What about land prices?

Are those going down concurrent with housing?

I wouldn't say prices are leveling off, but still, it isn't a steep as it was. But do I understand correctly that there is still a large amount of ARM's about to reset in 2009-2011?

Cardboard boxes on sale, however, behind Best Buy. Affordable housing, as long as you're as short as a refrigerator.

Off Topic - Anyone know where there's a good reference for who gets paid what when a company liquidates?

Looked in Ubernerd-dom, but no luck. Was talking to father-in-law about Lehman Bonds - which spun into a discussion about the structuring of who gets paid during bankruptcy.

Like, who's more protected if Goldman dived, bond-holders or Buffet?

New Survey

"financial elite" have doubts about certainty of bailout.

Damn straight pigmen. No more free lunch.

credit currency clarity confidence

sportsfan - I think part of it is cheerleading, however, I manage several companies and one is consumer related and banks are still lending to anyone with reasonable credit.

There is a serious disconnect between this WS "no one is lending" bs and what is really happenening on Main Street. Dont get me wrong, there is a serious slow down, but things have been slow on the consumer side since Nov 2007.

Is anyone else disappointed and disgusted that the only leadership on the issue either candidate has taken is to suggest raising the insurance limits to $250000? I know I will shock everyone to suggest that Obama is as politically calculating as McCain and refuses to step up and put forth a decent proposal. McCain's political inaptness is shocking, one softball after another tossed his way and he strikes out again and again.

JS, if they were to raise the FDIC limit, I'd expect that to cost the banks more in insurance premiums to FDIC. So it may be self defeating w/r/t bank capitalization.

JS...

They are both idiots. So to are those who vote for either of them.

Let's reframe , remarket, resell this cashfortrash----"credit is totally frozen so you won't get a paycheck".

Anonymous writes:
I think we need a new economic term: Trickle up.

I think that is a lot like pissing into the wind.

@12th Percentile: 85% making minimum payments... that's bad! Do I understand correctly that in a typical pay-option ARM the monthly payments will rise by several hundred dollars, dus to (a) minimum payments no longer allowed, and (b) the interest rate going up by typically 200 basis points (or more)?

The banks: we'll be able to trust each other if we can give our festering bags of garbage to the taxpayer.

I'm 65 yrs. old. I have seen a couple of slowdowns, but the CS trend lines and JP Morgan's projections of the CA real estate market scare the crap out of me. Our economy can not survive when a large percentage of homeowners are underwater. Our country needs a man with a plan or I will be dead before the good times return.
dave in texas | 09.30.08 - 10:14 am

How exactly do you "fix" that problem?

1) re inflate the bubble and ignore reality

2) cramdowns that will cause even more problems

3) time machine to go back and make sure the fed lends money at a reasonable rate.

This has to run it's course, I haven't seen a plan yet that will "fix" it. Use the $700 billion to make sure the support structures in this country will survive the fallout.

@Dave in Texas

JPM's loss estimates on Wamu's OAs and HELOCs are a tad optimistic for sure....20%? I don't think so Tim!

Dow is fine. No bailout.

Anyone who votes for it will be mopping stalls at McDonald's as his or her next career.

The cognitive dissonance of picking the lesser of two evils is what brought us as a country to this point.

Those who wish to control you make it a point to give you only choices which serve their intent. Sooner or later we must break this cycle. Take the power back.

Are there any websites or guidelines a person can use in determining the risk of their bank or credit union's closing.

@Question

FDIC's SDI

FDIC: Statistics on Depository Institutions 

Everything you ever wanted to know about your bank and more.

Google "Texas Ratio" and use it to do the math on your bank.

bloomberg tv "the markets are up due to optimism that the bill will pass the senate tomorrow".

When's the next big Treasury auction?

Land prices are sticky, sticky, sticky until a bank collapses in the area. Why?, primarily b/c their incentive is to keep prices from falling by rolling over the defaulted debt to someone else in order to keep their balance sheet in line (and not get taken over).

Remember, the assets and liabilities have to at LEAST match up (especially for a bank) and since the value of the loans are a direct consequence of the value of the collateral for the loans, a bank has a very intense incentive for the price to never go down.

Some of those 15-20 cent/dollar deals in California were because they were part of bonds sold through Wall Street. Not through traditional depository institutions.

And, you're seeing how that has paid off for them:( So, you can imagine what might happen if there are clearing transactions on bank-owned land in the depository world.

IMHO, the ABA (American Bankers Assoc.) is attacking this problem by going to the wrong "trough", but, then again, I think it's too late to fix.

The absolute, unquestionable, fundamental problem is that there is not enough money to be retrieved from the loans that were given out to meet the obligations that have accrued BY banks TO their depositors. (Deposits are liabilities- when you deposit money in a bank, you are, in effect, LOANING the bank your money).

Please read this again until it sinks in

I believe a rational argument could be made that depositors have never been compensated for the risks they have unknowingly taken, but, that's a topic for another day.

Apologies for the length, it's hard to encapsulate scope in a few words.

Have a great day everyone, gotta run.

Housing is a symptom. Redistribution of wealth and it's effect on capital allocation in our economy is the source.

Rich lazy people don't put money back into the economy in a way that benefits society. So instead of more better roads, telecom infrastructure, science grants, etc. We get bigger houses, boats, Ferraris, H2's, etc. None of this is a long term benefit to our economy. Quite the opposite.

Dean Baker's kicking @ss and taking names on an NPR show this a.m. (I think it's Dianne Rehm show). Catch it in archives!

maybe these sites are already known to many here, but for those looking for housing data in their own markets:

Paper Economy - A Real Estate Bubble Blog

input your city/state & it breaks down your local inventory by land, SFR, condo, etc, & compares it to peak bubble era-- 7/2006 to present.

The best "statistical breakdowns" realty site I've found so far is at Homes for Sale, MLS Listings Search, Real Estate Agents -- Zip Realty

register, enter your inputs, & then click on any house that comes up. Go to "sales trends", up in the top menu, & it will give info on current Median List, Sale, $ perSQF prices, and Sales Volume for that neighborhood. It also does a good job if you click on "recent sales", next to the "sales trends" box-- gives you a gps style map of all sales in that area-- 3-month, 6-month, etc.

It's the best public-access realty site I've found so far. It also gives you separate daily e-mail updates on new foreclosures.
(& no I don't work for either of these sites!

This is horrible!

If this trend continues, houses will eventually be AFFORDABLE!! Imagine being able to actually BUY a house and PAY IT OFF - the horror! Whatever shall our banker-parasites do?! How can they can rich from interest and debt if people can afford to BUY things?!

Fortunately, Bailout Bill II will help fix all this, I am sure!

serious moo goo:

so this is why the banks buy back their own defaulted loans at note price at the foreclosures on courthouse steps auctions, foreclosure sales, right?-- to hang onto it in shadow inventory so as to avoid busting out all their other comps for other properties they hold as collateral in that area. (am I understanding this correctly?)correct?

Over 30 years == for the full term of a 30 year mortgage

Make no mistake. With great power, comes great responsibility. The con job that these people have pulled is a direct threat to our nation's safety and security. Our enemies see this weakness. You really believe that Putin's invasion of Georgia is coincidental to our troubles?

What these people have done is tantamount to treason.

I'm listening to all of the talking heads on CNBC parroting how this is a "lifetime buying opportunity".

Anyone check the A/D line or up/down volume today on this rally? Sucker rally.

OT and possible Tinfoil:

I'm starting to think that the dems were just hood-winked.

Perhaps the republicans have internally conceded the oval office, but threw the current executive branch on the grenade to create some financial hysteria (bait) that the Dems foolishy gobbled up. Now, whatever happens, the dems look like cowardly idiot pawns of WS and the Republicans get control of possibly both the house and senate as all reps who voted for the bill are voted out by the pitchfork holding J6P.

If the the stock markets rally or go flat, the dems look quite foolish for pushing so hard on the bailout of WS.

If it tanks, they look like they have no balls to pass a bill on their own.

I know, it's a long shot - but this has popped into my head a few times over the last few days. Anyone else thinking this?

and to whomever above who posted about new HUD grants-- this is from my local newsrag I'm in Norfolk VA) on 9/28/08:

am summarizing: 'HUD announced Friday how they'll divide $4 billion in CBDG's (*community block development grants) across the country. Of that, nearly $3 million will go to Wash. DC, $46 million to Maryland, & $45 million to VA. In VA, Prince George's County gets $11 mil, Prince William, $4 mil, & Fairfax County gets $2.8 mil.' direct quote: "The money will be used to buy foreclosed homes at a discount, demolish and renovate them, or help buyers with down payment and closing costs among other things."

Someone smarter than me once said the most effective way to control the citizens is "to keep them in fear and keep them in debt". The last 8 years of Bush shows how effective this strategy has been and still is. I believe this "rescue plan" aka bailout is yet another application of this plan and is nothing more than an egregious attempt to loot the taxpayers of what little they have left. JP6 are finally opening their collective eyes and seeing this for what it really is and at the same time coming to the stark realization that our government, BIG corporations and Wall Street are a criminal enterprise rampant with greed and corruption. Apparently now Congress knows that we know and that they are being watched very carefully. As an aside to the foregoing, Jas Jain has been right on throughout these many months and it appears a shift has taken place among CR commenters concerning the wisdom of his "uncomfortable" description of us being "born and bred dopes". We HAVE been, we still ARE to a great degree, but that is changing and changing fast. So I say thanks to Jas for telling an Inconvenient Truth. We can still save this country and economy along with our freedom and dignity by keeping intense pressure on the politicians to do what's right and come up with the best possible course of action. Today's up market seems to expose the fiction of imminent collapse so lets capitalize on this and make a loud noise to our elected "leaders".

banks won't lend to each other because nobody knows who is healthy and who is not. Firm after firm have said 'we're healthy' but then later we find their level 3 assets are far over-valued and overleveraged. it's a problem of solvency. The problem: the banks don't know who is and who is not insolvent.

Which is why, as Dirk mentioned in another thread, removing mark to market will only muddy the waters more. Until every financial institution is FORCED to bring forth its dead, the crisis of confidence will linger and linger and linger.

Any rescue or bailout or whatever you want to call it, needs this more than any single other thing.

NYTIMES:
"As the assumptions that had blown air into the bubble began to dissipate, many mainstream reports became increasingly skeptical in their reporting and blogs like Calculated Risk offered increasingly alarming insights."

Daring to Say Loans Made No Sense

"It’s as if the global pool of money thought it was putting trillions of dollars in a savings account, but really, half of it was going into a furnace. The money is gone, burned up, never to come back. That was five months ago, and now that same furnace is about to burn public money."

A secondary aspect is the Commercial Paper market. That market is also suffering. Companies used this in the past as it was cheaper to do than other types of loans. Sure, they can eventually get into something else, but right now it's tight BECAUSE THE BANKS ARENT LENDING and investors aren't investing. Thus, these companies are having a hard time because the CP is short term. so as it rolls over the company needs to either get back into CP, or get a loan from somewhere, or just pay it all off (difficult but not impossible)

That's just not true. The Fed publishes figures on commercial paper every business day, at:

http://www.federalreserve.gov/releases/cp/default.htm 

The figures clearly show that nonfinancial companies with good credit are having no trouble selling their paper at low interest rates. Volumes at all but the longest maturities are running higher than usual. The "freeze-up" looks to be hitting only financial firms, lower-rated firms, and asset-backed paper.

The Fed also publishes the weekly H.8 release showing assets and liabilities of commercial banks. The latest data are for the week ending Sept 17'th, at:
http://www.federalreserve.gov/releases/H8/

and they show bank credit increasing at a healthy rate.

All of the evidence I've heard so far of a falloff in lending to nonfinancial firms is anecdotal and contradicted by the available data. The commercial paper data are very timely, even if the bank credit data is not. The Fed will publish data for the week ending Sept 24'th on Thursday afternoon. Can we not wait until then to see how much panic is called for?

I am so sick of seeing people live off of their houses. Let them fall and live in their Hummers. I be ready with cash at the bottom of the slope.