DataQuick: Mortgage Defaults Hit Record in California
Submitted by
CalculatedRisk on Wed, 04/22/2009 - 9:51am (175 comments)
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This is enough to make Nemo shake
More defaults.. fewer foreclosures.
Bandoes coming to a manor near you.
Another record. This eCONomy just gets better and better.
It's like having the olympics at high altitude.
A particularly toxic period appears to have been August through November 2006 which had more than a 9 percent default rate.
This is wishful thinking. This was the peak of the bubble. Of course they would be most exposed -at first- to price decline driven defaults. Unfortunately that in turn puts older vintage loans underwater. Now the second big wackage in the form of unemployment is striking at the same time 2003-2005 era low equity borrowers find their properties worth less than their balances.
We have to save wall street in order to save California!
In Romania no one worrys about this because they live in yurts. Yurts were modernized in America and became what we know as the Mobile Home. These are what my forefathers aspired to live in once they retired. Now, the mighty mobile yurt homes no longer cover the grassy expanse of retirement villages.
Less than 1 percent of the home loans originated in late 2006 by Citibank and Bank of America have since gone into default.
So BofA said "Hey, we're not making enough crappy loans! Let's lend some money to Countrywide. Wait! Even better idea! Let's buy it!"
Yahoo! 404 - Page Not Found
Sounds like wishful thinking...."reset".
Here's hoping this mess is more like game-changing.
INDU forming the right shoulder on the MortgagePig(tm) . . . . . . . .
No on 1A, 1B, 1C, 1D, 1E and 1F. Burn mother****** burn.
When this mess is finally over I expect many of these eCONomic records to stand for centuries. Bob Beamon's long standing long jump record will look like historical blip in comparison.
This eCONomy rocks!
Eric (member) wrote on Wed, 4/22/2009 - 11:01 am reply
INDU forming the right shoulder on the MortgagePig(tm) . . . . . . . .
Saw that too. When do we get the cute little curly tail way down around 5860?
anoddamoose (member) wrote on Wed, 4/22/2009 - 11:01 am reply
No on 1A, 1B, 1C, 1D, 1E and 1F. Burn mother****** burn.
What's wrong with Prop 1F?
The measure would prohibit the state commission that sets salary levels for the governor, other top state officials, and members of the California State Legislature (both the state senate and the state assembly) from increasing those salaries if the state General Fund is expected to end the year with a deficit. (Specifically, if the state's Director of Finance reports that there will be "a negative balance in the Special Fund for Economic Uncertainties at the end of that fiscal year.")
Currently, California legislators are paid $116,208 annually, which is the highest among state legislators in the U.S. Legislators also are given $170/day "per diem" expense money for each day they are in session.
Now the second big wackage in the form of unemployment is striking at the same time 2003-2005 era low equity borrowers find their properties worth less
My friend had sold his 800sq. ft Playa Del Rey condo for 435K during 2003-2004 time period - The 2003 prices did not make sense then and it does not make sense now.
if your mortgage was 2 million and your neighbors house is worth 1 million will you stay in your home?
That will be like 5 foreclosures at once with even less able buyers.
In all seriousness, 69% of loans defaulting should be enough to finally prosecute. Right?
Hm, state legislators in Massachusetts make under 70k base salary. California legislators: overpaid.
Angry Saver wrote on Wed, 4/22/2009 - 10:59 am
We have to save wall street in order to save California!
LOL. save wall street to save rodeo drive
Did someone say more defaults, fewer foreclosures? From 4 days ago:
Foreclosure filings jump 24% in first quarter over last year - Apr. 16, 2009
First quarter foreclosure filings nationally jumped 24% over prior year.
The March and first quarter filings were the highest monthly and quarterly filings on record.
Imagine how much work could be done to develop both new renewable sources of energy and re-engineering of the grid with a trillion dollars.
Bloomberg: U.S. May Never Need More Nuclear, Coal Plants, FERC Head Says
How about 2 trillion?
Who is gonna save us after we save the toxic assets?
Holeee Cow....nice spike!!!
I wouldn't be surprised to see 50% of the homeowners in CA choose the jingle mail route. Put that in the stress test.
it makes no sense to fight a losing battle for the benefit of bankers and a corrupt system. What's the point?
CR says : " About two-thirds of the loans that ResMAE and Ownit made in 2006 are in default."
There is no way there is this much incompetence in the world.
This is what I was getting at in my exchange with Martin Wolf. He still does not want to believe there was systematic fraud. You tell me how you can run a business this badly without it, please.
Oh, if we could just do a where are they now expo on these firms. Id think Jail would be an appropriate place for most of their senior mgmt.
"In all seriousness, 69% of loans defaulting should be enough to finally prosecute. Right?
In this country, I don't know.
After all, it's increasingly clear that Somebody in the last administration said, "We want to torture people. Write us a cover legal opinion that justifies it, but let's not actually let people read it while we're in office so no one can call BS." But it's not clear that anyone's going to jail even for that.
Good News: Option ARM Resets Delayed - BusinessWeek
Jingle all the way...
" Comrade Scott (member) wrote on Wed, 4/22/2009 - 2:11 pm
Holeee Cow....nice spike!!! "
'specially since there's no zero suppression......
They pretend to make loans, and we pretend to repay them.
Welcome to the USA.
Man, you should use green instead of red CR.
That'd make one big. mean, green shoot.
There should be a program to unload the foreclosed homes to returning Iraqi vets--no money down--0% interest--government subsidizing 30% of the payments/year for every year's service. This would stabilize neighborhoods and repay those that risked their lives. The feds will be picking up the tab for these mistaken loans anyway--this way, they'd also be helping heroes.
anoddamoose,
Foreclosure filings are the Notice of Defaults, Notice of Trustee sale/sheriff sale and Trustee sale / sheriff sale
The number of actual homes foreclosed on is very low when compared to the default notices sent out.
Banks Sway Bills to Aid Consumers
- NY Times
The banks will very soon be competing with taxes in further diminishing the discretionary income of the public. Banks might act like they have the upper hand but as long as the local, state and federal taxes can garnish and put tax liens on you then non recourse debt will be abandoned going forward. Why can't the banks figure out that if you do the debtor a favor the debtor will feel obligated to pay back the debt. Increase the interest rates, fees, and penalties and the debtor will simply say screw it and walk away. I can't follow the logic being put forward by the banks. Simple short sightedness?
Angry Saver wrote on Wed, 4/22/2009 - 11:12 am reply
I wouldn't be surprised to see 50% of the homeowners in CA choose the jingle mail route. Put that in the stress test.
Ummm, with about a third of California homeowners with no mortgage and another quarter with very low CLTVs this seems a wholly unbelievable estimate.
Holeee Cow....nice spike!!!
Is it the right ear of the dreaded Mortgage Pig formation?
Hm, state legislators in Massachusetts make under 70k base salary. California legislators: overpaid.
Not really when you consider how expensive our housing is.
I wonder how many underwater borrowers are holding on waiting for a rebound.
OT
Obama:[in Iowa, on high-speed rail] "You won't have to take off your shoes to visit Chicago."
Sir: Madrid, London, Tokyo.
'But it's not clear that anyone's going to jail even for that.'
Well, possibly not if they stay within the confines of the U.S. - but for a number of former administration officials, the meaning of 'No-Fly list' looks a lot differently to them now that when it was originally conceived, becoming a lesson in legal geography, not a capricious exercise of power hiding behind secret lists and laws..
... the resets will begin to accelerate next spring, rising from about $4 billion resetting in March 2010 to a peak of $14 billion in September 2011. The current level is about $1 billion. About $500 billion of option ARM loans are outstanding, according to the bank. "Things have gotten pushed out," "Right now it looks like the big increase is probably going to be somewhere toward the middle of next year."
Option ARMs typically reset after five years, at which point the monthly bill increases 65% or more. About 37.5% of option ARMs originated in 2005 are still outstanding, 63% of the 2006 vintage are outstanding, and 82% of the 2007 loans remain, according to Barclays Capital (BCS). And about a third of the outstanding loans in these years are deeply delinquent.
Bottom is in. This should cause DOW to spike 300+ points.
Just living up to our reputation that California has the best politicians money can buy.
Spoke to my brother's brother in law, who is a mortgage broker in CA. Said he's never been busier mostly doing re-fi's for desperate homeowner's who are in those ARM's right and trying desperately to avoid foreclosure. Hanging on by the skin of their teeth.
One thing future jingle mailers need to remember is that the Bush's suspension of the tax on forgiven mortgage interest expires in December of 2009 (iirc).
This Christmas season should be interesting.
Jingle mail, jingle mail, jingle all the way, oh what fun it is to run from your mortgage debt today. Keys in envelopes ring, making bankers fright, what fun it is to mail the keys and make your burden light...oh
Option ARMs resets could start accelerating next spring
BusinessWeek
Angry Saver
Foreign Flippers????
You've got some cause and effect reversed on why "2006 was a toxic year". You say it was "probably because that was when house prices peaked or were starting to fall". 2006 was a toxic year because that's when the bubble was running on fumes with only the worst types of loans on inflated prices left to fuel the final blow off. The peaking and falling of prices were a symptom, just like the current poor performance of that period's loans. So the root cause was the bubble dynamics / end of Minsky cycle. The falling prices are symptom which then do amplify the poor performance of the loans on the way down.
...
O'r The land of the Yurt,
And the home of the serfs!
So , the foreclosure moratorium was a full success .
Nixon also tried to stop inflation with price and wage controls .
American fools never learn , they always try to avoid the cosequences of their irresponsibility . But in the end , they always lose . Haha .
" rb wrote on Wed, 4/22/2009 - 11:17 am
I wonder how many underwater borrowers are holding on waiting for a rebound."
a lot, i would bet. loss aversion is a big issue when it comes to housing.
http://pluto.huji.ac.il/~msfalkin/0101-paper.pdf
No no no werner, ya got it all wrong! This was a kick the can scheme. You see, if you push those foreclosures out down the road to when that there stimulus thing kicks in, I mean, heck, problem solved right? Just tweak a little witholding, and you give all those families the extra cash they need to keep paying.
Bwahahahaha. Scatman would be proud.
Whip Deflation Now just doesn't have the same zing.
I wonder how many underwater borrowers are holding on waiting for a rebound.
I think very few. They just don't have any good options. They'll hang until some triggering event makes up their mind for them.
Obama: "God bless the USA"
I guess prayer is the answer, as always. Wouldn't want to see any difficult action.
From the nyt link above. A bill to bail out banks for 7 billion of FDIC premiums.
That legislation would make permanent the temporary increase in deposits guaranteed by the Federal Deposit Insurance Corporation, to $250,000 from $100,000. It would also increase the F.D.I.C.’s credit line with the federal government to $100 billion, from $30 billion, thus enabling regulators to reduce a proposed special premium the banks will owe the F.D.I.C. later this year by more than 50 percent — a $7.7 billion savings.
American fools never learn...
That's American dopes to you, sir.
The lending institutions with the highest default rates for loans originated in August to November 2006 include ... Master Financial (64.6 percent)....
Another case of "just a liquidity problem" turning out to be something else entirely. Let's go back to March of 2007:
To all of the employees of Master Financial, Inc.
It is with the deepest regret that I have to announce that we are ceasing operations in our wholesale sub-prime origination unit effective today. This comes as a result of a continued strain in the secondary market and lack of liquidity for the loans we, as an industry, produce....
We are not in this position because we have problems, or that our loans are bad, or that we did anything wrong. This is an industry-wide phenomenon, strictly due to the unprecedented market conditions that exist today. There is really nothing we could do right now or could have done over the last twelve months to avoid this....
Bakersfield Bubble: Master Financial
Lets look on the bright side, sending all these default notices helps the US Postal Service with its gaping deficit.
Rob Dawg (member) wrote on Wed, 4/22/2009 - 2:25 pm
Whip Deflation Now just doesn't have the same zing.
"WDN" --lousy acronym for a button, too ...
Rob Dawg ... I don't feel as strongly about 1F as I do the others. But I fear it will lead to a new wave of tax increases (and fee/license increases) in order to "balance the budget" - if that is indeed the effect - and preserve the "right" to salary increases (what right????). I'd rather see a showdown at budget time where the revenue and expense items are on the table together. An open door to salary increases gives license to the (political appointee) state commission to hand out candy in return for higher taxes. How about they take salary CUTS like so many others in the state are?
What needs to be addressed, and is not, is totally out-of-control SPENDING, not the deficit. IMO (although reining in spending would certainly help the deficit). "If state spending increases by more than the CPI less 0.5%" would be a lot more effective than the "projected deficit in the Special Fund" approach.
It's a tax versus spend thing, and IMO the party is over on the spending side. California is broke, and needs to show some serious restraint if it is to be funded on a go-forward basis (as to which there can be no assurance).
" Tim waiting for 2012 wrote on Wed, 4/22/2009 - 11:17 am
... the resets will begin to accelerate next spring, rising from about $4 billion resetting in March 2010 to a peak of $14 billion in September 2011. The current level is about $1 billion. About $500 billion of option ARM loans are outstanding, according to the bank. "Things have gotten pushed out," "Right now it looks like the big increase is probably going to be somewhere toward the middle of next year."
Option ARMs typically reset after five years, at which point the monthly bill increases 65% or more. About 37.5% of option ARMs originated in 2005 are still outstanding, 63% of the 2006 vintage are outstanding, and 82% of the 2007 loans remain, according to Barclays Capital (BCS). And about a third of the outstanding loans in these years are deeply delinquent."
I saw this article, they are wrong about the timing, trust me, these will start exploding much sooner. Besides, they contradict themselves - big increase next year, but 1/3 are deeply delinquent?
Many of these borrowers can't or don't want to make even the 7.5% annual increased in payments. Also, many were done with a 40 year amortization on the minimum payment, meaning they neg am even faster. Lower rates have helped, especially the MTA loans, those some were COFI or some other weird index (Wachovia had some strange ones). By early 2007 originators started raising margins, but not teaser rates, further increasing the pace of neg am all else equal (the gap between the teaser rate and the accrual rate is what matters). The rating agency models did not account for the neg am gap, of course.
Furthermore, the profile of this borrower was usually "fast money" anyway, it was all about cash flow. I would wager that the average OA borrower is much more likely to walk away than the average agency loan borrower, all else equal. It is the mindset of these folks that a house is an asset, once it is underwater, just stop paying.
A question for you housing experts.
Two condos on either side of mine in our development have gone on the market within the past month. Both of these units were purchased in 2005 at local market highs, and in one case very substantial improvements were made to the interior. Home prices in this area have dropped a good 25% since late last year and one other condo about five doors away has been on the market for over a year with next to no traffic. Neither case involves a new job elsewhere. What short of financial distress might motivate a sale at this time? I can't imagine such short residency otherwise. Could it have been something I said?
The percentage of homes not mortgaged in the U.S. was 32% in 2006 versus 24% in California. - http://www.library.ca.gov/crb/08/08-006.pdf
As in so many other things, California looks to be atypical, having a third less unmortgaged homes as in the rest of the nation. Which doesn't make 50% of homes in foreclosure any more likely, but the number 1/3 is 1/3 off itself for California.
"Let's begin our speculation with a question: if a new President (of either party) wanted to destroy the political power of the investment banker cabal which currently holds sway over Treasury and Congress, what path would actually lead to success?"
charles hugh smith-Weblog and Essays
Good speculation.
Someone just fired the market's afterburners. Standard afternoon PPT spurt? Did Timmy trip and fall on the button early? I'm glad haven't yet started piling into puts in earnest. My eyes get puffy when I weep.
Angry Saver wrote on Wed, 4/22/2009 - 10:57 am
It's like having the olympics at high altitude.
All the better for cliff diving
Rob Dawg,
Regarding CA jingle mail, I should have said 50% of home owers with mortgages. Even then, admittedly, it is a stunning statement. But so was the housing stupidity in CA. I foresee overshoot to the downside in a big way.
Also, I wonder about your statement that 25% of home owners in CA have a low CLTV. That seems so 2006.
I know a young couple that bouth a house in Seattle in May of 06, about a year before the peak in this area.
Put 20% down and took out a mortgage.
Cash out refinance a year later to remodel the kitchen.
In the process of refinancing again to take advantage of lower rates.
Three mortgages in less than four years. Don't know how much they have paid in fees each time, but the banks must love them.
MLM (member) wrote on Wed, 4/22/2009 - 11:27 am
American fools never learn...
That's American dopes to you, sir.
No need to insult the dopes .
(I always thought that Jas calling Americans born and breed dopes inadvertently only insulted the dopes , Haha. )
'The number of actual homes foreclosed on is very low when compared to the default notices sent out.'
Not in my neighborhood. The homes on both sides of me are empty with nods filed recently as well as 2 more in my short 11 home culdesac and 14 more along the lake edge. That's 1 in 5.8 and before you say no way, I checked the county recorder site and have walked the development and looked in windows. The community is having a meeting this week about what to do.
I wonder what the Jas Lounge looks like?
Plastic slipcovers all over the furniture, perhaps?
Lavarenti Beria,
" A question for you housing experts.
Two condos on either side of mine in our development have gone on the market within the past month. Both of these units were purchased in 2005 at local market highs, and in one case very substantial improvements were made to the interior. Home prices in this area have dropped a good 25% since late last year and one other condo about five doors away has been on the market for over a year with next to no traffic. Neither case involves a new job elsewhere. What short of financial distress might motivate a sale at this time?"
Damn, a word problem...OK...when did train B leave the station again....Is that the light at the end of the tunnel?
Is that the Jaws theme? ....
OOOOOO....I know....
Three housing flippers walk into a Condo complex....
Maybe it is time to allow homeowners the chance to repurchase instead of refinance their homes. Those in trouble of foreclosing should be given the option to buy their homes again, but at a reduced market price. The market price for sale could be determined based on comps. The banks with customers who are interested in this option will save on foreclosure costs. The banks will lobby government for some sharing of the costs of mortgage reduction, but that will happen no matter what policy is pursued. This is a better option than cram downs achievable only through bankruptcy.
jn
OT
Obama announced plans yesterday.to cut 100 million in spending. [there was no closeup cut with pinkie to lips]
So if you run a trillion dollar deficit in six months and make cuts of 100 million, the budget will be balanced by....(get the abacus).
Angry Saver wrote on Wed, 4/22/2009 - 11:38 am reply
Rob Dawg,
Regarding CA jingle mail, I should have said 50% of home owers with mortgages. Even then, admittedly, it is a stunning statement. But so was the housing stupidity in CA. I foresee overshoot to the downside in a big way.
Also, I wonder about your statement that 25% of home owners in CA have a low CLTV. That seems so 2006.
Think of a typical bell curve centered on 6 years. That's how the ages of mortgages are distributed [conservative]. There are a great many "homeowners" in years 8-29 of their mortgage which gives them a purchase basis of 1980-2001 pricing.
While your observation that we will overshoot is correct, your estimates of defaults is not. On the former you need also remember that even if marginally upside down both inertia and equivalent rent will keep them paying into a "losing" proposition.
GDD9000 (member) wrote on Wed, 4/22/2009 - 1:13 pm
Oh, if we could just do a where are they now expo on these firms.
John Mullins, former president of Master Financial, is now owner of Retirement Resourcing LLC, a firm whose only internet footprint is Mullins's own linkedin page.
Son (I think, but I'm not absolutely certain) Chris, who was CIO and EVP under John and who I believe was acting as COO at the time of Master's final demise, is now running the wholesale division of one of the country's largest reverse mortgage lenders.
David Vida, who was CEO at the end, was also President of Strategic Recovery Group, Inc., offering "tomorrow's mortgage solutions, today." "Leverage SRG's expertise, national legal network, and innovative technologies and practices to increase recovery dollars on seriously delinquent assets." I assume business is booming.
It's a Fate Accompli in California.
Nowhere else in the country did people get the chance to go to the HELOC well, over & over again, with it eventually replacing many people's jobs.
Day of Wreckening
Lots of interesting news today.
We learn more about how Citi and Wells cooked the books. Again.
We learn about Fannie's CFO killing himself. Allegedly.
It really inspires confidence.
Whip Deflation Now just doesn't have the same zing.
W.D.N. I'm not even sure how you pronounce that.
Sorry, that was Freddie's CFO.
Well, who knows? Maybe he'll be next.
"Option ARMs typically reset after five years, at which point the monthly bill increases 65% or more
I believe they reset when LTV reaches 115% which, if one only made the minimum payment, would kick in much sooner.
Day of Wreckening passes, but Fate Accompli fails, since it doesn't substantially alter "Fait," I reckon.
"W.D.N. I'm not even sure how you pronounce that."
WaDiN.
Use in a sentence.
We're blowin' the WaDiN' making the banks whole!
WDN = Widen
WFC home equity protoflio is $120B, all clear chargeoffs diminumus stock up $1 on news of firsts!
We will have to WDN the deficit to make banks whole.
WDN = Widen
Maybe WDN sounds like 'Would'n'
as in "WDN you like to be a Bankster too?" Kind of like that old Dr. Pepper commercial.
It's supposed to be "Whip Inflation, Not Deflation".
As in, "why does Fed insist on breaking WIND?"
"" Bob Dobbs (member) wrote on Wed, 4/22/2009 - 11:14 am
* reply
"In all seriousness, 69% of loans defaulting should be enough to finally prosecute. Right?
In this country, I don't know.
After all, it's increasingly clear that Somebody in the last administration said, "We want to torture people. Write us a cover legal opinion that justifies it, but let's not actually let people read it while we're in office so no one can call BS." But it's not clear that anyone's going to jail even for that. ""
can you believe this?:
"Dick Cheney demands Barack Obama reveals torture 'success' memos"
Video: Dick Cheney demands Barack Obama reveals torture 'success' memos - Times Online
then there's this:
"Barack Obama grants CIA permission to retain right to carry out renditions - Times Online"
Barack Obama grants CIA permission to retain right to carry out renditions - Times Online
Homebuilders up 4-8% today. So much for deflation. S'Okay. The new focus is on REITs and CRE. When SPG implodes in the next few weeks it could be the trigger.
mp wrote on Wed, 4/22/2009 - 11:50 am
Sorry, that was Freddie's CFO.
Well, one swallow doesn't make a summer .
Morgan Stanley reduces risk which is good, too bad this guy doesn't get it:
Morgan Stanley Results Leave Bernstein’s Hintz ‘Humiliated’ - Bloomberg.com
Judgement @ Nomoneyburg
.
Anonymous wrote on Wed, 4/22/2009 - 11:42 am
* reply
I wonder what the Jas Lounge looks like?
Plastic slipcovers all over the furniture, perhaps?
Some buckets of water with sponges soaking and someone knocks on the door every hour and yells: "Time!"
Less than 1 percent of the home loans originated in late 2006 by...Bank of America have since gone into default.
OK, let's not mention that BAC is now the proud owner of Countrywide (7.7% default) and, through Merrill, Ownit (63.6%). Still under 1% on that late-'06 production, Mr. Lewis?
Got this today via e-mail from RealtyTrac...
Avoid Foreclosure Evictions with our New Renter Alerts.
With renter evictions increasing nationwide, tenants need to protect themselves. Now you can with RealtyTrac's Renter Alerts - a fast and easy way to find out and monitor if your landlord is in foreclosure.
We truly are living in interesting times.
"f a new President (of either party) wanted to destroy the political power of the investment banker cabal"
Sigh.
A very sad rationalization.
'There are a great many "homeowners" in years 8-29 of their mortgage which gives them a purchase basis of 1980-2001 pricing.'
Any numbers on the refis/HELOCs? It is reasonable to assume that just as California is actually underweighted in free and clear homeownership, it is overweighted in terms of people taking advantage of the home ATM.
Especially since I doubt that many mortgages made in 1981 are still being paid - an interest rate of 15%+ is pretty crushing. Effective Federal Funds Rate and 30-Year Mortgage Rates
I will wager that the number of 27 year old fixed rate mortgages still being paid at this point can be easily ignored in a bell curve.
Yalt (member) wrote on Wed, 4/22/2009 - 12:10 pm reply
Less than 1 percent of the home loans originated in late 2006 by...Bank of America have since gone into default.
OK, let's not mention that BAC is now the proud owner of Countrywide (7.7% default) and, through Merrill, Ownit (63.6%). Still under 1% on that late-'06 production, Mr. Lewis?
And let us not forget those loans re-fied 2006-2009 from the Class of 2006 that will eventually default as well.
Hey, didn't Kenny say Merrill was immediately accretive? Sounds like a job for the cops at SEC.
if Custer had the ppt he would have been thought of as a hero today....Geithner 200 years from now...snark off
With 2/3's in default, think maybe Citadel should have asked for more than 150 basis points off?
From Marketwatch on March 2006:
Citadel offered to pay $22.4 million, plus a break-up fee of up to $1.5 million, for the company. The deal was announced by Citadel and ResMAE in a statement on the mortgage firm's Web site. In a separate transaction, Citadel purchased ResMAE loans for 98.5% of their face value, or roughly $160 million.
Another sign of the times.
Every January and July I file a Sales Tax Refund request for our church with the NC Dept. of Revenue. We typically get the refund check within 6 weeks.
I filed the most recent around the end of January. Just got the refund check today, which is close to twice as long as it has ever taken before. I'm guessing they postponed making the refund payments until they had received more income tax payments. Not a good sign if true. Razor thin operations at the State level.
I guess that's still better than CA, where we would have received an IOU.
Bloomberg.com:
Government Bonds
30y T 3.83, last week 2.50
buhbuhbuhbut, won't that push interest rates on everything using this as basis?
Zacktlee
In turbulent times prudent money managers really go for 10y+ committments. Especially with memories of ARS and the lockup it had. Don't get caught making short term trades on long term products in a fault zone.
er, 3.5
Here is Boise, Idaho they are reporting and one is 42 homes is in foreclosure.
Which one is Elmo, again? And why can't we find Nemo?
here nemo, nemo, nemo....
//sprinkling fish food on the waters surface........
DQNews - Capital Regions Chart
all you doomsters just don't like the fact that this rally is based on solid fundamentals - look at that 10% jump in fresno county condo medians just in the last month!
Back when subprime defaults began soaring, I speculated here that foreclosures in CA alone could total a million or more.
It seemed an outrageous number at the time.
I'm sure Citadel made money on the deal, just like we're all going to make money on the PPIP.
It was just a liquidity problem, after all. Nothing wrong with the loans themselves.
Jesse's Café Américain: The Setup in the US Equity Markets and SP Futures Hourly Chart
heh, gaijin granny...
From above
"Whip Deflation Now just doesn't have the same zing".
You don"t think a little crack of the whip can stop deflation?
i was at a party in sweden and one of the guests said that americans have no culture. i pointed out that all our movies were in their theaters, our MTV on their televisions, our music on their stereos, and they all spoke english.
those foreigners who like to call our countrymen dopes are only broadcasting their own spite and jealousies. what is a dope anyway? an unsophisticated person? a financially unsophisticated person? this definition implies most poor africans, poor indians, poor europeans, and poor south americans would be dopes to jas as well.
the compulsive "dope callers" are really just congratulating themselves for not being poor... or poor anymore. it is a class slur. they justify their exploitation of those they see as lesser by denigrating them.
those who, for whatever reason, are less intelligent or less fortunate do not deserve to be fucked and spat upon. we need to stop insulting our fellow citizens. we need to stop buying into the fraud that we are entitled to consume the health and wealth of those who are less clever.
this is the fraud of "self-interested competition". we all should know by now what happens when we let the invisible hand of the divine sort things out.
it is time we heal eachother and help the less fortunate, before they that have nothing to lose burn this MF down.
Kermit is green.
Elmo is red.
Nemo is a name of guile.
Flipping is dead.
"You don"t think a little crack of the whip can stop deflation?"
Well, if you're into that sort of thing, you really don't have to ask. But you could say it in a naughty sort of way. That might do the trick.
In the Jas Lounge they play Grateful Dead Thread?
Elmo scores. PPT claim interference. They must change the rules again.
"it was just a little liquidity problem..."
Yeah right, try using that excuse with your girlfriend
Hey, where'd that ugly little red muppet come from?
O/T :
4/22/2009 : GM won't make $1 billion debt payment .
4/22/2010 : US won't make $1 billion debt payment .
As goes GM so goes America .
(formerly known as : What's good for GM is good for America .)
and massive amounts of dope, hash and the like...
whats everyone doing for happy hour this friday? you should swing by.....
"most poor africans, poor indians, poor europeans, and poor south americans are as dopey as unsophisticated Merikuns."
Otis, I'm not sure you're helping your case here.
"
"it was just a little liquidity problem..."
Yeah right, try using that excuse with your girlfriend"
Heh, try using it on her father...and add in that it only caused her a "little bit" of pregnancy.
Too many people, too little work.
"The shakeup in the world financial system has brought forth a lot of hand-wringing over the future of capitalism. Most commentators devote themselves to how best to get capitalism back onto whatever their preferred path is. Thus, we see a range of ideas from improved regulation, corporate governance, compensation restrictions or, at least, review, and changes to tax policy.
What we don't see, at least among the most quoted commentators, is any examination of the basic economic foundations of modern society. I'll summarize:"
European Tribune - Community, Politics & Progress.
Otis - DFTT applies not just to internet threads but to global anti-Americanism.
The cultural influences you speak of speak for themselves, as does the uniformly bad taste they show in what slices of American culture they enjoy. Lionel Richie is HUGE overseas. Most of these countries also have a deep-seated inferiority complex, e.g., Sweden controlled Northern Europe with authority for a century 400 or so years ago. Now they know that anyone outside of Europe is going to have an impossible time differentiating them, their flag, their capital city, their language, from any one of the other Scandinavian states.
As for genuinely anti-american immigrants like Jas, I wouldn't sweat it, they're an incredibly tiny minority. I would worry more about the ones who bought whole hog into the "American dream" a few years ago and stacked up tons of rental properties on loose financing terms. There are PLENTY of those, and they love America just fine.
The next wave will see record default notices in places other than Cali, Florida, Arizona and Michigan.
"What we don't see, at least among the most quoted commentators, is any examination of the basic economic foundations of modern society. I'll summarize:""
(No let me...I love this one)
Ahem....
I'm a know it all, and my models, aside from being really cool when I run around with them going "BRRRRRROOOOMMM!" also tell me that all the stuff that could possibly be needed and wanted can be made by me and my invisible friend. Therefore there's excess labour, and the excess people must be neutralized. I prefer soylent green, but however it's done that's cool.
(That ought to be close. Prolly some blah blah about unemployment in 3rd world kleptocracies, whose over burdening gov'ts couldn't possibly be the cause of said unemployment, etc.)
NYSE breadth (volume) has flipped to downside in the last few minutes of trading. First time all day Elmo has had that going for him.
A central point of Dmitry Orlov's "Reinventing Collapse" is that people have to learn how to do without income (income that pays for services). No more service economy, and one where doing favors for one another (and cashing in on those favors) matters more than trading pieces of paper back and forth.
Hey, where'd that ugly little red muppet come from?
Today's chart looks like a miniature version of that 15-year (or so) S&P 500 chart CR likes to post.
Buying some QID and FAS to hold until tomorrow as a lottery ticket...
i agree. i changed it.
"what is a dope anyway? an unsophisticated person? a financially unsophisticated person? this definition implies most poor africans, poor indians, poor europeans, and poor south americans would be dopes to jas as well."
I sure am glad that the volatility of the market is decreasing... /snark
you need also remember that even if marginally upside down both inertia and equivalent rent will keep them paying into a "losing" proposition.
Rob Dawg,
Per the fed's own research, the primary driver of walk-aways is negative equity . Per the Brookings institute, CA has 2.8 million home owers with negative equity and 5.6 million homes with mortgages (50%).
Unemployment is rising, rents are falling, house prices are falling and the past is not prologue.
Ahh, hogwash, 50% is way too high. Deflation is impossible. Housing and rents never fall.
Buckle up doomers. That looks like a head and shoulders pattern forming on the S&P.
And in other news, Merkel is willing to give Opel away...being an exporter in a depression is no cakewalk.
VW profits crash
Published: 22 Apr 09 15:05 CET
Europe's biggest carmaker Volkswagen has hit the skids this year with "extremely weak" economic conditions slashing profits and sending sales down sharply, results showed Wednesday.
The German firm said net profit slumped 74 percent year-on-year to €243 million ($314 million) in the first three months of the year while revenues fell 11.2 percent to €24 billion.
Without a €600-million gain from the sale of a Brazilian unit VW would have made an operating loss instead of a profit, and excluding the firm's Swedish trucks and buses unit Scania, sles fell an even sharper 17.2 percent.
Even including the Brazilian windfall, operating income was less than a quarter of what it was a year ago, falling to €312 million from €1.3 billion in the first three months of 2008.
Pre-tax profit was also a fraction of what it was a year earlier, falling to just €52 million from €1.4 billion.
Whoops there went 7900. You think the smart money is getting concerned about all of the gaps down lately and exiting at eod?
Looking at Faz you could buy 200 shares and the downside to upside risk is unbelievable. Downside 1.8k. Upside 5-10k?
18 question quiz on economic theory. To post on CR you should have to take the quiz and score at least 15/18.
- NY Times
nice double top in the russell 2000 and sp500 took out 850
Market decided to nosedove starting about 3:40 ... Dow down 1%--ho, hum, so predictable ....
QID and FAS... I managed to lose some on both today.
good luck to you tomorrow.
"To post on CR you should have to take the quiz and score at least 15/18"
To post on CR, you should have to take the quiz and score under 15.
Otherwise you are merely a regurgitating Drone Of the Empire.
swap otis
Looks like the grand tetons
Lionel Richie is HUGE overseas
So is David Hasselhof - weird. Strangely, Abba was/is big in the U.S.
There is no accounting for taste apparently. At least I know I ain't got no cooth.
bgates wrote on Wed, 4/22/2009 - 12:45 pm
...Lionel Richie is HUGE overseas....
Who the hell is Lionel Richie ?
Never heared of him . Honestly . And I do live overseas (I think) .
I suspect he is as familliar here as Karl Richter is in the US . (talking about culture !)
Well, Japan is making a move to reduce unemployment...paying Latin Americans to go home. If they take the deal, they will not be allowed back to Japan.
Goodbye, Honored Guest - NY Times
That was a bullish close, right?
18 question quiz on economic theory. To post on CR you should have to take the quiz and score at least 15/18.
If you score that high, you should be banned for life.
"Too many people, too little work"
There's a number of problems. Distribution of work is one (as i often mention.
) as well as a mis-mapping of model to reality, i.e. money system to physical goods & services.
Distribution of work is one
Definition of work and value of assigned tasks is another. Organizational structure and behavior, also.
this is what boring investment banking looks like. Sigh...
Morgan Stanley today posted a $177 million loss in the first quarter, or 57 cents a share, compared with the 8-cent average loss estimate of 19 analysts surveyed by Bloomberg. Hintz, a 59-year-old former Morgan Stanley treasurer, was the top-ranked analyst covering brokerage firms in a survey by Institutional Investor magazine last year.
He said he was “very disappointed” that Morgan Stanley reaped $1.3 billion of fixed-income revenue in the same quarter that Goldman Sachs Group Inc. had record revenue of $6.56 billion and JPMorgan Chase & Co. had revenue of $4.9 billion, both records.
“Why on earth would you bring down a balance sheet or reduce your leverage to 11 times in the face of what were excellent flow trading results?” he said, referring to the leverage ratio that compares total assets to shareholder equity. . . .
Colm Kelleher, Morgan Stanley’s chief financial officer, said today that the trading results reflected the firm’s reduced appetite for risk. Chief Executive Officer John Mack said in the earnings statement that “we have focused on prudent stewardship of our balance sheet, capital and risk profiles.”
jobs and existing home sales tomorrow.
Bloomberg.com:
Economic Calendar
otis,
and AMZN reports - now available at 54x P/E - [sighs, shakes head]
I said it last year if McCain won in 2012 we would get a true Socialist in the White house.
Obama won now we will get a Right Wing Warhawk in 2012. Plan accordingly.
If you score that high, you should be banned for life.
No kidding. I stopped taking that quiz when I reached question 2 and I couldn't find the correct answer.
Q. To counteract a recession, the Federal Reserve should:
A. Be waterboarded by Dick Cheney.
"Who the hell is Lionel Richie ?"
Give it up, Werner, I've heard lionel TWICE in a cab in Berlin, and "Hello" was the winning song (sung in English) on "Deutschland sucht den Superstar" in one of my recent visits.
You are correct, Tim. The 21st Century Hitler is in the pipeline. The stage is being set. What will be the 21st Century Zyklon B? Who will be the 21st Century Jews?
When I worked in Dueren, there was a Country & Western radio station. Any American culture that is widely known here is widely known in Germany. Any claims to the contrary are crap.
" Organizational structure and behavior, also"
Behavior is an interesting comment. I'm fairly sure that org structure is a network model issue and can easily be modeled in an efficient way. Ultimately it's a function of industry, size, environment. While I was goofing with design patterns, I realized that corporations (and government) become bureaucratic in order to grow larger, not vice versa. An improperly structured system can't be efficient enough to grow without huge inefficiencies.
Transaction Costs - I/O of Network Nodes
Maybe I'll spend some more time on this. An org chart is a network. There's maximum flow, balance of input versus output, separation and delegation of work, which in something like an IP is the mix of payload versus routing. I did a rough cut and assumed that behavior fell into one of two states - predictable and un-predictable. Environment responses tend to be unpredictable, internal process tend to be predictable. Separating the two types lets define procedures internal to a node, i.e. define bureaucracy for higher repeatability, which means better scalability.
No, no, i don't have time for this right now.
I've got to go downtown for awhile and a dinner.
B. Should waterboard Dick Cheney
Amazing how fast Godwin occurs when the market isn't trading. Are most of the folks who bring the Godwin effect to CR busy doing losing flips on direxion products when it is open?
What will be the 21st Century Zyklon B? Who will be the 21st Century Jews?
That's easy. Nukes and Arabs.
B. Should waterboard Dick Cheney
That works too.
"Maybe it is time to allow homeowners the chance to repurchase instead of refinance their homes."
It seems better to just put it on the market and sell it for the highest offer. At least the bank will get a new borrower, and hopefully, a better credit risk, if for nothing else, due to some money down. Can you imagine the amount of fraud and manipulation of the comps that would take place if you let the defaulting buyer repurchase, as you say, "based on comps"?
The defaulting borrower had better be out of cash, at this point, so he's always the worst risk.
C. Should waterboard Dick Cheney with urine from Fallujan Toilets.
fried (profile) wrote on Wed, 4/22/2009 - 12:57 pm
...And in other news, Merkel is willing to give Opel away...
...VW profits crash...
Haha , Americans never learn :
a) "Merkel is willing to give Opel away" : The concept that you can not give away what you don't own is alien to an American .
b) "VW profits crash" : Ups. On the eve of GM's and Chrysler's bankruptcy you reveal that WV still makes a profit ? Ups , how awkward . Haha.
"A. Be waterboarded by Dick Cheney"
You forgot "183 times".
Don't worry, everybody.
The "free market" is gonna sort all this out any day now.
Is there a Facebook killer, too?
What's the guiness world record for most times waterboarded?
bgates wrote on Wed, 4/22/2009 - 1:14 pm
"Who the hell is Lionel Richie ?"
...Give it up, Werner, I've heard lionel TWICE in a cab in Berlin...
In a cap ? Oh , I see , a cap probably driven by a Turk "Gastarbeiter" . Now I understand.
And what about Karl Richter ? Need Wikipedia , ehh ?
Werner must be 90 years old. And like Sergeant Schultz, he hears nuting, he sees nuting, he knows nuting.
I'm sure that Werner only listens to Wagner.
Comrade Terry (profile) wrote on Wed, 4/22/2009 - 1:45 pm
...I'm sure that Werner only listens to Wagner...
See , you just made that Swede's point ! Karl Richter has nothing to do with Wagner , he never ever played Wagner .
"Who will be the 21st Century Jews?"
Stock Market Shorts. They will be stripped of their funds, and gassed...
Woohoo 15/18 on the quiz. Pissed me off that they didn't give extra credit for giving the correct Austrian answer. Stupid Keynesians!