I've spent 10-15 hours in the last couple weeks shopping for a new apt in Austin, TX. We have had a boom in SFRs but most of it isn't very convenient to downtown. However, an enormous supply of apartments and condominiums have come online in the last few years. One property manager I talked to said that lots of places are sitting at 80-85% occupancy. I visited a couple places which were essentially empty. None of the places I visited were willing to deal, though. From what I gathered, prices generally had been set by a management company in another state based on a computer model and so no property managers had control over the price they leased at. Managements here are generally convinced that Austin's economy is stronger than everywhere else, and maybe they are right for the time being. Austin is a college and government town (some tech) and with the hit to parents 401ks and waning tax receipts, we will see weakness here.
Homeownership will probably fall another 4.5% to the ccycle bottom. 4.5% x 75 million homes is 3,375,000 homes. That is excess inventory. About 10 years of oversupply at today's new home sales rates. Break out the bulldozers. Otherwise housing will drag the US economy for another ten years.
Feb. 3 (Bloomberg) -- A record 19 million U.S. houses stood empty at the end of 2008 as banks seized homes faster than they could sell them and prices continued to fall.
The fourth quarters all-time high was 6.7 percent above a year ago when 17.8 million properties were vacant, the U.S. Census Bureau said in a report today. The vacancy rate, the share of empty homes for sale, rose to 2.9 percent in the last quarter, the most in data that goes back to 1956.
Somebody, I am in austin and rent a house in tarrytown close to downtown. I have friends in the monarch - no one lives there. The austonian I hear will be a shell as they have quit construction of the building - it will be an eyesore on congress. It is akin to the old intel building shell left from the glory days of the dot.com bubble which ironically was knocked down to build guess what condos.
Austin is screwed top largest private employers are samsung, freescale (levered semiconductor company), dell, whole foods and AMD. All are walking dead.
\t\t\t \t\t\t\tHome values in L.A., Orange counties higher than reported, Zillow.com says\t \t\t\t \t\t\t\t\t\t\t\t\t\t\t\t\t\t \t\t\t \t\t\t \t\t\t \t\t\t \t\t\t \t\t\t \t\t\tUsing its own index, the real estate information service says the extent of the housing downturn has been exaggerated by the high percentage of sales of foreclosures. http://www.latimes.com/news/local/orange/la-fi-zillow3-2009feb03,0,2319170.story Zillow, one of my favorite alternate realities.
Somebody, where did you end up leasing and if you don't mind what was the price point. I am on a month to month and they are trying to sell my house with no success so I may be moving soon and would love to know.
Thanks
JPMorgan Chase & Co , the second-largest U.S. bank by assets, on Tuesday said the Federal Reserve hired it as a custodian for its program to purchase up to $500 billion in guaranteed mortgage bonds Fed hires JPMorgan as custodian for MBS buy program
| Reuters
To clarify, the 3.375M excess homes doesn't include the additional 1.5% x 75M = 1,125,000 homes that have already come onto the market as the ownership rate has fallen from 69%. That is a total of 4.5M house of oversupply. Break out the bulldozers.
Yep, because of the 900 thousand illegal aliens who walked-away from their homes. It's all being covered up by the US govt.
dUCKdUCKgOOSE | 02.03.09 - 10:44 am | #
Around here they doubled down...two FC fams buy one house at 70% off (peak)
and share. Sounds like a good deal when read to them in espanol.
I signed an extension at Post Park Mesa. 875 sf for $900/mo. There were lots of ~750 sf apts for $710-$780 at various places. There are quite a few places trying to get that "higher end" renter, and the prices at those places started around $1000/mo for 750 sf. Every apt has what seems like a lot of fees on top of signing a lease. When I factored in the price of moving, I decided to stay put a little longer.
Thanks somebody. Austin and the state of texas are about 6-9 months behind the country as we were on the $14 natural gas and $150 oil train up until July of last year. The forecast is severe pain without a chance of bailouts for my beloved dirty energy companies and service companies.
I just found a fake quarter in my washing machine! From the other piece I found it was the second one. They are dated 1965 but no way is it a US quarter. Looks like 2 pieces with a tiny circle in the center to hold it together.
mwah writes:
Yep, because of the 900 thousand illegal aliens who walked-away from their homes. It's all being covered up by the US govt.
dUCKdUCKgOOSE | 02.03.09 - 10:44 am | #
Around here they doubled down...two FC fams buy one house at 70% off (peak)
and share. Sounds like a good deal when read to them in espanol.
mwah | 02.03.09 - 10:50 am | #
"About 29% of the Senate stimulus proposal's price tag is due to tax cuts. That's up from 22% in the House-passed bill. Senate Republicans have been calling for tax cuts to make up at least 40% of the total bill, since that's what President Obama's original, broadly outlined $775 billion proposal included."
didn't "we" pass a tax break stimulus package last spring?
didn't it work?
i think we, taxpayers should pay them for year long vacation, it will be cheaper and more beneficial for us in the long run.
Stop spreading untrue propaganda spread by the government-media-complex. I have see it with my own eyes.
Also, how do they know anything about illegal aliens if illegal aliens are not tracked or aren't even supposed to own homes in the first place. What SS# did they use when they bought it? What was their credit score with no SS#.
mine too.....I bailed when they applied for the commercial paper buying spree announced by the Fed. Got out in mid teens....they then drove it back up to about 26....should have reloaded but WTF.....money in the bank. SBUX is similar IMO....no meat left.
Perhaps. But note that he is not buying HOG stock; he is buying the debt at a 15% yield.
Also, at $300 million, it is very possible this investment is by one of his lieutenants rather than the man himself. (Deals less than $1 billion or so are too small for him to bother with personally.)
Off Topic- Saw a great posting on Waldman's Interfluidity: Interfluidity :: Winterspeak wonderland & miraculous Mencius He quotes Mencius and Winterspeak to provide the best explanation I've seen of the reserve lending crisis we're in- Winterspeak presents a view of the monetary/finacial system in which the government is ultimately the hub. As above, when we "save" without explicitly investing, we don't lend to banks which then lend to businesses. We lend to the state â we hold instruments that are ultimately claims against the state â while the government organizes the distribution of loans, implicitly via how it structures bank lending or explicitly by various forms of directed credit.
He then goes on to describe why fiat money is the bubble that need never collapse due to Nash equilibrium and breaking govt investment and consumption apart to clarify the meaning of "savings"- The reason this is important is because we talk about savings, economists and real Americans alike slip between the two definitions unconsciously, which badly muddles things. On the one hand, we talk about the savings rate, which most certainly includes investment: If you were contributing to your 401-K or buying farm machinery, you were doing your part to keep the US savings rate above zero. But on the other hand, when we say that during this crisis, Americans' shift to savings is proving disruptive of aggregate demand, what we are talking about sudden desire to hold claims on money rather than to invest in real capital.
The whole thing is much clearer than I could quote here and I hope others find it as useful as I.
CR is upfront about counting as excess only the differential in rental units from 10.1% to 8%. The 'base' 8% of 40 million units adds another 3.2 million to his 1.87.
Similarly, he only counts as excess the differential in housing from 2.9% to 1.7%, leaving the base of 1.7% of 75 million units, which adds another 1.275 million to his 1.87.
I don't see CR getting above a little over 6 million units (not just houses).
Bloomberg, though, is specific about "19 million empty houses." It doesn't make a lot of sense.
So what.....when said debt is worthless how exactly is he (or anyone else FTM) going to collect?
This is why I said anyone buying long term notes is going to regret it....it has nothing to do with the yield. The gov't will be in a similar situation soon.....
I had no idea the Wall Street Journal was government propaganda mouth piece.
What SS# did they use when they bought it? What was their credit score with no SS#.
It's called an ITIN. Contrary to popular belief, a number of illegal immigrants do pay taxes and have credit scores. And those are the ones who buy homes.
Here's another article for you since you seem to be google challenged. It's probably more to your liking this time. It's a negative article.
Perhaps. But note that he is not buying HOG stock; he is buying the debt at a 15% yield. Nemo | Homepage | 02.03.09 - 11:02 am | #
Yes, I did note that. I wouldn't buy into a new issue of HOG bonds no matter the yield. Further, if you're too big to be bothered to be dealing with deals that large, you've probably lost touch a while ago.
interesting tidbit about Macys. My buddy works at the Macy's Home store at South Coast Plaza:
[7:58 AM] [buddy]: and this is direct from the CEO in this email he sent everyone
[7:58 AM] [buddy]: so they're apparently streamlining the whole corporation so instead of having like Macy's West, East, Central, Hawaii, Home Store, etc. it's all under the new york office now
[7:59 AM] [buddy]: so all the executives that headed up those divisions are out of a job
don't hate, there are so many of us and so few of him.
Besides my bet would be, you just annoyed him with ridiculously flowed data taken from moveon.org.
sportsfan writes:
There's a big difference between 1.87MM excess housing units (CR) and 19MM empty houses (Bloomberg)
I trust CR's numbers; per back-of-the-envelope 19 million is to high. Another reason good bloggers like CR are more reliable than MSM
ren writes:
I don't have time to read today, but the House committee on agriculture is discussing legislation to regulate derivatives.
Just in case no one else mentioned it.
~~~~~~~~~~~~~~
The Committee on Agriculture ?!?!
I guess I will stop wondering about anything in the US.
But it's true. Thanks , would never have checked that Committee.
You are not allowed to prove with data that CR has been wrong. Amazing. Jas Jain | Homepage | 02.03.09 - 11:02 am | #
The great thing is that if you don't like the way CR runs his blog, you can post elsewhere. I mean, why would you invest time in posting if your post is just going to be removed? Unless of course, you are a slow learner and enjoy wasting your time.
California, goes broke, halts $3.5 billion in payments. People are going to be hurt starting today, said Hallye Jordan, speaking on behalf of the state Controller. Theres no money.
JPMorgan Chase & Co , the second-largest U.S. bank by assets, on Tuesday said the Federal Reserve hired it as a custodian for its program to purchase up to $500 billion in guaranteed mortgage bonds http://www.reuters.com/article/ b...353514820090203
The great fleecing continues unabated. \t Anonymous | \t \t \t \t02.03.09 - 10:49 am | #
It is dizzying how many ways the taxpayer is getting sopped. Insuring crap mortgages at rates a fraction of private insurers. Loss carryback provision in the stimulus that apply largely to big banks. Over 2 trillion on the Fed balance of who the eff knows what. Feel free to add more I'm not aware of.
OT: Did anyone partake in the free Denny's breakfast? The deal got me curious, so I was looking at their numbers. Man, they are not in good shape. No wonder they need to give food away.
When considering the value of bank assets for the new TARP initiative, I submit that any assets on the books of GS will be worth by far than any others. Because GS is globally recognized as smarter than any institution on the planet, the US Taxpayer should feel honored to pay above par for their meticulously assembled collection of CDO/CDS/CMBS blah blah blah.
It pays to have friends in DC with their pockets stuffed with your money.
Homeownership percentage equals the percentage of people who own homes. One person can own more than one home. If you own 2, live in one, and don't rent the other one out, one is empty. If you own 4, live in one, and don't rent the other 3 out, 3 are empty. Forgot where I was going with this, but the gist is that is the difference between the numbers.
Comments are disappearing and reappearing on haloscan a lot over the last two days so maybe that's what Jas is referring to. locust | 02.03.09 - 11:16 am | #
I'm way more inclined to buy that. CR has been quite benevolent with his censorship...
To be fair, i've seen no written indication that any data forthcoming from this site to be chiseld in stone.
Atworst, assumptions are made and trendline's drawn.
At best, a simple synopsis of current conditions. no more, no less.
A mortgaged home is not home ownership for the individual/family residing in the mortgaged home, especially considering the fiasco in lending standards for the past decade and a half. Once again, a misleading and euphemistic indicator. It's effectively become a de facto renting scenario, except the renter gets to deduct their payment, or a portion thereof, for tax purposes.
GD2.0, sure, I delete Jas' posts without reading them ... he has attacked people I know without cause. I gave him plenty of warning.
As far as his analysis, I have no idea what he is writing about because I don't read his comments. Basically Jas is upset at me because I corrected him a number of times over the years.
Jas used to compare housing starts directly with new home sales. I politely pointed out that housing starts included many units not included in the new home sales report (like apartments and owner built units). Instead of thanking me for helping him, he attacked me! That is his personality.
I just ignore him now. The reason I changed Haloscan to have the name first (ahead of the comment) was because of frequent complaints about Jas - other people wanted to skip his comments too. I just delete them when I see them.
Dimon said that although bonuses have been very large, sizable portions are paid in stock, with strict rules on when that stock can be sold. He said an employer wants to support the best people on the payroll, and the quality of an employee is not always based on performance.
Although he suggested the president should not be pointing a finger at the financial community, Dimon acknowledged that banks are to blame for the crisis, with too much leverage, too many products, and bad underwriting.
German proverb: Moving three times is like being burned out once.
I'd like to see a chart of persons per household trends. Data is probably too delayed to see the recent uptick, but any attempted divinations of excess capacity have to take the long term secular decline in #/household into account.
Immigrants have always worked harder and contributed more to our society than lazy entitled anglos.
Subprime is dwarfed by problems with whitey loans -- i/o and option arm. And next in line for the deflationary firing squad are the largely white upper income house fetishists who bought more "prime" than they could afford (because housing always goes up).
Watching rich mostly white morons lose their life savings is sheer fun!
If you want to know how I feel about social justice in this fine banana republic...see my handle.
They should do homeownership rates like they do unemployment rates. Only those actively looking for a home should be included in the "non-homeownership rate." Those discouraged from owning a home, not having the means to own, or having no desire to own should be excluded from this rate. Like somebody said, that would make the effective homeownership 100%.
Every time a Politican is turned over and examined, there seems to be issues, especially "tax issues". Even more remarkable is the "business-as-usual" reaction to this.
The Judicial Watch site lists Obama, Clinton, Dodd, and Pelosi as the 10 most wanted corrupt politicians.
Does Judicial Watch have any credibility or are they a bunch of kooks?
Immigrants have always worked harder and contributed more to our society than lazy entitled anglos.
deathtorentiers | 02.03.09 - 11:25 am | #
It actually has nothing to do with the color of your skin but rather how many generations your family has been here. Studies have show that the most successful generations are the children of immigrants... It was true for the jews, the irish, the indians, the italians, the mexicans, the brazilians etc.... Success being defined as the generational socioeconomic delta...
Q: why did the homeownership rate rocket upwards in the second half of the 90s? Did Bill do something? (Not a politically loade question, I'm really curious.)
I've never seen Jas post any data - just conclusions. He and Sebastian are the same - long on opinions that never change regardless of the data. Jas has been saying the same thing for over the past decade and you would have been bankrupted listening to him. Now he looks like a hero but people have no idea what losses they would have had to absorb to get here. I have no doubt he will hold his current trade and bearish/deflation positions too long and ultimately get buried.
Sebastian on the other hand has already been buried.....
I block both.
CR: Sorry for feeding the troll above, although perhaps you saw the direction I was going with it. Please delete away, it certainly wasn't adding to the discussion (or even less so than I normally do...
Judicial Watch is a right wing group so they're not an equal opportunity basher. That said, they're also the group who uncovered the Iraqi oil field maps when they filed FOIA requests for information regarding Cheney's "energy task force meetings" which we pretty much can assume now were planning sessions for the war in Iraq.
You must be joking. How many overweight, bald, pony-tailed nerdy closeted wannabes who dream of wearing leather chaps can there be in America?
That market is probably close to saturated. But what about in China? India? HOG is exactly the sort of luxury good that would do great internationally with a rising standard of living. And if it fails, BH gets the equity in BK?
HOG sells lifestyle and attitude as much as a bike. For a certain class of person, having a H/D logo cap, or black henley, or branded Ford F150 (!) is the height of cool.
(Gielgud accent): And one must usually go to a bowling alley to meet a person of this caliber.
Solar Cycle 24 began early last year when a reverse polarity sunspot appeared in the suns Northern Hemisphere. A sunspot is an area of highly organized magnetic activity on the surface of the sun. The number of sunspots and solar storms will gradually increase in the next few years, reaching a maximum by 2012.
Scientists have regarded space weather as a potential problem since a major solar storm in 1859 caused telegraph wires to short out in the United States and Europe, igniting widespread fires. A similar storm today would have "significantly more extensive (and possibly catastrophic) social and economic disruptions," the researchers conclude.
JPMorgan Chase & Co. said Tuesday that it has been selected by the Federal Reserve to serve as custodian of the government's program to buy mortgage-backed securities.
The Federal Reserve also selected four investment managers, BlackRock Financial Management Inc., Goldman Sachs Asset Management LP, Pacific Investment Management Co. and Wellington Management Co. to assist with the program.
And if it fails, BH gets the equity in BK?
Ralph Cramdown | 02.03.09 - 11:32 am | #
I wonder if Warren Buffett would rather see his sister in a whorehouse than his brother on a Japanese motorcycle? I remember that old bumpersticker.... kind of the 70's equivalent of the Calvin peeing thing.
According to this, the U.S. home ownership rate is still pretty high compared to a lot of European countries. The range is 34.6% in Switzerland to 85.3% in Spain.
HOG sells lifestyle and attitude as much as a bike. For a certain class of person, having a H/D logo cap, or black henley, or branded Ford F150 (!) is the height of cool. anonymous | 02.03.09 - 11:36 am | #
Yeah, we had a Harley dealer in town with as much space set aside to Harley-branded clothing, gear, belt-buckles, etc. as to the actual hogs. Not that there weren't a lot of motorcycles, it was a huge dealership.
Emphasis on "was." Went bust in November, space for rent, hogs still sitting there in the window. They're just now beginning to truck out some of the clothing/soft goods. Lifestyle's not such a good play in hard times; rent and food and medical care, are.
We leased a house on Spring Lane in Tarrytown when we moved back to Austin in 2006. 1943 construction, lovely craftsman that needed some updates. Priced about $1.40 / sq ft. The owner sold it last July for $574K, buyer immediately demolished it (a crime). The vacant lot has sat there ever since, now has a fsbo sign up.
Prices, both sale and lease, in good areas (Tarrytown, Clarksville, Travis Heights, Bouldin, SoCo) are still high and not coming down. But the lease prices are much, much better than sale, and look to be poised to drop.
We found a nice SFH off S. Lamar, $1.00 / sq ft for 2001 construction and are leasing it now. If the owner ever capitulates a bit on price, we might buy it (we're sitting on the cash from sale of our NoVa house). But we won't be buying at these prices unless inflation starts eating our cash's value.
As for those pricey downtown condos, I don't see them making it. But then again, I don't see how folks can pay $950K for an updated 1940's 3/2 in TT, or do the $650K tear-down thing. It's all a wonder to me.
CR. No need to explain why you delete Jas's comments (I ignore them too). If I wanted an opposing view I would read another website (I do). Mostly I give more weighting to what you write than others do because you have been proven correct more often.
Delete whoever you like. Jas will never understand that most of what he spouts is simply juvenile and unworthy of most peoples attention. Nobody is going to take his whining seriously.
A high rental vacancy rate is particularly difficult in these circumstances:
The owner had a low cap rate (or negative cap rate) to start with.
The owner has few units (if you have 3 units, you cannot have a 10% vacancy rate, you can have 0%, 33%, 66%, etc).
I suspect the bubble made these conditions more common. The amateur and accidental landlords with only a few units who weren't making much money on the rent to start with will have particular difficulty as rental vacancy rises and rental rates fall.
California, goes broke, halts $3.5 billion in payments. âPeople are going to be hurt starting today," said Hallye Jordan, speaking on behalf of the state Controller. âThere's no money." km4 | 02.03.09 - 11:11 am | #
I'd bet that is how things went from bad to worse in Argentina too....
BTW Ferrari makes more selling branded shit then they do selling cars. It's a lucrative biz (branding) as you can buy just about anything with a Ferrari logo on it. See Porsche's less successful (designer) son. Sunglasses anyone?
"Holders of so-called subprime mortgages are in danger of losing their homes, especially in the Central Valley, according to a report from the Center for Responsible Lending.
As much as $164 billion in mortgages is at risk due to foreclosures in the subprime mortgage market, it says.
With 25 percent of the mortgages issued this year being subprime, Merced County ranks as the nations most risky area for foreclosures, according to the report.
Other Central Valley areas are not much better, it says.
Bakersfield ranks second in the nation; Fresno is fifth; Stockton is seventh and Visalia-Porterville is 13th.
In contrast, Yuba City ranks 152; Sacramento 28; Modesto 205; Madera 29; and Hanford-Lemoore( I'M FROM HERE ), 152.
We project that one out of five (19 percent) subprime mortgages originated during the past two years will end in foreclosure. This rate is nearly double the projected rate of subprime loans made in 2002, and it exceeds the worst foreclosure experience in the modern mortgage market, which occurred during the Oil Patch disaster of the 1980s, the report says."
In other words, as the boom went on, the more preposterous loans were sold at higher and higher prices. Probably the worst part of the market for risky buyers to get in. What would be interesting would be a graph plotting this relation. Does one exist?
JH, agreed. What people fail to realize is that austin is a govt. university town. There are few jobs here over $100k. We do have a ton of Cali transplants who have cashed out of bubble markets and real estate compared to bubble areas appear cheap but like all investments fundamentals eventually matter. Median income is too low for median housing prices and that matters.
BTW Ferrari makes more selling branded shit then they do selling cars. It's a lucrative biz (branding) as you can buy just about anything with a Ferrari logo on it. See Porsche's less successful (designer) son. Sunglasses anyone? MS | 02.03.09 - 11:54 am | #
Haha, so true. There's a guy at work that doesn't even have a driver's license, and he wears Ferrari crap all the time! It seems to me for half of the retailers, their strategy is to "sell the lifestyle." Some, like Starbucks and HOG, more successful than others. The other half's strategy seems to be, "so cheap you can't afford NOT to buy." I'm exaggerating, but it's like there's no middle ground for well-made, decently priced products. Weird.
"Holders of so-called subprime mortgages are in danger of losing their homes, especially in the Central Valley, according to a report from the Center for Responsible Lending.
Very true, but the article was likely referring to the givers of those mortgages.
Missed you guys while I was hiking Kilimanjaro. I thought of all the hiking CR did and I'm sure he would enjoy Kili. Being away from phones or computers for 10 days was wild. It was weird not knowing what was going on in the world right when Obama was being sworn in. Being in Tanzania showed me that no matter what, we are all lucky to be Americans. I have seen poverty and desperation that shocked me.
CR you are a true gentleman. And very patient. Was thinking of Tanta this weekend as we were walking the doggie on Lake Mendota in the blinding sunshine (yes, you can do that in Madison in the winter!). Deep sigh.
KS writes:
sportsfan writes:
There's a big difference between 1.87MM excess housing units (CR) and 19MM empty houses (Bloomberg)
I trust CR's numbers; per back-of-the-envelope 19 million is to high. Another reason good bloggers like CR are more reliable than MSM
KS | 02.03.09 - 11:07 am | #
Perhaps the discrepancy is due to a typo (BB's # should be 1.9MM?).
America may be the last society to come around to the conclusion that in the modern world it's not practical/possible for everyone to live in a house with a white picket fence, but this too is coming to pass.
2000: 2.66 persons per dwelling unit. 2007: at the same 2.66 persons per dwelling unit would require 114,000,000 dwelling units.
Current estimate of housing stock: 128,000,000 dwelling units. Excess: 14 million dwelling units. Conclusion; "1.87 million excess housing units" is far too conservative.
Here's a dot to connect to the Korea production cliffdiving... (note the lowest in 17 years is going back to the limit of the time series)
Brazils Industrial Output Plunges Most in 17 Years (Update2)
By Andre Soliani and Jeb Blount
Feb. 3 (Bloomberg) -- Brazils industrial output fell the most in at least 17 years as companies across the country slashed production to adjust to plunging demand.
Factory production declined 14.5 percent in December from the year-ago month, the biggest decline since the statistics agency began tracking annual output in 1992. The drop exceeded all 22 forecasts in Bloomberg survey of economists. Output fell a revised 6.4 percent in November. Brazil’s Industrial Output Plunges Most in 17 Years (Update2) - Bloomberg.com
S&P lowers California GO rating
2009-02-03
Standard & Poor's Ratings Services lowered its rating and underlying rating (SPUR) to 'A' from 'A+' on California's $46 billion of general obligation (GO) debt and removed the ratings from CreditWatch with negative implications, where they were placed Dec. 10, 2008. The outlook is stable. At the same time, Standard & Poor's affirmed its 'SP-2' short-term rating on the state's $5 billion revenue anticipation notes (RANs). The rating on the state's sales tax-supported GO economic recovery bonds (A+/Stable) is not affected. S&P lowers California GO rating
I thought the whole public policy rationale for high home ownership rates was "stable communities" and "lower crime." But there are several countries here with much lower rates than the US, yet aren't noted for being particularly high crime. For example, Switzerland is on the bottom, and Japan, much of Scandinavia, Canada, etc. are lower than we are. So I don't see a relationship at all. If I were cynical, I'd say the public policy stuff was a cover for "let's make money off the rubes!"
"No worries" passes as surf-speak down here. CR has mentioned he's from a beach town - have I seen you in the water, CR? Swami's? Old Man's? Please don't tell me you're a regular at The 'Bu.
I thought the whole public policy rationale for high home ownership rates was "stable communities" and "lower crime." But there are several countries here with much lower rates than the US, yet aren't noted for being particularly high crime. For example, Switzerland is on the bottom, and Japan, much of Scandinavia, Canada, etc. are lower than we are. So I don't see a relationship at all. If I were cynical, I'd say the public policy stuff was a cover for "let's make money off the rubes!" scone | 02.03.09 - 12:23 pm | #
It is a whole lot more complex than that. Within societies homeownership does lower crime. Across societies there are other factors that take precedence. There are some interesting, some strange and some obvious. Strange; English as the dominate language. Interesting; geographic latitude. Obvious; density and degree of urbanization.
Strange; English as the dominate language. Interesting; geographic latitude. Obvious; density and degree of urbanization.
Rob Dawg
.
English speaking crims don't go out in cold weather?
Expanding Homeownership. The President believes that homeownership is the cornerstone of America's vibrant communities and benefits individual families by building stability and long-term financial security. In June 2002, President Bush issued America's Homeownership Challenge to the real estate and mortgage finance industries to encourage them to join the effort to close the gap that exists between the homeownership rates of minorities and non-minorities. The President also announced the goal of increasing the number of minority homeowners by at least 5.5 million families before the end of the decade. Under his leadership, the overall U.S. homeownership rate in the second quarter of 2004 was at an all time high of 69.2 percent. Minority homeownership set a new record of 51 percent in the second quarter, up 0.2 percentage point from the first quarter and up 2.1 percentage points from a year ago. President Bush's initiative to dismantle the barriers to homeownership includes:
* American Dream Downpayment Initiative, which provides down payment assistance to approximately 40,000 low-income families;
* Affordable Housing. The President has proposed the Single-Family Affordable Housing Tax Credit, which would increase the supply of affordable homes;
* Helping Families Help Themselves. The President has proposed increasing support for the Self-Help Homeownership Opportunities Program; and
* Simplifying Homebuying and Increasing Education. The President and HUD want to empower homebuyers by simplifying the home buying process so consumers can better understand and benefit from cost savings. The President also wants to expand financial education efforts so that families can understand what they need to do to become homeow
Snow apparently caused by Global Warming.
Rob Dawg
.
Yes, it would. Destabilize a self-organizing system, push it out of equilibrium, and you have all sorts of unexpected effects, at first. So we get some chaos, then it moves to a new, hotter equilibrium in some places. That's the theory, anyway.
had posted about this on another thread but somehow it never appeared--
Some of that excess housing stock will be slurped up soon if the current buzz in the Senate prevails. In the Senate debate about amending the Stim Plan, as of the past few days, "fix housing" is hot again, the key proposal being 4% Gov't mortgages and re-fi's-- available to everybody, not just troubled homeowners-- plus a $15K tax credit for those who buy a home.
I saw a C-span hearing last week where Sen. Lindsay Graham (R) S. CA blew in for a bit, & sorta hijacked the economists' panel discussion on the Stim Plan. Love him or hate him, Graham is a political animal, & he very bluntly told the economists that no matter what advice they had, he still had to go back home "to the folks" with a political solution. In sum, 'people don't understand CDO's, etc., but they do understand 4% mortgages & a coupla extra 100 bucks in their pockets each month.' He could 'sell' that, both to the folks in danger of losing their homes, and it would lessen the resentment & give some reward to those who HAD played by the rules & are paying their mortgages-- so it'd help prevent walkaways.
The economists pointed out that 50% of mods re-default, & Graham essentially said 'so what?-- a glass half full is better than empty'. He brought up the two-fer effect-- that along with making his constituents happy about the 4% mortgages & re-fi's, this extra coupla 100 bucks discretionary income per month would stimulate the larger economy beyond housing. He talked about an 18-month "hard sunset" on this 1-time-only good deal, & when the economists objected with "the huge popularity of such a program" almost guarantees its continuance, Graham smilingly blew them off-- 'an emergency is an emergency.' He basically got the economists to concede that $100 B from the Stim Plan spent on "fix housing" would be a politically viable & economically productive use of the funds. (He also mentioned some type of 80/20-ish solution, wherein the Gov might buy the difference between the original loan, & what the home is now worth, & said his people were costing that out now.)
Point: Graham is a politician first & everything else second, he was McCain's camopaign advisor, & he carries weight in the GOP. You should've seen all the other Sen's beady little eyes light up when Graham frankly dumped the "what's gonna make me popular?" issue on the table. These Sen's are sick of hard math & numbers, but they all understand counting votes.
So Graham's proposal-- that at least $100 Bil be re-directed from the existing Stim Plan towards housing-- seems like an inherently attractive & done deal, to me.
I'm in Austin, too, and am perplexed by what's been going on with the whole luxury condo scene.
I bought a 1300 sf townhouse out near 183/290 for about $0.50/sf and gutted and remodeled it and am now happy with a very modest mortgage (though not so great of neighbors - I've now got my second active drug dealer next door, that's fun).
I'd love to live in downtown, but the prices around here just don't make any sense, even though I moved here from NorCal. Especially the downtown area. Who did they think would buy those things?
That would be AGW Theory v7.1 because the previous half dozen guesses have been proven embarrassingly incorrect.
Rob Dawg
.
Don't confuse weather with climate. At any rate, it might even be possible for global warming to cause an ice age.
But let's stay OT, o.k.? I want that 4% mortgage, dammit!
"Officials said the GOP was coalescing behind a proposal designed to give banks an incentive to make loans at rates currently estimated at 4 percent to 4.5 percent. Fannie Mae and Freddie Mac, which were seized by the federal government in September, would be required to purchase the mortgages once banks have made them to consumers."
So now Fannie and Freddie are forced to eat everything that comes along, getting more toxic with time.
This bit about the GOP 4% plan just floors me. The problem to now hasn't exactly been that interest rates are too high...
"Officials said loans to credit-worthy borrowers on primary residences with a mortgage of up to $625,000 would qualify, including those seeking to refinance their current loans."
Would this be adjusted on a per-CMA basis, or would it benefit wealthy Republican voters in flyover states with a huge subsidy? Obviously, it's already heavily skewed to the upper end - the bigger your mortgage, the more you save.
Ah, screw it. This obviously isn't based on any logic at all, save "if we could just reflate house prices, everything would go back to the halcyon days!"
Median income is too low for median housing prices and that matters. Ian in Austin | 02.03.09 - 11:56 am | #
Not in California. Texas does have some realatively strict mortgage rules that were put in place after S&L that discourage any bubblicious effect. As such, I not inclined to bail out banks that made bad loans nor the borrowers that took them.
I think, in general, that with the premise being "we're all falling off a cliff-- banks, jobs, homeowners"-- many senators feel that future losses to Fan/Fred/Treasury can be discounted now to "fix" this emergency. Graham's 'glass half full vs. completely empty' resonates.
Fact: it resonated with me-- I've been waiting to buy my first home for some "homeowner incentives" to do so--key Q being, when is the amount of incentive roughly on par with "amount-as-yet-unknown" decline in home values? A 4% 30 yr fixed plus a $15K tax credit sound nice.
And it resonated with you, too-- Soooo... unless somebody pokes great big holes in it quickly, this is on its face likely to be a hugely popular GOP proposal, that will bring Dems on board also.
Point nobody's mentioned tho: it's not like these mortgages will be assumable, so since people on average move every 5-7 years, & in theory, the economy will be "fixed" by then, that means this 4% deal will sorta "sunset" itself, by limiting its long term value to only those who live in the house for 30 years.
Ralph Cramdown & Blackhalo-- yup, I don't wanna subsidize bad actors either, but looks like that ship has already sailed. Maybe this 4% solution coould be targeted, like you noted-- maybe they could just declare "housing national emergency" areas??
Broward-- yes-- that's precisely what Graham got the economists to concede-- this would be, at minimum, a 2-fer. Housing, plus the economic boost thru increased discretionary income.
I don't understand people who say to bulldoze housing.
Unemployment is rising and people should pay MORE for housing?
Wouldn't that make our economy even worse?
While your at it, why not raise gas prices back to $4 a gallon and raise taxes!!!
This way the economy will REALLY take off!
I see a lot of people blaming only Bush, but if you look at the homeownership graph, you will find that it made it biggest jump starting with 1993 and Clinton's term, and continued to 2007 under Bush....the really scary thing, is that over a 50 year time span, we still have a lot further to drop to get to the average...
Elvis, I like your figures...when you multiply the difference time the national average home price..say in 2004, it comes out to a little over 2 trillion...so at a 20% default rate that would equal 2 trillion, compound that with people who were already homeowners that used their homes as ATMS and you have your perfect storm.
Elvis,
your explanation makes sense...vacant homes vs. home owners.
Though the Bloomberg piece uses Census data, it's not clear if they are counting vacation homes, for example, unrented and empty most of the year. I wonder at what point aging, abandoned housing in Cleveland or Detroit is still counted...if it still has a roof or it's still mostly standing?
I read this morning in Professional Builder that the rate of formation of new households is twice what the building starts currently is. Something doesn't jive here. We need more data on this.
I read this morning in Professional Builder that the rate of formation of new households is twice what the building starts currently is. Something doesn't jive here. We need more data on this.
Rob Dawg flubs an attempt at irony when he writes:
"Snow apparently caused by Global Warming."
That is correct. Warmer air carries more moisture than cooler air, hence more snow in some colder areas. This is why, for instance, snowfall has increased in the interior of Greenland even as the total ice mass of Greenland glaciers dramatically decreases.
A society built millions more houses than it needs because of poor planning. That sounds like something you'd find in a science fiction story or something. It's a weird problem to have: all these houses we don't know what to do with.
Another fine achievement of the Bush presidency.
It's a great time to own or rent a home !
Where's the sticky everyone keeps talking about?
Seriously, the allure of ownership is no more and that means people are going to let their houses go far more readily than in any prior downturn.
I behaved prudently and did not buy. It is time for this behavior to be punished by government intervention. Teach me a lesson, government!
1.87 million to absorb. Immigration anyone?
Nemo?
The ownership society! Hahahahahaha.
I'd like to double down on new houses.
Nostrovia,
Another Sawtooth Mountain Market day.
Schumer must like the HOG news. CNBS stated he wants to kick start the economy. Do hogs have kick starts anymore?
Nostrovia,
The Pwnership Society, brought to you by George W. Bush.
p.s. another day another 10K in job losses. Motorolla is a toast.
Home Owner = Bank-Owned Property Custodia
my personal anecdote:
I've spent 10-15 hours in the last couple weeks shopping for a new apt in Austin, TX. We have had a boom in SFRs but most of it isn't very convenient to downtown. However, an enormous supply of apartments and condominiums have come online in the last few years. One property manager I talked to said that lots of places are sitting at 80-85% occupancy. I visited a couple places which were essentially empty. None of the places I visited were willing to deal, though. From what I gathered, prices generally had been set by a management company in another state based on a computer model and so no property managers had control over the price they leased at. Managements here are generally convinced that Austin's economy is stronger than everywhere else, and maybe they are right for the time being. Austin is a college and government town (some tech) and with the hit to parents 401ks and waning tax receipts, we will see weakness here.
I can't vouch for everywhere else....but all of those excess rentals are all brand new "luxury" offerings as well.
Granite countertops and high rents as far the eye can see.
This is how the old decrepit units which were the same luxury units from the LAST boom will be replaced.
Stop the doom and gloom!
Joe the Economist is going to offer his views, opinions and suggestions on the financial situation.
The best part of that link? The preeningly posed mugshot.
Imagine that you were a busted message board. Now imagine that you were Haloscan. But I'm being redundant.
Nostrovia,
it seems 20y home ownership average is even lower then 2001.
More pain to come, buckle up.
HOG: Berkshire Hathaway buys half
WB must not like his children or grandchildren.
Ciao
MS
Homeownership will probably fall another 4.5% to the ccycle bottom. 4.5% x 75 million homes is 3,375,000 homes. That is excess inventory. About 10 years of oversupply at today's new home sales rates. Break out the bulldozers. Otherwise housing will drag the US economy for another ten years.
Bad Haloscan.
How low can it go? Occupancy rate limbo!
Where's CRBot? Banished? Decommissioned?
Bloomberg claiming 19 million vacant houses.
Feb. 3 (Bloomberg) -- A record 19 million U.S. houses stood empty at the end of 2008 as banks seized homes faster than they could sell them and prices continued to fall.
The fourth quarters all-time high was 6.7 percent above a year ago when 17.8 million properties were vacant, the U.S. Census Bureau said in a report today. The vacancy rate, the share of empty homes for sale, rose to 2.9 percent in the last quarter, the most in data that goes back to 1956.
900 thousand excess vacant homes.
Yep, because of the 900 thousand illegal aliens who walked-away from their homes. It's all being covered up by the US govt.
Somebody, I am in austin and rent a house in tarrytown close to downtown. I have friends in the monarch - no one lives there. The austonian I hear will be a shell as they have quit construction of the building - it will be an eyesore on congress. It is akin to the old intel building shell left from the glory days of the dot.com bubble which ironically was knocked down to build guess what condos.
Austin is screwed top largest private employers are samsung, freescale (levered semiconductor company), dell, whole foods and AMD. All are walking dead.
"Now imagine that you were Haloscan."
LOL,it has been pretty sucky the last couple of days. Don't mean to carp, but....
By the way, this is a test.
BTW I have started layering into SYY puts. (long dated)
Love the action there....
Ciao
MS
CR Bot has been Haloscan'd.
OM NOM NOM NOM
Good news from Zillow for CR:
\t\t\t \t\t\t\tHome values in L.A., Orange counties higher than reported, Zillow.com says\t \t\t\t \t\t\t\t\t\t\t\t\t\t\t\t\t\t \t\t\t \t\t\t \t\t\t \t\t\t \t\t\t \t\t\t \t\t\tUsing its own index, the real estate information service says the extent of the housing downturn has been exaggerated by the high percentage of sales of foreclosures.
http://www.latimes.com/news/local/orange/la-fi-zillow3-2009feb03,0,2319170.story
Zillow, one of my favorite alternate realities.
There's a big difference between 1.87MM excess housing units (CR) and 19MM empty houses (Bloomberg).
Ian,
I agree Austin will be hit hard. My lease was ending 2/16 so I had to do something. I signed a 6 month lease, and plan on getting a deal in 6 months.
Homeowner vacancy correlates with speculation bloom.
"Love the action there...."
I've been living large on ace-duece and aces on my come out rolls. Different strokes, I suppose.
Nostrovia,
Somebody, where did you end up leasing and if you don't mind what was the price point. I am on a month to month and they are trying to sell my house with no success so I may be moving soon and would love to know.
Thanks
Interest rates are going to shoot straight through the roof. They are being kept artificially low. Turns out there is risk in lending money! Who knew?
JPMorgan Chase & Co , the second-largest U.S. bank by assets, on Tuesday said the Federal Reserve hired it as a custodian for its program to purchase up to $500 billion in guaranteed mortgage bonds
Fed hires JPMorgan as custodian for MBS buy program
| Reuters
The great fleecing continues unabated.
To clarify, the 3.375M excess homes doesn't include the additional 1.5% x 75M = 1,125,000 homes that have already come onto the market as the ownership rate has fallen from 69%. That is a total of 4.5M house of oversupply. Break out the bulldozers.
misean-
unfortunately that's all that is at this point.....
At least you get ciggies and drinks thought
Ciao
MS
Yep, because of the 900 thousand illegal aliens who walked-away from their homes. It's all being covered up by the US govt.
dUCKdUCKgOOSE | 02.03.09 - 10:44 am | #
Around here they doubled down...two FC fams buy one house at 70% off (peak)
and share. Sounds like a good deal when read to them in espanol.
There's a big difference between 1.87MM excess housing units (CR) and 19MM empty houses (Bloomberg).
sportsfan
I agree. I'd like to understand the divergence in the numbers...who's counting what?
anonymous writes:
It's a great time to own or rent a home !
anonymous
May I correct?
It's a great time to have a roof over one's head.
Yeah I went to Austin two weeks ago and the amount of empty newly developed real estate was interesting. And by interesting I mean astounding.
"I agree. I'd like to understand the divergence in the numbers...who's counting what?
fried"
Second, third, and tenth homes.
Muestra aquí. Usted no tiene que tener ningún dinero abajo y en 3 años usted puede apenas financiar de nuevo. ¡Qué un reparto!
Ciao
MS
Yep, because of the 900 thousand illegal aliens who walked-away from their homes.
There's a lower rate of default among illegal immigrants.
WSJ: Unlikely Mortgage Winner
I signed an extension at Post Park Mesa. 875 sf for $900/mo. There were lots of ~750 sf apts for $710-$780 at various places. There are quite a few places trying to get that "higher end" renter, and the prices at those places started around $1000/mo for 750 sf. Every apt has what seems like a lot of fees on top of signing a lease. When I factored in the price of moving, I decided to stay put a little longer.
MS,
"unfortunately that's all that is at this point.....
At least you get ciggies and drinks thought"
Double check.
Nosrtrovia,
Here's the link to the Bloomberg piece claiming 19 million vacant houses in the US.
Record 19 Million U.S. Homes Stood Vacant in 2008 (Update3) - Bloomberg.com
Here in Atlanta there are literally thousands if not tens of thousands condos either recently finished or nearing completion
"When I factored in the price of moving"
Anger, pain, injuries, broken stuff, and less friends are the main price of moving.
O/T : (insane method to present charts)
Now you can hear the Dow Jones :
YouTube - Johannes Kreidler - Charts Music - Songsmith fed with Stock Charts
(cought the link just by accident)
Thanks somebody. Austin and the state of texas are about 6-9 months behind the country as we were on the $14 natural gas and $150 oil train up until July of last year. The forecast is severe pain without a chance of bailouts for my beloved dirty energy companies and service companies.
I just found a fake quarter in my washing machine! From the other piece I found it was the second one. They are dated 1965 but no way is it a US quarter. Looks like 2 pieces with a tiny circle in the center to hold it together.
Slots? Vending machines? Another Chinese import?
Who cares..... market up!!!
mwah writes:
Yep, because of the 900 thousand illegal aliens who walked-away from their homes. It's all being covered up by the US govt.
dUCKdUCKgOOSE | 02.03.09 - 10:44 am | #
Around here they doubled down...two FC fams buy one house at 70% off (peak)
and share. Sounds like a good deal when read to them in espanol.
mwah | 02.03.09 - 10:50 am | #
LMAO!
HOG: Berkshire Hathaway buys half
MS | 02.03.09 - 10:42 am | #
The old man has lost his touch. HOG was one of my favorite shorts last year. Now, not enough meat left for it to be worth shorting.
I don't have time to read today, but the House committee on agriculture is discussing legislation to regulate derivatives.
Just in case no one else mentioned it.
"About 29% of the Senate stimulus proposal's price tag is due to tax cuts. That's up from 22% in the House-passed bill. Senate Republicans have been calling for tax cuts to make up at least 40% of the total bill, since that's what President Obama's original, broadly outlined $775 billion proposal included."
didn't "we" pass a tax break stimulus package last spring?
didn't it work?
i think we, taxpayers should pay them for year long vacation, it will be cheaper and more beneficial for us in the long run.
Thanks goodness that O- is leading, now, and will reverse this high vacancy rate and low ownership rate shortly.
I've been living large on ace-duece and aces on my come out rolls
out of shear boredon one day, i played 12 for $1....did'nt hit for 113 times(stats say 1-35)
I was PO'd lol.
On the 114 roll(yes, i counted) i said F it, rady to walk away, placed a $60 horn.
Pop, comes the twelve.I took it an ran.
Next two hits. 12,12
gambling really is for losers and bored people
locust writes:
Yep, because of the 900 thousand illegal aliens who walked-away from their homes.
There's a lower rate of default among illegal immigrants.
WSJ: Unlikely Mortgage Winner
locust | 02.03.09 - 10:53 am | #
Stop spreading untrue propaganda spread by the government-media-complex. I have see it with my own eyes.
Also, how do they know anything about illegal aliens if illegal aliens are not tracked or aren't even supposed to own homes in the first place. What SS# did they use when they bought it? What was their credit score with no SS#.
Tax cuts: so much for change.
ille-
mine too.....I bailed when they applied for the commercial paper buying spree announced by the Fed. Got out in mid teens....they then drove it back up to about 26....should have reloaded but WTF.....money in the bank. SBUX is similar IMO....no meat left.
Ciao
MS
Thanks goodness that O- is leading, now, and will reverse this high vacancy rate and low ownership rate shortly.
well, he's already found a home for his MIL
ille_vir --
The old man has lost his touch.
Perhaps. But note that he is not buying HOG stock; he is buying the debt at a 15% yield.
Also, at $300 million, it is very possible this investment is by one of his lieutenants rather than the man himself. (Deals less than $1 billion or so are too small for him to bother with personally.)
19 million vacant homes is unbelievable. Prices will drop another 50% if it keeps up.
There's a lower rate of default among illegal immigrants.
locust | 02.03.09 - 10:53 am | #
No doc no doc loans?
"gambling really is for losers and bored people
ZeroPointZero"
Given the way you bet I agree.
Nostrovia,
Off Topic-
Saw a great posting on Waldman's Interfluidity:
Interfluidity :: Winterspeak wonderland & miraculous Mencius
He quotes Mencius and Winterspeak to provide the best explanation I've seen of the reserve lending crisis we're in-
Winterspeak presents a view of the monetary/finacial system in which the government is ultimately the hub. As above, when we "save" without explicitly investing, we don't lend to banks which then lend to businesses. We lend to the state â we hold instruments that are ultimately claims against the state â while the government organizes the distribution of loans, implicitly via how it structures bank lending or explicitly by various forms of directed credit.
He then goes on to describe why fiat money is the bubble that need never collapse due to Nash equilibrium and breaking govt investment and consumption apart to clarify the meaning of "savings"-
The reason this is important is because we talk about savings, economists and real Americans alike slip between the two definitions unconsciously, which badly muddles things. On the one hand, we talk about the savings rate, which most certainly includes investment: If you were contributing to your 401-K or buying farm machinery, you were doing your part to keep the US savings rate above zero. But on the other hand, when we say that during this crisis, Americans' shift to savings is proving disruptive of aggregate demand, what we are talking about sudden desire to hold claims on money rather than to invest in real capital.
The whole thing is much clearer than I could quote here and I hope others find it as useful as I.
...who's counting what?
fried | 02.03.09 - 10:52 am | #
CR is upfront about counting as excess only the differential in rental units from 10.1% to 8%. The 'base' 8% of 40 million units adds another 3.2 million to his 1.87.
Similarly, he only counts as excess the differential in housing from 2.9% to 1.7%, leaving the base of 1.7% of 75 million units, which adds another 1.275 million to his 1.87.
I don't see CR getting above a little over 6 million units (not just houses).
Bloomberg, though, is specific about "19 million empty houses." It doesn't make a lot of sense.
"he is buying the debt at a 15% yield."
So what.....when said debt is worthless how exactly is he (or anyone else FTM) going to collect?
This is why I said anyone buying long term notes is going to regret it....it has nothing to do with the yield. The gov't will be in a similar situation soon.....
Ciao
MS
I had no idea the Wall Street Journal was government propaganda mouth piece.
What SS# did they use when they bought it? What was their credit score with no SS#.
It's called an ITIN. Contrary to popular belief, a number of illegal immigrants do pay taxes and have credit scores. And those are the ones who buy homes.
Here's another article for you since you seem to be google challenged. It's probably more to your liking this time. It's a negative article.
Mortgage Prospects Dim for Illegal Immigrants
Perhaps. But note that he is not buying HOG stock; he is buying the debt at a 15% yield.
Nemo | Homepage | 02.03.09 - 11:02 am | #
Yes, I did note that. I wouldn't buy into a new issue of HOG bonds no matter the yield. Further, if you're too big to be bothered to be dealing with deals that large, you've probably lost touch a while ago.
interesting tidbit about Macys. My buddy works at the Macy's Home store at South Coast Plaza:
[7:58 AM] [buddy]: and this is direct from the CEO in this email he sent everyone
[7:58 AM] [buddy]: so they're apparently streamlining the whole corporation so instead of having like Macy's West, East, Central, Hawaii, Home Store, etc. it's all under the new york office now
[7:59 AM] [buddy]: so all the executives that headed up those divisions are out of a job
"CR is getting good at censorship business."
don't hate, there are so many of us and so few of him.
Besides my bet would be, you just annoyed him with ridiculously flowed data taken from moveon.org.
sportsfan writes:
There's a big difference between 1.87MM excess housing units (CR) and 19MM empty houses (Bloomberg)
I trust CR's numbers; per back-of-the-envelope 19 million is to high. Another reason good bloggers like CR are more reliable than MSM
ren writes:
I don't have time to read today, but the House committee on agriculture is discussing legislation to regulate derivatives.
Just in case no one else mentioned it.
~~~~~~~~~~~~~~
The Committee on Agriculture ?!?!
I guess I will stop wondering about anything in the US.
But it's true. Thanks , would never have checked that Committee.
Now if we could just undo all of the last administration's other screwups this quickly. Oh wait, what's that? We're too busy making our own? I see.
fried writes:
There's a big difference between 1.87MM excess housing units (CR) and 19MM empty houses (Bloomberg).
sportsfan
Maybe bloomberg missing decimal...
You are not allowed to prove with data that CR has been wrong. Amazing.
Jas Jain | Homepage | 02.03.09 - 11:02 am | #
The great thing is that if you don't like the way CR runs his blog, you can post elsewhere. I mean, why would you invest time in posting if your post is just going to be removed? Unless of course, you are a slow learner and enjoy wasting your time.
California, goes broke, halts $3.5 billion in payments. People are going to be hurt starting today, said Hallye Jordan, speaking on behalf of the state Controller. Theres no money.
JPMorgan Chase & Co , the second-largest U.S. bank by assets, on Tuesday said the Federal Reserve hired it as a custodian for its program to purchase up to $500 billion in guaranteed mortgage bonds
http://www.reuters.com/article/ b...353514820090203
The great fleecing continues unabated.
\t Anonymous | \t \t \t \t02.03.09 - 10:49 am | #
It is dizzying how many ways the taxpayer is getting sopped. Insuring crap mortgages at rates a fraction of private insurers. Loss carryback provision in the stimulus that apply largely to big banks. Over 2 trillion on the Fed balance of who the eff knows what. Feel free to add more I'm not aware of.
o flame intended- top 50 wsop
i play out of fife, wa.
OT: Did anyone partake in the free Denny's breakfast? The deal got me curious, so I was looking at their numbers. Man, they are not in good shape. No wonder they need to give food away.
I dont know that Jas posted and had it removed.... Jas is this what you're inferring?
..........
It is time to create a SuperFannieMae. We need 100% homeownership.
When considering the value of bank assets for the new TARP initiative, I submit that any assets on the books of GS will be worth by far than any others. Because GS is globally recognized as smarter than any institution on the planet, the US Taxpayer should feel honored to pay above par for their meticulously assembled collection of CDO/CDS/CMBS blah blah blah.
It pays to have friends in DC with their pockets stuffed with your money.
Now's a great time to buy a noose.
Jas Jain writes:
CR is getting good at censorship business. There is a career for him under a more authoritarian regime.
You are not allowed to prove with data that CR has been wrong. Amazing.
Jas
Hey, what's up with that? CR or Jas, care to comment?
Boycott CNBC Day on Tuesday February 3 StockTwits Blog
LoL
Homeownership percentage equals the percentage of people who own homes. One person can own more than one home. If you own 2, live in one, and don't rent the other one out, one is empty. If you own 4, live in one, and don't rent the other 3 out, 3 are empty. Forgot where I was going with this, but the gist is that is the difference between the numbers.
Comments are disappearing and reappearing on haloscan a lot over the last two days so maybe that's what Jas is referring to.
ille_vir writes:
OT: Did anyone partake in the free Denny's breakfast?
The last time I ate at Denny's was, uh, explosive. And that's why it was the last time.
OT - seriously, take a look at TGT
Comments are disappearing and reappearing on haloscan a lot over the last two days so maybe that's what Jas is referring to.
locust | 02.03.09 - 11:16 am | #
I'm way more inclined to buy that. CR has been quite benevolent with his censorship...
To be fair, i've seen no written indication that any data forthcoming from this site to be chiseld in stone.
Atworst, assumptions are made and trendline's drawn.
At best, a simple synopsis of current conditions. no more, no less.
Jas, you create much angst in your own mind.
A mortgaged home is not home ownership for the individual/family residing in the mortgaged home, especially considering the fiasco in lending standards for the past decade and a half. Once again, a misleading and euphemistic indicator. It's effectively become a de facto renting scenario, except the renter gets to deduct their payment, or a portion thereof, for tax purposes.
HOG?
You must be joking. How many overweight, bald, pony-tailed nerdy closeted wannabes who dream of wearing leather chaps can there be in America?
See you in Sturgis !
It is dizzying how many ways the taxpayer is getting sopped.
sexy derivative | 02.03.09 - 11:11 am |
Remember only 50% of us are taxpayers these days.
If you raise your kids to not be taxpayers, no guilt.
GD2.0, sure, I delete Jas' posts without reading them ... he has attacked people I know without cause. I gave him plenty of warning.
As far as his analysis, I have no idea what he is writing about because I don't read his comments. Basically Jas is upset at me because I corrected him a number of times over the years.
Jas used to compare housing starts directly with new home sales. I politely pointed out that housing starts included many units not included in the new home sales report (like apartments and owner built units). Instead of thanking me for helping him, he attacked me! That is his personality.
I just ignore him now. The reason I changed Haloscan to have the name first (ahead of the comment) was because of frequent complaints about Jas - other people wanted to skip his comments too. I just delete them when I see them.
best to all.
daily fail
daily fail
(takes in a big breath)
DAILY FAIL !
Effectiveley , homeownership is at 100%
Dimon said that although bonuses have been very large, sizable portions are paid in stock, with strict rules on when that stock can be sold. He said an employer wants to support the best people on the payroll, and the quality of an employee is not always based on performance.
Although he suggested the president should not be pointing a finger at the financial community, Dimon acknowledged that banks are to blame for the crisis, with too much leverage, too many products, and bad underwriting.
German proverb: Moving three times is like being burned out once.
I'd like to see a chart of persons per household trends. Data is probably too delayed to see the recent uptick, but any attempted divinations of excess capacity have to take the long term secular decline in #/household into account.
"I have see it with my own eyes."
What? Their brown skin?
Immigrants have always worked harder and contributed more to our society than lazy entitled anglos.
Subprime is dwarfed by problems with whitey loans -- i/o and option arm. And next in line for the deflationary firing squad are the largely white upper income house fetishists who bought more "prime" than they could afford (because housing always goes up).
Watching rich mostly white morons lose their life savings is sheer fun!
If you want to know how I feel about social justice in this fine banana republic...see my handle.
CR ~ no beating around the bush there! LOL! Loved it... Cheers!
lol..wrong haloscan window...but kind of fits here too.
They should do homeownership rates like they do unemployment rates. Only those actively looking for a home should be included in the "non-homeownership rate." Those discouraged from owning a home, not having the means to own, or having no desire to own should be excluded from this rate. Like somebody said, that would make the effective homeownership 100%.
ille_vir writes:
OT: Did anyone partake in the free Denny's breakfast?
Finally an example of marked to market.
Every time a Politican is turned over and examined, there seems to be issues, especially "tax issues". Even more remarkable is the "business-as-usual" reaction to this.
The Judicial Watch site lists Obama, Clinton, Dodd, and Pelosi as the 10 most wanted corrupt politicians.
Does Judicial Watch have any credibility or are they a bunch of kooks?
I know why Jas is grumpy. Bonds are getting obliterated today. B Gross is drinking Malox for breakfast. Couldn't be happier...
"Watching rich mostly white morons lose their life savings is sheer fun!"
yes I have to agree......and I'm white....well I've been made an honorary borequeno (sp)....hmmm I seemed to have lost the tilde function.
Ciao
MS
Immigrants have always worked harder and contributed more to our society than lazy entitled anglos.
deathtorentiers | 02.03.09 - 11:25 am | #
It actually has nothing to do with the color of your skin but rather how many generations your family has been here. Studies have show that the most successful generations are the children of immigrants... It was true for the jews, the irish, the indians, the italians, the mexicans, the brazilians etc.... Success being defined as the generational socioeconomic delta...
.............
I blame Obama - erasing 8 years of the ownership society in less than a month of his presidency.
Q: why did the homeownership rate rocket upwards in the second half of the 90s? Did Bill do something? (Not a politically loade question, I'm really curious.)
I've never seen Jas post any data - just conclusions. He and Sebastian are the same - long on opinions that never change regardless of the data. Jas has been saying the same thing for over the past decade and you would have been bankrupted listening to him. Now he looks like a hero but people have no idea what losses they would have had to absorb to get here. I have no doubt he will hold his current trade and bearish/deflation positions too long and ultimately get buried.
Sebastian on the other hand has already been buried.....
I block both.
CR: Sorry for feeding the troll above, although perhaps you saw the direction I was going with it. Please delete away, it certainly wasn't adding to the discussion (or even less so than I normally do...
carlo-
See the FHLA and community re-investment act for the answer to your question.
Ciao
MS
Corey(Unrated) writes:
\tille_vir writes:
OT: Did anyone partake in the free Denny's breakfast?
Finally an example of marked to market.
\t Corey | \t \t \tHomepage | \t02.03.09 - 11:27 am | #
Good one, Corey. The nyt article yesterday on valuing mortgage securities was excellent, but I'm too lazy to link it. Sorry.
FD i'm 3 or 4 generation and make Mr Lebowski look like a Clydesdale...
Judicial Watch is a right wing group so they're not an equal opportunity basher. That said, they're also the group who uncovered the Iraqi oil field maps when they filed FOIA requests for information regarding Cheney's "energy task force meetings" which we pretty much can assume now were planning sessions for the war in Iraq.
You must be joking. How many overweight, bald, pony-tailed nerdy closeted wannabes who dream of wearing leather chaps can there be in America?
That market is probably close to saturated. But what about in China? India? HOG is exactly the sort of luxury good that would do great internationally with a rising standard of living. And if it fails, BH gets the equity in BK?
HOG sells lifestyle and attitude as much as a bike. For a certain class of person, having a H/D logo cap, or black henley, or branded Ford F150 (!) is the height of cool.
(Gielgud accent): And one must usually go to a bowling alley to meet a person of this caliber.
"HOG sells lifestyle and attitude as much as a bike."
Sounds like Starbucks. Oh, no.
Solar Cycle 24 began early last year when a reverse polarity sunspot appeared in the suns Northern Hemisphere. A sunspot is an area of highly organized magnetic activity on the surface of the sun. The number of sunspots and solar storms will gradually increase in the next few years, reaching a maximum by 2012.
Scientists have regarded space weather as a potential problem since a major solar storm in 1859 caused telegraph wires to short out in the United States and Europe, igniting widespread fires. A similar storm today would have "significantly more extensive (and possibly catastrophic) social and economic disruptions," the researchers conclude.
MS: not sure if you are arguing that the CRA contributed to the housing bubble, but I thought that this had been put to bed.
Wasn't Forbes a Harley guy? Maybe Buffet is having Forbes envy.
http://www.sco.ca.gov/eo/fiscalissues/payments01-2009c.shtml#paymentmenu
and the LA times is no even talking about it
JPMorgan Chase & Co. said Tuesday that it has been selected by the Federal Reserve to serve as custodian of the government's program to buy mortgage-backed securities.
The Federal Reserve also selected four investment managers, BlackRock Financial Management Inc., Goldman Sachs Asset Management LP, Pacific Investment Management Co. and Wellington Management Co. to assist with the program.
These crooks should all be in prison!
And if it fails, BH gets the equity in BK?
\t Ralph Cramdown | \t \t \t \t02.03.09 - 11:32 am | #
Senior unsecured notes, so no, no equity.
fox guarding the ...
Yahoo! 404 - Page Not Found
change you can believe in!
And if it fails, BH gets the equity in BK?
Ralph Cramdown | 02.03.09 - 11:32 am | #
I wonder if Warren Buffett would rather see his sister in a whorehouse than his brother on a Japanese motorcycle? I remember that old bumpersticker.... kind of the 70's equivalent of the Calvin peeing thing.
According to this, the U.S. home ownership rate is still pretty high compared to a lot of European countries. The range is 34.6% in Switzerland to 85.3% in Spain.
Do existing tax incentives increase homeownership?
HOG sells lifestyle and attitude as much as a bike. For a certain class of person, having a H/D logo cap, or black henley, or branded Ford F150 (!) is the height of cool.
anonymous | 02.03.09 - 11:36 am | #
Yeah, we had a Harley dealer in town with as much space set aside to Harley-branded clothing, gear, belt-buckles, etc. as to the actual hogs. Not that there weren't a lot of motorcycles, it was a huge dealership.
Emphasis on "was." Went bust in November, space for rent, hogs still sitting there in the window. They're just now beginning to truck out some of the clothing/soft goods. Lifestyle's not such a good play in hard times; rent and food and medical care, are.
So it tuns out that if you have a penis, tax problems are A.O.K.
If you have tits, they force you to quit.
Let's hear it for Change.... Yes We Can!
JP, no worries. Long term readers know what I've put up with from that guy. Tanta thought I was far too kind to him.
best to all
Ian, S0mebody -
We leased a house on Spring Lane in Tarrytown when we moved back to Austin in 2006. 1943 construction, lovely craftsman that needed some updates. Priced about $1.40 / sq ft. The owner sold it last July for $574K, buyer immediately demolished it (a crime). The vacant lot has sat there ever since, now has a fsbo sign up.
Prices, both sale and lease, in good areas (Tarrytown, Clarksville, Travis Heights, Bouldin, SoCo) are still high and not coming down. But the lease prices are much, much better than sale, and look to be poised to drop.
We found a nice SFH off S. Lamar, $1.00 / sq ft for 2001 construction and are leasing it now. If the owner ever capitulates a bit on price, we might buy it (we're sitting on the cash from sale of our NoVa house). But we won't be buying at these prices unless inflation starts eating our cash's value.
As for those pricey downtown condos, I don't see them making it. But then again, I don't see how folks can pay $950K for an updated 1940's 3/2 in TT, or do the $650K tear-down thing. It's all a wonder to me.
This is like a starvation diet for the morbidly obese. Absolutely necessary, but terribly slow and painfu.
CR. No need to explain why you delete Jas's comments (I ignore them too). If I wanted an opposing view I would read another website (I do). Mostly I give more weighting to what you write than others do because you have been proven correct more often.
Delete whoever you like. Jas will never understand that most of what he spouts is simply juvenile and unworthy of most peoples attention. Nobody is going to take his whining seriously.
auto sales out shortly
A high rental vacancy rate is particularly difficult in these circumstances:
I suspect the bubble made these conditions more common. The amateur and accidental landlords with only a few units who weren't making much money on the rent to start with will have particular difficulty as rental vacancy rises and rental rates fall.
carlo-
not at all......it was there to be used. It was used...that's all.
Ciao
MS
California, goes broke, halts $3.5 billion in payments. âPeople are going to be hurt starting today," said Hallye Jordan, speaking on behalf of the state Controller. âThere's no money."
km4 | 02.03.09 - 11:11 am | #
I'd bet that is how things went from bad to worse in Argentina too....
BTW Ferrari makes more selling branded shit then they do selling cars. It's a lucrative biz (branding) as you can buy just about anything with a Ferrari logo on it. See Porsche's less successful (designer) son. Sunglasses anyone?
Ciao
MS
From 2006:
Central Valley Business Times
"Holders of so-called subprime mortgages are in danger of losing their homes, especially in the Central Valley, according to a report from the Center for Responsible Lending.
As much as $164 billion in mortgages is at risk due to foreclosures in the subprime mortgage market, it says.
With 25 percent of the mortgages issued this year being subprime, Merced County ranks as the nations most risky area for foreclosures, according to the report.
Other Central Valley areas are not much better, it says.
Bakersfield ranks second in the nation; Fresno is fifth; Stockton is seventh and Visalia-Porterville is 13th.
In contrast, Yuba City ranks 152; Sacramento 28; Modesto 205; Madera 29; and Hanford-Lemoore( I'M FROM HERE ), 152.
We project that one out of five (19 percent) subprime mortgages originated during the past two years will end in foreclosure. This rate is nearly double the projected rate of subprime loans made in 2002, and it exceeds the worst foreclosure experience in the modern mortgage market, which occurred during the Oil Patch disaster of the 1980s, the report says."
In other words, as the boom went on, the more preposterous loans were sold at higher and higher prices. Probably the worst part of the market for risky buyers to get in. What would be interesting would be a graph plotting this relation. Does one exist?
"JP, no worries." CR is British, or maybe Aussie?
JH, agreed. What people fail to realize is that austin is a govt. university town. There are few jobs here over $100k. We do have a ton of Cali transplants who have cashed out of bubble markets and real estate compared to bubble areas appear cheap but like all investments fundamentals eventually matter. Median income is too low for median housing prices and that matters.
scone
CR can't be foreign, he has to be a born and raised American dope!
I kid.
"no worries....mate"
Quintessential Aussie remark....
As in the world is falling to shit so we're printing up $42b to help it..
"no worries mate"
Ciao
MS
BTW Ferrari makes more selling branded shit then they do selling cars. It's a lucrative biz (branding) as you can buy just about anything with a Ferrari logo on it. See Porsche's less successful (designer) son. Sunglasses anyone?
MS | 02.03.09 - 11:54 am | #
Haha, so true. There's a guy at work that doesn't even have a driver's license, and he wears Ferrari crap all the time! It seems to me for half of the retailers, their strategy is to "sell the lifestyle." Some, like Starbucks and HOG, more successful than others. The other half's strategy seems to be, "so cheap you can't afford NOT to buy." I'm exaggerating, but it's like there's no middle ground for well-made, decently priced products. Weird.
scone, nah. Born in the USA. But I had Aussie neighbors, and it rubbed off on me.
Best wishes.
"Holders of so-called subprime mortgages are in danger of losing their homes, especially in the Central Valley, according to a report from the Center for Responsible Lending.
Very true, but the article was likely referring to the givers of those mortgages.
Missed you guys while I was hiking Kilimanjaro. I thought of all the hiking CR did and I'm sure he would enjoy Kili. Being away from phones or computers for 10 days was wild. It was weird not knowing what was going on in the world right when Obama was being sworn in. Being in Tanzania showed me that no matter what, we are all lucky to be Americans. I have seen poverty and desperation that shocked me.
Wish everyone the best...
CR-
That means you have been fostered by those blokes
boy can they drink and party! just don't get talked into a rugby game when your drunk!
CR you are a true gentleman. And very patient. Was thinking of Tanta this weekend as we were walking the doggie on Lake Mendota in the blinding sunshine (yes, you can do that in Madison in the winter!). Deep sigh.
time to fix halo CR.....getting very annoying....
Ciao
MS
KS writes:
sportsfan writes:
There's a big difference between 1.87MM excess housing units (CR) and 19MM empty houses (Bloomberg)
I trust CR's numbers; per back-of-the-envelope 19 million is to high. Another reason good bloggers like CR are more reliable than MSM
KS | 02.03.09 - 11:07 am | #
Perhaps the discrepancy is due to a typo (BB's # should be 1.9MM?).
Performance Czar nom. also cheated on her taxes.
Obama, you sure can pick 'em
Official: Performance czar withdraws candidacy
"scone, nah. Born in the USA."
Well, There's a thread music cue, if ever there was one:
YouTube - Born In The USA - Bruce Springsteen Paris 85
America may be the last society to come around to the conclusion that in the modern world it's not practical/possible for everyone to live in a house with a white picket fence, but this too is coming to pass.
I've been pondering the demographic shifts of a contracting housing market. First a few tidbits from our friends the Census:
Year Total Houses Crowded Severely Crowded
1940 34,447,032 6,964,894 20.2% 3,085,922 9.0%
1950 42,154,443 6,628,292 15.7% 2,607,717 6.2%
1960 53,023,875 6,113,473 11.5% 1,902,923 3.6%
1970 63,449,747 5,210,874 8.2% 1,408,416 2.2%
1980 80,389,673 3,648,445 4.5% 1,134,619 1.4%
1990 91,947,410 4,548,799 4.9% 1,911,867 2.1%
2000 105,480,101 6,057,890 5.7% 2,873,122 2.7%
1-PERSON OCCUPANCY RATES
2000 1990 1980 1970 1960 1950 1940
25.8% 24.6% 22.7% 17.6% 13.3% 9.3% 7.7%
2000: 2.66 persons per dwelling unit.
2007: at the same 2.66 persons per dwelling unit would require 114,000,000 dwelling units.
Current estimate of housing stock: 128,000,000 dwelling units. Excess: 14 million dwelling units.
Conclusion; "1.87 million excess housing units" is far too conservative.
Bond bubble continues to implode...
F Jan. sales down 38% YoY. Ford says US retail sales are stabilizing. LOL
Excellent Interview with former prime minister Paul Keating discussing the global financial crisis
Lateline - 02/02/2009: Paul Keating joins Lateline
F] Ford U.S. sales fall 42.1% to 90,596 in January
What if, The Obama PPT was buying up cheap shares of corporate stock that will be used for collateral for future cash flow?
axioms:
"Don't fight the Fed"
"Don't bet against the US consumer"
uh oh.
Here's a dot to connect to the Korea production cliffdiving... (note the lowest in 17 years is going back to the limit of the time series)
Brazils Industrial Output Plunges Most in 17 Years (Update2)
By Andre Soliani and Jeb Blount
Feb. 3 (Bloomberg) -- Brazils industrial output fell the most in at least 17 years as companies across the country slashed production to adjust to plunging demand.
Factory production declined 14.5 percent in December from the year-ago month, the biggest decline since the statistics agency began tracking annual output in 1992. The drop exceeded all 22 forecasts in Bloomberg survey of economists. Output fell a revised 6.4 percent in November.
Brazil’s Industrial Output Plunges Most in 17 Years (Update2) - Bloomberg.com
Ju writes:
"LA times is no even talking about it"
http://www.sco.ca.gov/eo/fiscalissues/payments01-2009c.shtml#paymentmenu
Controller's Office claims 30 day delay, thinking swhtf soon...
Here's Cali's cash flow chart
http://www.sco.ca.gov/eo/fiscalissues/payments01-2009a.shtml#paymenttop
Notify me of followup comments via email
I just got back from vacation and have 3000 followup comments, thanks.
Where are y'all getting the Ford numbers?
S&P lowers California GO rating
2009-02-03
Standard & Poor's Ratings Services lowered its rating and underlying rating (SPUR) to 'A' from 'A+' on California's $46 billion of general obligation (GO) debt and removed the ratings from CreditWatch with negative implications, where they were placed Dec. 10, 2008. The outlook is stable. At the same time, Standard & Poor's affirmed its 'SP-2' short-term rating on the state's $5 billion revenue anticipation notes (RANs). The rating on the state's sales tax-supported GO economic recovery bonds (A+/Stable) is not affected.
S&P lowers California GO rating
I thought the whole public policy rationale for high home ownership rates was "stable communities" and "lower crime." But there are several countries here with much lower rates than the US, yet aren't noted for being particularly high crime. For example, Switzerland is on the bottom, and Japan, much of Scandinavia, Canada, etc. are lower than we are. So I don't see a relationship at all. If I were cynical, I'd say the public policy stuff was a cover for "let's make money off the rubes!"
Do existing tax incentives increase homeownership?
@scone
"No worries" passes as surf-speak down here. CR has mentioned he's from a beach town - have I seen you in the water, CR? Swami's? Old Man's? Please don't tell me you're a regular at The 'Bu.
scone, you can accomplish the same community stability with rent control and/or rent stabilization.
your cynicism is well placed.
I thought the whole public policy rationale for high home ownership rates was "stable communities" and "lower crime." But there are several countries here with much lower rates than the US, yet aren't noted for being particularly high crime. For example, Switzerland is on the bottom, and Japan, much of Scandinavia, Canada, etc. are lower than we are. So I don't see a relationship at all. If I were cynical, I'd say the public policy stuff was a cover for "let's make money off the rubes!"
scone | 02.03.09 - 12:23 pm | #
It is a whole lot more complex than that. Within societies homeownership does lower crime. Across societies there are other factors that take precedence. There are some interesting, some strange and some obvious. Strange; English as the dominate language. Interesting; geographic latitude. Obvious; density and degree of urbanization.
you can accomplish the same community stability with rent control and/or rent stabilization.
Gary | 02.03.09 - 12:27 pm | #
Cite?
Where are y'all getting the Ford numbers?
Joe Stalin | 02.03.09 - 12:19 pm | #
Ford US Auto Sales Down 44% in January, Much Worse Than Expected (Story Developing) CNBC
2000: 2.66 persons per dwelling unit.
With current trends toward longer single status and less marriage in general, this ratio will decline.
With economic stress, the ratio will increase.
With boomers aging, dying, and retiring, the ratio will decline.
Other factors?
I'd like to double down on new houses.
Nostrovia,
\t Comrade Misean is Dope | \t \t \t \t02.03.09 - 10:31 am | #
Comrade Misean is Dope | 02.03.09 - 10:31 am | #
Or do you mean 'bubble down"?
Ford reported a worse-than-expected 39% slump in U.S. light-vehicle sales for January. Report WSJ
Chrysler/GM and the rest to follow
03 Feb 2009
1:00 PM Ford Motor Company January 2009 U.S. Sales Conference Call
Webcast Event - Ford
Strange; English as the dominate language. Interesting; geographic latitude. Obvious; density and degree of urbanization.
Rob Dawg
.
English speaking crims don't go out in cold weather?
English speaking crims don't go out in cold weather?
\t scone | 02.03.09 - 12:34 pm | #
England has an experiment runing right now. London is all but paralyzed from a few inches of snow. Snow apparently caused by Global Warming.
You mean the Ownership Society didn't work??? Who could have known.
Straight from the Bush Whitehouse web page:
http://z22.whitehouse.gov/news/releases/2004/08/20040809-9.html
Expanding Homeownership. The President believes that homeownership is the cornerstone of America's vibrant communities and benefits individual families by building stability and long-term financial security. In June 2002, President Bush issued America's Homeownership Challenge to the real estate and mortgage finance industries to encourage them to join the effort to close the gap that exists between the homeownership rates of minorities and non-minorities. The President also announced the goal of increasing the number of minority homeowners by at least 5.5 million families before the end of the decade. Under his leadership, the overall U.S. homeownership rate in the second quarter of 2004 was at an all time high of 69.2 percent. Minority homeownership set a new record of 51 percent in the second quarter, up 0.2 percentage point from the first quarter and up 2.1 percentage points from a year ago. President Bush's initiative to dismantle the barriers to homeownership includes:
* American Dream Downpayment Initiative, which provides down payment assistance to approximately 40,000 low-income families;
* Affordable Housing. The President has proposed the Single-Family Affordable Housing Tax Credit, which would increase the supply of affordable homes;
* Helping Families Help Themselves. The President has proposed increasing support for the Self-Help Homeownership Opportunities Program; and
* Simplifying Homebuying and Increasing Education. The President and HUD want to empower homebuyers by simplifying the home buying process so consumers can better understand and benefit from cost savings. The President also wants to expand financial education efforts so that families can understand what they need to do to become homeow
"Snow apparently caused by Global Warming."
Trolling, Dawg? For shame.
Snow apparently caused by Global Warming.
Rob Dawg
.
Yes, it would. Destabilize a self-organizing system, push it out of equilibrium, and you have all sorts of unexpected effects, at first. So we get some chaos, then it moves to a new, hotter equilibrium in some places. That's the theory, anyway.
had posted about this on another thread but somehow it never appeared--
Some of that excess housing stock will be slurped up soon if the current buzz in the Senate prevails. In the Senate debate about amending the Stim Plan, as of the past few days, "fix housing" is hot again, the key proposal being 4% Gov't mortgages and re-fi's-- available to everybody, not just troubled homeowners-- plus a $15K tax credit for those who buy a home.
I saw a C-span hearing last week where Sen. Lindsay Graham (R) S. CA blew in for a bit, & sorta hijacked the economists' panel discussion on the Stim Plan. Love him or hate him, Graham is a political animal, & he very bluntly told the economists that no matter what advice they had, he still had to go back home "to the folks" with a political solution. In sum, 'people don't understand CDO's, etc., but they do understand 4% mortgages & a coupla extra 100 bucks in their pockets each month.' He could 'sell' that, both to the folks in danger of losing their homes, and it would lessen the resentment & give some reward to those who HAD played by the rules & are paying their mortgages-- so it'd help prevent walkaways.
The economists pointed out that 50% of mods re-default, & Graham essentially said 'so what?-- a glass half full is better than empty'. He brought up the two-fer effect-- that along with making his constituents happy about the 4% mortgages & re-fi's, this extra coupla 100 bucks discretionary income per month would stimulate the larger economy beyond housing. He talked about an 18-month "hard sunset" on this 1-time-only good deal, & when the economists objected with "the huge popularity of such a program" almost guarantees its continuance, Graham smilingly blew them off-- 'an emergency is an emergency.' He basically got the economists to concede that $100 B from the Stim Plan spent on "fix housing" would be a politically viable & economically productive use of the funds. (He also mentioned some type of 80/20-ish solution, wherein the Gov might buy the difference between the original loan, & what the home is now worth, & said his people were costing that out now.)
Point: Graham is a politician first & everything else second, he was McCain's camopaign advisor, & he carries weight in the GOP. You should've seen all the other Sen's beady little eyes light up when Graham frankly dumped the "what's gonna make me popular?" issue on the table. These Sen's are sick of hard math & numbers, but they all understand counting votes.
So Graham's proposal-- that at least $100 Bil be re-directed from the existing Stim Plan towards housing-- seems like an inherently attractive & done deal, to me.
@zuzu's petals
.
4% mortgage? Jeez, I'd take it and run, I'm at 6 5/8% at the moment.
That's the theory, anyway.
scone | 02.03.09 - 12:39 pm | #
That would be AGW Theory v7.1 because the previous half dozen guesses have been proven embarrassingly incorrect.
I'm in Austin, too, and am perplexed by what's been going on with the whole luxury condo scene.
I bought a 1300 sf townhouse out near 183/290 for about $0.50/sf and gutted and remodeled it and am now happy with a very modest mortgage (though not so great of neighbors - I've now got my second active drug dealer next door, that's fun).
I'd love to live in downtown, but the prices around here just don't make any sense, even though I moved here from NorCal. Especially the downtown area. Who did they think would buy those things?
We'll see.
That would be AGW Theory v7.1 because the previous half dozen guesses have been proven embarrassingly incorrect.
Rob Dawg
.
Don't confuse weather with climate. At any rate, it might even be possible for global warming to cause an ice age.
But let's stay OT, o.k.? I want that 4% mortgage, dammit!
Looks to me like it's headed to 1994 levels.
@zuzu's petals
Found it: The article requested is no longer available.
And here's the catch:
"Officials said the GOP was coalescing behind a proposal designed to give banks an incentive to make loans at rates currently estimated at 4 percent to 4.5 percent. Fannie Mae and Freddie Mac, which were seized by the federal government in September, would be required to purchase the mortgages once banks have made them to consumers."
So now Fannie and Freddie are forced to eat everything that comes along, getting more toxic with time.
This bit about the GOP 4% plan just floors me. The problem to now hasn't exactly been that interest rates are too high...
"Officials said loans to credit-worthy borrowers on primary residences with a mortgage of up to $625,000 would qualify, including those seeking to refinance their current loans."
Would this be adjusted on a per-CMA basis, or would it benefit wealthy Republican voters in flyover states with a huge subsidy? Obviously, it's already heavily skewed to the upper end - the bigger your mortgage, the more you save.
Ah, screw it. This obviously isn't based on any logic at all, save "if we could just reflate house prices, everything would go back to the halcyon days!"
Home"OWNER"ship declines? Yes, sure.
Median income is too low for median housing prices and that matters.
Ian in Austin | 02.03.09 - 11:56 am | #
Not in California. Texas does have some realatively strict mortgage rules that were put in place after S&L that discourage any bubblicious effect. As such, I not inclined to bail out banks that made bad loans nor the borrowers that took them.
thank you, scone--
I think, in general, that with the premise being "we're all falling off a cliff-- banks, jobs, homeowners"-- many senators feel that future losses to Fan/Fred/Treasury can be discounted now to "fix" this emergency. Graham's 'glass half full vs. completely empty' resonates.
Fact: it resonated with me-- I've been waiting to buy my first home for some "homeowner incentives" to do so--key Q being, when is the amount of incentive roughly on par with "amount-as-yet-unknown" decline in home values? A 4% 30 yr fixed plus a $15K tax credit sound nice.
And it resonated with you, too-- Soooo... unless somebody pokes great big holes in it quickly, this is on its face likely to be a hugely popular GOP proposal, that will bring Dems on board also.
Point nobody's mentioned tho: it's not like these mortgages will be assumable, so since people on average move every 5-7 years, & in theory, the economy will be "fixed" by then, that means this 4% deal will sorta "sunset" itself, by limiting its long term value to only those who live in the house for 30 years.
This bit about the GOP 4% plan just floors me. The problem to now hasn't exactly been that interest rates are too high...
It's about maintaining discretionary spending, not house prices.
.
Ralph Cramdown & Blackhalo-- yup, I don't wanna subsidize bad actors either, but looks like that ship has already sailed. Maybe this 4% solution coould be targeted, like you noted-- maybe they could just declare "housing national emergency" areas??
Broward-- yes-- that's precisely what Graham got the economists to concede-- this would be, at minimum, a 2-fer. Housing, plus the economic boost thru increased discretionary income.
....maybe Obama ought to hire more Repubs and Libertarians - none of those appointments have had tax-return "challenges" have they?
THANX Anon, for the Harbor Freight link...most of their stuff is perfect for around here.
Is the infrastructure in place to refinance every existing mortgage to 4%?
I don't understand people who say to bulldoze housing.
Unemployment is rising and people should pay MORE for housing?
Wouldn't that make our economy even worse?
While your at it, why not raise gas prices back to $4 a gallon and raise taxes!!!
This way the economy will REALLY take off!
I see a lot of people blaming only Bush, but if you look at the homeownership graph, you will find that it made it biggest jump starting with 1993 and Clinton's term, and continued to 2007 under Bush....the really scary thing, is that over a 50 year time span, we still have a lot further to drop to get to the average...
Elvis, I like your figures...when you multiply the difference time the national average home price..say in 2004, it comes out to a little over 2 trillion...so at a 20% default rate that would equal 2 trillion, compound that with people who were already homeowners that used their homes as ATMS and you have your perfect storm.
meant to say comes out to 20 trillion, before the default rate.
Elvis,
your explanation makes sense...vacant homes vs. home owners.
Though the Bloomberg piece uses Census data, it's not clear if they are counting vacation homes, for example, unrented and empty most of the year. I wonder at what point aging, abandoned housing in Cleveland or Detroit is still counted...if it still has a roof or it's still mostly standing?
I read this morning in Professional Builder that the rate of formation of new households is twice what the building starts currently is. Something doesn't jive here. We need more data on this.
Urbanist
I read this morning in Professional Builder that the rate of formation of new households is twice what the building starts currently is. Something doesn't jive here. We need more data on this.
Urbanist
Steve Blackham | 02.03.09 - 5:50 pm | #
They are lying. It is that simple.
Rob Dawg flubs an attempt at irony when he writes:
"Snow apparently caused by Global Warming."
That is correct. Warmer air carries more moisture than cooler air, hence more snow in some colder areas. This is why, for instance, snowfall has increased in the interior of Greenland even as the total ice mass of Greenland glaciers dramatically decreases.
A society built millions more houses than it needs because of poor planning. That sounds like something you'd find in a science fiction story or something. It's a weird problem to have: all these houses we don't know what to do with.