does the market pause while we all rush over to the new thread?

One thing you cannot forget about what has happened to RE in certain high end markets, is that in the past few years, the rich became much much richer, and more people joined their ranks. For many folks now, the prices for prime real estate are still just a pittance of their net worth, even after you send the stock market down 50%. For these folks, there is no better market to buy into. There is only so much high end stuff in the US. It used to be that there were only so many rich folks. But Id dare say that the number of rich folks over the past few years, grew far far faster than the amount of superprime housing.

check out the realestalker.blogspot.com website, if you want to know what Im talking about. Once youve squirreled enough money away to be obscenely rich, you should also have put a sizeable chunk of it away that is not sensitive to market crashes. Super rich folks can hold lots of cash. I think one thing we've neglected is that when all is said and done here, the range between topend resid RE and bottom end is going to still be much wider than ever in history.

The super prime prices may not keep going up, but they really dont have to fall that far if at all, unless the recently made rich are dumber than I think they are.

SF proper will be a good way to track the tier that is right below super high end. So far, rents are the highest they have been in history, and anything nice in the city hasnt fallen at all as far as I can tell. Other part of the city are down a bit. But we still dont know how much of this is being propped by option arms that havent converted. And of course, we dont know how many will be able to pay the new tab for the mortgage after reset, but Id think its a far higher share than most places.

I keep waiting to be proven wrong on this, and I would LOVE to be, but Im worried that it may not happen.

On the plus side, there are a lot of nice higher end east bay places that ARE falling, so that gives me hope that it is just a matter of time.

Now the question is... does anyone want to be long overnight?

"LAST CALL!!!!!"

If the gov't will foot the bill, why pay your debtor? Of course, consumer deliquencies are increasing.

C&D loans are short for "Catastrophic and Destructive" Loans these days, not Construction and Development.

just in wave analysis, this looks like a 5 year climb up. i would find 30% delinquency not unlikely.

I like to ask a construction loan officer the following:

"On a scale of 1 to ten, five being highest, ten being lowest, and 1 being somewhere in between, how would you rate your decision to give a C&D loan to build out infrastructure on a planned 500 lot residential development parcels even though the housing market is obviously extremely overbuilt and land prices are collapsing?"

The one exception was consumer credit cards (declined slightly), although charge-offs for credit cards rose in Q3.

Charge-offs? I thought they got rid of mark-to-market. Weird.

PeakVT,
You know I'm retail. TGT has it's own card - it's marked to market.

Noooooooooooooooooo...

::stops to breath::

ooooooooooooooooooo...

::stops to breath again::

oooooooooooooooh well. There is always tomorrow.

Pissed Off,
Fear mongering - just a bit ??

No green for the gold bugs. Wonder where those dollars were dumped? Oh, yeah, straight into the smoldering pit.
Oil down, Oil companies up.
And someone was accumulating silver, it appears.

Now if only they could print new rule books as fast as they can print dollars...

Arrested Development movie seems to be going ahead, maybe the market was rallying on that. Or maybe it was rallying because of the dozen or two points I've thrown out before that are more concerned with market mechanics than discounting future cash flows

It's useless to be right about a downturn if you cannot prove that same judgment on an upturn.

Exhuberance continuing after hours ... SPY up a buck since close.

sm_landlord,

"Now if only they could print new rule books as fast as they can print dollars... ;-)"

You're apparently unaware of just how Calvin ball is played.

Nostrovia,

sm_landlord writes:
Pissed Off In California writes:
"Multiple bank CEOs have stated that they are shocked that people are walking away from their obligations."

What else can they say?

What they can say is that "walk away debt" is as predictable as any other economic phenomenon {not very}. On the other hand there are models. Consider the TGT conference call. That is one team that is on top of this particular game.

Fear is easy to hype. Reality is that - thus far, we are not out of normative model for credit card write offs. Honesty is a good thing. Fear is more profitable.

Jus sayin -

Slightly OT, why did Met Life and Prudential go off the cliff the last couple of days? I haven't seen any indication that the "toxic" assets have gone TU in a public forum.

steelhead writes:
Slightly OT, why did Met Life and Prudential go off the cliff the last couple of days? I haven't seen any indication that the "toxic" assets have gone TU in a public forum.

steelhead | 11.18.08 - 4:21 pm

Look harder. Like at this post above:
nova: Pony Shampoos | 11.18.08 - 4:07 pm

CMBSter is comin' a callin'.

Icelandic Kronor not out of the woods yet

Pissed Off In California writes:
6 months ago I was convinced that bank CEOs were simply lying, now I'm convinced most of them are so removed from real-life that they truly are shocked by the change in consumer behaviour towards paying off debt.

I'm actually more scared now then I was previously about how badly this is going to turn out.

6 months ago, I was convinced you were credible.

I'm actually more convinced now that you are not honest and spread fear only to improve your immediate profit.

Buy hey, I'm not kidding.

6 months ago, I was convinced you were credible.

I remember the first time I used the internet.

Pissed Off,

I'm sorry, most honest disagreements on the market are in timing. You obviously hold a long term view. Mine is extremely short.
I actively trade. I don't spend the time to know the detail you seem to have your finger on and then do nothing. You must be extra-ordinarily rich.

S&P rebalanced today in the last hour with Budweiser becoming part of InBev. Buying across he board of shares and index ETF.

Regular slumping will resume tomorrow as scheduled.

I'm convinced most of them are so removed from real-life that they truly are shocked by the change in consumer behaviour towards paying off debt

One of the more interesting aspects of the data-mining & theory is the impedance. People just don't THINK well. Now, to me, that's shocking.

But I see it over and over again in the graphs. For instance, Mish likes to argue about how free markets have so much power but time and again, Mish ( and Roubini ) have called an event which was clearly in the making but "markets" couldn't figure it out.

I've wondered for years if they're lying or deluded. Here's another example. I had a guy who faked his resume and I said, "You can't do that".

he said, "What?"

I said, "Claim something you haven't done. It's lying".

And he said, "No, it's not. I can DO the work"

I was stunned.
He HONESTLY thought he wasn't lying.

This is Generation X, man.
I'm sure it shows up in boomers, too, but wow... I just couldnt' believe I'm talking to a guy who literally does not know the difference between truth and lie.

yagij-

and the most telling thing to me is that somewhere sits Andrew Fastow, in prison, for creating and trial-running the entire level 3 asset valuation system that is utilized by every major company that bought any of this shit in the world.

I bet it pisses him off when his friend "bubba" has his daily go at him.

That's gotta hurt.....in both ways.

Ciao
MS

The financial shenanigans of the last year should have sparked mass protests in D.C.

We actually provided capital which will be used for bank dividends and bonuses. Health care - NFW. Affordable college education - NFW.

A society that bails out the wealthy at the expense of the majority and its future citizens is truly sick.

crispy&cole writes:
Is this divy safe? 454%

http://finance.yahoo.com/q?s=ggp

As safe as houses

Plenty of examples of resume fraud at senior levels over the last few years in the press

those guys knew they were lying.

this guy didnt' seem to comprehend that a resume is experience, not ability.

MS writes:
I bet it pisses him off when his friend "bubba" has his daily go at him.

That's gotta hurt.....in both ways.

MS | 11.18.08 - 5:00 pm

As all techies know, there is a price to be paid--a concrete premium--to be a first adopter. Apparently, Mr. Fastow wasn't a techie or decided that since Steve Jobs keeps screwing him as an early adopter that he was ready to adjust his risk tolerances.

And technically, I think it is "thrice ways" 'cause you don't know what kind of collateral "Bubba" uses in his negotiations...

...just sayin'.

Wow, I never thought I'd see a CR comment thread go quiet like that. Bottom here?

Nah, I go hit the treadmill at market close, every day, up or down.

"falsitudes"

Ciao
MS

The financial shenanigans of the last year should have sparked mass protests in D.C.

The internet is the new opiate of the masses. We would rather talk about it than do something about it. And then one day the internet just stops. Isolated, nowhere near organized enough to protest.

OT alaska senate results
11/18/2008
12:39:27 PM (4:39 EST)
Begich, Mark \tDEM \t146286 \t47.56%

Stevens, Ted \tREP \t143912 \t46.79%

Eric writes: Wow, I never thought I'd see a CR comment thread go quiet like that. Bottom here?

Lunch in Japan. Happens every day.