WALL STREET JOURNAL: The SEC has opened an informal investigation into stock sales by Countrywide Financial's CEO, deepening problems at the nation's largest mortgage lender... Developing...
Data from the US Treasury showed outflows of $163bn (£80bn) from all forms of US investments. "These numbers are absolutely stunning," said Marc Ostwald, an economist at Insinger de Beaufort.
Asian investors dumped $52bn worth of US Treasury bonds alone, led by Japan ($23bn), China ($14.2bn) and Taiwan ($5bn). It is the first time since 1998 that foreigners have, on balance, sold Treasuries.
"Greenspan said it was impossible to foresee an end to the U.S. economic troubles and that the outlook for the economy hinged on a recovery in the property market, he was quoted as telling the conference organized by the Czech Teleaxis agency." My emphasis added.
I am stunned. Greenspan has essentially told us we are literally screwed until property markets recover. So, how long will they take to recover? Wer weiss? We is done, so now we should just decide how to take shelter from this storm.
The decline in economic circumstances is proceeding far faster than the mainstream media is aware of, and far faster than most of economic actors seem prepared for. So, now comes the crisis management.
This will be very interesting.
Greenspan behind closed doors saying the crisis will continue until at least 2009- maybe longer.
Someday this war's gonna end...and I hope that I live to see it.
I B so charmed with these responses from those in control (ok, stress related incontinence aside): "We were going through an orderly correction in the housing market until the middle of the year, when there was a significant falloff,"
It was all good --orderly in fact, if it weren't downright civil and polite...and then it wasn't: real investors lost confidence (not like Citi, real gamblers)...had the audacity to think that ABCP was not as good as the rating agencies stamp said it was...had the audacity to think that the appraisers were colluding with the lenders and that the underlying assets were not going to generate but deteriorate.
But WaMu CEO is not suffering that much: Washington Mutual CEO awarded $5.97 mln stock
| Deals
| Regulatory News
| Reuters
Rather odd! I seem to recall WaMu saying a few months back that the housing market would not lead to losses because they do not carry the debt but rather it is sold off.umh? Anyone else recall this story.. I think it was in July/August 07
Actually, I question whether Countrywide is solvent, based on the inventory of over 13,000 properties now available nationwide. Wells Fargo is another that has huge liquidity issues. 39 pages of houses available in Arizona alone, with a ton now scheduled for auction.
I feel that it is going to be brutal in the future with no resources available for Joe sixpack to get more liquidity through his credit cards either.
delinquencies > this always happen when the economy is soft. But I am shocked at the %. I would call this a "correction" and I sure somebody has lost their job. These nums are tracked daily, weekly, monthly. They had to have known that this frieght train was about to hit a wall. And then they have the added close to a million more card holders some statement "ya but we got mo cardholders". How do you anticipate or budget for this churn?
Now I know that they never loose on these even in collection given the fees bla bla. But gosh it is a hit.
In light of the absolutely terrible bank confessions, homebuilder collapse, and abyssmal housing data coming to light, I wonder why the major economic indicators (employment, GDP, consumer spending, psychlogy) are not showing weakness?
I ask "Houston, why don't we have a problem?"
What happened to all that neg-am income (was it refered to as "capitalized interest"?) WAMU has been booking? Have that many neg-am loans already reset thus forcing the borrower to finally make a payment and they are not able to?
WaMu moves these to their portfolio and they have to write them down. E-Trade moves them out of their portfolio and they have to write them down... Gheezzz... Cant move these p.o.s. anywhere with out taking a hit...
There comes a time when a fiat-based economy craps-out. It is here and now. The money-masters are desperately trying to keep this beast afoat, to no avail. The utter systemic corruption is now at it's peak. We can go no further. Financial re-fold is at hand. Get ready for a new reality.
wrt crispy's "more Black Swans" comment. Why do I imagine a scene from Hitchcock's "The Birds" only its a California town with enormous flocks of Black Swans attacking every homeowner?
I am stunned, surprised, and amazed at the sheer number of Black Swans out there in the financial woodwork.
EBay Inc (EBAY.O: Quote, Profile, Research) customers who park extra cash in a nearly $1 billion PayPal money market fund are exposed to the same type of assets targeted for an emergency bailout by the largest U.S. banks, regulatory filings show.
PayPal Money Market Fund, whose popularity has mushroomed with online consumers, is invested in a portfolio that contains structured investment vehicles, or SIVs, linked to troubled subprime loans and other debt.
The risk surrounding these illiquid assets has forced the largest U.S. banks to attempt to create a roughly $80 billion rescue fund to prevent SIV assets from plummeting in value.
Gaudia is a realist. As such, the predictions made and posted here are valid. If anybody has eyes to see it, then you will be justly rewarded. If not, it is your loss.
I seek false trends and bet against them, Gaudia has zeroed in on such a trend. It is your choice. If you play wrong, you lose long. I prefer to go with a winner.
look i'm not delusional. i've been here as long as CR has been in existence.
i know the score
BUT
all my mortgage broker contacts tell me that in the last two weeks they closed more loans than all summer combined. sales brokers are busy. even i'm getting multiple offers on my last listings.
it could be a dead cat, but right now, the front of the sale spectrum is feeling hot in dc.
and i expect MBS and MBS related securities issued post 9/07 to perform well and restore liquidity overall to the market.
"I am stunned. Greenspan has essentially told us we are literally screwed until property markets recover. So, how long will they take to recover? "
He also said there will be no recession. Let's put it all into context. There is a housing slowdown with some spill-over effect into the general economy. This spill-over is not strong enough to cause a recession, just a slow-down. This shows, on the other hand, how resillient the economy is in general.
elvis, its funny, one of my clients just bought a place in a comstock development. it was their idea they loved and it we priced the market out completely for months. they ended up getting a 1300 sqft 2br 2ba w/ 400 sqft outdoor terrace in a gorgeous full-service building at a major discount. nice.
i mean look, i've got broker contacts all over the region and they all tell me that they are closing more loans in the last two weeks than all summer. which isn't sayiing much in absolute levels but it is showing at least a dead cat bounce
anon-
thats funny you should say that. i happen to have a semi-first hand look into underwriting. i know whats getting underwritten and what isn't. everyone qualifies. no one gets 100%. hell no one gets 95%. PMI is back. actual accurate verification is happening.
hey if the market says i'm only buying XYZ instead of ABC you deliver XYZ right??
come on some of these brokerage houses have management that realize that their life depends on resale therefore their secondary market buyers set the market and you conform.
hell, i underwrite every deal i do before i even bring it to a lender because i only propose deals that can get done.
Thx Joe; but the bottomline is not to follow me. I'm asking that everyone who's investing "look" at what I'm pointing out and decide for themselves. If they don't "get it", it's ok as it may not be "it". I believe it is; but I'm not 100%. I bot gold in the high 6's before it dropped to the low 6's. I also urged everyone and their mother to buy gold at 5 (I was in at 450) and there are folks who email me now who bought at 550 when I hammered them to take positions. They like me. But I'm no angel. I'm in way below everyone here on silver as I added for years; but I lost a pile of opportunity cost on the stuff I carried forward from the 80's too. This is the last easy train ride of my economic life, AFAICanSee; so I'm gettin' on.
I see what I see. Hussmann sees what he sees. Rogers/Sinclair, you, and those kind enough to share their views who I don't think are malarkey artists, what they see. We each see it the same way. I read their stuff, but I don't trust them. I only trust me. (And there's that guy who's been a perrenial bear, with his magic, hidden pivot points, doing the world tour...I don't care what he says either, though it's fun to go with his "energy".) Again, I only trust me, and as I'm scared, I really must trust me or I don't pull the trigger. This game is for real. It's a zero sum game in commodities; so either be right or do what Sinclair says, get a CDN $ account and spend your money wisely, in therapy examining why you don't trust yourself.
"As Jesse Livermore noted at the end of his dramatic life: "Men who can both be right and sit tight are uncommon."
This is the essence of taking out a position. You grab the trend and ride it for all it's worth. The understanding of the trend allows one to get out and maximize profits.
Gaudia has layed out the current trend, both in the PM complex and the equities. If you have the eyes to see it, jump on board. Otherewise, read em and weep.
Half the families in RE the other half law. Familial broker contacts in CA are sweating bullets. People in dc don't earn money they print it. Ou here in the real world it ain't so nice. (Yeah I know CA ain't the real world. )
Can WaMu actually pay the dividend ? If they won't go bankrupt, then I don't mind taking a small position every now and then. Sort of like averaging it out over next few months/years.
What is the chance that they can survive this and have the money to pay the dividends ?
Looks to me like the spread is 15-65 bps depending on the paper. High by recent standards, perhaps, but not out of whack historically.
Such a weak dollar (and so many reasons for it to get weaker) has got to be inflationary. That seems obvious, but then I do not understand how the long bond can have such a low yield. This is the most mysterious piece of the puzzle to me, so far.
I can quite believe there's a dead cat bounce going on in DC. Lots of people surely still believe real estate is a sure-fire long-term investment, and that this slowdown is a once-in-lifetime buying opportunity.
In Japan, the real estate crash of the early '90s was followed by an echo boom as properties suddenly became more affordable.
Although most areas of the US don't have much pent-up demand (rather the opposite), I have no trouble believing in pent-up demand in DC. There's a lot of money being made there, and the jobs are among the nation's most secure.
emo:
i find it odd too the long bond. i've been asking out loud for years why the long bonds were wrong. i believed they were wrong and learned they were wrong due to setser et al.
yields are relatively low even tho non-rational interest in treasuries (FCBs) is apparently at recent lows. as well supply of treasuries is apparently at recent highs.
i have no idea what the deal is and take no position on it except to say it makes me smile when the ten year rallies 10 bps in a day.
regarding DC. sept sales (yoy delta) were the absolute worst by a long margin i have seen in years and years with 10 years tracking this data monthly. market clearing ratio went from under 5 months where it had been for half a year or more and then exploded to nearly 9 months.
however, in the last two weeks i have first hand experience and second hand hersay from more than a handful of mortgage brokers, agents, title insurance writers etc that they are busier now than in months.
as well, the mortgage guys say their writing good clean deals (because thats all they can sell on the secondary market) to qualified loaded buyers.
i have no idea what this all means.
i do know i have no more residential to sell.
yippee. must be the bottom when i've cleared my hands of it all.
Such a weak dollar (and so many reasons for it to get weaker) has got to be inflationary. That seems obvious...
It seems obvious but it is wrong. It could be a weak currency and a deflation. Like Yen was all the last 17 years. Weak currency will affect only gas prices,, everything else will get cheaper and cheaper every year.
Don't you mean that a weak currency will affect all imports that don't come from nations with currencies pegged to the dollar? Imports from Europe, Canada, etc., will be more expensive for sure. And if China breaks with the dollar its exports will rise in price too.
Between expanding federal deficits, and a fed opposed to deflation above all, I'd think deflation is a long shot. Add expensive imports due to falling dollar, and I find it even more unlikely. What's you reasoning?
I am wondering the same things that Nemo is. What was up with the big rally in treasuries today?
It can't be a flight to quality b/c the spread with corporates is not out of line. Mysteriously, the market is signaling a lack of inflation fear, even as the price of oil and other commodities race ahead. And with the dollar tanking, why would foreigners (FCBs excepted) be buying? And the market can't be anticipating that the Fed is now less likely to lower rates, when the Fed futures is pricing in a higher likelihood.
FWIW On Cape Cod we have been trying to sell our house for 6 months with barely a few showings. Our broker says that things started moving again in the last 2 weeks.
Did anyone notice the regional breakdown of the housing numbers? Down everywhere, except up in the northeast. Is there more demand here? or are they overbuilding more here? If more demand, why? Is Financialization more here?
I wonder which of the major banks will go belly up first? Will it be one of the biggest because of over exposure, or a smaller one with not enough political clout to leverage a bailout?
I keep imagining W trying to direct the cover-up/bailout. The half point cut and the MLEC abomination, all just stringing it out. When the crack comes it will be a real doozy!!!
After start of school year, sellers still around are either super desperate or they're delusional, while buyers are shopping for value.
A little seller capitulation could've soaked up available buyers; I noticed a similar phenomena in my neck of the woods as well(a property I bid @ 10% below ask sold last week for 8% below ask, that sale price reset the bar & another 2 nearby properties sold within days)
I'm due to close on a house in the DC suburbs Oct. 31. Using full doc, 80-15-5, with ~700 fico on a 600k loan. I could have gone 100%, but only with an ARM product. I got 8% off list, with 3% closing as well.
I was told that 5% down was still ok for scores down to 680. So much for tighter lending standards.
I rented for 3 years, and don't have the patience to move and rent again. I expect a near-term additional 10% drop in the DC area and no price recovery for 7 years. The situation sucks for buyers and sellers.
Something similar to this real estate debacle happened in the oilbelt in the late 1980's. Here's how I noted the bottom. You had at least one see through on most corners. A see through is an office tower with no sides and you can see through to the other side. Commercial RE hasn't even hit the headlines yet to give you a hint as to how early this is. Another sign of the bottom was when the City of San Antonio advertised for a City Traffic Engineer job, and subsequently received over 600 resumes in a couple of days. That was about the bottom as the RTC began to hire pretty significantly shortly thereafter.
I believe your anecdotal evidence but as someone who lived in the DC area for seven years, I feel qualified to say it is an outlier for the US.
If anywhere really is "different here", it is the Capitol.
Why? Heavy reliance on govt spending, which has been going up for 40+ years without any real pause. Less dependence on the private sector than just about any place in the country. I would expect there to be more overanxious knife-catchers there, as home prices have gotten way out of line and any price drop could look like a once-in-a lifetime opportunity to the nervous buyer.
its not the drones that buy, its the consultants, contractors and professional service providers.
dc is also not as transient as it used to be. people come here for an entry level job or college and stay a while. i can't tell you how many people i know who moved here ten years ago and have either never left or left and come back.
prices are still crazy in some places for sure and sales were the WORST last month.
it could all just be centered around my area, who knows.
This is WaMu's mortgage division's 5th straight quarterly loss. The only difference is that this time the loss was big enough to drag the whole company down to the negative. WaMu has a lot more in common with CountryWide than many think.
More "Black Swans"...
WALL STREET JOURNAL: The SEC has opened an informal investigation into stock sales by Countrywide Financial's CEO, deepening problems at the nation's largest mortgage lender... Developing...
sorry prevoiusly posted, the CFC news.
I am concerned, but, then I just ate a sugar cookie, and now I feel much much better.
More liquidity!
Fannie and Freddie will buy it all with the Fed providing liquidity.
That seems to be the only choice left, other than a collapse into the depression.
I can't wait for this war to end...
Speaking of no end in sight...
Japan and China lead flight from the dollar
Data from the US Treasury showed outflows of $163bn (£80bn) from all forms of US investments. "These numbers are absolutely stunning," said Marc Ostwald, an economist at Insinger de Beaufort.
Asian investors dumped $52bn worth of US Treasury bonds alone, led by Japan ($23bn), China ($14.2bn) and Taiwan ($5bn). It is the first time since 1998 that foreigners have, on balance, sold Treasuries.
Japan and China lead flight from the dollar - Telegraph
I want to know whether they are disappointed but not surprised, or disappointed and stunned?
km4, I can top that:
Yahoo! 404 - Page Not Found
"Greenspan said it was impossible to foresee an end to the U.S. economic troubles and that the outlook for the economy hinged on a recovery in the property market, he was quoted as telling the conference organized by the Czech Teleaxis agency." My emphasis added.
I am stunned. Greenspan has essentially told us we are literally screwed until property markets recover. So, how long will they take to recover? Wer weiss? We is done, so now we should just decide how to take shelter from this storm.
The decline in economic circumstances is proceeding far faster than the mainstream media is aware of, and far faster than most of economic actors seem prepared for. So, now comes the crisis management.
This will be very interesting.
Greenspan behind closed doors saying the crisis will continue until at least 2009- maybe longer.
Someday this war's gonna end...and I hope that I live to see it.
I'm suprised Greenspan hasn't been found stuffed in a dumbwaiter with his tongue cut out.
AllenM yes it appears former Fed chief Greenspin is trying hard to become concerned American citizen Greenspan by these 'heads up' outpourings.
More Americans should know that the US requires $70bn a month in capital inflows to cover its current account deficit.
But no America and most Americans are not living beyond their means
I B so charmed with these responses from those in control (ok, stress related incontinence aside):
"We were going through an orderly correction in the housing market until the middle of the year, when there was a significant falloff,"
It was all good --orderly in fact, if it weren't downright civil and polite...and then it wasn't: real investors lost confidence (not like Citi, real gamblers)...had the audacity to think that ABCP was not as good as the rating agencies stamp said it was...had the audacity to think that the appraisers were colluding with the lenders and that the underlying assets were not going to generate but deteriorate.
But WaMu CEO is not suffering that much:
Washington Mutual CEO awarded $5.97 mln stock
| Deals
| Regulatory News
| Reuters
Rather odd! I seem to recall WaMu saying a few months back that the housing market would not lead to losses because they do not carry the debt but rather it is sold off.umh? Anyone else recall this story.. I think it was in July/August 07
I guess they were disappointed, stunned and surprised, then. They didn't even own the stuff, and they've had to write it down.
CR - Here is the one liner we are looking for!
"Credit card profit fell 51 percent to $102 million, hurt by rising delinquencies..."
Nice percentage. Not 5%, not 12% but 51%!!!
Consumers are getting tired.
Alec - LOL!! Thx.
Barley, good point. Rising delinquicies everywhere ...
Best Wishes.
Actually, I question whether Countrywide is solvent, based on the inventory of over 13,000 properties now available nationwide. Wells Fargo is another that has huge liquidity issues. 39 pages of houses available in Arizona alone, with a ton now scheduled for auction.
I feel that it is going to be brutal in the future with no resources available for Joe sixpack to get more liquidity through his credit cards either.
Got money?
Otherwise- by bye.
Stagflation is going to make me crazy...
I am stunned. Greenspan has essentially told us we are literally screwed until property markets recover
and he chuckles wildly after each utterance
delinquencies > this always happen when the economy is soft. But I am shocked at the %. I would call this a "correction" and I sure somebody has lost their job. These nums are tracked daily, weekly, monthly. They had to have known that this frieght train was about to hit a wall. And then they have the added close to a million more card holders some statement "ya but we got mo cardholders". How do you anticipate or budget for this churn?
Now I know that they never loose on these even in collection given the fees bla bla. But gosh it is a hit.
In light of the absolutely terrible bank confessions, homebuilder collapse, and abyssmal housing data coming to light, I wonder why the major economic indicators (employment, GDP, consumer spending, psychlogy) are not showing weakness?
I ask "Houston, why don't we have a problem?"
Come and vote if interested.
Joe Six Pack will become Joe 6 Packing
What happened to all that neg-am income (was it refered to as "capitalized interest"?) WAMU has been booking? Have that many neg-am loans already reset thus forcing the borrower to finally make a payment and they are not able to?
WaMu moves these to their portfolio and they have to write them down. E-Trade moves them out of their portfolio and they have to write them down... Gheezzz... Cant move these p.o.s. anywhere with out taking a hit...
There comes a time when a fiat-based economy craps-out. It is here and now. The money-masters are desperately trying to keep this beast afoat, to no avail. The utter systemic corruption is now at it's peak. We can go no further. Financial re-fold is at hand. Get ready for a new reality.
"I am stunned. Greenspan has essentially told us we are literally screwed until property markets recover. So, how long will they take to recover? "
No worries. Several years of 10 percent inflation will get the adjusted cost of a 600K home right down there. Along with your savings.
wrt crispy's "more Black Swans" comment. Why do I imagine a scene from Hitchcock's "The Birds" only its a California town with enormous flocks of Black Swans attacking every homeowner?
I am stunned, surprised, and amazed at the sheer number of Black Swans out there in the financial woodwork.
EBay Inc (EBAY.O: Quote, Profile, Research) customers who park extra cash in a nearly $1 billion PayPal money market fund are exposed to the same type of assets targeted for an emergency bailout by the largest U.S. banks, regulatory filings show.
PayPal Money Market Fund, whose popularity has mushroomed with online consumers, is invested in a portfolio that contains structured investment vehicles, or SIVs, linked to troubled subprime loans and other debt.
The risk surrounding these illiquid assets has forced the largest U.S. banks to attempt to create a roughly $80 billion rescue fund to prevent SIV assets from plummeting in value.
EBay customers' cash linked to risky assets
| Reuters
Do you know where your children are?
Gaudia is a realist. As such, the predictions made and posted here are valid. If anybody has eyes to see it, then you will be justly rewarded. If not, it is your loss.
I seek false trends and bet against them, Gaudia has zeroed in on such a trend. It is your choice. If you play wrong, you lose long. I prefer to go with a winner.
WAMU sounds roughly like the noise I make when I vomit..."Get out of the way! I'm going to...WAMUUUUUUU! Sorry about your clothes."
look i'm not delusional. i've been here as long as CR has been in existence.
i know the score
BUT
all my mortgage broker contacts tell me that in the last two weeks they closed more loans than all summer combined. sales brokers are busy. even i'm getting multiple offers on my last listings.
it could be a dead cat, but right now, the front of the sale spectrum is feeling hot in dc.
and i expect MBS and MBS related securities issued post 9/07 to perform well and restore liquidity overall to the market.
EXTRA EXTRA READ ALL ABOUT IT RIGHT HERE
Funny, dc1000. Tell that to Comstock Homebuilding Corp. 3 net sales.
actually, if my luck is anything like it is with my pro sports team obsessions, the residential has just bottomed.
i just got my last of 100+ units under contract and my pipeline is completely EMPTY.
of course just as i have exorcised my market demons and relieved myself of residential product risk, the market would bottom.
i'm completely out of the residential game therefore, the market must be poised for recovery.
if you dont believe that then see above post. its no lie.
"I am stunned. Greenspan has essentially told us we are literally screwed until property markets recover. So, how long will they take to recover? "
He also said there will be no recession. Let's put it all into context. There is a housing slowdown with some spill-over effect into the general economy. This spill-over is not strong enough to cause a recession, just a slow-down. This shows, on the other hand, how resillient the economy is in general.
O-Joe
elvis, its funny, one of my clients just bought a place in a comstock development. it was their idea they loved and it we priced the market out completely for months. they ended up getting a 1300 sqft 2br 2ba w/ 400 sqft outdoor terrace in a gorgeous full-service building at a major discount. nice.
i mean look, i've got broker contacts all over the region and they all tell me that they are closing more loans in the last two weeks than all summer. which isn't sayiing much in absolute levels but it is showing at least a dead cat bounce
and i expect MBS and MBS related securities issued post 9/07 to perform well and restore liquidity overall to the market.
Maybe you should step up to the plate and buy a few if your so damn confident I wouldn't touch that crap with my worst enemy's money.
At the risk of repeating myself...
If we are in for 10% inflation for N years, why did the yield on the 30-year Treasury fall to 4.81% today?
Put another way, if the dollar is so obviously going to zero, who the heck is making 30-year loans at 4.8% interest? And why?
T-Bill yields are saying deflation, not inflation. Maybe they are wrong, but that is what they are saying.
anon-
thats funny you should say that. i happen to have a semi-first hand look into underwriting. i know whats getting underwritten and what isn't. everyone qualifies. no one gets 100%. hell no one gets 95%. PMI is back. actual accurate verification is happening.
hey if the market says i'm only buying XYZ instead of ABC you deliver XYZ right??
come on some of these brokerage houses have management that realize that their life depends on resale therefore their secondary market buyers set the market and you conform.
hell, i underwrite every deal i do before i even bring it to a lender because i only propose deals that can get done.
Thx Joe; but the bottomline is not to follow me. I'm asking that everyone who's investing "look" at what I'm pointing out and decide for themselves. If they don't "get it", it's ok as it may not be "it". I believe it is; but I'm not 100%. I bot gold in the high 6's before it dropped to the low 6's. I also urged everyone and their mother to buy gold at 5 (I was in at 450) and there are folks who email me now who bought at 550 when I hammered them to take positions. They like me. But I'm no angel. I'm in way below everyone here on silver as I added for years; but I lost a pile of opportunity cost on the stuff I carried forward from the 80's too. This is the last easy train ride of my economic life, AFAICanSee; so I'm gettin' on.
I see what I see. Hussmann sees what he sees. Rogers/Sinclair, you, and those kind enough to share their views who I don't think are malarkey artists, what they see. We each see it the same way. I read their stuff, but I don't trust them. I only trust me. (And there's that guy who's been a perrenial bear, with his magic, hidden pivot points, doing the world tour...I don't care what he says either, though it's fun to go with his "energy".) Again, I only trust me, and as I'm scared, I really must trust me or I don't pull the trigger. This game is for real. It's a zero sum game in commodities; so either be right or do what Sinclair says, get a CDN $ account and spend your money wisely, in therapy examining why you don't trust yourself.
"As Jesse Livermore noted at the end of his dramatic life: "Men who can both be right and sit tight are uncommon."
This is the essence of taking out a position. You grab the trend and ride it for all it's worth. The understanding of the trend allows one to get out and maximize profits.
Gaudia has layed out the current trend, both in the PM complex and the equities. If you have the eyes to see it, jump on board. Otherewise, read em and weep.
dc,
MWEOWRRRRR...boing...pfff.
Half the families in RE the other half law. Familial broker contacts in CA are sweating bullets. People in dc don't earn money they print it. Ou here in the real world it ain't so nice. (Yeah I know CA ain't the real world.
)
Cheers,
PS congrats on clearing your pipeline.
Nemo, maybe nobody in the US wants to hold anything in the US that's not govt paper?
You've not commented on the spread between govt 10 yr and corporate paper.
What's that? The standard fraction of a percent? ??
Can WaMu actually pay the dividend ? If they won't go bankrupt, then I don't mind taking a small position every now and then. Sort of like averaging it out over next few months/years.
What is the chance that they can survive this and have the money to pay the dividends ?
Govt 10-year:
http://finance.yahoo.com/q?s=%5ETNX
Commercial Paper:
http://www.federalreserve.gov/releases/cp/
Looks to me like the spread is 15-65 bps depending on the paper. High by recent standards, perhaps, but not out of whack historically.
Such a weak dollar (and so many reasons for it to get weaker) has got to be inflationary. That seems obvious, but then I do not understand how the long bond can have such a low yield. This is the most mysterious piece of the puzzle to me, so far.
Perhaps the obvious is not what is happening.
I can quite believe there's a dead cat bounce going on in DC. Lots of people surely still believe real estate is a sure-fire long-term investment, and that this slowdown is a once-in-lifetime buying opportunity.
In Japan, the real estate crash of the early '90s was followed by an echo boom as properties suddenly became more affordable.
Although most areas of the US don't have much pent-up demand (rather the opposite), I have no trouble believing in pent-up demand in DC. There's a lot of money being made there, and the jobs are among the nation's most secure.
And wouldn't it be so right:
I moved my money OUT of the PayPal money market fund! phew.
How do you mix cement if your water supply is 60-90 days?
I'm just saying...
(/cryptic)
I moved my money out of the TIAA money market fund too. Phew. I got out some time ago after I saw that it was heavily into commercial paper.
I do not understand how the long bond can have such a low yield.
Nemo, in a word, China. There's some evidence they're starting to back away from treasuries, but then again, this has been predicted before.
emo:
i find it odd too the long bond. i've been asking out loud for years why the long bonds were wrong. i believed they were wrong and learned they were wrong due to setser et al.
yields are relatively low even tho non-rational interest in treasuries (FCBs) is apparently at recent lows. as well supply of treasuries is apparently at recent highs.
i have no idea what the deal is and take no position on it except to say it makes me smile when the ten year rallies 10 bps in a day.
regarding DC. sept sales (yoy delta) were the absolute worst by a long margin i have seen in years and years with 10 years tracking this data monthly. market clearing ratio went from under 5 months where it had been for half a year or more and then exploded to nearly 9 months.
however, in the last two weeks i have first hand experience and second hand hersay from more than a handful of mortgage brokers, agents, title insurance writers etc that they are busier now than in months.
as well, the mortgage guys say their writing good clean deals (because thats all they can sell on the secondary market) to qualified loaded buyers.
i have no idea what this all means.
i do know i have no more residential to sell.
yippee. must be the bottom when i've cleared my hands of it all.
It seems obvious but it is wrong. It could be a weak currency and a deflation. Like Yen was all the last 17 years. Weak currency will affect only gas prices,, everything else will get cheaper and cheaper every year.
Don't you mean that a weak currency will affect all imports that don't come from nations with currencies pegged to the dollar? Imports from Europe, Canada, etc., will be more expensive for sure. And if China breaks with the dollar its exports will rise in price too.
theroxylandr,
Between expanding federal deficits, and a fed opposed to deflation above all, I'd think deflation is a long shot. Add expensive imports due to falling dollar, and I find it even more unlikely. What's you reasoning?
Thanks,
I am wondering the same things that Nemo is. What was up with the big rally in treasuries today?
It can't be a flight to quality b/c the spread with corporates is not out of line. Mysteriously, the market is signaling a lack of inflation fear, even as the price of oil and other commodities race ahead. And with the dollar tanking, why would foreigners (FCBs excepted) be buying? And the market can't be anticipating that the Fed is now less likely to lower rates, when the Fed futures is pricing in a higher likelihood.
I just can't make sense out of it.
FWIW On Cape Cod we have been trying to sell our house for 6 months with barely a few showings. Our broker says that things started moving again in the last 2 weeks.
Did anyone notice the regional breakdown of the housing numbers? Down everywhere, except up in the northeast. Is there more demand here? or are they overbuilding more here? If more demand, why? Is Financialization more here?
I wonder which of the major banks will go belly up first? Will it be one of the biggest because of over exposure, or a smaller one with not enough political clout to leverage a bailout?
I keep imagining W trying to direct the cover-up/bailout. The half point cut and the MLEC abomination, all just stringing it out. When the crack comes it will be a real doozy!!!
Put another way, if the dollar is so obviously going to zero, who the heck is making 30-year loans at 4.8% interest? And why?
Caribbean account Monitezation
If ever selling begins in earnest...
The 12 meter teams are well paid to arb that situation... and sail the rest of the day.
. Our broker says that things started moving again in the last 2 weeks.
Selling Hope,for free. How special of him
Could someone call Ben and tell him his helicopter was stolen by someone who is dropping size 12 Bruno Magli's instead of cash?
Theory on RE picking up:
After start of school year, sellers still around are either super desperate or they're delusional, while buyers are shopping for value.
A little seller capitulation could've soaked up available buyers; I noticed a similar phenomena in my neck of the woods as well(a property I bid @ 10% below ask sold last week for 8% below ask, that sale price reset the bar & another 2 nearby properties sold within days)
yep, made a bid 10% below and it was accepted. Couldn't pass this opportunity
I'm due to close on a house in the DC suburbs Oct. 31. Using full doc, 80-15-5, with ~700 fico on a 600k loan. I could have gone 100%, but only with an ARM product. I got 8% off list, with 3% closing as well.
I was told that 5% down was still ok for scores down to 680. So much for tighter lending standards.
I rented for 3 years, and don't have the patience to move and rent again. I expect a near-term additional 10% drop in the DC area and no price recovery for 7 years. The situation sucks for buyers and sellers.
dc1000
Something similar to this real estate debacle happened in the oilbelt in the late 1980's. Here's how I noted the bottom. You had at least one see through on most corners. A see through is an office tower with no sides and you can see through to the other side. Commercial RE hasn't even hit the headlines yet to give you a hint as to how early this is. Another sign of the bottom was when the City of San Antonio advertised for a City Traffic Engineer job, and subsequently received over 600 resumes in a couple of days. That was about the bottom as the RTC began to hire pretty significantly shortly thereafter.
Best regards,
ww
dc1000,
I believe your anecdotal evidence but as someone who lived in the DC area for seven years, I feel qualified to say it is an outlier for the US.
If anywhere really is "different here", it is the Capitol.
Why? Heavy reliance on govt spending, which has been going up for 40+ years without any real pause. Less dependence on the private sector than just about any place in the country. I would expect there to be more overanxious knife-catchers there, as home prices have gotten way out of line and any price drop could look like a once-in-a lifetime opportunity to the nervous buyer.
But can even the government drones afford the insane prices in DC on their salaries? I sort of doubt it, hence prices must still come down long term.
its not the drones that buy, its the consultants, contractors and professional service providers.
dc is also not as transient as it used to be. people come here for an entry level job or college and stay a while. i can't tell you how many people i know who moved here ten years ago and have either never left or left and come back.
prices are still crazy in some places for sure and sales were the WORST last month.
it could all just be centered around my area, who knows.
i'll have the oct resale numbers on nov 10.
Countrywide shares fall 3.2%, to $16.80 in pre-market trade
Does this mean BAC is now down $1.20/share on their $2B loan to CFC?
WaMu down 9% at 10:30 a.m.
This is WaMu's mortgage division's 5th straight quarterly loss. The only difference is that this time the loss was big enough to drag the whole company down to the negative. WaMu has a lot more in common with CountryWide than many think.
Reggie Middleton's Boom, Bust & Bling Blog - HAS MOVED TO REGGIEMIDDLETON.BOOMBUSTBLOG.COM!!!: Yeah, Countrywide is pretty bad, but it ain’t the only one at the subprime party… Comparing Countrywide to its peers
What?
Greenspan visits the confessional?