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yesss
and 2nd
CNN.com - Page not found
Guessin' he'd brew up some red robed whoop ass! But little else, being a Nazarene.
still long cat food, mom's gotta eat ya know
Got me some really sticky tickers. Lotta strangeness in today's trades.
OT...sorry
(Reuters) - NEW YORK, Oct 24 (Reuters) - A measure of future economic growth in the United States fell to a seven-year low and its annualized growth rate hit a 33-year low, indicating a severe recession is underway, a research group said on Friday.
The Economic Cycle Research Institute, a New York-based independent forecasting group, said its Weekly Leading Index fell to 114.0 in the week to Oct. 17, down from 117.0 in the previous period. It is at its lowest level since Oct. 26, 2001, when it stood at 112.7.
The index's annualized growth rate slid from minus 17.1 percent to negative 19.3 percent, its lowest since Jan. 10, 1975, when it was minus 19.4 percent, according to ECRI data.
"The nose dive in WLI growth to within half a point of its all-time low underscores the speed of deterioration in the economic outlook." said Lakshman Achuthan, managing director at ECRI.
The index fell due to unfavorable moves in all components except for a measure of money supply, he said.
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VIX was at 90, VXN was at 86. That's gotta be a record. Lucky it meant a rally from limit down.
The market is trying to liquidate as fast as they can to work off inventory, but the 2nd wave of foreclosures related to layoffs hasn't even begun.
2Q 2009 should be a doozy.
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What's with the 10-year? Sell-off by the PPT to fund equities?
Oh my GOD this is HUGE!
CNBC says that at the top of the hour they are going to have a BULL and a BEAR "face off"!!!
Shadow inventory is likely huge. I know people living in SW Florida who have been trying to sell thier home since 2005...yep...that is not a typo...and they have given up months ago after thier next door neighbors went into foreclosure at a price beneath thier cost.
This is a neighborhood they bought into in 2003 for around 300K....at the peak an identical home in the development was selling for 550K....and now they are listing foreclosures in the neighborhood at around 225K.
This is a 1,000 home development so I am sure there are a lot of trapped owners wishing they could sell. Multiply all over the country and you got shadow inventory out the ass.
This is a 1,000 home development so I am sure there are a lot of trapped owners wishing they could sell. Multiply all over the country and you got shadow inventory out the ass.
Mr. T. | 10.24.08 - 11:54 am
So we now have shadow banking, shadow unemployment ( U6 ), and shadow inventory at all time highs. Everyone is hoping for a quick turnaround. Maybe if Americans had something saved for a rainy day they could weather this storm, but they don't.
Yup, lotsa shadow inventory here in MA. Though prices are only back at 2003 prices, boomers are some of the durndest wishers out there. It will be decades before we pierce the nominal peak (absent the Zimbabwe solution).
Guys, what think you of my new business idea?
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Several options to choose from:
Could've been worse package (-5%) $50
Continuing growth package (+15%) $75
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This NSA graph really shows the situation more clearly.
It's no better than the last few months, trendwise.
If only we had the bright sunlight of transparency we could get rid of all these shadows.
safe_as_apartments writes:
"What's with the 10-year? Sell-off by the PPT to fund equities?"
That IS a huge move...and a departure from the pattern over the last few days...makes me wonder too. It's also funny that all the pre-market chatter was about today being "historical"...looks pretty tame so far to me. I think there was too much anticipation of a crash today for it to happen...which to me IS NOT GOOD for the markets in the short-term.
Something wonderful is going to happen.
Mr. T. | 10.24.08 - 11:54 am |
One thing I noticed in Charlotte County the last 3 months. Price cuts on REO's to make them go away. I have seen properties sell that have been vacant for over 3 years. We actually had a 1k plus sales month in September. I haven't seen that for over three years. Are prices still declining...yep. At least homes are selling. Gonna be an interesting October.
Chris
BTW...The barber said he had his busiest September/beginning October in almost 4 years...Lots of snowbirds.
"Something wonderful is going to happen."
I guess that all depends on which side of the trade your on.
Anyone think rate cuts will help excite people about buying an overvalued home?
"Everyone at the Fed has pretty much told you they're going to cut," said Rich Yamarone, director of economic research at Argus Research. "They're in a kitchen sink mode right now. Rate cuts, fiscal stimulus, bailouts - they're throwing everything they can at this right now."
Still, would the Fed really consider lowering interest rates below 1%? The last time rates were at 1% was between June 2003 and June 2004.
USD/JPY 94.25 now.
Interesting to see major world currencies trade like micro-caps.
My spider sense is tingling again.
Countrywide Foreclosures (REO) Blog
Countrywide has 19k houses for sale.
All this talk about "shadow inventory" - dont we see that with every RE downturn? I mean every time RE turns sour, arent there always people who want to sell, but dont because they are waiting for a better day?
One caveat - the shadow invery of REO's I will admit, that is likely different. We never had that in the past. But all this talk of normal homeowners "holding out" - thats no different than it was in the past...
Hundreds of hedge funds will fail and policy makers may need to shut financial markets for a week or more as the crisis forces investors to dump assets, New York University Professor Nouriel Roubini said.
We've reached a situation of sheer panic,'' Roubini, who predicted the financial crisis in 2006, said at a conference in London today.There will be massive dumping of assets,'' and ``hundreds of hedge funds are going to go bust,'' he said.
Shadow inventory are the tents of evicted tenants who've moved to the backyard.
interesting chart of long term dow. support is about 4300.
Chart of the Day - www.chartoftheday.com
@ Rat Turd
As this is the largest drop in housing since GD1 I would say that the shadow inventory situation is probably several orders of magnitude greater than anything we have seen in decades and decades.
Even in other downturns we did not have house values falling off a cliff like they are now.
I suspect suspended trading. My ETFs aren't moving in a very volatile trading day.
speed,
"Something wonderful is going to happen."
Unfortunately, this time the Russian space ships drives cut out, and were a bit too close to Jupiter.
Nostrovia,
Bloomberg has quit talking about PNC's multi billion $ tax dodge.
In Colorado Springs the Realtors are flat not taking listings unless you are willing to price accordingly. Many many homes are for sale and rent. I moved there in 2000 and some of the homes I looked at then are cheaper today. I recently got a new Mcmansion rental but almost thought about buying. Till I returned to sanity and realized the 2000 prices were to high then and are definetely to high now.
My hair stylist at Great Clips was complaining that they too have slowed down quite a bit.
Of course, you can always postpone haircut by a week or two in tough times.
It will be a while before it is official but we are heading into a depression.
Debt destruction feeds on itself.
We are on the other side of peak credit.
This is why government intervention sucks.
After the last currency crisis during the late 1990s, the emerging markets were told they needed excess reserves to intervene in case of currency runs.
So the emerging countries hoarded reserves, which of course lowered interest rates in the developed world, which created the credit bubble.
To stave off the credit bubble collapse, the OECD countries begin guaranteeing bank transactions, which of course, has created currency runs on emerging currencies who don't have the reserves for intervention.
I know this is "existing" home sales but if you think of it as "used" home sales then there are additional hundreds of thousands of inventory that are aging in place on the builder pink sheets.
Our local disaster is Riverpark in Oxnard and while a few are on the MLS any inquiry would show those few are for marketing purposes only and you can take your pick of a dozen shadow listings identical to the MLS product.
IMO, the USD/JPY is now trading at a level that is realistic based on purchasing power parity calculations. The BoJ and carry trade have artificially suppressed the yen vs the dollar for quite a while now. The BoJ's goal of course has been to support exports to the US...now Japanese exporters are going to get killed. Which would explain the drop in the Nikkei.
I work for the US office of a Japanese exporter.
I live in a farm town outside of PDX by 30 miles or so...it is unreal how many homes are for sale. No big developers here; just people exploiting IO ARMs and so forth. And small time builders.
Mr. T. I dont doubt it, but look at the inventory trend line. In the past, once it peaks, it peaks. Now absent a convusion (war, natural disaster, debt default, etc) its likely we have hit the peak again and inventory will continue to decline YOY.
The whole time this is happening, more and more of the shadow inveory will move back into the market - likely not as a deluge, but as a trickle - meaning the downward trend in inventory shall continue.
Again, the one caveat is the banks - what do they do? The banks could move invetory in bulk meaning inventory will spike again, but thats just speculation at this point. Bottom line, shadow inventory or not, without another huge shock, I think this is the peak of the inventory cycle.
We need an uplifting leader like Barney Rubble Franks to take this rudderless economy into his chubby hands and guide this crisis into a place where few of us have ever dared to dream about...
coffee anyone?
All of these monthly inventory levels and sales stats is nice but it is really just noise at this point.
Housing is dead for a generation at least. There is no way mortgage rates are not signifigantly higher 5 years from now and incomes signifigantly lower. And underwriting standards will be even tighter. All of the factors that were in favor of housing over the past decade and more are moving in reverse.
Pretty soon the concept of housing as an investment will change and a house will be viewed as a liability IMO.
My real estate agent says the only houses moving in south-central Pennsylvania are investment property (meaning rentals). I'm still waiting for my contingent buyers to sell their house so they can buy mine.
Lots of elderly around here want to sell to move near children, go into assisted living, etc., but there's no market for them to sell into, so they sit tight. Some of the baby boomers I know around here who are about to retire intend to move, too, but I don't think they're going to once they take a look at the market.
Real Estate just hit the control-alt-delete button and rebooted the last five years.
Joyful Alternativ
"Some of the baby boomers I know around here who are about to retire intend to move, too, but I don't think they're going to once they take a look at the market."
Nor are they going to retire when the see their 401k statements...
SpeciousRiches
Specious Riches
"So the emerging countries hoarded reserves, which of course lowered interest rates in the developed world, which created the credit bubble.
To stave off the credit bubble collapse, the OECD countries begin guaranteeing bank transactions, which of course, has created currency runs on emerging currencies who don't have the reserves for intervention."
Can anybody else see the conflict in these two sentences.?
Developing countries have hoarded reserves, and then they dont have reserves in the second sentence.
Developing countries are sitting on 2 trillion of US treasuries.
Why should they not unload them to raise dollars and defend their currencies?
I think we just have'nt reached that tipping point yet.
But I am pretty sure it is coming.
And thatz how the current fake/fiat/unsound currency based monetary system will collapse.
Can anybody else see the conflict in these two sentences.?
Developing countries have hoarded reserves, and then they dont have reserves in the second sentence.
Sorry, I meant to clarify; the emerging countries are somewhat bifurcated. Countries like China and the GCC are cash rich.
Others like Vietnam and Mexico, just hopped along for the ride.
This seems like a fun McCain groupie spin lately (retards);
The WSJ is the latest to pound on this drum just this morning: "Credit markets have started to thaw, yet stocks and the larger economy keep sliding. What's going on? Among the problems are the reality of recession and the uncertainty over Barack Obama's policies."
But would the market really feel better of McCain were leading in the polls. He's been scapegoating Wall Sreet throughout the campaign, and generally, he doesn't seem to have much love for business. And bey all accounts, Wall Street has turned on McCain, telling him they're sick of his rhetoric.
Lawrence Yun, NAR chief economist, said more markets are seeing year-over-year gains. The sales turnaround which began in California several months ago is broadening now to Colorado, Kansas, Minnesota, Missouri and Rhode Island, he said. The South was hampered by much lower home sales in Houston in the aftermath of Hurricane Ike.
"Sorry, I meant to clarify; the emerging countries are somewhat bifurcated. Countries like China and the GCC are cash rich."
OK that makes sense.
Yes, the countries (their banks) which borrowed in the international market are the first ones to get obliterated.
Iceland, Hungary, Romania etc.
But those like Russia, China , India should be able to defend their currencies once the Central Banks start to interfere. Till they finally realise that the USD & the Euro are nothing but worthless pieces of paper, like their own currency.
In "AIG Is A Fracking BLACK HOLE," we noted that AIG CEO Edward Liddy has admitted that the company may need even more than the $123 billion US taxpayers have already promised to provide collateral for its credit default insurance bets. We wondered lightheartedly whether AIG's losses were potentially infinite.
AIG: Are Taxpayer Losses Potentially Infinite?
Safety Glod move?
Lawrence Yun. That guy is a genius and should be listened to without question. I love that guy. Seriously. No really. I do.
oneworldcurrency yogi writes:
Safety Glod move?
~~~~~~~~~
If you meant "Gold" not "Glod".
Yeah, once the deleveraging shows signs of leveling, puts gold in the $600-$650 range. It will be time to start hoarding physical gold.
In the meantime make those secret compartments in your mattress to hide them
CR- It seems odd to mention the "substantial shadow inventory" without also mentioning the pent up demand of buyers who are waiting to purchase until after prices bottom but have been afraid to catch a falling knife.
In a deflationary environment with falling incomes and asset values owning a house with a mortgage will sink you financially.
On the other hand if there is massive monitary inflation and debasing the currency than real estate with a fixed mortgage will be the best hedge against hyperinflation the average American can have.
The jury is still out on the inflation vs. deflation debate. I see ample evidence to support both theories.
R Timm. Sort term, (1 year) this leans heavily toward deflation. Long term, as the printing pressess fire up to fight deflation its inflation with a bullett!
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Los Angeles, California
In addition to the succinct comments by Mr. T. that clearly explain the negative drivers for RE over the next 5yrs, we also have a shadow glut of homes owned by the baby boomers that will all be coming on the market in the near future.
This is a huge and very pricey segment (>$1M) of potential inventory for sale into a market with a declining population of qualified buyers seeking loans based on even normal borrowing standards. As with the hedge funds when they are forced to liquidate stocks en-mass, these homes will have to be realistically priced or they won't move.
The other reasons we see a leveling off of reported inventory, is just that, they are not reporting true inventories. It is also possible that the flood of REO's to hit the banks was so huge their systems/staff could not handle the flow and with the recent requirement that banks now give advance notice to defaulting home owners, this surely has pushed out inventory that would have otherwise shown a continuing rise in repos.
My view is prices must fall at least 50% from the 2006 top, and most likely it will afffect all price ranges starting as it has at the bottom end. This is a once in a lifetime correction of speculative excess that won't be over until around 2015, give or take.
BTW, RE was never considered a liquid asset, and you can see why now. Sure in a panic buying frenzy all the rules seem to be different this time, but reality does eventually rule.
A house is just a wood box that rots in the rain and requires constant repairs and maintenance. In many cases it can return a profit over time while providing shelter to you and your family.
Converting it from it's historic utilitarian use to speculative highly-leveraged commodity investment status carries both the inherent positive and negative risks of it's new status, as we now see.
CR, could you please explain more why do think we're near peak inventory, or do you mean peak inventory for 2008 only? I am thinking there is a huge number of Alt-As starting to reset that might double the current foreclosure numbers.
YouTube - Willie Nelson - Ray Charles - Georgia on my mind
Willie Nelson - Ray Charles - Georgia on my mind
i agree that gold may get down to the $600-650. but if it does i STRONGLY DOUBT you will be able to buy any physical gold for anywhere near that price.
my dealer ran out of quality silver over a month ago. nowadays, he hardly has any quality gold. and what he does have carries a $70 or higher premium over spot. ($90 on american eagles.) i was able to get some odd pieces at $45 over spot. major dealer. i remember getting american eagles for $10 over. way back when. i used to get bars for like $7 over but the only bars available are one ounce bars at $70+ premium.
Warehouse REO sales are ramping up to offset the shadow and some of the growing extinct listing inventory. This backstage action is stabilizing the inventory inventory situation in some areas. The billion dollar initiative is part two, banks will lend to the "young with money". they can get it and will take it. Not everyone wants to rent a foreclosure. many see this as an opportunity to be a portfolio investor. many involved in the warehouse clearinghouses are creating tidy packages of saleable re equities. when you purchase at 10cents on the dollar there's money to be made on the front. prices are the condition. not the inventory. the inventory is being controlled. a controlled landing...by guess who?
When you remove foreclosed REO's, sales have drastically fallen. Practically every foreclosure is a guaranteed sale, unlike most homeowners who choose to sell.
Using a aggregate statistic like this is like crediting murder for preventing heart attacks and cancer.
have watched so much C-span recently my eyes are crossing, but Th. nite they had on a meeting of the NAHB. Speaker was Ivy Zelman, of Zelman Research, & it came up in discussion that NAHB & the mortgage folks, etc. are lobbying Congress really hard to include a $10 to $20K tax credit for homeBuyers-- to get that included in whatever "stimulus package" the critters are beavering away at as we type. Zelman said the $7500 "tax credit" in this summer's Housing Bill was a total fizzle.
She also said her sources said Congress did NOT like the idea of this 10 to 20 grand tax credit much, but she said they're still mainly focused on the "keep the homeowers in their home!" meme, & haven't yet addressed the Q of even if you keep people in their homes, who's gonna step up to buy all the existing inventory?
Shadow Inventory - yeah, like all the defaults that the servicers haven't even BEGUN to process and are basically ignoring, all the AltA, OptionARMs set to blow, etc.
Seeing WAY more postponements and delayed trustee sales lately.
Shadow Inventory indeed.
Looks like a sales volume bottom to me. I'm noticing less "pull back" in non-distressed listings here that I saw from last winter through mid-summer. The people who need to sell are probably a lot more willing to take their lumps and move on. It will be interesting to see what effects the $7500 tax credit will have on volume and inventory in the Spring (my guess both up).
There's another "shadow" inventory. Banks are hiding properties in the paperwork pipeline and keeping them out of mls.
The snowball of foreclosures has not begun. Job loss hasn't exploded yet. It's like a bunch of businessmen in Dec 1929 talking about recovery and good times ahead.
The fat lady is singing alright; the national anthem! This ballgame is just getting started.