRE crashing... Any BKs on the horizon yet?
dryfly - Or make sure they have a rich uncle back stopping them - well an uncle with a really big line of credit from clueless creditors.
Would that rich uncle happen to have the ability to print money out of thin air? I think I know the one.
According to the recent SEC emergency rule limiting short sale, neither WaMu nor Wachovia are on the list of protected banks.
I wonder why?...
U.S. Company Bond Sales Slow to $5.7 Billion in Week
U.S. Company Bond Sales Slow to $5.7 Billion in Week (Update1) - Bloomberg.com
U.S. Treasury Secretary Henry Paulson's plan to pump equity into Fannie Mae and Freddie Mac if needed, potentially diluting shareholder value, added to concerns in the new issues market, said Jason Brady, a portfolio manager at Thornburg Investment Management Inc. in Santa Fe, New Mexico.
Overall corporate sales compare with a weekly average this year of $21.2 billion. Investment-grade companies sold $3.8 billion of bonds, compared with $11.3 billion last week.
Latest Hussman is excellent:
Hussman Funds - Weekly Market Comment: How the War, Tax Cuts and the Swaps Market Debased the U.S. Financial System - July 21, 2008
Cooking ramen in my percolator --
Because neither WaMu nor Wachovia is a primary dealer.
My totally random guess: The emergency SEC rule is primarily intended for Fannie, Freddie, and Lehman.
c&c,
Danke. What's your take on the entire area? I presume that it's suffering along with the rest of CA, but I'd have wagered the slowdown wouldn't be as ugly due to the petro industries and such.
Thanks Nemo.
Does that mean Wachovia has now been placed on death watch?
May God have mercy on Sebastien's and his fellow Carolinans' souls.
New Home Sales out on Friday. Can't wait...
safe_as_apartments,
BofA is in North Carolina, too. As the highlander always say, "In the end, there could only be one."
On topic, Lost in Space.
bg - the petro dollars are a plus, however, most of the dollars go back to Houston and LA (Occidental)
More of the same from financial times
Office vacancy rates are headed up and by the end of 2009 may be close to an all-time high.
Cutbacks in key industries such as information technology, finance and professional services have led to more than a quarter-million layoffs during the first half of 2008, which has emptied an estimated 38 million square feet of office space.
The result? According to a report issued today by commercial real estate advisory firm Grubb & Ellis, the percentage of U.S. offices that are empty could hit 17% by the end of next year.
Thats a startling figure, and not far off the numbers seen in the prior two recessionary cycles. The vacancy rate hit 17.9% in the first quarter of 2004; during the third quarter of 1991, it topped 18.0%.
Dude, where's my BoA rally?
Dude, where's my BoA rally?
Gey Ben and Hank on the phone anything less than double is unacceptable!!!
i think markets are back to reality, so mid summer rally is over; also it could have been driven by people covering their shorts...
and i was hopping of getting your hyped SKF @ under 100..
Interesting - DC sounds a bit like san diego and a bit like portland. In DC and close in VA, absorbtion rate is positive and rents are spiking.
Yet, right across the political border in MD, they are running a negative absorbtion rate, with the further you are from the core, the worse it is.
So, what up with Wachovia? If call happened at 1:00 pm (presumably EST?), where is press release? Was this just garbage rumor?
and close in VA, absorbtion rate is positive and rents are spiking.
I'm in Alexandria, and rents are plummeting. Many signs up for free rent for new renters. There's even a "Rooms for rent" sign.
DrC,
Perhaps the markets are not as sanguine as Secretary Paulson regarding his bailout proposal...
safe_as_apartments writes:
Dude, where's my BoA rally?
Quit your whining, they're up 7%.
Love, Phil Gramm.
Four times in the history of Port O'Connor it has been struck by hurricanes.
NRL Monterey Satellite Photos
Does that work?
Hmmm. I'm not so good at forgery. Pretend I changed my username.
safe_as_apartments writes:
Dude, where's my BoA rally?
Up 7% on my BAC long
up 1% on my COF short
Texas hedge anyone?
Some oil companies began evacuating offshore personnel ahead of Dolly, which is expected to become a hurricane after it enters the Gulf of Mexico. It currently is projected to come ashore near the Texas-Mexico border late July 23 or early July 24. Shell Oil Co. said it evacuated 125 people from the western gulf July 20 and plans to evacuate another 60 July 21. However, Shell officials said, "Based on current information and forecast, we do not expect any impact on Shell-operated production in the Gulf of Mexico." Dolly's projected path would take it north of Campeche Bay, where Petroleos Mexicanos produces about 1 million b/d of oil.
Meanwhile, the Centre for Global Energy Studies (CGES), London, said, "The world has been short of oil since the middle of 2006 and remains short now, although demand destruction is gathering pace and prices have fallen." CGES analysts charged, "Saudi Arabia, the one country that could supply significant additional volumes quickly, refuses to widen the discounts against benchmark grades for its heavy oil, while the Organization of Petroleum Exporting Countries continues to assert that the world is well supplied with crude and refuses to accept that production needs to rise. In the absence of additional supply, only a global recession, destroying enough demand to reduce the need for OPEC oil, can set prices on a downward path."
"If call happened at 1:00 pm"
After the market closes.
Yup- can't see why they'd issue press release until close of day
Bank of Atlantic going under?
MarketWatch.com
DH, was a rough week , no?
Meanwhile, Tropical Storm Cristobal, which formed Friday, strengthened and was 190 miles northeast of Cape Hatteras, N.C., moving northeast at 13 mph with 65 mph winds and 75 mph gusts, forecasters said.
Heavy swells were reported along the U.S. eastern seaboard and the storm's projected path showed it nearing Nova Scotia, Canada, Tuesday. The Canadian Hurricane Center issued an advisory Monday saying it was also monitoring Cristobal.
--
Let us not forget that CRE was not as overbuilt as RRE, right CR?
Jas
SIUB: That reminded me of a less glassy left handed version of Tommy Curren at Supertubes in the 80's.
Jus sayin writes:
DH, was a rough week , no?
Jus sayin | 07.21.08 - 2:54 pm
If it is not rough, I start to get worried. I Still hope the doomsday
scenario does not play out. Meanwhile,
I hope I do not run out of luck.
Jas Jain writes:
Let us not forget that CRE was not as overbuilt as RRE, right CR?
I've been riding CR pretty hard myself but collegially. I "suspected" that CRE was massively overbuilt because of changing demographics and demand destruction for gross square footage. Could be but regardless we are about to find out. CR took the other side of the bet and used past basal trends and population and other hard facts to project forward a moderate overbuilding. Equally a defensible position. I still think I'm right but that doesn't make the excellent work CR does "wrong."
"I've been riding CR pretty hard myself but collegially." -- Rob Dawg
Were your universities rivals? Bruins and Tojans perhaps?
Rivals? Nah, I was asked to "pursue my academic career elsewhere" from a slew of East Coast schools. I'm sure CR was cum laude someplace important.
My eldest toddles off to Bruin territory in September.
Page Not Found - Portfolio.com
if you can not buy them..., sue them!
Hmmm...
Joseph Mason, the fella that wrote the paper on how the ratings agencies were all fooling us. Well, in addition to still being quoted in the media, he's added his touch of doom to the Roubini website. If that guy's is so credible, how come no reputable university will touch him? It looks like he just got tenure at a University in Baton Rouge. Who endowed his chair? Hog-Looking Banker. Now that Rosner character... who's paying his bills???
Nice call on W-, c-&c-.
Hilarious, the Starbucks/McD- banter.
"JP writes:
and close in VA, absorbtion rate is positive and rents are spiking.
I'm in Alexandria, and rents are plummeting. Many signs up for free rent for new renters. There's even a "Rooms for rent" sign."
See attached article. Marcus & Millchap is reporting the same thing expect about a 5% increase for close in areas like Alexandria.
It makes sense if you think about it. The exurban rental market is collapsing as the most price sensitive renters seek closer in environs, driving up rental rates.
Best And Worst Cities For Renters - Forbes.com
I just can't wait to see what wonders Wachovia and WaMu have in store for us tomorrow. SunTrust also!!