Some asshat on CNBC pointed out the sliver lining: The year over year changes have stabilized at 19%. Like saying the titanic is only taking on 20000 gallons/minute, same as the last minute.
Dawg- perhaps it was that houses are sticky because sellers can't get rid of the assets. Nothing is moving in Cthulhu's 'hood, and the short sales have now started to appear. (at ridiculously high prices, nonetheless)
....probably like matty,.....I don't notice any decrease in my property value (see Las Vegas). Is it because it's paid for, I live here, and am planning on literally being buried here?
Dawg,two signs of stickiness in my 'hood.Wishing prices in good neighborhoods are not changing and Brown Trousers are MUCH more popular than last year.
When we are building houses at approximately 33% of capacity, we may be nearing a bottom. OTOH, when the capacity for Industrial production goes to 30%, it just might be game over......
And the slope gets more slippery.. This housing metric is the only one worth looking at anymore, as it compares actual price declines of the same houses, Year Over Year (YOY).
In Los Angeles, prices have now eroded in the high end markets. Pacific Palisades represented the first $1,000,000+ price cut, using the Case/Shiller Method.
5697 sqft House, 14,000 sqft Lot
SOLD 7/10/07 $3,320,000
SOLD 12/11/08 $2,200,000 (-33.8%)
I receive listings of bank owned properties in suburban Boston. The prices are about 30% or more lower than comparable regular listings.
I received one yesterday that had sold in 2005 for $445k that the bank is now selling for $220.
"At least we're not dragging this out for 16 years like Japan."
That's because every frigging country is in the same boat and they are all trying to do the same damn thing, borrow money, spend money, print money. This is crowding out ALL private investment and making the frigging situation WORSE. Stupid bastards.
Dawg,two signs of stickiness in my 'hood. Wishing prices in good neighborhoods are not changing and Brown Trousers are MUCH more popular than last year. -Tom Stone
Not that kind of stickiness. Eeew.
As I mentioned yesterday with the house 666 days on market that isn't "sticky". It isn't going to sell. Wishing prices have lost their predictive value now as well. And that's the big problem at this stage. Very little data retain their past predictive capacity.
That graph crax me up. It feels the need to identify what state Phoenix is in, along with Detroit and Minny, but not Miami (FL or Ohio?) or others. Yuks.
Mr. Beach writes:
"Still no move in prices in posh California. Palo Alto, ie, is still around $1000/sqft."
I have noticed a couple of price cuts in ultra-high end stuff, meaning $10 million plus. But I haven't seen anything significant in "regular" high-end, which I think of as the one to five million range expressed in bubble prices.
My area is still between $800 and $1100 per square foot. Will the C&D at First Fed affect that? Remains to be seen. The market seems to still be frozen.
So whats the surprise? Housing has another 20% down to go - maybe a little more. With the government printing money buying good RE in 18 -24 months will probably be a decent place to park some money.
I am still waiting for this "stickiness" everyone assures me applies to housing prices on the way down.
I actually think that these are sticky, relatively speaking. Short of a long burst of hyperinflation, we're looking at a down-trend for the next 6 years or so.
Where I am you have to look at the individual properties because of the mix and low volume.One or two high end sales skews the median drastically...we have 50% or more to go before prices for a 3/2 in a good neighborhood are in line with incomes/rents.
It really is nothing more than the cheap money being withdrawn from the market.Make someone have to put money down....and they are gone...F-U. This mess has made it so NO one has any money left to put down. Thanks boys in Charge...Mission Accomplished!
this is really OT: but it seems like every bar or eatery I sit in here in Cambodia I'm enveloped in a cocoon of pot smoke... time to get rid of PM Hun Sen and import Mike Bloomberg to take all of our fun away!
Late to the party, as is Houston - lagging due to strenghth in energy prices over the summer - that and the ease of building made for a much more limited run-up in prices as well.
I don't know why people in Dallas haven't gotten scared yet, but it is coming. The suburbs of Dallas have been continuously sprawling for a few decades. There are plenty of overpriced houses all over the metroplex.
University endowments collapsing: mal | 01.27.09 - 9:39 am | # ---- Can I haz entire article plz?
It is a side fascination of my own to see how the Ivory Towers of Education hold up against the Tides of Collapse and Hordes of Change. Any and all articles/insights are appreciated!
I think, 'sell now, or be prepared to garden those tulips.'
There was a blurb on NPR this week - IIRC - about the end of WW-II when the dutch were starving to death as they watched the allies marching east towards Germany, just to their south. They discovered you could boil those bulbs and make a kind of food...I suppose this amounts to ripping off the crown molding and using it to heat the place...though that's tough given the height of ceilings in these McMansions and the shift to Natural Gas "fireplaces".
"NEW YORK (Reuters) - Consumer confidence fell to a record low in January as a downtrodden housing sector and worsening job prospects kept the country in a somber mood.The Conference Board, an industry group, said its sentiment index fell to 37.7 from a revised 38.6 in December, confounding forecasts for a small uptick."The beatings will continue until morale improves!
I think chart 2 gives and interesting way of looking at things. Since C-S is a nominal index, mentally draw a line at about the 3% level (apx the avg inflation over the period) When the area under the curve belwo the line starts to approach the area above the line durring the boom, then we can think about the housing price decline being over. That is a long way off.
MSM news last night in Vegas: Local coffee shop advertised for a dishwasher. Over a hundred applications. The newest casino venture in Vegas needs 12K employees - over 63K applied.
Housing prices in Bryn Maw (Philly's prime old money suburb) are down 25% for houses over a million but only down 2% for houses under 500k.
I wonder if the stickiness of the lower end homes has to do with Philly not being included in Case Schiller index? (i.e. info is not readily accessible)
Heartland Payment Systems stock (HPY) was hit hard in the wake of what is being described as the biggest single breach of consumer and financial data security ever. The company issued statements Friday (1/23) in an effort at damage control in which the CEO compares the potential industry-wide impact of the breach to none other than that of the Tylenol poisonings of some twenty-five years ago that nearly brought down the drug maker.
Mr Beach,
Confirm: 1000 per sq was what our 50 year old PA rancher went for in Nov.
Hiding out in the Sierras waiting for the crash to hit the PA area so we can move back. Waiting Waiting Waiting
The wife is going cabin crazy as she loves to garden and at 7 degrees outside that is not possible. Did some snowshoeing yesterday and maybe so ski runs today if the temperature gets up to the mid 20s otherwise more cabin fever.
Re: High End
A young couple was talking to us as we were moving out about their parents trying to sell at $3.5M in Atherton for a year with no bites. They lowered it to $2.5M with still no bites.
OT, but I am keen to see what story AMZN spins for their earnings release today...analyst estimates are coming in at $0.39/share, down almost 19% from last year 4Q of $0.48/share.
The thing that has me really wondering is that comScore did not release any total holidays online spending press release or a total year online spending press release for 2008...
It's time for our monthly comment that Krugman and CR's theory about flatland and zoned zone still doesn't seem to fit the data. Phoenix and Las Vegas ARE NOT ZONED! But maybe CR is seeing the light, since I don't think he mentioned the theory this time around.
I don't know about Condo sales but the waterfront developements have locked up. Several thousand acres near Port O'Conner, along the intracoastal began development a couple of years ago, I hear the title companies have begun working foreclosures.
A 800 acre deal near Palacious also appears to have stalled.
I have a good buddy with a home in Matagorda. Prices of individual properties are still holding up well. Activity has slowed but prices are not off. That is the case wtih large acreage tracts in most of the state. To date less activity, but stable prices.
"Duke of Con Dao writes:
I see Dallas on the tail end, are they just a late to the party or what? also, anyone have any info on condo sales in the South Padre area of TX
Duke of Con Dao | 01.27.09 - 10:04 am | # "
Texas in general.
High property tax rates (no income tax) makes the advantage of home buying much less on a financial basis.
Stiff home equity laws on the books since the 80's bust.
Stiff state regulation of the mortgage industry after the 80's bust.
Lots of land and a commuting populace make building further out possible which moderates prices in the interiors.
Ever increasing population due to higher birth rates and move-in population allowing for builders to continue to build while the overall economy was down.
Less zoning concerns so apartments and new homes can be built readily maintaing mortgage/rent ratio.
All these factors equal an environment where prices could not rise very rapidly and therefore not fall like other cities in the index.
yesterday's existing home sales showed a drop of 5k in one month from 180k to 175k...to me this was the more important and lesser mentioned stat..it means that people in homes are still seeing severe deleveraging, no matter how many homes are sold...
Yes I am wondering what accounting BS they will be allowed to get away with yet again. Putting the sale of an asset in the operations "bucket" last time was just too cute.
All these factors equal an environment where prices could not rise very rapidly and therefore not fall like other cities in the index.
A C Shareholder
I agree that prices had a hard time going up. If they did, some developer would just build a new community a couple miles farther away. But I don't see where the jobs are going to come from to support all the people who live in the suburbs. IMO, prices could fall very hard.
You're right -- incomes don't affect rental yields except indirectly.
The deflationists say look out for falling rents. That tends to make renting more attractive and contributes to falling home prices. What they miss is that incomes fall as well, so as long as home prices fall more, the incentive to buy increases. I believe there's a rental yield -- somewhere around 8% -- at which it makes no sense to rent if you can save up a downpayment.
The problem is we are far from that rental yield today except in places like Oceanside, CA, where subprime foreclosures have already devastated the housing market.
"All these factors equal an environment where prices could not rise very rapidly and therefore not fall like other cities in the index.
A C Shareholder"
Just remember that places where appreciation was relatively low during the past 7 years are just as succeptible to foreclosures as markets with greater appreciation/depreciation, because the low appreciation markets have less "equity" cushions. A relatively small percentage decline is painful there and puts many underwater. For this reason, Dallas, Houston, and Denver are at great risk especially with the collapse in oil prices.
Across the whole of the UK, 49% of the economy will consist of state spending, while in Wales, the figure will be 71.6% up from 59% in 2004-5. Nowhere in mainland Britain, however, comes close to Northern Ireland, where the state is responsible for 77.6% of spending, despite the supposed resurgence of the economy after the end of the Troubles.
Even in southern England, the governments share of spending is growing relentlessly. In the southeast, it has gone up from 33% to 36% of the economy in four years.
Sril(Unrated) writes: \tThe Link on CR's post is pointing to October 2008. Updated Link for November 2008 - http:// www2.standardandpoors.com...tory_012724.xls \t Sril | \t \t \t \t01.27.09 - 10:11 am | # Thank you!
latesummer2009
Your are right. Case Shiller is the best.
Only things to watch out for are :
1) The numbers today represent prices agreed end Aug/ early Sept on average. Deals being done today are FIVE months later. So suggest one adds at least -5% pts to the fall from peak percentage change numbers.
2) The CS index excludes most houses built in the last ten years (and all appartments). As the price falls have been concentrated in the new stock and apartments, the CS index is overstated.
Both of these lead to a conclusion that the real number today is much worse than the one quoted. Looking on the bright side (for banks / sellers and the government), it may also means that we are nearer the point at which prices cease falling than the charts would suggest.
The sales of large tracts outside Houston have stopped. We assume they have gone down but there is no market support. I mean a sale and resale you can point to and argue prices are off xx%. After you get past the leading edge of the urban sprawl prices have always fallen off sharply. Beyond that there are still sales, but far below what they are asking for the finge tracts.
Tulips and Holland. The man across from me at the community gardens was from Holland. He never grew tulips. He also got very irate when I asked him, because of his accent, if he was German.
"It is a side fascination of my own to see how the Ivory Towers of Education hold up against the Tides of Collapse and Hordes of Change. Any and all articles/insights are appreciated!"
That's an interesting one. I'm inclined to mention the tourists in Asia who, seeing the tide roll out, wandered on to the sand to play with all of the nifty items that were revealed. This was of course a tragic mistake; the storm surge that followed was catastrophic.
The academic equivalent of this analogy is to hold a budget meeting, appoint a "special" task force, or to crank up a long defunct standing committee for "emergency" sessions.
The net result of these various meetings invariably creates debilitating controversy, endless debate about the validity of the underlying data, and then, eventually, some vague document that waffles endlessly only to conclude that "something" should be done, only what exactly is left unsaid, or merely alluded to, because the factions that endlessly wordsmith the document have to assuage their various constituencies.
All of this is done in the name of the students, of course.
On good days it feels like the committee in the movie Life of Brian. On bad days it is a YouTube video of the Tsunami.
Everday brings more sales calls. Plus the "we have accounts in that area. I would like to pop in."
I never have gotten this many calls or requests to "pop in."
Across the whole of the UK, 49% of the economy will consist of state spending, while in Wales, the figure will be 71.6% up from 59% in 2004-5. Nowhere in mainland Britain, however, comes close to Northern Ireland, where the state is responsible for 77.6% of spending, despite the supposed resurgence of the economy after the end of the Troubles.
Even in southern England, the governments share of spending is growing relentlessly. In the southeast, it has gone up from 33% to 36% of the economy in four years.
Anonymous
Maybe not so surprising that the UK is flirting with bankruptcy.
I disagree Pearson. I would like to introduce you to my friend the tax man, you can call him Property Tax. I would think a typical property tax equates to way more than 8% of rent a year alone.
Moreover, the very people who compile the survey suggested that there remains no change in the economic downtrend and that the ECB has room to cut rates quite a bit more. Finally, it is worth noting that a well-known fund preumed to operate with non-public information was rumoured to be taking profits and/or hedging its European front end longs over the past few days
David, I think we must be experiencing an anomaly in SW Florida, then. Price resistance to rents on offer here have broken the rental market. And job losses are shrinking the pool of available renters.
Too many variables, though I agree with you on principle.
I wouldn't want to own rental property here unless it was acquired in the last bust, i.e., at a peppercorn price.
Although the falls look big, they are in some ways not. Running the top 10 losers shows prices have fallen only to Aug 2003 (San Diego) to April 2005 (Atlanta) levels. That's not exactly significant retrenchment over time.
Detroit (Rock City) is back to 1999, though!
The Comp 10 is back to 2004, and the 20 is about the same.
The net result of these various meetings invariably creates debilitating controversy, endless debate about the validity of the underlying data, and then, eventually, some vague document that waffles endlessly only to conclude that "something" should be done, only what exactly is left unsaid, or merely alluded to, because the factions that endlessly wordsmith the document have to assuage their various constituencies. Northern Cali | 01.27.09 - 10:54 am | # ----- In summary, many will be eaten alive unless someone saves them from themselves?
Hi, is anyone watching currently
United States Senate Committee on Banking's "Madoff Investment Securities Fraud: Regulatory and Oversight Concerns and the Need for Reform" hearing ?
Amazing numbers. You pay taxes, and the gov gives you a job so you can pay taxes.
nova
Sadly in practice it seems that this arrangement tends to break down because it makes the whole system less motivated. It becomes overburdened, lethargic, and can't generate the revenues to support itself.
Bankruptcy, political failure, wash, rinse, repeat.
In the US, meanwhile, we can all rejoice that the financial crisis is over. After all, what other conclusion are we to take from the fact that Pfizer has been able to secure $22.5 bio in bank loans to finance its acquisition of Wyeth? If the M&A pipeline is open, baby, then let the good times roll!
As always, the small print matters. The rate at which they are borrowing (7% or so over one-year swaps) wouldn't look out of place in Vinny the Loan Shark's book of business. For the time being, PFE is a AAA-rated company; what does this borrowing rate suggest about the availability of credit for large universe of firms with less shiny ratings?
Or if you use it 1/2 of the time and rent it out the other half.
Oh, many have done that here for years, Elvis. Though I can't say just how many snowbirds will continue to spend the dark mid-winter with us going forward.
Not sure I'd take that route. Or be happy in it if I were already there.
"Not sure I'd take that route. Or be happy in it if I were already there.
burnside"
I'd consider buy a beach house in small town in Florida if prices came down far enough. Beach living is good living except when there are hurricanes. Holding costs would be high, but that would be balanced out with quality of life decisions.
s0mebody writes:
...Werner, Cspan.org says it is not airing...
Thanks, yes I saw that C-SPAN did not deem this to be important enough, they shoe something else (not that "inconvenient"). So, I went directly to the subcommitties page.
It's time for our monthly comment that Krugman and CR's theory about flatland and zoned zone still doesn't seem to fit the data. Phoenix and Las Vegas ARE NOT ZONED! But maybe CR is seeing the light, since I don't think he mentioned the theory this time around. \t eric eric | 01.27.09 - 10:36 am | #
Both markets are zoned by geography, PHX is zoned due to indian reservations as well. Zomburbs built out on old farm land couldn't rise that much, areas landlocked by the rez or the mountains(like Maricopa and Scottsdale) bubbled like it was going out of style.
NY Times: Sen. Chuck Schumer calls the fraud âa punch in the gut" to the financial system and castigates the S.E.C. for its failure to uncover the scheme. He likens the actions to a giant elephant standing in a small room next to the S.E.C. for decades and ânot only did they not see the elephant, they didn't even smell the peanuts on his breath," Mr. Schumer said...
question is who was feeding it peanuts? Chuck's buds: Fuld, Thain, Rubin, etc...
all your gonna hear is:
"we didn't know"
"not my fault"
"need more regulations"
"not intentional" (oh sorry that was Timmay's excuse)
"more oversight"
"better enforcement actions"
Why put yourself through yet more bumbling asshats clamoring to assign blame yet not actually doing it.
I was disappointed with the last hearing where one of the witnesses didn't show up. The other 2 witnesses didn't have much responsibility for missing the ponzi. I wanted to see if someone who was partially responsible for missing the Madoff mess was going to be questioned.
Cuomo Subpoenas Thain Over Bonuses Paid Before Merrill Takeover
By John Pickering
Jan. 27 (Bloomberg) -- New York Attorney General Andrew Cuomo subpoenaed former Merrill Lynch & Co. head John Thain and Bank of America Corp. Chief Administrative Officer J. Steele Alphin to testify about executive bonuses paid by Merrill just before its takeover by Bank of America. Cuomo Subpoenas Thain Over Bonuses Paid Before Merrill Takeover - Bloomberg.com
s0mebody writes:
...link
...I didn't expect it to be on TV, but it should be on the website (I think).
Thanks, its the placeholder in the archive. So, let's hope we have it tomorrow there in C-SPAN's archive. The Senate subcommitte also has a hearings archive. So, let's wait. Thanks.
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What others have said about CRBot: Gary writes: This CRbot is pretty nifty. EvilHenryPaulson writes: CRBot is great on mobiles Loudocracy writes:
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CRBot: Killing dead threads deader since last week.
I was disappointed with the last hearing where one of the witnesses didn't show up.
Markopolis. The guy who warned the SEC for a few years about Madoff. The most important witness re: SEC missing Madoff and he has yet to appear since he was "sick" and had to cancel his first appearance. Push it under the rug, new season of american idol has begun, the people will forget
MS writes:
all your gonna hear is:
"we didn't know"
"not my fault"
"need more regulations"
"not intentional" (oh sorry that was Timmay's excuse)
"more oversight"
"better enforcement actions"
...Why put yourself through yet more bumbling asshats clamoring to assign blame yet not actually doing it...
Well, I do agree with you !
But it's still "interesting" to directly see and hear them when they lie or are evasive. Kinda "masochism" , I agree.
as a New Yorker looks like Cuomo racheting up the prosecution machine to snare the big names and then make a run ai Patterson in 2010 (see: Dewey, Guiliani, Spitzer)
Portland, Or. We're behind the curve here and still falling. Many sellers in denial, despite rising foreclosures and builders going BK. Down about 16% off the peak, but the damage is very unevenly distributed. DOM over 100, mostly, but price/sq.ft. generally over $150, except for the trash. There may be some "shadow inventory," but a large part of that is sellers waiting for a better market, IMO. I'm seeing a lot of (presumably paid-off) ranches on big lots. Not updated, still with original '50's kitchens. The Greatest Generation looking to cash out, I guess.
Even in bubble states, not all markets are falling. In northern California, Eureka/Humboldt county most home prices are within 5% of peak pricing and people seem impervious to the declines elsewhere. This is in a small town where the primary legal industries are failing...lumber and fishing. Also, the number of homeless on the streets is amazing, as are the numbers of businesses that have gone under. My only guess is that the pot trade is artificially propping up home prices here.
Only 13.3 percent of consumers expect business conditions to get better within the next six months, The Conference Board said.
S&P said its composite index of 10 metropolitan areas also fell 2.2 percent in November from October for a 19.1 percent year-over-year drop, matching the previous month's record decline.
Did anyone see The Flapping Bat Pattern in the index today? This has always been a sign of money coming off the sidelines and flying on radar.
The 60 Minute Chart shows the Dow continues to build out within the large, developing trading range, which now spans from 7,900 to 8,250. More range behavior is expected within this pattern until a big breakout occurs. Eventually, a breakout will determine the next medium term trend. Watch 8,250 and 7,900 for a breakout move. SignalWatch LIVE!
ova writes:
...Why the fascination with America Werner? It is obviously a love/hate one...
Ok, now I have time to insult you :
It's obviously a love/hate affair. Yes, as I previously stated I worked for a (still very reputable) american company , visited some of the US labs frequently and lived for ca. 4 years there (in a warm southern state), all as an employee of that company, and some time ago. (Now they pay (part of) my retirement.)
So, that's where the "love" came from. And when I realized that there was (in recent years) systemic corruption in the financial/political sector, I started to despise America. Now I whitness it's inability to deal with it's problems and it's downfall.
Austin Texas, house on the next block sold for the WTF price of $415,000 two years ago. Cosmetic flip, they put in granite countertops but didn't upgrade the plumbing or electrical. Tenant says it constantly smells of sewer gas. It is in foreclosure, goes to auction next week, reserve is $250,000. Bank will end up owning it.
Both of these lead to a conclusion that the real number today is much worse than the one quoted.
Home prices are headed down to a lower multiple of income, and income is declining. New REO listings like this, see 245 Martelli, 33% below identical comps tell me how far the real market is below C-S.
Fair Economist writes:
Obama makes Citigroup cancel jet purchase
That's going to be a popular decision.
I'm a pilot so I'm getting a kick...
Anyway, I was wondering when someone was going to red flag that. Good for Obama. It's about time someone bitch-slapped these criminals and brought them back into reality.
Even if they could justify a new jet vs. the thousands of nice used ones available, the least they could do is buy something made here. I hear Cessna is looking for sales...
After reviewing a history of the relationship between banking crises and property losses (see graph), one reasonably concludes that we are now drowning in a worst case scenario. A nationwide loss in property values of 40% to 50% from the high is now a reasonable guess. A loss of this magnitude cannot be less than devastating.
Meanwhile, long-bond spreads continue to widen. 10-year Treasuries are up over 1/2 point this month alone, with mortgage rates (to those few who qualify) following suit.
Consider that house prices continue to plumb heretofore unseen depths despite a winter of record low mortgage rates - that we may not see again in my lifetime.
What's going to happen to any nascent home-price rally when (not if) the average 30-year FRM goes to 7 percent? Or 8, or 9 percent?
The P&I on a 30-year FRM at 5% for a $300,000 loan is the same as that on an 8% FRM for ... a $220,000 loan.
$1T in excess capacity by YE
real unemp of 13.5 currently
$6T in excess private debt
Since there is no "official" definition of a depression, as opposed to for a recession ( 2 qtrs back to back beg GDP), me thinks he is reluctant to put a hard number, but all the factors of something beyond recession are present
MS writes:
'William Dudley now President of the FRBNY..
Just what we need..yet more GS people. This time we get an "economist"
It just keeps getting better and better...'
MS You are speaking out of your rear end.
Dudley is worthy of great praise. he is brave reformer who if he had been in charge would have seen off the coming depression by restricting the previous boom. It is a sad fact that the high salaries of wall St kept the best minds out off government; though to be fair the crazy right wing ideology of the Bush admins would have been of potting as well.
FT
Mr Dudley is a longstanding advocate of using new regulatory tools to deal with asset price and credit bubbles. In a 2006 conference on monetary policy, soon before joining the Fed, he challenged the doctrine of Alan Greenspan, former Fed chairman, that a central bank could not do much about asset bubbles and should concentrate on cleaning up the mess afterwards.
Mr Dudley said asset price bubbles are not that hard to identify especially large ones. He agreed with the idea that interest rates were not generally the right tool to use to deal with bubbles, but said this may require the development of additional tools.
At the time he highlighted mortgages and credit derivative obligations as one of the market segments not well addressed by the prevailing system of regulation.
He proposed using the Feds bully pulpit to warn of emerging bubbles and said margin requirements and possibly capital adequacy rules and/or counterparty risk rules designed to limit leverage and risk might be deployed.
On what basis are people concluding that Palo Alto homes are stagnating with "wishing" prices? All anecdotal evidence and local paper information indicates that the inventory is still moving at the asking prices. I see no capitulation on the ground.
Whenever I read how prices have dropped x percent, I think "who cares".
Didn't prices rise by a similar (or greater) amount in the years before the peak?
It would be nice to see a long term graph that shows prices rising and then falling to give readers some perspective.
BTW, I am a renter waiting on the sidelines for the bottom to possibly buy.
I'm just afraid Obama and the Democrats will take away all my savings.
Buy now or be priced out forever.
Wow!
I am feeling a little extra Japanese this morning.
Sell now, or be priced in forever?
Bottoming process. Wake me up in Q2 2010....
Still no move in prices in posh California. Palo Alto, ie, is still around $1000/sqft.
Catch a falling knife and
put it in your pocket
save it for your seppuku.
Some asshat on CNBC pointed out the sliver lining: The year over year changes have stabilized at 19%. Like saying the titanic is only taking on 20000 gallons/minute, same as the last minute.
University endowments collapsing:
Market Collapse Weighs Heavily on Endowments - Administration - The Chronicle of Higher Education
Brandeis U. selling off entire art collection:
News: Brandeis to Sell All of Its Art - Inside Higher Ed
Liv writes:
Sell now, or be priced in forever?
I think, 'sell now, or be prepared to garden those tulips.
I am still waiting for this "stickiness" everyone assures me applies to housing prices on the way down.
In Phoenix, house prices have declined more than 40% from the peak.
Still have a little work to do on the prices since prices shot up anywhere from around 70 - 400% during the boom. But progress all the same.
very happy to live in the only house I've ever owned, paid off and no plans to move.
How can this be? They told me that they're not making any more land!
Dawg- perhaps it was that houses are sticky because sellers can't get rid of the assets. Nothing is moving in Cthulhu's 'hood, and the short sales have now started to appear. (at ridiculously high prices, nonetheless)
Depression is coming...
....probably like matty,.....I don't notice any decrease in my property value (see Las Vegas). Is it because it's paid for, I live here, and am planning on literally being buried here?
At least we're not dragging this out for 16 years like Japan.
On the flip side, if we're still here 16 years from now we might be doing OK.
like being in the eye of the hurricane... oh, wait...
Dawg,two signs of stickiness in my 'hood.Wishing prices in good neighborhoods are not changing and Brown Trousers are MUCH more popular than last year.
...IF, ac, we learn to save. Consider frugality the best diet around.
Industrial Production and Capacity Utilization
When we are building houses at approximately 33% of capacity, we may be nearing a bottom. OTOH, when the capacity for Industrial production goes to 30%, it just might be game over......
And the slope gets more slippery.. This housing metric is the only one worth looking at anymore, as it compares actual price declines of the same houses, Year Over Year (YOY).
In Los Angeles, prices have now eroded in the high end markets. Pacific Palisades represented the first $1,000,000+ price cut, using the Case/Shiller Method.
5697 sqft House, 14,000 sqft Lot
SOLD 7/10/07 $3,320,000
SOLD 12/11/08 $2,200,000 (-33.8%)
Here we go...
WestsideREmeltdown
Santa Monica Meltdown, The "90402"
Corning lays off 4,900. I guess Bloody Monday's not over yet.
- NY Times
I receive listings of bank owned properties in suburban Boston. The prices are about 30% or more lower than comparable regular listings.
I received one yesterday that had sold in 2005 for $445k that the bank is now selling for $220.
"At least we're not dragging this out for 16 years like Japan."
That's because every frigging country is in the same boat and they are all trying to do the same damn thing, borrow money, spend money, print money. This is crowding out ALL private investment and making the frigging situation WORSE. Stupid bastards.
very happy to live in the only house I've ever owned, paid off and no plans to move.
me too!
Dawg,two signs of stickiness in my 'hood. Wishing prices in good neighborhoods are not changing and Brown Trousers are MUCH more popular than last year. -Tom Stone
Not that kind of stickiness. Eeew.
As I mentioned yesterday with the house 666 days on market that isn't "sticky". It isn't going to sell. Wishing prices have lost their predictive value now as well. And that's the big problem at this stage. Very little data retain their past predictive capacity.
That graph crax me up. It feels the need to identify what state Phoenix is in, along with Detroit and Minny, but not Miami (FL or Ohio?) or others. Yuks.
Mr. Beach writes:
"Still no move in prices in posh California. Palo Alto, ie, is still around $1000/sqft."
I have noticed a couple of price cuts in ultra-high end stuff, meaning $10 million plus. But I haven't seen anything significant in "regular" high-end, which I think of as the one to five million range expressed in bubble prices.
My area is still between $800 and $1100 per square foot. Will the C&D at First Fed affect that? Remains to be seen. The market seems to still be frozen.
So whats the surprise? Housing has another 20% down to go - maybe a little more. With the government printing money buying good RE in 18 -24 months will probably be a decent place to park some money.
I received one yesterday that had sold in 2005 for $445k that the bank is now selling for $220.
lama | 01.27.09 - 9:48 am | #
$220 dollars! Whoa!
How about Detroit. They didn't have a housing boom, but they having housing bust.
A hangover without the party. Good grief.
I am still waiting for this "stickiness" everyone assures me applies to housing prices on the way down.
I actually think that these are sticky, relatively speaking. Short of a long burst of hyperinflation, we're looking at a down-trend for the next 6 years or so.
That is pretty slow...
"That graph crax me up. It feels the need to identify what state Phoenix is in, along with Detroit and Minny,....."
CR is assisting the "publicly educated" amongst us.....
i.e. = id est = that is
e.g. = exempli gratia = for example
latesummer2009 writes:
"And the slope gets more slippery.. "
Thanks for the links. I stand corrected. It appears that a couple of properties in the high-end range have actually moved recently.
Whew! Glad I got mine before they were gone.......
Say goodbye to McMansions, homes are getting 'right-sized' - MarketWatch
OT, but Corning cutting 4,900 jobs.
- NY Times
Another higher-end SoCal marked where prices have slid (and are probably still sliding):
Manhattan Beach Confidential
Where I am you have to look at the individual properties because of the mix and low volume.One or two high end sales skews the median drastically...we have 50% or more to go before prices for a 3/2 in a good neighborhood are in line with incomes/rents.
When does everything go sepia?
Do the CNBC talking heads have to declare depression, or does it happen naturally after "X" many quarters of negative GDP growth?
I see Dallas on the tail end, are they just a late to the party or what? also, anyone have any info on condo sales in the South Padre area of TX
It really is nothing more than the cheap money being withdrawn from the market.Make someone have to put money down....and they are gone...F-U. This mess has made it so NO one has any money left to put down. Thanks boys in Charge...Mission Accomplished!
The East Valley in Phoenix (Mesa, Chandler etc) has strip malls galore and there are For Rent signs at nearly every one.
Anyone got a running tally for the day on job cuts announced so far?
this is really OT: but it seems like every bar or eatery I sit in here in Cambodia I'm enveloped in a cocoon of pot smoke... time to get rid of PM Hun Sen and import Mike Bloomberg to take all of our fun away!
Duke,
Late to the party, as is Houston - lagging due to strenghth in energy prices over the summer - that and the ease of building made for a much more limited run-up in prices as well.
Late to the game and less to deflate.
Re: Dallas
I don't know why people in Dallas haven't gotten scared yet, but it is coming. The suburbs of Dallas have been continuously sprawling for a few decades. There are plenty of overpriced houses all over the metroplex.
Conference Board's consumer confidence is reported at 37.7 - slightly below the expectations and the lowest on record (since 1967)
The Link on CR's post is pointing to October 2008.
Updated Link for November 2008 - http://www2.standardandpoors.com/spf/pdf/index/CSHomePrice_History_012724.xls
No Obama bump for consumer confidence?
We danced to their tune for the past 20 years and will rest for the next 15.
Double the size of the garden plot.
University endowments collapsing:
mal | 01.27.09 - 9:39 am | #
----
Can I haz entire article plz?
It is a side fascination of my own to see how the Ivory Towers of Education hold up against the Tides of Collapse and Hordes of Change. Any and all articles/insights are appreciated!
Margin Call of Cthulhu writes:
I think, 'sell now, or be prepared to garden those tulips.'
There was a blurb on NPR this week - IIRC - about the end of WW-II when the dutch were starving to death as they watched the allies marching east towards Germany, just to their south. They discovered you could boil those bulbs and make a kind of food...I suppose this amounts to ripping off the crown molding and using it to heat the place...though that's tough given the height of ceilings in these McMansions and the shift to Natural Gas "fireplaces".
Corning lays off 4,900. I guess Bloody Monday's not over yet.
mal | 01.27.09 - 9:48 am | #
----
pishaw! Tis but a flesh wound.
"NEW YORK (Reuters) - Consumer confidence fell to a record low in January as a downtrodden housing sector and worsening job prospects kept the country in a somber mood.The Conference Board, an industry group, said its sentiment index fell to 37.7 from a revised 38.6 in December, confounding forecasts for a small uptick."The beatings will continue until morale improves!
I think chart 2 gives and interesting way of looking at things. Since C-S is a nominal index, mentally draw a line at about the 3% level (apx the avg inflation over the period) When the area under the curve belwo the line starts to approach the area above the line durring the boom, then we can think about the housing price decline being over. That is a long way off.
MSM news last night in Vegas: Local coffee shop advertised for a dishwasher. Over a hundred applications. The newest casino venture in Vegas needs 12K employees - over 63K applied.
Housing prices in Bryn Maw (Philly's prime old money suburb) are down 25% for houses over a million but only down 2% for houses under 500k.
I wonder if the stickiness of the lower end homes has to do with Philly not being included in Case Schiller index? (i.e. info is not readily accessible)
University endowments collapsing:
mal | 01.27.09 - 9:39 am | #
Can I haz entire article plz?
Try here, no subscriber firewall, appears to have been based on same reports:
News: Fortunes Falling - Inside Higher Ed
Home prices are lubricated.
Prices will drop to a level below which the price to income level makes sense.
There's only one problem.
Incomes will likely drop as well.
{{citizen energyecon writes:
Anyone got a running tally for the day on job cuts announced so far?}}
Whatever the number is add 70 to it. The local rag announced layoffs this morning at our Merillat plant.
"Heartland Breach Bad As Tylenol Poisonings?"
Heartland Payment Systems stock (HPY) was hit hard in the wake of what is being described as the biggest single breach of consumer and financial data security ever. The company issued statements Friday (1/23) in an effort at damage control in which the CEO compares the potential industry-wide impact of the breach to none other than that of the Tylenol poisonings of some twenty-five years ago that nearly brought down the drug maker.
Heartland Breach Bad As Tylenol Poisonings? : Information Security Resources
Mr Beach,
Confirm: 1000 per sq was what our 50 year old PA rancher went for in Nov.
Hiding out in the Sierras waiting for the crash to hit the PA area so we can move back. Waiting Waiting Waiting
The wife is going cabin crazy as she loves to garden and at 7 degrees outside that is not possible. Did some snowshoeing yesterday and maybe so ski runs today if the temperature gets up to the mid 20s otherwise more cabin fever.
Re: High End
A young couple was talking to us as we were moving out about their parents trying to sell at $3.5M in Atherton for a year with no bites. They lowered it to $2.5M with still no bites.
When you hear your friends and neighbors say,
"I can't wait to save up a downpayment so I can buy a home -- these rents are killing me!"
Then, housing will have bottomed.
To all those people predicting falling rents: take into account a drop in income as well. We're not coming out of this without high rental yields.
OT, but I am keen to see what story AMZN spins for their earnings release today...analyst estimates are coming in at $0.39/share, down almost 19% from last year 4Q of $0.48/share.
The thing that has me really wondering is that comScore did not release any total holidays online spending press release or a total year online spending press release for 2008...
re: endowment investments...
"the first half of 2009 was particularly brutal, according to two new reports released Tuesday."
2009 we hardly knew ya!
-- w
It's time for our monthly comment that Krugman and CR's theory about flatland and zoned zone still doesn't seem to fit the data. Phoenix and Las Vegas ARE NOT ZONED! But maybe CR is seeing the light, since I don't think he mentioned the theory this time around.
Duke,
I don't know about Condo sales but the waterfront developements have locked up. Several thousand acres near Port O'Conner, along the intracoastal began development a couple of years ago, I hear the title companies have begun working foreclosures.
A 800 acre deal near Palacious also appears to have stalled.
I have a good buddy with a home in Matagorda. Prices of individual properties are still holding up well. Activity has slowed but prices are not off. That is the case wtih large acreage tracts in most of the state. To date less activity, but stable prices.
David? Was that a non sequitur?
If incomes fall, do you get high rental yields? Of course you know what you meant, but I somehow don't.
9 out of 10 execs at banks that received bailout still on job
Yup cronyism alive and well on Wall St. courtesy of US Treasury and Feb that offers TARP handouts with no strings attached.
Get your pitchforks and torches ready for Wall St. crooks !
"Duke of Con Dao writes:
I see Dallas on the tail end, are they just a late to the party or what? also, anyone have any info on condo sales in the South Padre area of TX
Duke of Con Dao | 01.27.09 - 10:04 am | # "
Texas in general.
All these factors equal an environment where prices could not rise very rapidly and therefore not fall like other cities in the index.
yesterday's existing home sales showed a drop of 5k in one month from 180k to 175k...to me this was the more important and lesser mentioned stat..it means that people in homes are still seeing severe deleveraging, no matter how many homes are sold...
RTTNews - Global Financial Newswires, Economic Calendar, Earnings Reports, Broker Ratings....
1/26/09...10 am..
Looks like we still have a long way to fall.
citizen energyecon | Homepage | 01.27.09 - 10:35 am | #
errr, Thursday that is - need more coffee lol!
Energy-
Yes I am wondering what accounting BS they will be allowed to get away with yet again. Putting the sale of an asset in the operations "bucket" last time was just too cute.
Ciao
MS
All these factors equal an environment where prices could not rise very rapidly and therefore not fall like other cities in the index.
A C Shareholder
I agree that prices had a hard time going up. If they did, some developer would just build a new community a couple miles farther away. But I don't see where the jobs are going to come from to support all the people who live in the suburbs. IMO, prices could fall very hard.
Burnside,
You're right -- incomes don't affect rental yields except indirectly.
The deflationists say look out for falling rents. That tends to make renting more attractive and contributes to falling home prices. What they miss is that incomes fall as well, so as long as home prices fall more, the incentive to buy increases. I believe there's a rental yield -- somewhere around 8% -- at which it makes no sense to rent if you can save up a downpayment.
The problem is we are far from that rental yield today except in places like Oceanside, CA, where subprime foreclosures have already devastated the housing market.
"All these factors equal an environment where prices could not rise very rapidly and therefore not fall like other cities in the index.
A C Shareholder"
Just remember that places where appreciation was relatively low during the past 7 years are just as succeptible to foreclosures as markets with greater appreciation/depreciation, because the low appreciation markets have less "equity" cushions. A relatively small percentage decline is painful there and puts many underwater. For this reason, Dallas, Houston, and Denver are at great risk especially with the collapse in oil prices.
Mish's Global Economic Trend Analysis: Return Of The Three-Day Work Week
Across the whole of the UK, 49% of the economy will consist of state spending, while in Wales, the figure will be 71.6% up from 59% in 2004-5. Nowhere in mainland Britain, however, comes close to Northern Ireland, where the state is responsible for 77.6% of spending, despite the supposed resurgence of the economy after the end of the Troubles.
Even in southern England, the governments share of spending is growing relentlessly. In the southeast, it has gone up from 33% to 36% of the economy in four years.
Sril(Unrated) writes:
\tThe Link on CR's post is pointing to October 2008.
Updated Link for November 2008 - http:// www2.standardandpoors.com...tory_012724.xls
\t Sril | \t \t \t \t01.27.09 - 10:11 am | #
Thank you!
MS | 01.27.09 - 10:43 am | #
Plus the favorable currency moves went the other way this time around...wonder what the topline is going to be like as well. We will see on Thursday.
Elvis | 01.27.09 - 10:46 am | #
All good points, plus I don't think we had any shortage of specuvestors here either, they just haven't been run through the fire yet...
latesummer2009
Your are right. Case Shiller is the best.
Only things to watch out for are :
1) The numbers today represent prices agreed end Aug/ early Sept on average. Deals being done today are FIVE months later. So suggest one adds at least -5% pts to the fall from peak percentage change numbers.
2) The CS index excludes most houses built in the last ten years (and all appartments). As the price falls have been concentrated in the new stock and apartments, the CS index is overstated.
Both of these lead to a conclusion that the real number today is much worse than the one quoted. Looking on the bright side (for banks / sellers and the government), it may also means that we are nearer the point at which prices cease falling than the charts would suggest.
dilbert dogbert | 01.27.09 - 10:31 am
I never thought of myself as a cheapskate until I tried to purchase a house in that area for about $750 a square foot. We saw some real beauties.
Along the way, I discovered that my real "make me move in" price is under $250.
Needless to say, my new zip code does not start with a 9. Maybe someday...
Tulip and lily bulbs are surprisingly tasty. foam and crackerjack box homes much less so.
The sales of large tracts outside Houston have stopped. We assume they have gone down but there is no market support. I mean a sale and resale you can point to and argue prices are off xx%. After you get past the leading edge of the urban sprawl prices have always fallen off sharply. Beyond that there are still sales, but far below what they are asking for the finge tracts.
Thru this week start watching OIL names. earnings week.
Tulips and Holland. The man across from me at the community gardens was from Holland. He never grew tulips. He also got very irate when I asked him, because of his accent, if he was German.
"It is a side fascination of my own to see how the Ivory Towers of Education hold up against the Tides of Collapse and Hordes of Change. Any and all articles/insights are appreciated!"
That's an interesting one. I'm inclined to mention the tourists in Asia who, seeing the tide roll out, wandered on to the sand to play with all of the nifty items that were revealed. This was of course a tragic mistake; the storm surge that followed was catastrophic.
The academic equivalent of this analogy is to hold a budget meeting, appoint a "special" task force, or to crank up a long defunct standing committee for "emergency" sessions.
The net result of these various meetings invariably creates debilitating controversy, endless debate about the validity of the underlying data, and then, eventually, some vague document that waffles endlessly only to conclude that "something" should be done, only what exactly is left unsaid, or merely alluded to, because the factions that endlessly wordsmith the document have to assuage their various constituencies.
All of this is done in the name of the students, of course.
On good days it feels like the committee in the movie Life of Brian. On bad days it is a YouTube video of the Tsunami.
Everday brings more sales calls. Plus the "we have accounts in that area. I would like to pop in."
I never have gotten this many calls or requests to "pop in."
Across the whole of the UK, 49% of the economy will consist of state spending, while in Wales, the figure will be 71.6% up from 59% in 2004-5. Nowhere in mainland Britain, however, comes close to Northern Ireland, where the state is responsible for 77.6% of spending, despite the supposed resurgence of the economy after the end of the Troubles.
Even in southern England, the governments share of spending is growing relentlessly. In the southeast, it has gone up from 33% to 36% of the economy in four years.
Anonymous
Maybe not so surprising that the UK is flirting with bankruptcy.
I disagree Pearson. I would like to introduce you to my friend the tax man, you can call him Property Tax. I would think a typical property tax equates to way more than 8% of rent a year alone.
But I may be misunderstanding your argument.
Macro Man: Recovery?
Moreover, the very people who compile the survey suggested that there remains no change in the economic downtrend and that the ECB has room to cut rates quite a bit more. Finally, it is worth noting that a well-known fund preumed to operate with non-public information was rumoured to be taking profits and/or hedging its European front end longs over the past few days
ac | 01.27.09 - 10:56 am
Amazing numbers. You pay taxes, and the gov gives you a job so you can pay taxes.
David, I think we must be experiencing an anomaly in SW Florida, then. Price resistance to rents on offer here have broken the rental market. And job losses are shrinking the pool of available renters.
Too many variables, though I agree with you on principle.
I wouldn't want to own rental property here unless it was acquired in the last bust, i.e., at a peppercorn price.
"I wouldn't want to own rental property here unless it was acquired in the last bust, i.e., at a peppercorn price.
burnside"
Or if you use it 1/2 of the time and rent it out the other half.
Although the falls look big, they are in some ways not. Running the top 10 losers shows prices have fallen only to Aug 2003 (San Diego) to April 2005 (Atlanta) levels. That's not exactly significant retrenchment over time.
Detroit (Rock City) is back to 1999, though!
The Comp 10 is back to 2004, and the 20 is about the same.
Get a six-figure salary – Consumer Tips - CNN.com Blogs
Get a six-figure salary
The net result of these various meetings invariably creates debilitating controversy, endless debate about the validity of the underlying data, and then, eventually, some vague document that waffles endlessly only to conclude that "something" should be done, only what exactly is left unsaid, or merely alluded to, because the factions that endlessly wordsmith the document have to assuage their various constituencies.
Northern Cali | 01.27.09 - 10:54 am | #
-----
In summary, many will be eaten alive unless someone saves them from themselves?
Cinch up the ligature, jam in the needle. Oh yeah, today I hurt myself. But a junkie luvin' the junk I put in me trunk. Dope fiends delight as they have coopted the Fed's prescription tablet.
Economic Cures Are Like Booze for an Alcoholic: Caroline Baum - Bloomberg.com
Don't miss...
YouTube - Johnny Cash - Hurt
Get a six-figure salary
\t
Anonymous | 01.27.09 - 11:01 am | #
Yeah, $000,000
anon @ 11:01
That reminds me of when I was much younger and hurt my back......the Dr. said..."we'll you just need to get a different job"....
WOW it's just THAT easy.....
Ciao
MS
Get a six-figure salary
Anonymous
LOL. FTA:
1) Air traffic controller
2) Plumbers
3) Police detective
4) Ultrasound technician
5) Court reporter
How long will the gov't jobs pay $100,000+?
Hi, is anyone watching currently
United States Senate Committee on Banking's "Madoff Investment Securities Fraud: Regulatory and Oversight Concerns and the Need for Reform" hearing ?
They simply cut off the transmission !!
Is your transmission still running?
ac | 01.27.09 - 10:56 am
Amazing numbers. You pay taxes, and the gov gives you a job so you can pay taxes.
nova
Sadly in practice it seems that this arrangement tends to break down because it makes the whole system less motivated. It becomes overburdened, lethargic, and can't generate the revenues to support itself.
Bankruptcy, political failure, wash, rinse, repeat.
Macro Man: Recovery?
In the US, meanwhile, we can all rejoice that the financial crisis is over. After all, what other conclusion are we to take from the fact that Pfizer has been able to secure $22.5 bio in bank loans to finance its acquisition of Wyeth? If the M&A pipeline is open, baby, then let the good times roll!
As always, the small print matters. The rate at which they are borrowing (7% or so over one-year swaps) wouldn't look out of place in Vinny the Loan Shark's book of business. For the time being, PFE is a AAA-rated company; what does this borrowing rate suggest about the availability of credit for large universe of firms with less shiny ratings?
Or if you use it 1/2 of the time and rent it out the other half.
Oh, many have done that here for years, Elvis. Though I can't say just how many snowbirds will continue to spend the dark mid-winter with us going forward.
Not sure I'd take that route. Or be happy in it if I were already there.
Werner | 01.27.09 - 11:05 am
Still going to the NPD rallies?
OT- Here's one half of a RICO indictment:
U.N. crime chief says drug money flowed into banks
Search - Global Edition - The New York Times
"Not sure I'd take that route. Or be happy in it if I were already there.
burnside"
I'd consider buy a beach house in small town in Florida if prices came down far enough. Beach living is good living except when there are hurricanes. Holding costs would be high, but that would be balanced out with quality of life decisions.
xxxxx(Good) writes:
\tOT- Here's one half of a RICO indictment:
U.N. crime chief says drug money flowed into banks
Search - Global Edition - The New York Times europe/OUKWD-UK-FINANCIAL-UN-DRUGS.php
\t xxxxx | \t \t \t \t01.27.09 - 11:09 am | #
xxxxx | 01.27.09 - 11:09 am | #
We need a consumer confidence Czar. A stock price czar. ...
And a Czar Czar.
Werner,
Cspan.org says it is not airing but Bloomberg TV just had some of the opening remarks. I don't know, but I wanted to catch it too.
ova writes:
...Still going to the NPD rallies?...
Thanks, you are not watching this stuff?
Not seeing that your "fine" Senate just cuts off transmission of "unconvenient" hearings ?
"Nemo writes:
Buy now or be priced out forever."
Actually it's "sell now or be priced IN forever"
Cspan.org says it is not airing but Bloomberg TV just had some of the opening remarks. I don't know, but I wanted to catch it too.
s0mebody
When the senate gavels in, CSpan 2 is required to cover.
Werner | 01.27.09 - 11:13 am
Why the fascination with America Werner? It is obviously a love/hate one.
When the senate gavels in, CSpan 2 is required to cover.
Anonymous
link
I didn't expect it to be on TV, but it should be on the website (I think).
Close that piano cover like a coffin, time for makin' the happy music is over. Dirge time.
Mene Mene Tekel Upharsin.
s0mebody writes:
...Werner, Cspan.org says it is not airing...
Thanks, yes I saw that C-SPAN did not deem this to be important enough, they shoe something else (not that "inconvenient"). So, I went directly to the subcommitties page.
Gee.. the first time this happened.
It's time for our monthly comment that Krugman and CR's theory about flatland and zoned zone still doesn't seem to fit the data. Phoenix and Las Vegas ARE NOT ZONED! But maybe CR is seeing the light, since I don't think he mentioned the theory this time around.
\t eric
eric | 01.27.09 - 10:36 am | #
Both markets are zoned by geography, PHX is zoned due to indian reservations as well. Zomburbs built out on old farm land couldn't rise that much, areas landlocked by the rez or the mountains(like Maricopa and Scottsdale) bubbled like it was going out of style.
Madoff hearing link for anyone that cares.
I didn't expect it to be on TV, but it should be on the website (I think).
s0mebody
Dodd's running the hearing. Nothing of value will come from it.
NY Times: Sen. Chuck Schumer calls the fraud âa punch in the gut" to the financial system and castigates the S.E.C. for its failure to uncover the scheme. He likens the actions to a giant elephant standing in a small room next to the S.E.C. for decades and ânot only did they not see the elephant, they didn't even smell the peanuts on his breath," Mr. Schumer said...
question is who was feeding it peanuts? Chuck's buds: Fuld, Thain, Rubin, etc...
Dodd's running the hearing. Nothing of value will come from it.
Anonymous
I'm young. I don't know any better.
all your gonna hear is:
"we didn't know"
"not my fault"
"need more regulations"
"not intentional" (oh sorry that was Timmay's excuse)
"more oversight"
"better enforcement actions"
Why put yourself through yet more bumbling asshats clamoring to assign blame yet not actually doing it.
Ciao
MS
MS,
I was disappointed with the last hearing where one of the witnesses didn't show up. The other 2 witnesses didn't have much responsibility for missing the ponzi. I wanted to see if someone who was partially responsible for missing the Madoff mess was going to be questioned.
Obama makes Citigroup cancel jet purchase
That's going to be a popular decision.
Cuomo Subpoenas Thain Over Bonuses Paid Before Merrill Takeover
By John Pickering
Jan. 27 (Bloomberg) -- New York Attorney General Andrew Cuomo subpoenaed former Merrill Lynch & Co. head John Thain and Bank of America Corp. Chief Administrative Officer J. Steele Alphin to testify about executive bonuses paid by Merrill just before its takeover by Bank of America.
Cuomo Subpoenas Thain Over Bonuses Paid Before Merrill Takeover - Bloomberg.com
William Dudley now President of the FRBNY..
Just what we need..yet more GS people. This time we get an "economist"
It just keeps getting better and better...
Ciao
MS
s0mebody writes:
...link
...I didn't expect it to be on TV, but it should be on the website (I think).
Thanks, its the placeholder in the archive. So, let's hope we have it tomorrow there in C-SPAN's archive. The Senate subcommitte also has a hearings archive. So, let's wait. Thanks.
Wait -- we've turned the corner!
Housing market may have turned a pivotal corner
| Reuters
"Cuomo Subpoenas Thain Over Bonuses Paid Before Merrill Takeover
By John Pickering"
That took awhile.
New Thread: FDIC to Tighten Interest Rate Restrictions on some Institutions ( 0 comments ...You could be FIRST! )
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Speaking of Thain:
Eschaton
McThain!
s0mebody writes:
MS,
I was disappointed with the last hearing where one of the witnesses didn't show up.
Markopolis. The guy who warned the SEC for a few years about Madoff. The most important witness re: SEC missing Madoff and he has yet to appear since he was "sick" and had to cancel his first appearance. Push it under the rug, new season of american idol has begun, the people will forget
MS writes:
all your gonna hear is:
"we didn't know"
"not my fault"
"need more regulations"
"not intentional" (oh sorry that was Timmay's excuse)
"more oversight"
"better enforcement actions"
...Why put yourself through yet more bumbling asshats clamoring to assign blame yet not actually doing it...
Well, I do agree with you !
But it's still "interesting" to directly see and hear them when they lie or are evasive. Kinda "masochism" , I agree.
as a New Yorker looks like Cuomo racheting up the prosecution machine to snare the big names and then make a run ai Patterson in 2010 (see: Dewey, Guiliani, Spitzer)
Portland, Or. We're behind the curve here and still falling. Many sellers in denial, despite rising foreclosures and builders going BK. Down about 16% off the peak, but the damage is very unevenly distributed. DOM over 100, mostly, but price/sq.ft. generally over $150, except for the trash. There may be some "shadow inventory," but a large part of that is sellers waiting for a better market, IMO. I'm seeing a lot of (presumably paid-off) ranches on big lots. Not updated, still with original '50's kitchens. The Greatest Generation looking to cash out, I guess.
Even in bubble states, not all markets are falling. In northern California, Eureka/Humboldt county most home prices are within 5% of peak pricing and people seem impervious to the declines elsewhere. This is in a small town where the primary legal industries are failing...lumber and fishing. Also, the number of homeless on the streets is amazing, as are the numbers of businesses that have gone under. My only guess is that the pot trade is artificially propping up home prices here.
My only guess is that the pot trade is artificially propping up home prices here.
Mark
Yep, Ditto here. Plus meth, of course. I think a larger portion of the economy may go underground, as a form of passive rebellion.
Only 13.3 percent of consumers expect business conditions to get better within the next six months, The Conference Board said.
S&P said its composite index of 10 metropolitan areas also fell 2.2 percent in November from October for a 19.1 percent year-over-year drop, matching the previous month's record decline.
Jack Hylton - Happy Days Are Here Again
YouTube -
Did anyone see The Flapping Bat Pattern in the index today? This has always been a sign of money coming off the sidelines and flying on radar.
The 60 Minute Chart shows the Dow continues to build out within the large, developing trading range, which now spans from 7,900 to 8,250. More range behavior is expected within this pattern until a big breakout occurs. Eventually, a breakout will determine the next medium term trend. Watch 8,250 and 7,900 for a breakout move.
SignalWatch LIVE!
Check out McArdle trying to take on Tanta:
What's the matter with mortgage cramdowns? - Megan McArdle
ova writes:
...Why the fascination with America Werner? It is obviously a love/hate one...
Ok, now I have time to insult you :
It's obviously a love/hate affair. Yes, as I previously stated I worked for a (still very reputable) american company , visited some of the US labs frequently and lived for ca. 4 years there (in a warm southern state), all as an employee of that company, and some time ago. (Now they pay (part of) my retirement.)
So, that's where the "love" came from. And when I realized that there was (in recent years) systemic corruption in the financial/political sector, I started to despise America. Now I whitness it's inability to deal with it's problems and it's downfall.
I stopped reading after this shit:
"Bankruptcy is usually undertaken to make it easier to keep the house by shedding unsecured debt:"
Megan is simply a boob out of her mind!
Austin Texas, house on the next block sold for the WTF price of $415,000 two years ago. Cosmetic flip, they put in granite countertops but didn't upgrade the plumbing or electrical. Tenant says it constantly smells of sewer gas. It is in foreclosure, goes to auction next week, reserve is $250,000. Bank will end up owning it.
Both of these lead to a conclusion that the real number today is much worse than the one quoted.
Home prices are headed down to a lower multiple of income, and income is declining. New REO listings like this, see 245 Martelli, 33% below identical comps tell me how far the real market is below C-S.
Fair Economist writes:
Obama makes Citigroup cancel jet purchase
That's going to be a popular decision.
I'm a pilot so I'm getting a kick...
Anyway, I was wondering when someone was going to red flag that. Good for Obama. It's about time someone bitch-slapped these criminals and brought them back into reality.
Even if they could justify a new jet vs. the thousands of nice used ones available, the least they could do is buy something made here. I hear Cessna is looking for sales...
Morons.
After reviewing a history of the relationship between banking crises and property losses (see graph), one reasonably concludes that we are now drowning in a worst case scenario. A nationwide loss in property values of 40% to 50% from the high is now a reasonable guess. A loss of this magnitude cannot be less than devastating.
Omnipotent Property Depression: History’s Ominous Omniscience « Your Mortgage or Your Life…
Meanwhile, long-bond spreads continue to widen. 10-year Treasuries are up over 1/2 point this month alone, with mortgage rates (to those few who qualify) following suit.
Consider that house prices continue to plumb heretofore unseen depths despite a winter of record low mortgage rates - that we may not see again in my lifetime.
What's going to happen to any nascent home-price rally when (not if) the average 30-year FRM goes to 7 percent? Or 8, or 9 percent?
The P&I on a 30-year FRM at 5% for a $300,000 loan is the same as that on an 8% FRM for ... a $220,000 loan.
This elevator may not stop at the lobby.
The Mess That Greenspan Made: Rosenberg on the Recession Depression
Rosenberg no longer holding back
New York is still way, way overpriced. Looking at rent/own and income/price should see another 40% to 60% decline.
Fortress areas will will along with the rest, including Palo Alto.
451 Addison Ave Palo Alto
Pre-Bubble for $175k
Post-Bubble Wishing Price is $1.2M
"Even if they could justify a new jet vs. the thousands of nice used ones available, the least they could do is buy something made here."
Citigroup still owns 2-4 other jets in addition to the new Falcon they "wanted" to buy
Both of these lead to a conclusion that the real number today is much worse than the one quoted.
Won't link: try this: this
Sam, I think it is fair to say that this is the first depression forecast although he does not really put number son it.
$1T in excess capacity by YE
real unemp of 13.5 currently
$6T in excess private debt
Since there is no "official" definition of a depression, as opposed to for a recession ( 2 qtrs back to back beg GDP), me thinks he is reluctant to put a hard number, but all the factors of something beyond recession are present
MS writes:
'William Dudley now President of the FRBNY..
Just what we need..yet more GS people. This time we get an "economist"
It just keeps getting better and better...'
MS You are speaking out of your rear end.
Dudley is worthy of great praise. he is brave reformer who if he had been in charge would have seen off the coming depression by restricting the previous boom. It is a sad fact that the high salaries of wall St kept the best minds out off government; though to be fair the crazy right wing ideology of the Bush admins would have been of potting as well.
FT
Mr Dudley is a longstanding advocate of using new regulatory tools to deal with asset price and credit bubbles. In a 2006 conference on monetary policy, soon before joining the Fed, he challenged the doctrine of Alan Greenspan, former Fed chairman, that a central bank could not do much about asset bubbles and should concentrate on cleaning up the mess afterwards.
Mr Dudley said asset price bubbles are not that hard to identify especially large ones. He agreed with the idea that interest rates were not generally the right tool to use to deal with bubbles, but said this may require the development of additional tools.
At the time he highlighted mortgages and credit derivative obligations as one of the market segments not well addressed by the prevailing system of regulation.
He proposed using the Feds bully pulpit to warn of emerging bubbles and said margin requirements and possibly capital adequacy rules and/or counterparty risk rules designed to limit leverage and risk might be deployed.
No surprise here.
On what basis are people concluding that Palo Alto homes are stagnating with "wishing" prices? All anecdotal evidence and local paper information indicates that the inventory is still moving at the asking prices. I see no capitulation on the ground.
Whenever I read how prices have dropped x percent, I think "who cares".
Didn't prices rise by a similar (or greater) amount in the years before the peak?
It would be nice to see a long term graph that shows prices rising and then falling to give readers some perspective.
BTW, I am a renter waiting on the sidelines for the bottom to possibly buy.
I'm just afraid Obama and the Democrats will take away all my savings.
Sorry, posted comment to wrong blog.
Guess I'm not so good at multi-tasking.