The Fed and Treasury are only trying to slow the crash so it does not lead to a broken system and social unrest. If it works, we just have to wait and see. Psychology has changed, nobody is interested in taking on more debt, it is all about saving. If they want to see more debt taken out they will have to do sponsorships at Nascar events.
you wouldn't believe the number of people I work with who believe that the Community Reinvestment Act of 1977 is responsible for today's crisis. I suspect the real reason for this irrational behavior by the U.S.'s leadership is their inability to admit to themselves or anyone else that deregulation is the real culprits. In essence, they don't want to stop believing in the Gipper. My opinion only, of course.
Just back from Vegas - the strip was dead after the Hatton fight.. the airport (which is usually a zoo on the way out) was empty.. we literally walked without waiting through security..
The next bailout package will provide $25,000.00 checks to all registered voters of record on 11/4/08. It is anticipated this action will stimulate NASCAR events in Charlotte, NC in 2009. Budwiser has rented 10 extra semi-trailers to hold the additional kegs of beer..... Free ponies to the first 2500 fans on-site..
Learned Helplessness is a psychological condition in which one continues to be hurt or damaged physically or mentally after having learned of one's powerlessness in a situation.
Cognitive Dissonance is the feeling of uncomfortable tension which comes from holding two conflicting thoughts in the mind at the same time.
As we review today's latest SOMA (Secure Official Money for 'Assets') program the progression from outrage to acceptance continues:
Discussion of the PPT on Hee-Haw elicited a remark from hometown hero Citizen Santelli that 'we know the Bank PPT exists' which resulted in the backbenchers proclaiming ' Where is the outrage?' '... and we like it!'
We're just powerless to deal with folks not wanting to sell assets worth a nickle at a nickle so we need a joint venture partnership between the Fed and the Treasury where the Treasury provides the equity to the Fed administered SIV. Let's leverage that puppy up and go collect full-faith and credit nickels in front of the printing press constrained bulldozer.
As the government coats the financial skeleton with taxpayer financed adamantanium, there are glimpses of cognitive dissonance setting in.
Someday the FED will have to mop up all these meatballs but we can't worry about that now.
If the government crowds out the private, more so because of the quality (what we are paying for the assets) as opposed to the quantity (and ultimately you can't fix a broken dam with more water), the government then has to bring the private sector in utilizing the very methods that have crowded them out, but we can't worry about that now.
Learned helplessness leads to cognitive dissonance.
The combination leads to cognitive helplessness and learned dissonance.
Second that Ralph. I even have several realtors in my extended family that put the blame for this mess on CRA! When I bring up the CDS problem or deregulation as a culprit, they look at me like I have two heads...
Charlotte still has BofA and it looks like they are going to wheather the storm. Wachovia is still hoping they can keep some operations here, but some think that will not be the case.
Hey we do have the Nascar Museum here! That should help with tourism (not)...
Charlotte is holding up very well, despite being a big financial center. Any thoughts on a reason for that?
Because, Like Denver, Charlotte did not experience a Bubble market from 2001-2006. For those keeping score, Denver has the best performance over the last six months for which data is available.
There are several condo Projects here in Charlotte which have gone BK. One on my street went under. I know several guys in realty property investment who are hurting. Don't see them out and about right now.
I think we are underestimating the power of TRUST in this wholesale housing disaster.
The "programs" designed to "save" people from losing their homes are, to a good extent, pretty bad. Reworking loans so that a home-owner has a 40 year note? C'mon. Fact is that renegotiated loans are subject to default rates of up to 50%!
People are scared, people are losing their jobs, people cannot pay their mortgages because their bills are piling up and they have less money and the KNOW that things are only gonna get worse.
you wouldn't believe the number of people I work with who believe that the Community Reinvestment Act of 1977 is responsible for today's crisis. I suspect the real reason for this irrational behavior by the U.S.'s leadership is their inability to admit to themselves or anyone else that deregulation is the real culprits. In essence, they don't want to stop believing in the Gipper. My opinion only, of course.
Well since it's happening globally - real estate bubbles everywhere - it seems hard to blame the CRA or the Gipper.
This is why blaming the central banks and excessively low interest rates are such a favorite among certain crowds - these practices have been adopted globally in recent years.
Plus the pattern fits the historical record of past crises.
Easy credit, often actively promoted by the government, seems to me to be the universal feature of all these meltdowns.
Easy credit, often actively promoted by the government, seems to me to be the universal feature of all these meltdowns.
ac: although I definitely agree with you here, I also have learned that easy credit promoted by govt is not necessarily a pre-requisite for a bubble.
I just finished rereading Galbraith's book "The Great Crash" and one thing he highlights is that the overall level of credit was relatively minor in the boom years of the 1929 stock bubble. At the time the overly cheap credit was coming somewhat from the govt, but moreso from private corporations and individuals.
once the speculative fever hit, little could stop it... since returns were so high. (so 10% interest rates didn't matter when you were making 100%+ on the market).
it was an interesting re-read and challenges many of my assumptions and thoughts.
I thought HP et al had to back to CONgress to get more $ after they shot their 350B wad? Doesn't the commitment of more funds from TARP require approval?
MOT - that is what I was explaining to my 97 year old grandmother today. She got all worked up after reading the NYT Sorkin article, peppering me with - why didnt they ask these questions about Geithner BEFORE they elected him. So I kind of had to let her in on the fact that he wasnt elected and their wont be any questioning of him. She tossed the paper in disgust.
Another angle on the inflation front is the money supply number of m-infinity which includes the "shadow banking system". While difficult to quantify this number, it is big and contracting.
By any traditional method inflation should be in the cards. Add in m-infinity and the picture gets a lot less clear.
As far as Charlotte, it did not have the housing boom in prices but there is lots of inventory. As the credit issues work through the economy, I expect the market to soften as Wachovia and Bank of America right size. On the other hand, I suspect that DC will take over the lead in drops as soon as the defense budget starts to take a hit. I expect further declines in 2009 as more inventory hits the market, defense contractors lay off employees, etc. Some of the softness might be countered by increase government hiring but there is no way that the government salaries match the contractor's salaries. Thankfully I am still renting.
My thoughts on the issue, the finance sector grew by an insane amount during the boom. A lot of "good people" went into it.
So how can so many "good people" do such bad things. They can't rationalize that they were a part of something that was so bad and failed so miserably and want to blame it on other things.
I'm not putting good people in quotes to mock them or to imply they're not good people. Just as a direct quote.
A lot of these good people are now losing their jobs and a lot of money. Many worked in areas that had nothing directly to do with the mess that Wall St created. So it's hard for them to blame the companies they work for.
They may be good people that deserve to make good money, but that doesn't give them the right to do so at a company that makes money in such a bad way. And yeah it was bad. A business that needs billions of dollars to stay afloat is a bad business.
I had written a bit on different factors related to the credit bubble and factors involved, including the CRA, GSEs, investment banks, etc and tried to consolidate it in this post about who is to blame for the financial crisis that you might find interesting.
"Because, Like Denver, Charlotte did not experience a Bubble market from 2001-2006. For those keeping score, Denver has the best performance over the last six months for which data is available.
JD"
Best performance is a relative term. I think you should change it to least worse. Denver has done practically nothing for about 7 years since its home prices bubbled from 1995 to 2000.
As Sec of Treasury, he has to be approved by the Senate, so there will be questions asked...
I'm sure he will be absolutely grilled. I mean the republicans will grill him because he's a republican... and the dems will grill him because he's Obama's choice.
IMO only 2 people might grill him
Ron Paul
Dennis Kucinich.
It is obvious we are in the middle of a crash. Nobody knows how long that crash will be. Once the crash stops, we will linger along the bottom in an L-shape for ???? Nobody knows. It is all hope and speculation. If we look at the facts, the rate of decline is accelerating.
Until the facts (Foreclosures & Bloated Inventory) change, we will have more of the same results.
Westside of LA will get smacked. Just like NYC and other high end areas.
Irrational psychology drove the mania. The question should be: what drove the psychology? I'd say it began in the mid-to-late '90s with the upper income spectrum funneling stock profits into a relatively small supply of high end houses. That drove up those prices. Each income strata saw an opportunity to make themselves rich, convinced by the entire investment media, that houses only go up - so why not trade up to a more expensive house? Then by the early 'aughts, with the help of shredded lending standards and "free money", the mania infected the whole income spectrum, bidding up every house in search of the ultimate safe piggy bank that yields 30% a year. Hoocoodanode it would end like this?!
Friday, July 21st, 2006,
HousingPanic, a particularly vitriolic BubbleBlog which is saying something asks:
Realistically, how overvalued are Phoenix home prices?
Obviously, I consider this a profoundly silly question, but to lurk among the BubbleBloggers and their seething commentariat is to acquire an education in a slice of America invisible from this side of the sewer gratings. Notwithstanding the idiotic economic analysis, which is really no worse than the static-market fallacies paraded as profundities in the pages of the Arizona Republic, these sites and not just HousingPanic are infested with a cult-like fever to inflict suffering at second hand, to be sure on people who are in fact guilty of nothing except failing to have drunk the BubbleBlogger KoolAde.
Thats all one. I dont care. The whole of the last century was dominated by the bad behavior of viciously angry wretches, but look where it got them. The BubbleBloggers will someday bawl balefully in private, but they will never, ever admit that they have been very publicly very foolish. You will know and I will know and in the secret chambers of their hearts they will know they were wrong all along. But as long as you dont hold your breath waiting for that contrite admission of error, you should be fine.
Heres where I do start to care. Whenever the subject of Phoenix comes up in a BubbleBlog, the assembled Brown Shirts pile on, for whatever reason.
You can read the rest of the 21 Reasons to Bank on Phoenix at the Greg SwannBloodhound Blog.
Not sure about the housing market in Charlotte, but I have a friend who works at Williams Sonoma. They are slow and way off last years business. Down about 20%.
i is a realtor in fort worth, tx, and i don't believe the index is accurate for Dallas. I'm closing on a condo that sat on the market for 9 months and is contracted to close 22% below where they were closing a year ago. These were identical units. we have our fingers crosssed the financing goes through and we can unload the thing. 12 months from now, the new owner no matter how good a deal he thinks he's getting today, will be underwater.
Does Paulson really believe what he's doing is a good thing? All of these facilities are incredibly foolish and reckless.
How could any sane person implement them?
He's so far down the rabbit hole, there's no way to turn back. His little "rally" may continue for a while longer. But it will be followed by currency destruction, steep market declines, and ultimately chaos.
I just finished rereading Galbraith's book "The Great Crash" and one thing he highlights is that the overall level of credit was relatively minor in the boom years of the 1929 stock bubble. At the time the overly cheap credit was coming somewhat from the govt, but moreso from private corporations and individuals.
once the speculative fever hit, little could stop it... since returns were so high. (so 10% interest rates didn't matter when you were making 100%+ on the market).
it was an interesting re-read and challenges many of my assumptions and thoughts.
And yet the rate cuts of 1927 seems to have an almost exact parallel to the cuts in 1998 in terms of the effect on the market.
E.G. a specific action by the central bank to ease the availability of money results in an immediate explosion of excesses in the market.
More recently the same thing happened again with housing and then commodities.
Again my contention all along has been that the mistake is attempting to keep the party going in order to prevent an economic slowdown.
The same thing appears to have happened in Japan during its bubble period.
So the first $350B was spent on bailouts and gifts to "friends of Paulson". Now he's going back to the original anticipated use of TARP in order to secure the second half? This clown makes me want to throw things on my TV.
you wouldn't believe the number of people I work with who believe that the Community Reinvestment Act of 1977 is responsible for today's crisis.
I think a case against the Community Reinvestment Act can be made based NOT on what it did directly, but what it did indirectly. Loans going to people who should not have received them, but got them anyway because of the color of their skin, was not the problem. Rather, the problem was that the CRA destroyed the culture of banking.
To be sure banking culture pre-CRA was insular, stodgy, arrogant, but the men who embodied that culture did a good job of intermediation, i.e., borrowing short and lending long, because they were good at assessing character. They had integrity, based on loyality to class and institution, and were an independent source of power, authority and confidence. This confidence and independence is what the government destroyed AND WANTED TO DESTROY. The political takeover of the banking system now undereway is not the beginning of something new. It is a final act in a drama that has been going on for a long time.
Why in my name do they allow this clown to be on TV. He is not confidence inspiring. He doesnt know what he's doing and it shows. The president is the one that should be doing these briefings - but then again, we'd need an articulate and intelligent president to do that.....
"Notwithstanding the idiotic economic analysis, which is really no worse than the static-market fallacies paraded as profundities in the pages of the Arizona Republic ..."
The OFHEO live graph site sheds the light.
Just did an overlay of AZ, NV, OH, IA.
I don't know what else anyone could rationally argue, after regarding that overlay. I've had family in Phoenix, since '92. The last 6-7 years were plainly real estate manic, for whatever conglomeration of reasons.
Anecdotal: Saw a listing in my area today (NH) -- cookie cutter colonial on a couple acres, 8 yrs. old, dropping in price from $344K to $299K. Been seeing a lot more of those big price cuts than I used to.
This is the most amazing bull market in history! We gained 20% of most bull markets in 2 days! At that rate, given the length of standard bull markets, we are looking at 1000% gains over a few years.
If you want to make money on this report you must ignore the year over year number. The year over year number will be quite negative for quite a while even after the month over month number turns positive. The investable information is the month over month number.
Why is the year over year number so heavily scrutinized? Did everyone buy their homes exactly a year ago? The one-year-ago level enters into just about no homeowner's decisions.
Leave the drama to the journalists ...it's not worthy of a blog this good!
I am down in SW florida visiting family for turkey day and everybody around me is glum.
Inlaws live in a million dollar condo that last time I was here (3 years ago) they were talking about being worth 3 million. They are seriously considering selling due to stock market losses.
Wife's sister last time I was down here was gushing about how they "made" 200K on thier house (which they now have been trying to sell for almost three years) and now there new-in-2005 development is riddled with foreclosures and they are underwater on the mortgage.
Wife's cousin was busily borrowing and dumping 100K into improvements into thier little piece of the American dream last time I was here and now they have just voluntarily entered foreclosre.....have stopped payments and are going to live there for free as long as they can.
What an ignorant comment. The CRA doesn't force banks to give loans out to people based on the "color of their skin".
It requires banks to service all members of the community in which they serve equally.
So a bank doesn't build a branch in a lower income neighborhood and only service clients from some of the surrounding more affluent neighborhoods. Building the branch in the lower income neighborhood to save on real estate costs.
If a bank doesn't want to service a particular segment, they can choose to not build a branch in that area.
As long as housing prices are in free fall, the paper on subject property is worth pennies on the dollar. Hank can buy up a much as he wants and the prices will continue to fall. Jobs are what matters and he is doing nothing to make that better. What a clown!
As you would expect, the real numbers are much worse than even Case-Shiller indicates.
Traipsing around Las Vegas in Zillow is hilarious these days. The Zestimates are nearly double asking prices. You'll zoom in on a neighborhood and see a dozen $260K homes and then one (of the same) for $140K -- that's the one for sale (and not moving).
Prices in my relative's NLV neighborhood are almost back to where they purchased in '94.
My point exactly. Not saying that the ruminating deflation verses inflation is not useful, but whether or not unemployment jumps and recovers is really the end-game. We can handle massive deflation/inflation if we're working and can meet our basic needs. Not so much if we're unemployed.
hahahuhu writes:
Can anyone tell me why Phoenix had such a boom? I mean its just a hot, who was buying all those houses ?
hahahuhu | 11.25.08 - 9:51 am | #
Well before they actually got the TARP money I thought the plan was to buy up MBS at some fantasy price level and then the entire system could use that one (or series of sales) as it's new input level. That actually would have been quite a bit smarter seeing how the system is allowed to ignore any price valuation it deems to low as a distressed sale.
Seems too easy to allow the write-downs to become write ups...
" On the other hand, I suspect that DC will take over the lead in drops as soon as the defense budget starts to take a hit. I expect further declines in 2009 as more inventory hits the market, defense contractors lay off employees, etc. Some of the softness might be countered by increase government hiring but there is no way that the government salaries match the contractor's salaries. Thankfully I am still renting."
franz | 11.25.08 - 10:09 am | #
Franz:
You have answered a question I have as a DC resident. I do not see prices of condos in my neighborhood dropping anything like 20+%. In fact, I'm not sure they're dropping much at all. So I was wondering how the C-S index could report such a large drop for "DC." Now I realize it's not DC it's talking about, but Arlington, Fairfax, PG, Montgomery, etc., where the downturns are occurring.
When the new socialist administration hits town, government jobs will expand exponentially and the "real" DC real estate market will be in fine shape. (Note there is a wistful editorial in today's Financial Times, which has just discovered that virtually all of the job growth in the UK since
Blair took office has been in public sector jobs. The FT is shocked, shocked . . .)
Rather, the problem was that the CRA destroyed the culture of banking.
This is an ideal comment to post on a blog where people know nothing about investment banking, commercial banking, or mortgage origination or securitization.
Since the leaders are elected by the people, and the people comprise the nation, what is it that you don't hate? The idea of a country that exists geographically on the North American continent, presumably peopled with only people that agree with you?
Anyone whose been through a BK or seen companies liquidated recognizes the USA for what it is, PAST THE BRINK. DEFACTO SOVEREIGN DEFAULT.
Hey Armageddon doesn't seem so bad. Except when it is.
Which is why I fully intend to redirect my network architecture skills into making the following rousing-type political speeches: "Who runs Bartertown?"
Of course, so many of my questions are purely rhetorical, but it's important to agree upon the facts.
With respect to the stock market, people look most often at day to day changes, not year over year . If the stock market goes down by 2% today, the headline will not be "Stocks in freefall...down 40%!" (from last year). This should be a clue as to how to look at this housing data...month over month is what matters. Period.
Very few houses were purchased in the past year, relatively speaking. So why not feature the two-year change, or the three-year change? That data is available. Why not? BECAUSE IN A DOWNTURN PEOPLE ARE DRAWN TO THE MOST NEGATIVE NUMBER. If you invest on this basis, it is your loss. If policy is based on this number, it is our collective loss.
Which is why I fully intend to redirect my network architecture skills into making the following rousing-type political speeches: "Who runs Bartertown?"
Just had a flash of Beard riding around on Bald's back...
"When the new socialist administration hits town, government jobs will expand exponentially and the "real" DC real estate market will be in fine shape. "
I hope this is sarcasm, otherwise Rip van Winkle is now posting. Bush has expanded the government beyond all previous admins, run up deficits greater than all previous admins combined, and his little friend paulson is tunneling future tax dollars into a black hole. Kleptocracy in action.
Please, get a cup of coffee and catch up on the past 8 yeaars.
Well I can say in my area of SF, Marina/Cow Hollow, they are still in the bubble. Several houses under renovation also.
Have noticed a certain condo that Sotheby's is the agent on is very slow to fill, but with a 1 bedroom going for right at 900k it is easy to see why...
It's a nice argument. My point is this: I have no reason to hate America, per se. I have traveled the entire land, lived in Texas, NY, CA, VT, MA, New Orleans have met wonderful folks, consumed wonderful foods, etc. etc.
However, I feel it fair to say I hate our corrupt political system, I hate our elected leaders, I hate lobbyists, I hate the growing class divide. And PLEASE don't give me the reductionist arguments: "Well if you don't like it, why not leave?" or "It's the best system around."
I hate what we are, what we have become. I hope we will change.
and since DC is my backyard, housing still declining, exurbs cratering. newbies to this area don't remember the crackwars--did wonders for now hip places like columbia pike, adams morgan, waterfront...
reinflate the credit bubble is the only hope to keep the shrinking GDP from creating a larger depression then the 30s. Massive unemployment in the growth sectors, finance,RE,Advertising,Marketing and sales needs to be contained.
This is a political/economic decision to keep the sheep busy how effective and long lasting can only be guessed.
"Bush has expanded the government beyond all previous admins, . . ."
I thought the complaint from you guys was that Bush outsourced too much federal work and that letting private contractors get work was unfair to the struggling federal workforce. No?
RE and CRE has absolutely crashed in SWFL. The are 27,000 foreclosures in process in Lee County. Empty new and used strip malls by the hundreds. Prices on RE down by half. Ugly stuff.
Mentioning the Omega brings back memories! I lived across the street from the Omega in the early 60s. I doubt if it is still there, but Adams-Morgan has plenty of similar places. No parking, though. The L-2 bus that runs down Connecticut fortunately stops right at 18th & Columbia Road, so I must revisit soon.
Duke's is no more. There is a restaurant in town run by one of his pals, but I have not visited it. Duke was a throwback!
I've been looking at a house in the suburbs of Washington DC. The homes i'm interested in cost about a cool mil at the peak. Now they're asking 750-800k. Consistent with a price drop of 20-25%.
I think i'll wait a little longer and see if I can snag one in the 600s. The thing that's a killer is the property taxes. They're based off peak prices.
any word on baltimore? what about all the bio tech building @ hopkins that's going on there? won't the houses in fells point and butchers hill be able to retain their worth?
Duke's is no more. There is a restaurant in town run by one of his pals, but I have not visited it. Duke was a throwback!
JohnR(VA) | 11.25.08 - 11:11 am
Met the man once when I sampled his crab cakes. Land mark establishment.
John, you can't lump every commenting visitor into the 'you guyz' net...
...the government expanded both fed jobs and contractor jobs. Look at DHS as an example. Some agencies went A76 but basically this was deck-chair realignment. The impacting factor in this region will be wages going down. By the way, billable rates are going down. I know govies getting re-org'd into lower GS levels. Contractors get to do more for less, etc...
...government ought to work efficiently, reduce and starve in some places, bolster in others as necessary...
my two cents is that it needs to be starved in quite a few areas, especially the large number of SES managers, and other GS15/14 personnel. Time in service does not equal competency...
"I'm on Connecticut Avenue NW above VanNess. Great bus/subway access, etc."
Yes, one of the things DC has going for it is good public transportation, and also lots of cabs. Between them you don't really need a car if you stay in town.
charlie writes: I've been looking at a house in the suburbs of Washington DC. The homes i'm interested in cost about a cool mil at the peak. Now they're asking 750-800k. Consistent with a price drop of 20-25%.
I think i'll wait a little longer and see if I can snag one in the 600s. The thing that's a killer is the property taxes. They're based off peak prices.
You can always challenge your assessment after you buy, charlie. The data should work in your favor by the time tax season rolls around.
I don't completely agree that prices in DC have dropped 20+%. Certain overpriced condo projects may have been slammed, certainly, but thus far it is homes in the exurbs that are pulling down prices. In the inner neighborhoods, sellers are still trying to hold out for 2005 prices. I see many empty houses with unrealistic numbers, and that doesn't seem to be changing.
Marcel Duchamp, thanks for the great link to Paper Economy. I don't know if everyone has ignored your post because you aren't in the CR posters' clique. The OFHEO chart is a great tool/toy. Forget Phoenix. I plugged in California and North Carolina. Ayayay!
flaminia said: "Marcel Duchamp, thanks for the great link to Paper Economy. I don't know if everyone has ignored your post because you aren't in the CR posters' clique. The OFHEO chart is a great tool/toy. Forget Phoenix. I plugged in California and North Carolina..."
Ditto for me, Marcel. The charts explain why the real estate market in my neck of the woods (Raleigh) was (and still is) vastly different from that of so many others who post here. I never was a real estate shill or blind to what was happening around me...the market was simply, and significantly, different.
I went to the paperdinero site and punched in my area, Scranton & Wilkes-Barre, PA. It shows that in the last year, home prices are still climbing. I'm told it's because people are coming from NY and NJ in search of a cheaper place to live and that richer folks are buying 2nd homes here with the idea of eventually coming out full time.
"Why is preliminary Q3 GDP revised down to 0.5 percent?.."
"So how many times has the $700 billion been spent already?..."
"Is there anything they won't buy or bailout?..."
"How is supporting a losing proposition going to restore faith?...."
"Is there a logical reason for such inanity?............"
"The first thing we need is disclosure...."
"How about a law that says......"
"It's time to create an economic system that is honest...."
"The FED should start buying ........"
".....we need a joint venture partnership...."
".........most people aren't even aware....."
"Nothing like keeping the common people in debt...."
"....the fed will try to do whatever they have to in order to make things go up....."
"We have reached a point where the govt. has lost control....."
"No one has even attempted to calculate these endless guarantees and the ultimate liability for all this leverage. They are pure black holes."
"People are scared, people are losing their jobs, people cannot pay their mortgages because their bills are piling up and they have less money and they KNOW that things are only gonna get worse."
"..........................yep.............this thing's going Mad Max....."
FDIC Graphs Show the Extent of Financial Crisis: More Institutions Report Declining Earnings, Quarterly Losses; Lower Asset Values Add to the Downward Pressure on Earnings; Growth in Reported Noncurrent Loans Remains High; Nine Failures in Third Quarter Include Washington Mutual Bank; Failure-Related Restructuring Contributes to a Decline in Reported Capital.
I guess I get a mortgage bailout soo
None of this matters -
I like how that chart has to specify that it's Phoenix-AZ, just in case anyone gets confused.
Basel Too, yeah - that is directly from the Case-Shiller spread sheet!
Free fallin'!
Best to all.
CR, how Petty of you.
Free pony for the first appropriate YouTube link!
No problem...rising unemployment, home prices free falling...announce some free ponies and all is well.
Charlotte is holding up very well, despite being a big financial center. Any thoughts on a reason for that?
So peeps in Vegas gambled on their housing and have crapped out, eh? So they own more of a Carribbean Dud, right?
Charlotte is holding up very well, despite being a big financial center. Any thoughts on a reason for that?
Hundreds of billions in bailouts to the financial 'industry'?
Home prices are going to fall for a long time yet the government keeps pumping insane amounts of money into the financial sector to keep it afloat.
The financial sector is dependant on housing to rebound if the taxpayer funds invested in it will be returned.
Aren't there better ways to spend trillions of dollars?
Seriously. This nonsense has to stop.
Can the Fed start buying house price futures to drive prices up?
I predict NYC moves up on this list (to the left)
"Charlotte is holding up very well ... Any thoughts on a reason for that?"
Paper Economy - A Real Estate Bubble Blog
Build a graph of NC and AZ, together, for example.
TBT down 5% from yesterday, despite these inflationary Fed interventions. Why?
I made my bet and bought 100 at $50.40
The Fed and Treasury are only trying to slow the crash so it does not lead to a broken system and social unrest. If it works, we just have to wait and see. Psychology has changed, nobody is interested in taking on more debt, it is all about saving. If they want to see more debt taken out they will have to do sponsorships at Nascar events.
ZLC in full crash mode...maybe they will announce a plan to buy up crappy jewelry.
Tom,
you wouldn't believe the number of people I work with who believe that the Community Reinvestment Act of 1977 is responsible for today's crisis. I suspect the real reason for this irrational behavior by the U.S.'s leadership is their inability to admit to themselves or anyone else that deregulation is the real culprits. In essence, they don't want to stop believing in the Gipper. My opinion only, of course.
Just back from Vegas - the strip was dead after the Hatton fight.. the airport (which is usually a zoo on the way out) was empty.. we literally walked without waiting through security..
I've never seen it so quiet..
TBT down 5% from yesterday, despite these inflationary Fed interventions. Why?
I made my bet and bought 100 at $50.40
It is interesting. Could be some of the nasty economic data today like the chain store sales.
Or there could be some cross-national money laundering scheme going on.
Mutual monetization of government debt and currency devalution.
One wonders.
The next bailout package will provide $25,000.00 checks to all registered voters of record on 11/4/08. It is anticipated this action will stimulate NASCAR events in Charlotte, NC in 2009. Budwiser has rented 10 extra semi-trailers to hold the additional kegs of beer..... Free ponies to the first 2500 fans on-site..
U.S. Economy Shrank 0.5% in 3rd Qtr, Most Since ’01 (Update1) - Bloomberg.com
Learned Helplessness is a psychological condition in which one continues to be hurt or damaged physically or mentally after having learned of one's powerlessness in a situation.
Cognitive Dissonance is the feeling of uncomfortable tension which comes from holding two conflicting thoughts in the mind at the same time.
As we review today's latest SOMA (Secure Official Money for 'Assets') program the progression from outrage to acceptance continues:
Discussion of the PPT on Hee-Haw elicited a remark from hometown hero Citizen Santelli that 'we know the Bank PPT exists' which resulted in the backbenchers proclaiming ' Where is the outrage?' '... and we like it!'
We're just powerless to deal with folks not wanting to sell assets worth a nickle at a nickle so we need a joint venture partnership between the Fed and the Treasury where the Treasury provides the equity to the Fed administered SIV. Let's leverage that puppy up and go collect full-faith and credit nickels in front of the printing press constrained bulldozer.
As the government coats the financial skeleton with taxpayer financed adamantanium, there are glimpses of cognitive dissonance setting in.
Someday the FED will have to mop up all these meatballs but we can't worry about that now.
If the government crowds out the private, more so because of the quality (what we are paying for the assets) as opposed to the quantity (and ultimately you can't fix a broken dam with more water), the government then has to bring the private sector in utilizing the very methods that have crowded them out, but we can't worry about that now.
Learned helplessness leads to cognitive dissonance.
The combination leads to cognitive helplessness and learned dissonance.
But we can't worry about that now.
Can anyone tell me why Phoenix had such a boom? I mean its just a hot, who was buying all those houses ?
Second that Ralph. I even have several realtors in my extended family that put the blame for this mess on CRA! When I bring up the CDS problem or deregulation as a culprit, they look at me like I have two heads...
Nasdaq succumbs to reality...no bailout for tech
Charlotte still has BofA and it looks like they are going to wheather the storm. Wachovia is still hoping they can keep some operations here, but some think that will not be the case.
Hey we do have the Nascar Museum here! That should help with tourism (not)...
LOL
ETrade says it's optimistic about TARP approvals
I want my free pony with lipstick.
Phoenix will recover...it will rise from the ashes. okay, bad joke.
iceman writes:
Charlotte is holding up very well, despite being a big financial center. Any thoughts on a reason for that?
Because, Like Denver, Charlotte did not experience a Bubble market from 2001-2006. For those keeping score, Denver has the best performance over the last six months for which data is available.
CNBC is trying to use the word bottom as much as they can, it's like Giuliani with 9/11.
Every sentence is a noun, verb, and the word bottom.
There are several condo Projects here in Charlotte which have gone BK. One on my street went under. I know several guys in realty property investment who are hurting. Don't see them out and about right now.
I'd like a few more comments such as Comrade Swans, I for one welcome the Speakwrite Enigma spin whilst shovelling my soylent green for breakfast.
Cracker, where did you get that soylent green? I am eating that horrible soylent yellow for breakfast.
Let's go shopping!!!!!!
We all live now in "Moralhazardlandstan"
Hey, at the end of the day, we will all get our bailout...so WTF!
RE: Houses, Houses, and nowhere to poop.
I think we are underestimating the power of TRUST in this wholesale housing disaster.
The "programs" designed to "save" people from losing their homes are, to a good extent, pretty bad. Reworking loans so that a home-owner has a 40 year note? C'mon. Fact is that renegotiated loans are subject to default rates of up to 50%!
People are scared, people are losing their jobs, people cannot pay their mortgages because their bills are piling up and they have less money and the KNOW that things are only gonna get worse.
Tom,
you wouldn't believe the number of people I work with who believe that the Community Reinvestment Act of 1977 is responsible for today's crisis. I suspect the real reason for this irrational behavior by the U.S.'s leadership is their inability to admit to themselves or anyone else that deregulation is the real culprits. In essence, they don't want to stop believing in the Gipper. My opinion only, of course.
Well since it's happening globally - real estate bubbles everywhere - it seems hard to blame the CRA or the Gipper.
This is why blaming the central banks and excessively low interest rates are such a favorite among certain crowds - these practices have been adopted globally in recent years.
Plus the pattern fits the historical record of past crises.
Easy credit, often actively promoted by the government, seems to me to be the universal feature of all these meltdowns.
One question for dan: why, oh why do you hate America so much?
the head has already been cut off of this chicken.
what we are seeing is just the nerves.
i am just making ready the oven, lemon juice, and butta baby
Easy credit, often actively promoted by the government, seems to me to be the universal feature of all these meltdowns.
ac: although I definitely agree with you here, I also have learned that easy credit promoted by govt is not necessarily a pre-requisite for a bubble.
I just finished rereading Galbraith's book "The Great Crash" and one thing he highlights is that the overall level of credit was relatively minor in the boom years of the 1929 stock bubble. At the time the overly cheap credit was coming somewhat from the govt, but moreso from private corporations and individuals.
once the speculative fever hit, little could stop it... since returns were so high. (so 10% interest rates didn't matter when you were making 100%+ on the market).
it was an interesting re-read and challenges many of my assumptions and thoughts.
Fed announces new TTFUD Lending Facility. "Turn that Frown Upside Down"
New Facility Targets Consumer Lending - WSJ.com
I thought HP et al had to back to CONgress to get more $ after they shot their 350B wad? Doesn't the commitment of more funds from TARP require approval?
MOT - that is what I was explaining to my 97 year old grandmother today. She got all worked up after reading the NYT Sorkin article, peppering me with - why didnt they ask these questions about Geithner BEFORE they elected him. So I kind of had to let her in on the fact that he wasnt elected and their wont be any questioning of him. She tossed the paper in disgust.
"Marcel Duchamp writes:
"Charlotte is holding up very well ... Any thoughts on a reason for that?"
Sebastian is holding it up.
Another angle on the inflation front is the money supply number of m-infinity which includes the "shadow banking system". While difficult to quantify this number, it is big and contracting.
By any traditional method inflation should be in the cards. Add in m-infinity and the picture gets a lot less clear.
Free pony for the first appropriate YouTube link!
PeakVT | 11.25.08 - 9:31 am
http://www.youtube.com/watch?v=qI7fXhN0guM
As far as Charlotte, it did not have the housing boom in prices but there is lots of inventory. As the credit issues work through the economy, I expect the market to soften as Wachovia and Bank of America right size. On the other hand, I suspect that DC will take over the lead in drops as soon as the defense budget starts to take a hit. I expect further declines in 2009 as more inventory hits the market, defense contractors lay off employees, etc. Some of the softness might be countered by increase government hiring but there is no way that the government salaries match the contractor's salaries. Thankfully I am still renting.
Ralph,
My thoughts on the issue, the finance sector grew by an insane amount during the boom. A lot of "good people" went into it.
So how can so many "good people" do such bad things. They can't rationalize that they were a part of something that was so bad and failed so miserably and want to blame it on other things.
I'm not putting good people in quotes to mock them or to imply they're not good people. Just as a direct quote.
A lot of these good people are now losing their jobs and a lot of money. Many worked in areas that had nothing directly to do with the mess that Wall St created. So it's hard for them to blame the companies they work for.
They may be good people that deserve to make good money, but that doesn't give them the right to do so at a company that makes money in such a bad way. And yeah it was bad. A business that needs billions of dollars to stay afloat is a bad business.
I had written a bit on different factors related to the credit bubble and factors involved, including the CRA, GSEs, investment banks, etc and tried to consolidate it in this post about who is to blame for the financial crisis that you might find interesting.
overall level of credit was relatively minor in the boom years of the 1929 stock bubble.
oops: should have said "overall level of credit supported by government was relatively minor"
"...whilst shovelling my soylent green for breakfast."
I beg your pardon. As a senior I am one of the prospective ingredients.
So I kind of had to let her in on the fact that he wasnt elected and their wont be any questioning of him.
As Sec of Treasury, he has to be approved by the Senate, so there will be questions asked...
I'm a veganarian. I only eat people that ate meat that ate veggies.
Basel - you're saying we survive til Jan 20? Hahahahha.
"Because, Like Denver, Charlotte did not experience a Bubble market from 2001-2006. For those keeping score, Denver has the best performance over the last six months for which data is available.
JD"
Best performance is a relative term. I think you should change it to least worse. Denver has done practically nothing for about 7 years since its home prices bubbled from 1995 to 2000.
Shelia Bair on Bloomberg is mucho depressed about US Banks. Wait, they just cut over to Hank P. We are now backing pudding and pies for Thanksgiving
As Sec of Treasury, he has to be approved by the Senate, so there will be questions asked...
I'm sure he will be absolutely grilled. I mean the republicans will grill him because he's a republican... and the dems will grill him because he's Obama's choice.
IMO only 2 people might grill him
Ron Paul
Dennis Kucinich.
It is obvious we are in the middle of a crash. Nobody knows how long that crash will be. Once the crash stops, we will linger along the bottom in an L-shape for ???? Nobody knows. It is all hope and speculation. If we look at the facts, the rate of decline is accelerating.
Until the facts (Foreclosures & Bloated Inventory) change, we will have more of the same results.
Westside of LA will get smacked. Just like NYC and other high end areas.
WestsideREmeltdown
Irrational psychology drove the mania. The question should be: what drove the psychology? I'd say it began in the mid-to-late '90s with the upper income spectrum funneling stock profits into a relatively small supply of high end houses. That drove up those prices. Each income strata saw an opportunity to make themselves rich, convinced by the entire investment media, that houses only go up - so why not trade up to a more expensive house? Then by the early 'aughts, with the help of shredded lending standards and "free money", the mania infected the whole income spectrum, bidding up every house in search of the ultimate safe piggy bank that yields 30% a year. Hoocoodanode it would end like this?!
Friday, July 21st, 2006,
HousingPanic, a particularly vitriolic BubbleBlog which is saying something asks:
Realistically, how overvalued are Phoenix home prices?
Obviously, I consider this a profoundly silly question, but to lurk among the BubbleBloggers and their seething commentariat is to acquire an education in a slice of America invisible from this side of the sewer gratings. Notwithstanding the idiotic economic analysis, which is really no worse than the static-market fallacies paraded as profundities in the pages of the Arizona Republic, these sites and not just HousingPanic are infested with a cult-like fever to inflict suffering at second hand, to be sure on people who are in fact guilty of nothing except failing to have drunk the BubbleBlogger KoolAde.
Thats all one. I dont care. The whole of the last century was dominated by the bad behavior of viciously angry wretches, but look where it got them. The BubbleBloggers will someday bawl balefully in private, but they will never, ever admit that they have been very publicly very foolish. You will know and I will know and in the secret chambers of their hearts they will know they were wrong all along. But as long as you dont hold your breath waiting for that contrite admission of error, you should be fine.
Heres where I do start to care. Whenever the subject of Phoenix comes up in a BubbleBlog, the assembled Brown Shirts pile on, for whatever reason.
You can read the rest of the 21 Reasons to Bank on Phoenix at the Greg SwannBloodhound Blog.
See the TTFUD (Turn that Frown Upside Down) Lending Facility is already working.
November consumer confidence index rises more than expected to 44.9
Not sure about the housing market in Charlotte, but I have a friend who works at Williams Sonoma. They are slow and way off last years business. Down about 20%.
i is a realtor in fort worth, tx, and i don't believe the index is accurate for Dallas. I'm closing on a condo that sat on the market for 9 months and is contracted to close 22% below where they were closing a year ago. These were identical units. we have our fingers crosssed the financing goes through and we can unload the thing. 12 months from now, the new owner no matter how good a deal he thinks he's getting today, will be underwater.
Does Paulson really believe what he's doing is a good thing? All of these facilities are incredibly foolish and reckless.
How could any sane person implement them?
He's so far down the rabbit hole, there's no way to turn back. His little "rally" may continue for a while longer. But it will be followed by currency destruction, steep market declines, and ultimately chaos.
Man Paulson was ducking and weaving on the question about get the money from Congress
I just finished rereading Galbraith's book "The Great Crash" and one thing he highlights is that the overall level of credit was relatively minor in the boom years of the 1929 stock bubble. At the time the overly cheap credit was coming somewhat from the govt, but moreso from private corporations and individuals.
once the speculative fever hit, little could stop it... since returns were so high. (so 10% interest rates didn't matter when you were making 100%+ on the market).
it was an interesting re-read and challenges many of my assumptions and thoughts.
And yet the rate cuts of 1927 seems to have an almost exact parallel to the cuts in 1998 in terms of the effect on the market.
E.G. a specific action by the central bank to ease the availability of money results in an immediate explosion of excesses in the market.
More recently the same thing happened again with housing and then commodities.
Again my contention all along has been that the mistake is attempting to keep the party going in order to prevent an economic slowdown.
The same thing appears to have happened in Japan during its bubble period.
So the first $350B was spent on bailouts and gifts to "friends of Paulson". Now he's going back to the original anticipated use of TARP in order to secure the second half? This clown makes me want to throw things on my TV.
I hope he gets what he deserves.
you wouldn't believe the number of people I work with who believe that the Community Reinvestment Act of 1977 is responsible for today's crisis.
I think a case against the Community Reinvestment Act can be made based NOT on what it did directly, but what it did indirectly. Loans going to people who should not have received them, but got them anyway because of the color of their skin, was not the problem. Rather, the problem was that the CRA destroyed the culture of banking.
To be sure banking culture pre-CRA was insular, stodgy, arrogant, but the men who embodied that culture did a good job of intermediation, i.e., borrowing short and lending long, because they were good at assessing character. They had integrity, based on loyality to class and institution, and were an independent source of power, authority and confidence. This confidence and independence is what the government destroyed AND WANTED TO DESTROY. The political takeover of the banking system now undereway is not the beginning of something new. It is a final act in a drama that has been going on for a long time.
TARF.....more like BARF
Buy Assets "Revive" Families.....BARF
What will the come up with next?
Ciao
MS
You guys are stressing me out.
Rule number one: Don't fight bull markets.
Paulson: "I'm going to continue to run to the very end..."
Just what I was afraid of.
Why in my name do they allow this clown to be on TV. He is not confidence inspiring. He doesnt know what he's doing and it shows. The president is the one that should be doing these briefings - but then again, we'd need an articulate and intelligent president to do that.....
Easy credit, often actively promoted by the government, seems to me to be the universal feature of all these meltdowns.
ac | 11.25.08 - 10:04 am |
In this case the consumers can't keep up with the volume of goods coming out of the manufacturing no matter where the factory is located.
YTL:I just finished rereading Galbraith's book "The Great Crash"
Also read consider reading Galbraith's :, American Capitalism (1952), The Affluent Society (1958), and The New Industrial State (1967).
Did Paulson play the charactor of Charlie Babbit in "One flew over the cuckoos nest"?
Ministry of Truth writes:
Fed announces new TTFUD Lending Facility. "Turn that Frown Upside Down"
We need to have a song so we all can hum along.
My new personal ad
Bottles, Gas and Rags seeking match and nearest Citi building..
safe_as_apartments writes:
You guys are stressing me out.
Rule number one: Don't fight bull markets.
Which bull market are you refering to?
Apartments,
News Flash: This isn't a bull market.
Apartments,
News Flash: This isn't a bull market.
Comrade Gavshire Hathaway | 11.25.08 - 10:25 am
snork (spit take)
"Notwithstanding the idiotic economic analysis, which is really no worse than the static-market fallacies paraded as profundities in the pages of the Arizona Republic ..."
The OFHEO live graph site sheds the light.
Just did an overlay of AZ, NV, OH, IA.
I don't know what else anyone could rationally argue, after regarding that overlay. I've had family in Phoenix, since '92. The last 6-7 years were plainly real estate manic, for whatever conglomeration of reasons.
Again ...
( Paper Economy - A Real Estate Bubble Blog )
Anecdotal: Saw a listing in my area today (NH) -- cookie cutter colonial on a couple acres, 8 yrs. old, dropping in price from $344K to $299K. Been seeing a lot more of those big price cuts than I used to.
So I hear him talking, and it sounds like I'm being talked to be a nervous car salesma
Tom,
I'll take a look at your post later.
One of the reasons I enjoy this blog so much is that it challenges our thoughts and assumptions.
Ok, back to work.
Gee. I feel so much better after being briefed by Henry.
Sort of like a nervous car salesman that can't figure out why the car won't start. Or why the washers won't work. And there are no doors.
Otherwise, she's a real beauty though.
This is the most amazing bull market in history! We gained 20% of most bull markets in 2 days! At that rate, given the length of standard bull markets, we are looking at 1000% gains over a few years.
Sorry, CR, some sloppy thinking here.
If you want to make money on this report you must ignore the year over year number. The year over year number will be quite negative for quite a while even after the month over month number turns positive. The investable information is the month over month number.
Why is the year over year number so heavily scrutinized? Did everyone buy their homes exactly a year ago? The one-year-ago level enters into just about no homeowner's decisions.
Leave the drama to the journalists ...it's not worthy of a blog this good!
I didn't see this anywhere: the updated spreadsheet through September.
http://www2.standardandpoors.com/spf/pdf/index/CSHomePrice_History_112555.xls
Not sure if this has been posted yet...
Citigroup's $306 Billion Rescue Fueled by Pizza From Domino's - Bloomberg.com
I am down in SW florida visiting family for turkey day and everybody around me is glum.
Inlaws live in a million dollar condo that last time I was here (3 years ago) they were talking about being worth 3 million. They are seriously considering selling due to stock market losses.
Wife's sister last time I was down here was gushing about how they "made" 200K on thier house (which they now have been trying to sell for almost three years) and now there new-in-2005 development is riddled with foreclosures and they are underwater on the mortgage.
Wife's cousin was busily borrowing and dumping 100K into improvements into thier little piece of the American dream last time I was here and now they have just voluntarily entered foreclosre.....have stopped payments and are going to live there for free as long as they can.
What a difference 3 years makes.
Why is the year over year number so heavily scrutinized?
Seasonality, noise, and other things.
Commissar to Proletarian? Whatsup, Dawg?!?
Ragnarock,
What an ignorant comment. The CRA doesn't force banks to give loans out to people based on the "color of their skin".
It requires banks to service all members of the community in which they serve equally.
So a bank doesn't build a branch in a lower income neighborhood and only service clients from some of the surrounding more affluent neighborhoods. Building the branch in the lower income neighborhood to save on real estate costs.
If a bank doesn't want to service a particular segment, they can choose to not build a branch in that area.
"subsisting on Domino's pizza for dinner"
The horror.......horror..
Ciao
MS
money.cnn.com:
FDIC says 171 banks were on its �problem list� at the end of September, most since 1995 and up from 117 in June. More soon.
CRA : HousingBubble :: chinese tea prices : house prices
On a brighter note, if we can just get them to backstop the utilities and energy we will have it made.
It will be a new pony EVERY day!
As long as housing prices are in free fall, the paper on subject property is worth pennies on the dollar. Hank can buy up a much as he wants and the prices will continue to fall. Jobs are what matters and he is doing nothing to make that better. What a clown!
Tom writes:
Ragnarock,
What an ignorant comment. The CRA doesn't ...
CRA hasn't been enforced during the Bush admin. Talking points from right-wing whack jobs, nothing more
As you would expect, the real numbers are much worse than even Case-Shiller indicates.
Traipsing around Las Vegas in Zillow is hilarious these days. The Zestimates are nearly double asking prices. You'll zoom in on a neighborhood and see a dozen $260K homes and then one (of the same) for $140K -- that's the one for sale (and not moving).
Prices in my relative's NLV neighborhood are almost back to where they purchased in '94.
Handing by a thread:
My point exactly. Not saying that the ruminating deflation verses inflation is not useful, but whether or not unemployment jumps and recovers is really the end-game. We can handle massive deflation/inflation if we're working and can meet our basic needs. Not so much if we're unemployed.
In the meantime, the Fed is both the lender and (now) buyer of last resort -- Wall Street's pawn shop.
Commissar to Proletarian? Whatsup, Dawg?!?
Just for fun as I am moving from computer to computer getting the kids ready for school.
With these billions being thrown at Wall St., Paulson and Co. are pushing Obama to the left in regards to Obama's initial policy initiatives.
blackhat,
"Not so much if we're unemployed."
This things going Mad Max.
Nostrovia,
hahahuhu writes:
Can anyone tell me why Phoenix had such a boom? I mean its just a hot, who was buying all those houses ?
hahahuhu | 11.25.08 - 9:51 am | #
Retired Canadians.
.
Basic industries laying off but retail holding up in our area. That shoe will drop after the holidays.
Well before they actually got the TARP money I thought the plan was to buy up MBS at some fantasy price level and then the entire system could use that one (or series of sales) as it's new input level. That actually would have been quite a bit smarter seeing how the system is allowed to ignore any price valuation it deems to low as a distressed sale.
Seems too easy to allow the write-downs to become write ups...
Fools...all of them.
Ciao
MS
Zillow=Rich Barton
'nuff said.
Ciao
MS
@ Assume Crash Positions!
i don't hate America. I hate its leaders.
Rob Dawg,
LOL on that Phoenix realtor site. Prices down 4% since last December. Too much!
Nostrovia,
" On the other hand, I suspect that DC will take over the lead in drops as soon as the defense budget starts to take a hit. I expect further declines in 2009 as more inventory hits the market, defense contractors lay off employees, etc. Some of the softness might be countered by increase government hiring but there is no way that the government salaries match the contractor's salaries. Thankfully I am still renting."
franz | 11.25.08 - 10:09 am | #
Franz:
You have answered a question I have as a DC resident. I do not see prices of condos in my neighborhood dropping anything like 20+%. In fact, I'm not sure they're dropping much at all. So I was wondering how the C-S index could report such a large drop for "DC." Now I realize it's not DC it's talking about, but Arlington, Fairfax, PG, Montgomery, etc., where the downturns are occurring.
When the new socialist administration hits town, government jobs will expand exponentially and the "real" DC real estate market will be in fine shape. (Note there is a wistful editorial in today's Financial Times, which has just discovered that virtually all of the job growth in the UK since
Blair took office has been in public sector jobs. The FT is shocked, shocked . . .)
FED should start buying crude contracts or the broad market is toast. It would also compel developments of the plug-in pony.
Rather, the problem was that the CRA destroyed the culture of banking.
This is an ideal comment to post on a blog where people know nothing about investment banking, commercial banking, or mortgage origination or securitization.
As in, not this one.
I do not see prices of condos in my neighborhood dropping anything like 20+%.
Where are you JohnR? Here in Alexandria, we are down probably 25% in condoland.
dan writes:
@ Assume Crash Positions!
i don't hate America. I hate its leaders.
Since the leaders are elected by the people, and the people comprise the nation, what is it that you don't hate? The idea of a country that exists geographically on the North American continent, presumably peopled with only people that agree with you?
Anyone whose been through a BK or seen companies liquidated recognizes the USA for what it is, PAST THE BRINK. DEFACTO SOVEREIGN DEFAULT.
Hey Armageddon doesn't seem so bad. Except when it is.
Somebody kicked the rally in the nuts! /Cartman
Nostrovia,
Misean,
Which is why I fully intend to redirect my network architecture skills into making the following rousing-type political speeches: "Who runs Bartertown?"
Of course, so many of my questions are purely rhetorical, but it's important to agree upon the facts.
Privateer Gerkinov, don't get me started about Canadians. That is one group that is even worse than the US when it comes to financial decisions.
With respect to the stock market, people look most often at day to day changes, not year over year . If the stock market goes down by 2% today, the headline will not be "Stocks in freefall...down 40%!" (from last year). This should be a clue as to how to look at this housing data...month over month is what matters. Period.
Very few houses were purchased in the past year, relatively speaking. So why not feature the two-year change, or the three-year change? That data is available. Why not? BECAUSE IN A DOWNTURN PEOPLE ARE DRAWN TO THE MOST NEGATIVE NUMBER. If you invest on this basis, it is your loss. If policy is based on this number, it is our collective loss.
Ian said: "Not sure if this has been posted yet..."
Hilarious!
blackhat writes:
Misean,
Which is why I fully intend to redirect my network architecture skills into making the following rousing-type political speeches: "Who runs Bartertown?"
Just had a flash of Beard riding around on Bald's back...
uh, oh, somebody pulled out the canuk card...
/ducks
CRA hasn't been enforced during the Bush admin.
No need to. Credit was easy. CRA only needs enforcement when credit is hard.
Where are you JohnR? Here in Alexandria, we are down probably 25% in condoland.
boycott | 11.25.08 - 10:55 am | #
I'm on Connecticut Avenue NW above VanNess. Great bus/subway access, etc.
A lots of extracted CA "equity" went into other investment properties nearby, and Arizona was a prime target.
Since the leaders are elected by the people, and the people comprise the nation...
The Hobson's choice of America: I'll let you choose any politician you like, so long as he's shit.
I'm on Connecticut Avenue NW above VanNess. Great bus/subway access, etc.
JohnR(VA) | 11.25.08 - 10:58 am
Near the embassies?
Basel Too: Re: Phoenix, "AZ".
Have you seen the New Mexico license plates? They say "New Mexico, USA" on the bottom.
"When the new socialist administration hits town, government jobs will expand exponentially and the "real" DC real estate market will be in fine shape. "
I hope this is sarcasm, otherwise Rip van Winkle is now posting. Bush has expanded the government beyond all previous admins, run up deficits greater than all previous admins combined, and his little friend paulson is tunneling future tax dollars into a black hole. Kleptocracy in action.
Please, get a cup of coffee and catch up on the past 8 yeaars.
"A lots of extracted CA "equity" went into other investment properties nearby, and Arizona was a prime target."
DING DING DING!
Nostrovia,
Roots 'n' grubs. Shoelaces and leather belts. chair caning. armchair stuffing. Lapdogs and hamsters.
What's on the menu in a year's time for urbanites. Oh, and 200 year hardwood banisters from your Brownstone kicked out for firewood.
Soup in dinner jacket and tie.
Phoenix bubble? Same with Las Vegas. Blame California "investors".
Near the embassies?
Volker the Viking | 11.25.08 - 10:59 am | #
Yes. Great, overwhelming police presence as a result. The new Chinese embassy is something to behold. They obviously wanted to one-up the Brits.
Well I can say in my area of SF, Marina/Cow Hollow, they are still in the bubble. Several houses under renovation also.
Have noticed a certain condo that Sotheby's is the agent on is very slow to fill, but with a 1 bedroom going for right at 900k it is easy to see why...
@ REL
It's a nice argument. My point is this: I have no reason to hate America, per se. I have traveled the entire land, lived in Texas, NY, CA, VT, MA, New Orleans have met wonderful folks, consumed wonderful foods, etc. etc.
However, I feel it fair to say I hate our corrupt political system, I hate our elected leaders, I hate lobbyists, I hate the growing class divide. And PLEASE don't give me the reductionist arguments: "Well if you don't like it, why not leave?" or "It's the best system around."
I hate what we are, what we have become. I hope we will change.
Comrade lurker we must be neighbors. Where in the Marina District?
Agree with fried,
and since DC is my backyard, housing still declining, exurbs cratering. newbies to this area don't remember the crackwars--did wonders for now hip places like columbia pike, adams morgan, waterfront...
Ministry,
I live on the corner of Chestnut and Divisadero.
"Lower" Pacific Heights here. Across the great social divide.
reinflate the credit bubble is the only hope to keep the shrinking GDP from creating a larger depression then the 30s. Massive unemployment in the growth sectors, finance,RE,Advertising,Marketing and sales needs to be contained.
This is a political/economic decision to keep the sheep busy how effective and long lasting can only be guessed.
As someone who has worked in banking..CRA is a joke.
If you actually read the law that becomes pretty clear.
Blaming our predicament on it is asinine. Almost as asinine as CRA itself.
Personal ad update-
Pitchfork seeking tar and feathers..I can be a little pointed at times but I do have this cool house I mean tarp thingy the govt assisted me with..
been known to hang around for years before intended use comes about...
"Bush has expanded the government beyond all previous admins, . . ."
I thought the complaint from you guys was that Bush outsourced too much federal work and that letting private contractors get work was unfair to the struggling federal workforce. No?
boycott writes:
I do not see prices of condos in my neighborhood dropping anything like 20+%
I don't see it here either. Only overpriced Condo's sitting on the market for 2-3 years,stagnant like pond scum
JohnR(VA): Is there still a restaurant called Omega, Cuban cuisine with award winning chicken enchiladas?
What about Duke Ziebert's (sp)? Still serving up big assed dill pickles?
Sing Muse of the Tears of Mr. Market...
RE and CRE has absolutely crashed in SWFL. The are 27,000 foreclosures in process in Lee County. Empty new and used strip malls by the hundreds. Prices on RE down by half. Ugly stuff.
Volker:
Mentioning the Omega brings back memories! I lived across the street from the Omega in the early 60s. I doubt if it is still there, but Adams-Morgan has plenty of similar places. No parking, though. The L-2 bus that runs down Connecticut fortunately stops right at 18th & Columbia Road, so I must revisit soon.
Duke's is no more. There is a restaurant in town run by one of his pals, but I have not visited it. Duke was a throwback!
Yen strong, l-bond strong, oil weak.
Put the rally hats back on the rack.
I've been looking at a house in the suburbs of Washington DC. The homes i'm interested in cost about a cool mil at the peak. Now they're asking 750-800k. Consistent with a price drop of 20-25%.
I think i'll wait a little longer and see if I can snag one in the 600s. The thing that's a killer is the property taxes. They're based off peak prices.
any word on baltimore? what about all the bio tech building @ hopkins that's going on there? won't the houses in fells point and butchers hill be able to retain their worth?
Duke's is no more. There is a restaurant in town run by one of his pals, but I have not visited it. Duke was a throwback!
JohnR(VA) | 11.25.08 - 11:11 am
Met the man once when I sampled his crab cakes. Land mark establishment.
Ahhh... the good old days.
JohnR(VA):
John, you can't lump every commenting visitor into the 'you guyz' net...
...the government expanded both fed jobs and contractor jobs. Look at DHS as an example. Some agencies went A76 but basically this was deck-chair realignment. The impacting factor in this region will be wages going down. By the way, billable rates are going down. I know govies getting re-org'd into lower GS levels. Contractors get to do more for less, etc...
...government ought to work efficiently, reduce and starve in some places, bolster in others as necessary...
my two cents is that it needs to be starved in quite a few areas, especially the large number of SES managers, and other GS15/14 personnel. Time in service does not equal competency...
"I'm on Connecticut Avenue NW above VanNess. Great bus/subway access, etc."
Yes, one of the things DC has going for it is good public transportation, and also lots of cabs. Between them you don't really need a car if you stay in town.
Does anyone know where you can find similar information regarding the Philadelphia RE market?
"much federal work and that letting private contractors get work was unfair to the struggling federal workforce. No?"
You mean like Noncompetitive contractors? Shame on them!
Is there really any doubters left?
Jesse's Café Américain: Russian Expert Says US Headed for Collapse
Destroyed the bond short-end, Let's go after the long-end now. Bond vigilantes? Har!
charlie writes:
I've been looking at a house in the suburbs of Washington DC. The homes i'm interested in cost about a cool mil at the peak. Now they're asking 750-800k. Consistent with a price drop of 20-25%.
I think i'll wait a little longer and see if I can snag one in the 600s. The thing that's a killer is the property taxes. They're based off peak prices.
You can always challenge your assessment after you buy, charlie. The data should work in your favor by the time tax season rolls around.
I don't completely agree that prices in DC have dropped 20+%. Certain overpriced condo projects may have been slammed, certainly, but thus far it is homes in the exurbs that are pulling down prices. In the inner neighborhoods, sellers are still trying to hold out for 2005 prices. I see many empty houses with unrealistic numbers, and that doesn't seem to be changing.
Marcel Duchamp, thanks for the great link to Paper Economy. I don't know if everyone has ignored your post because you aren't in the CR posters' clique. The OFHEO chart is a great tool/toy. Forget Phoenix. I plugged in California and North Carolina. Ayayay!
The Paper Economy graph is good for states. Doesn't work right for metro areas.
flaminia said: "Marcel Duchamp, thanks for the great link to Paper Economy. I don't know if everyone has ignored your post because you aren't in the CR posters' clique. The OFHEO chart is a great tool/toy. Forget Phoenix. I plugged in California and North Carolina..."
Ditto for me, Marcel. The charts explain why the real estate market in my neck of the woods (Raleigh) was (and still is) vastly different from that of so many others who post here. I never was a real estate shill or blind to what was happening around me...the market was simply, and significantly, different.
Sebastia
It's pure deflation. The prices were not sustainable because it was cheap money. One the deflation stops, get ready for massive inflation.
I went to the paperdinero site and punched in my area, Scranton & Wilkes-Barre, PA. It shows that in the last year, home prices are still climbing. I'm told it's because people are coming from NY and NJ in search of a cheaper place to live and that richer folks are buying 2nd homes here with the idea of eventually coming out full time.
IMO, CRA finger-pointing is racist 'code' -
"Why is preliminary Q3 GDP revised down to 0.5 percent?.."
"So how many times has the $700 billion been spent already?..."
"Is there anything they won't buy or bailout?..."
"How is supporting a losing proposition going to restore faith?...."
"Is there a logical reason for such inanity?............"
"The first thing we need is disclosure...."
"How about a law that says......"
"It's time to create an economic system that is honest...."
"The FED should start buying ........"
".....we need a joint venture partnership...."
".........most people aren't even aware....."
"Nothing like keeping the common people in debt...."
"....the fed will try to do whatever they have to in order to make things go up....."
"We have reached a point where the govt. has lost control....."
"No one has even attempted to calculate these endless guarantees and the ultimate liability for all this leverage. They are pure black holes."
"People are scared, people are losing their jobs, people cannot pay their mortgages because their bills are piling up and they have less money and they KNOW that things are only gonna get worse."
"..........................yep.............this thing's going Mad Max....."
More Fun With Graphs:
FDIC Graphs Show the Extent of Financial Crisis « Your Mortgage or Your Life…
FDIC Graphs Show the Extent of Financial Crisis: More Institutions Report Declining Earnings, Quarterly Losses; Lower Asset Values Add to the Downward Pressure on Earnings; Growth in Reported Noncurrent Loans Remains High; Nine Failures in Third Quarter Include Washington Mutual Bank; Failure-Related Restructuring Contributes to a Decline in Reported Capital.