We should start promoting the idea that it is socially unacceptable for old people of retirement age to continue working. They are taking jobs away from younger people with families to feed. We need to promote that it is shameful for old people to be steeling jobs from younger folks with kids who really need the money to survive. Hiring old people who don't need medical benefits is the new wage arbitrage and we should see that for what it is.
Was folding laundry and watching CNBC with the sexta-box (?).
From what is reported, Paulson responded that he threatened to de-seat BoA management and board (at request of Bernanke) should they not go through with the Merrill purchase.
"They are taking jobs away from younger people with families to feed."
The OLDER GENERATION (like US) are the ones that still have to work due to the kids and grandkids and GREAT grandkids coming "home" - needing a place to stay, eat, sleep, AND work (us old people still have friends that have businesses needing workers - a "who you know" kind of thing) . . . .
A bit more information about GM and Fiat -
'Fiat SpA and Magna International Inc. are the “main” bidders for a stake in General Motors Corp.’s Opel division in Germany, a state minister said in an interview today.
Fiat, Italy’s largest carmaker, and Magna, North America’s biggest auto-parts maker, are the sole car-industry suitors for Opel, said Hendrik Hering, the economy minister for the state of Rhineland-Palatinate. The state government opposes Fiat acquiring a holding in Opel because it may cost jobs in Germany, where GM’s plans to revamp the division are likely to eliminate 5,000 to 8,000 positions, he said.
Canadian owned Magna looks interesting -
'Through its various subsidiaries and divisions, Magna International makes just about everything you might need to put together a car, minivan, or truck. Magna Steyr, Magna's largest division, offers niche vehicle production services in Europe. Magna's interiors and seating divisions make seats, instrument and door panels, closures, and sound insulation. Cosma International makes metal auto body systems. MAGNA Powertrain offers transaxles, transmission systems, and engine parts. Magna's exterior systems unit offers exterior trim, lighting, and sealing systems. Magna Donnelly makes automotive mirrors and engineered glass products. Other operations include Magna Car Top Systems.' Magna International Inc. Company Profile - Yahoo! Finance
Well, the business logic pioneered by companies like GM has reached its conclusion - the parts suppliers no longer need the car companies, they are becoming car companies. There just might be a moral there for those that think brand marketing beat factories.
My mother survives just fine on $1200/month without working a formal job. She does Volunteer work at the local hospital when she gets board. Old people should do only volunteer work if they can't figure out anything else to do with their time.
First you got to get mad, then you got to cop an attitude.
We need more generational warfare and class warfare. Don't let anyone tell you don't have the right to point fingers and play the blame game. The blame game needs to get heated up and give credit where credit is due.
You all are asking; What can I do about it? This is the best place to start. Blame and point all the fingers you want.
"the system could not sustained a total collapse of MER. "
Is it a system worth saving? How long would it have taken for banks that are not into CDS, CDO, and MBS to fill in the void? Has it really been saved or the inevitable postponed with a few trillion of other peoples money?
Lewis Testifies U.S. Urged Silence on Deal
Bank of America Chief Says Bernanke, Paulson Barred Disclosure of Merrill Woes Because of Fears for Financial System Lewis Testifies U.S. Urged Silence on Deal - WSJ.com
Mr. Lewis's testimony suggests how aggressively federal regulators have been willing to behave in their fight to fix the U.S. financial system. The testimony for the first time spreads some of the blame to Messrs. Paulson and Bernanke for Mr. Lewis's decision to keep problems at Merrill under wraps.
According to a person familiar with the matter, Mr. Paulson in March told Cuomo investigators that Mr. Lewis may have misinterpreted some remarks about the Treasury's disclosure obligations as referring to BofA's obligations.
Lewis : They done told me to do it.
Austin Paulson : Did i say it was my bag? I said I don't know whose bag is it!
Quote from the article: "...Prices will probably continue to fall until the months of supply reaches more normal levels (in the 6 to 8 month range), and that will take some time...."
Question: Does the "# of months" inventory take into account the slowed sales?
For example, 1 million homes on the market = 6 months of inventory if the sales rate is 166666/month.
But if the sales slows to 50000/month, then suddenly the same 1 million homes becomes 20 months worth of inventory.
How do you apply the "normal level" of 6 to 8 months apply?
That Paulson is a piece of work. First he tells CONgress that there will be marshall law unless they immediately fork over hundreds of billions and then he takes control of the country's biggest bank via unlawful threats.
It's for our own good of course as we need to save wall street in order to save main street. And you can't save wall street unless you dole out HUGE bonuses to foolish bankers.
The original idea of social security (in Germany) WAS to encourage retirement (or make it possible) so that younger workers could move up and even younger workers could find jobs. Originally Germany set retirement age at 70, but not enough workers were living that long anyway, and the program was not accomplishing its purpose of making jobs available for young people. So Germany lowered the retirement age to 65. When FDR brought the program to the US, the age 65 concept came along, although it is slowly creeping up now.
Incidentally, I did work a few years beyond normal retirement age, and had to pay back some of the social security (and pay income tax on the rest) because of my "earnings". Strong inducement to stop working.
i don't see how anyone expects the housing market to get better until we fix the housing finance system. we are going on 9 months after the takedown of Fannie and Freddie, and there is still no resolution on these beasts. they are still publicly traded (?????), but their shareholders have no say in the operations of the companies. they still don't have full faith and credit of the government, requiring BB to turn on the printing presses to sop up their debt and guaranteed MBS.
the 50% of the market that is not going to the toxic twins is going to FHA, which is the next big failure coming down the pipe (with all due respects to Dirk, I liked his column this morning, but I think the FHA is going to blow up before the FDIC, or it will be a close race in any case).
99% of housing finance in this country is backed by the government. doesn't anyone see this as a problem?
so we don't have universal health care, but we have universal housing finance? i guess financing a house purchase is more important than giving pre-natal care to expecting mothers.
this country is so screwed up.
let the housing market crash suddenly, I say, rather than this slow, grinding decline, and do away with this subsidized financing. let house prices fall to a level where they are in a better equilibrium with incomes and rental rates, and where lenders will advance funds that they keep on their balance sheet. if that means they charge 7% while requiring 25% down, full documentation, a 25% DTI, and 1 year in reserves, so be it.
and do away with this national belief that Homeownership = The American Dream. it ain't.
Existing home sales are about 65% of what they were in 2005 and 2006.
But if half of today's sales are foreclosures (of which there were very few in 2005-6) then sales of non-foreclosed existing homes are occurring at just one third of the 2005-6 rate.
So for a homeowner trying to sell today, even if the current inventory of homes for sale were at the 2005-6 level, it would still take three times as long on average to achieve a sale.
Disaggregate the market in this way and it becomes clear that we still have a long way to go before individual homeowner-sellers will see market conditions capable of encouraging them to be firm about their prices. Until that happens prices must continue downwards, as a few drop their prices and sell, while many more would-be sellers just hold their properties off the market.
Golden State Mortgage Defaults Jump to Record High
April 22, 2009
La Jolla, CA.--Lenders filed a record number of mortgage default notices against California homeowners during the first three months of this year, the result of the recession and of lenders playing catch-up after a temporary lull in foreclosure activity, a real estate information service reported.
A total of 135,431 default notices were sent out during the January- to-March period. That was up 80.0 percent from 75,230 for the prior quarter and up 19.0 percent from 113,809 in first quarter 2008, according to MDA DataQuick.
Your analysis on housing while interesting and spot on from a charting perspective retrospectively is interesting, it begs the question of prospective analysis considering thyield curve. A serious opf charts showing mortgage rates histotically the affordability ratios if yous ee a spike to say 6-7-8% and the implciations for housing would be the more constructive path. Also, the refi boom being seen in the bank resutls indicates that people are scambliong to refi cheaper and likely to stay in their homes especially if the rates more lower. So you are damned if you do and damned if you don;t as a seller. You either refi into cheaper loan and try to sel fast into a falling market. or you refio and sit on your property knowing rates are going up and you have just deferred (not avoided) the coming further capital loss.
Cross post from Zacks. Graphs referenced are the first and third from CR's initial post on EHS.
Sales of existing homes fell 3.0% in March from February to a seasonally adjusted annual rate of 4.57 million. This is a 7.1% decline from a year ago. The February numbers were also revised downward. There was a little bit of good news in that the median price rose 4.2% during the month, although it was still down 12.4% year over year. Median prices are not seasonally adjusted, but there is a normal pattern where median prices rise in the spring, but this appears to be a somewhat larger than normal increase. It could also mean that the mix of houses that are selling is changing. For this reason, repeat sales indexes like Case Schiller are better measures of housing prices than the median price.
Since distressed sales (either former foreclosures being sold by banks, or short sales to avoid a foreclosure) made up more than half of all sales, it could mean that distress is continuing to move from “the wrong side of the tracks” to some of the tonier neighborhoods. Distressed sales are, of course, real transactions, but this means that with over all sales continuing to fall, that the level of non distressed transactions is getting extremely small. Distressed sales are going to be a major part of the market for the foreseeable future. During the winter, the number of foreclosures was artificially depressed by foreclosure moratoriums at Fannie Mae (FNM) and Freddie Mac (FRE) as well as some of the largest banks like J.P. Morgan (JPM) and Citigroup (C). They were waiting for the Obama administration to come up with its housing plan, and lifted the moratorium after it was announced. Also several states had imposed procedures that were designed to slow the foreclosure process. Those delays are also coming to an end. If a bank takes the first step in a foreclosure today, that house will show up in the inventory of distressed housed for sale in five or six months. That pipeline is going to fill up fast now that the moratoriums have been lifted.
As shown in the chart below (larger version available at: Blogger: Page not found shows used home sales have been bumping along at around the current levels for the past few months, a pace that is well below what had previously looked like a stabilization level for most of 2008, before the credit markets totally seized in the fall. The current levels of sales are at about the same levels as early 1998. Of course the population has increased a bit since then as well. Sales fell despite very favorable mortgage rates which averaged 5.0% in March versus 5.13% in February and 5.97% in March of 2008.
Looking a little deeper, single family sales were down 2.8% on the month and down 5.7% on the year to a seasonally adjusted annual rate of 4.10 million. The median price of a single family home was $174.9K, down 11.5% year over year. Condo sales were harder hit, falling 4.1% on the month and are off 17.8% year over year. The median price of a condo or co-op was $177.6K, down 18.7% year over year. Regionally, for the month the Northeast was down the most (-8.0%) followed by the West (-4.2%) and the South (-1.7%). Sales in the Midwest were unchanged for the month. The picture is much the same on a year over year basis with the Northeast down the most (-22.5%) followed by the West (-18.9%) and the Midwest (11.1%%). The South is down the least (-10.9%). In terms of year over year price declines, the Northeast is down 18.4%, followed by the South (-12.2%), and the West (-11.1%). The Midwest which was the least affected by the bubble on the way up is down the least (-6.1%).
Inventories declined 1.6% to 3.74 million houses available for sale. However the decline was not as much as sales, so the months of supply ticked up to 9.8 months in March from 9.7 months in February. As shown in the second graph (also from Blogger: Page not found, the months of supply metric is off of its highs it reached a year ago above 11.0 months. However, it is still well above normal. For the first six years of this century, the months of supply generally fluctuated between four and five months. Thus relative to the current pace of sales, inventories are about double their level then. As long as inventories remain high relative to sales, housing prices will continue to be under pressure. This means still more evaporation of homeowners equity, and more houses underwater which then leads to more foreclosures, and all the problems they cause for the banks. As pointed out in the front page story in today’s New York Times, the large numbers of people being underwater on their homes has substantially decreased labor mobility. If people cant sell their current home, they can not afford to move to get a new job. In 2008 only 35.2 million people moved to a new home. That was the lowest absolute number of moves since 1962! Given the huge number of foreclosures, the number voluntary moves had to have been significantly less than that. It is probably overstating things to say that we are becoming a nation of serfs who are tied to the land, but the general effect is somewhat similar. Over the long term, labor mobility has been one of America ’s great economic strengths. The decrease in it is one more reason why the economic recovery, when it comes, will most likely be exceptionally anemic.
Ethan: We're not living in Germany. What if Granny with the $1200/mo income gets sick?
Or needs to put a new roof on her house? What if her savings is looted. Lots of grannies working here in my village because the income isn't enough to pay all the bills.
We should start promoting the idea that it is socially unacceptable for old people of retirement age to continue working. They are taking jobs away from younger people with families to feed. We need to promote that it is shameful for old people to be steeling jobs from younger folks with kids who really need the money to survive. Hiring old people who don't need medical benefits is the new wage arbitrage and we should see that for what it is. -Michael
So Mike, if someone who is 68 years old and has seen the equity in his house evaporate and his 401K turn into a 201k, they are supposed to sit quitely and starve?
WTF is wrong with some of you?
This thread is about home sales.
So someone posts a comment about GM & Fiat?
No wonder this country is going down the tubes.
Nobody can stay focused on anything !!!
Prices for home resales posted their biggest monthly gain since June 2005, and NAR chief economist Lawrence Yun said that some regions are seeing multiple bids on properties. Today’s housing figures indicate that the record-low mortgage rates fueled by the Federal Reserve are stanching the industry’s hemorrhage.
ghost face, you may be right about it being a tight race. I'm not sure if it matters all that much which collapses first, both are in big trouble. Here is the post that he referenced, see Mish for the graph and table referenced:
Even before the FDIC gets into the business of insuring loan to the PPIP (there will be no losses there according to their accountant Lewis Caroll) it looks like the fund is in pretty bad shape. As a percent of insured deposits it fell to 0.40% at the end of the fourth quarter from 0.76% at the end of the third quarter, and 1.22% at the end of 2007. Since then 26 banks have failed, the same number as in all of 2008. The year end reserve ratio for the fund was the lowest since the second quarter of 1993, a the tail end of the S&L debacle (back then banks and S&L’s had separate funds, but on a combined basis). Given the failures so far this year, there is no doubt in my mind that the reserve ratios have declined sharply since the end of the year. The graph below shows the trend (larger version available at Blogger: Page not found.
Clearly we have not seen the end of bank failures this year. You should count on at least one FDIC pizza party each week for the rest of the year. Just take a look at the table below (also from Blogger: Page not found. At the end of last year there were a total of 252 banks that were listed as troubled by the FDIC, up from 76 at the end of 2007 and 50 at the end of 2006. The assets of troubled institutions has grown even more quickly, to $159.4 billion at the end of 2008, from $22.2 billion at the end of 2007 and just $8.3 billion at the end of 2006. The FDIC historically has been very hesitant about putting banks on the list, for example, none of the biggest disasters of 2008 (Indymac, WAMU, Wachovia) were on the list at the end of 2007. Thus it is extremely likely that this list significantly understates the problem.
None of the big 19 currently undergoing the so called stress tests are on the list. If the results of the tests come out and they say that all 19 passed with flying colors the whole world will rightfully yell WHITEWASH. The AP story yesterday said that the tests are going to take a harder line on whole loans than on securitized investments. This makes no sense to me, except from a political gamesmanship point of view. Somebody will have to be thrown under the bus, and since it can’t be Citigroup (C) or Bank of America (BAC), it will probably be Keycorp (KEY) or Fifth Third (FITB). That would be the only reason to be tougher on whole loans (largely held by the regional banks) than on the securitized stuff (MBS, CDO etc). After all with a whole loan, the banker probably even knows who the borrower is, not so true with the securitized stuff.
If one puts any sort of reasonable loss expectations from the PPIP, it is clear that the FDIC will soon be insolvent. Don’t worry, I’m not trying to start a run on the banks, your checking account will still be there if your bank goes under (up to $250,000). However, the FDIC will need an emergency loan from the Fed or a bailout from Congress to make sure that happens. I have no doubt that such funding would come through. However it is likely to be the next big ticket bailout coming down the line, and it will probably be a doozy.
So, can someone answer me this. Are all the refi's going on, up to the conforming limit, just being sold to Freddie and Fannie. Which in turn are securitizing with sales to the Fed? I was in a vanpool conversation this morning and four out of six were in the process of refi'ing to less than 5.25%, all 30-year fixed. But, I can't figure out if it really just is the gov, through Freddie and Fannie, that is buying all of these loans.
ghostfaceinvestah (profile) wrote on Thu, 4/23/2009 - 9:32 am reply
i don't see how anyone expects the housing market to get better until we fix the housing finance system."
Today and the future mortgage debt market will be the government funded, its growth and even unwind can only be managed through government funding due to the size of the mortgage debt pile. Expect more government sponsored incentives to buy houses and endless mortgage lending rules as the gov't attempts to both spike home sales and keep the budding mortgage fraud industry under control, should make for some interesting times.
A good graph to show would also be a monthly bar graph (as done with the Existing Home Sales graphs) showing the total value of home sales. That would show the amount of money that has left housing as the bubble continues deflating.
I'm one of the shadow inventories... I had planned to sell our relatively large home about now, and use part of the money to trade up our high end rv to a newer model... We have no debt and some funds, but I'm not willing to sell the home in this market... so we are waiting, and so is our rv dealer... Making our small contribution to the contraction in GDP...
The idea that you can live better through debt is a fallacy. Most people would be best off if they never had any debt. You should only use debt to make money, not for consumption - that means buying an appreciating asset, investing in yourself through education or in a business - but you need to make sure that the education will result in a higher paying job and that the business will succeed... When I used to employ minimum wage labor I had several people working for me who had a Master's degree in a useless field, and most of them still had student loans too. What a waste.
The only things that have true value are materials and labor... America is going to continue to have problems as long as there are a large number of people who dont want to work, and who have discovered that they can form a pressure group on the politicians... and the politicians are willing to give them 'free' stuff and pass the cost along in taxes and inflation...
If the country split into a liberal and conservative countries, or if there was a truly conservative country available, I would be moving in a minute...
I don't believe that the NAR's numbers include auction sales. When I say auction sales I mean primarily Williams and Williams and the other companies that auction off REOs, Though foreclosure sales to investors who are renting the properties is also significant (I have have 5 such rentals I have purchased in the past 12 months). The REO auctions probably account for 8% of sales currently in the Denver market, vs. 1% of sales 2+ years ago.
Has it really been saved or the inevitable postponed with a few trillion of other peoples money?
An excellent question. I vote for the latter. Never accept the assumptions of these swine. Who was it that said, "given one faulty assumption I can prove anything?"
Furst?
second?
Turd?
OT- Cuomo sending in a probe to BAC. Paulson and Ben in question.
Unemployment rising....
Sales look a little Soupy.
Cuomo's must be a loose cannon for the Dems.
We should start promoting the idea that it is socially unacceptable for old people of retirement age to continue working. They are taking jobs away from younger people with families to feed. We need to promote that it is shameful for old people to be steeling jobs from younger folks with kids who really need the money to survive. Hiring old people who don't need medical benefits is the new wage arbitrage and we should see that for what it is.
Haha:
Was folding laundry and watching CNBC with the sexta-box (?).
From what is reported, Paulson responded that he threatened to de-seat BoA management and board (at request of Bernanke) should they not go through with the Merrill purchase.
They're all swine...
It seems to me Paulson was doing a whole lot of threatening, remember the martial law debacle some Congress critters reported?
Yeah, Michael!
Let's throw some generational warfare into the mix, too.
I'm gonna take your advice and tell my mother that it's time to die. /snark.
People are Soylent Green.
Bazooka Joe Paulson is who the donkeys need to pin the tale on.
"Paulson responded that he threatened to de-seat BoA management and board"
was gonna take away their fancy commodes i guess
regardless of their methods, i'll give Paulson and Bernanke the benefit of doubt that the system could not sustained a total collapse of MER.
Basel, my other thought was, they should have been removed anyway...
They're all swine...
Increasingly hard to argue with this point.
Michael, I call BS..........
"They are taking jobs away from younger people with families to feed."
The OLDER GENERATION (like US) are the ones that still have to work due to the kids and grandkids and GREAT grandkids coming "home" - needing a place to stay, eat, sleep, AND work (us old people still have friends that have businesses needing workers - a "who you know" kind of thing) . . . .
A bit more information about GM and Fiat -
'Fiat SpA and Magna International Inc. are the “main” bidders for a stake in General Motors Corp.’s Opel division in Germany, a state minister said in an interview today.
Fiat, Italy’s largest carmaker, and Magna, North America’s biggest auto-parts maker, are the sole car-industry suitors for Opel, said Hendrik Hering, the economy minister for the state of Rhineland-Palatinate. The state government opposes Fiat acquiring a holding in Opel because it may cost jobs in Germany, where GM’s plans to revamp the division are likely to eliminate 5,000 to 8,000 positions, he said.
“We shouldn’t invite every investor at any cost,” Hering said by telephone. Opel employs 3,400 workers at an engine factory in Rhineland-Palatinate. Fiat’s “overcapacities and high debts are problematic.”'
Magna, Sberbank Bid Jointly for Opel, Minister Says (Update1) - Bloomberg.com
Canadian owned Magna looks interesting -
'Through its various subsidiaries and divisions, Magna International makes just about everything you might need to put together a car, minivan, or truck. Magna Steyr, Magna's largest division, offers niche vehicle production services in Europe. Magna's interiors and seating divisions make seats, instrument and door panels, closures, and sound insulation. Cosma International makes metal auto body systems. MAGNA Powertrain offers transaxles, transmission systems, and engine parts. Magna's exterior systems unit offers exterior trim, lighting, and sealing systems. Magna Donnelly makes automotive mirrors and engineered glass products. Other operations include Magna Car Top Systems.' Magna International Inc. Company Profile - Yahoo! Finance
Well, the business logic pioneered by companies like GM has reached its conclusion - the parts suppliers no longer need the car companies, they are becoming car companies. There just might be a moral there for those that think brand marketing beat factories.
My mother survives just fine on $1200/month without working a formal job. She does Volunteer work at the local hospital when she gets board. Old people should do only volunteer work if they can't figure out anything else to do with their time.
Off topic, sorry...
Anyone care to speculate on why such a big increase in the volume of FAZ in April? Should I read anything into that?
FAZ Fund Charts - Direxion Shs Etf Tr Fund Charts
Full disclosure: no postion in FAZ now or in the past...
Treasury Chief Tim Geithner Profile - Executives - Portfolio.com
timmay!
So give your kid your job and have them pay you rent. You'll have a lot more time to go fishing.
Anyone care to speculate on why such a big increase in the volume of FAZ in April?
one reason: a lot more volume at $9, instead of $100.
YouTube -
Here is what Single Family Home sales and Condo Sales look like for the San Fernando Valley:
Effective Demand: San Fernando Valley March 2009 sales report
I have Ventura County sales on my blog as well for any locals who haven't seen it.
First you got to get mad, then you got to cop an attitude.
We need more generational warfare and class warfare. Don't let anyone tell you don't have the right to point fingers and play the blame game. The blame game needs to get heated up and give credit where credit is due.
You all are asking; What can I do about it? This is the best place to start. Blame and point all the fingers you want.
She does Volunteer work at the local hospital when she gets board.
Would that be waterboarded? Boarded up?
Just trying to have fun with a boring post.
elmo's pulling kermit underwater
"the system could not sustained a total collapse of MER. "
Is it a system worth saving? How long would it have taken for banks that are not into CDS, CDO, and MBS to fill in the void? Has it really been saved or the inevitable postponed with a few trillion of other peoples money?
"old people to be steeling jobs
Do you think we make those jobs out of iron ore ?
Lewis Testifies U.S. Urged Silence on Deal
Bank of America Chief Says Bernanke, Paulson Barred Disclosure of Merrill Woes Because of Fears for Financial System
Lewis Testifies U.S. Urged Silence on Deal - WSJ.com
Mr. Lewis's testimony suggests how aggressively federal regulators have been willing to behave in their fight to fix the U.S. financial system. The testimony for the first time spreads some of the blame to Messrs. Paulson and Bernanke for Mr. Lewis's decision to keep problems at Merrill under wraps.
According to a person familiar with the matter, Mr. Paulson in March told Cuomo investigators that Mr. Lewis may have misinterpreted some remarks about the Treasury's disclosure obligations as referring to BofA's obligations.
Lewis : They done told me to do it.
Austin Paulson : Did i say it was my bag? I said I don't know whose bag is it!
Haha, perhaps Ben and Hank need to be teabagged until they talk?
John Thain:
Hero to Goat to Supergenius in 8 short months
So is the Kindle going to save the Western world after the close today (AMZN reports)? /snark
Problem is, they would enjoy it.
Misinterpreted.....Love that word........Isn't that the word Fidel used in stating O had MISINTERPRETED what Raul had meant.
only if you read the kindle while driving a segway
Michael,
A tune for you - esp the lyrics.
YouTube - Steely Dan - Kid Charlemagne (Live)
homedad43,
The very least old people can do is stop eating. Younger people have families to feed.
"Cuomo's [sic] must be a loose cannon for the Dems ."
On the contrary, he can and will investigate anyone who does wrong whether the Republican attack dogs focus on him or not.
Haha, perhaps Ben and Hank need to be teabagged until they talk?
Cruel and unusual punishment. Ugh.
Corporate Tax Receipts are down 57%!
so I guess that gets him of the hook too- he was only following orders.
By the impeccable logic of our revered leader we should no only look forward.
For those who missed some very intriguing articles by Armstrong :
*Financial Panics = Political Change
and more at : kzuur58 | Scribd
Steely Dan. oh so hip but damn they used great musicans.
crazyv wrote (in reply to...) on Thu, 4/23/2009 - 11:14 am reply so I guess that gets him of the hook too- he was only following orders.
That phrase is eerily familiar...
That phrase is eerily familiar...
It is what was used by the imfamous "Mary Kay Pinkos"
Quote from the article: "...Prices will probably continue to fall until the months of supply reaches more normal levels (in the 6 to 8 month range), and that will take some time...."
Question: Does the "# of months" inventory take into account the slowed sales?
For example, 1 million homes on the market = 6 months of inventory if the sales rate is 166666/month.
But if the sales slows to 50000/month, then suddenly the same 1 million homes becomes 20 months worth of inventory.
How do you apply the "normal level" of 6 to 8 months apply?
That Paulson is a piece of work. First he tells CONgress that there will be marshall law unless they immediately fork over hundreds of billions and then he takes control of the country's biggest bank via unlawful threats.
It's for our own good of course as we need to save wall street in order to save main street. And you can't save wall street unless you dole out HUGE bonuses to foolish bankers.
It's all about the bonus. What a sham(e).
Lewis should have resigned. BOA share holders should go after Lewis and Burrnanke.
Thanks basel 2, that makes perfect sense.
It looks like our resident citizen of the nation of Idiocracy has found a home here on CR. Hide of a rhino, that one.
Ken will save us.
Folks:
Don't be too hard on Michael.
The original idea of social security (in Germany) WAS to encourage retirement (or make it possible) so that younger workers could move up and even younger workers could find jobs. Originally Germany set retirement age at 70, but not enough workers were living that long anyway, and the program was not accomplishing its purpose of making jobs available for young people. So Germany lowered the retirement age to 65. When FDR brought the program to the US, the age 65 concept came along, although it is slowly creeping up now.
Incidentally, I did work a few years beyond normal retirement age, and had to pay back some of the social security (and pay income tax on the rest) because of my "earnings". Strong inducement to stop working.
i don't see how anyone expects the housing market to get better until we fix the housing finance system. we are going on 9 months after the takedown of Fannie and Freddie, and there is still no resolution on these beasts. they are still publicly traded (?????), but their shareholders have no say in the operations of the companies. they still don't have full faith and credit of the government, requiring BB to turn on the printing presses to sop up their debt and guaranteed MBS.
the 50% of the market that is not going to the toxic twins is going to FHA, which is the next big failure coming down the pipe (with all due respects to Dirk, I liked his column this morning, but I think the FHA is going to blow up before the FDIC, or it will be a close race in any case).
99% of housing finance in this country is backed by the government. doesn't anyone see this as a problem?
so we don't have universal health care, but we have universal housing finance? i guess financing a house purchase is more important than giving pre-natal care to expecting mothers.
this country is so screwed up.
let the housing market crash suddenly, I say, rather than this slow, grinding decline, and do away with this subsidized financing. let house prices fall to a level where they are in a better equilibrium with incomes and rental rates, and where lenders will advance funds that they keep on their balance sheet. if that means they charge 7% while requiring 25% down, full documentation, a 25% DTI, and 1 year in reserves, so be it.
and do away with this national belief that Homeownership = The American Dream. it ain't.
my carpool said something on the way in about Cramer and "that guy that used to be at the fed" calling a bottom for housing in June 09.
i raged.
Existing home sales are about 65% of what they were in 2005 and 2006.
But if half of today's sales are foreclosures (of which there were very few in 2005-6) then sales of non-foreclosed existing homes are occurring at just one third of the 2005-6 rate.
So for a homeowner trying to sell today, even if the current inventory of homes for sale were at the 2005-6 level, it would still take three times as long on average to achieve a sale.
Disaggregate the market in this way and it becomes clear that we still have a long way to go before individual homeowner-sellers will see market conditions capable of encouraging them to be firm about their prices. Until that happens prices must continue downwards, as a few drop their prices and sell, while many more would-be sellers just hold their properties off the market.
Rally On:
Golden State Mortgage Defaults Jump to Record High
April 22, 2009
La Jolla, CA.--Lenders filed a record number of mortgage default notices against California homeowners during the first three months of this year, the result of the recession and of lenders playing catch-up after a temporary lull in foreclosure activity, a real estate information service reported.
A total of 135,431 default notices were sent out during the January- to-March period. That was up 80.0 percent from 75,230 for the prior quarter and up 19.0 percent from 113,809 in first quarter 2008, according to MDA DataQuick.
CR,
Your analysis on housing while interesting and spot on from a charting perspective retrospectively is interesting, it begs the question of prospective analysis considering thyield curve. A serious opf charts showing mortgage rates histotically the affordability ratios if yous ee a spike to say 6-7-8% and the implciations for housing would be the more constructive path. Also, the refi boom being seen in the bank resutls indicates that people are scambliong to refi cheaper and likely to stay in their homes especially if the rates more lower. So you are damned if you do and damned if you don;t as a seller. You either refi into cheaper loan and try to sel fast into a falling market. or you refio and sit on your property knowing rates are going up and you have just deferred (not avoided) the coming further capital loss.
The movie Idiocracy is more true than most people think.
Cross post from Zacks. Graphs referenced are the first and third from CR's initial post on EHS.
Sales of existing homes fell 3.0% in March from February to a seasonally adjusted annual rate of 4.57 million. This is a 7.1% decline from a year ago. The February numbers were also revised downward. There was a little bit of good news in that the median price rose 4.2% during the month, although it was still down 12.4% year over year. Median prices are not seasonally adjusted, but there is a normal pattern where median prices rise in the spring, but this appears to be a somewhat larger than normal increase. It could also mean that the mix of houses that are selling is changing. For this reason, repeat sales indexes like Case Schiller are better measures of housing prices than the median price.
Since distressed sales (either former foreclosures being sold by banks, or short sales to avoid a foreclosure) made up more than half of all sales, it could mean that distress is continuing to move from “the wrong side of the tracks” to some of the tonier neighborhoods. Distressed sales are, of course, real transactions, but this means that with over all sales continuing to fall, that the level of non distressed transactions is getting extremely small. Distressed sales are going to be a major part of the market for the foreseeable future. During the winter, the number of foreclosures was artificially depressed by foreclosure moratoriums at Fannie Mae (FNM) and Freddie Mac (FRE) as well as some of the largest banks like J.P. Morgan (JPM) and Citigroup (C). They were waiting for the Obama administration to come up with its housing plan, and lifted the moratorium after it was announced. Also several states had imposed procedures that were designed to slow the foreclosure process. Those delays are also coming to an end. If a bank takes the first step in a foreclosure today, that house will show up in the inventory of distressed housed for sale in five or six months. That pipeline is going to fill up fast now that the moratoriums have been lifted.
As shown in the chart below (larger version available at: Blogger: Page not found shows used home sales have been bumping along at around the current levels for the past few months, a pace that is well below what had previously looked like a stabilization level for most of 2008, before the credit markets totally seized in the fall. The current levels of sales are at about the same levels as early 1998. Of course the population has increased a bit since then as well. Sales fell despite very favorable mortgage rates which averaged 5.0% in March versus 5.13% in February and 5.97% in March of 2008.
Looking a little deeper, single family sales were down 2.8% on the month and down 5.7% on the year to a seasonally adjusted annual rate of 4.10 million. The median price of a single family home was $174.9K, down 11.5% year over year. Condo sales were harder hit, falling 4.1% on the month and are off 17.8% year over year. The median price of a condo or co-op was $177.6K, down 18.7% year over year. Regionally, for the month the Northeast was down the most (-8.0%) followed by the West (-4.2%) and the South (-1.7%). Sales in the Midwest were unchanged for the month. The picture is much the same on a year over year basis with the Northeast down the most (-22.5%) followed by the West (-18.9%) and the Midwest (11.1%%). The South is down the least (-10.9%). In terms of year over year price declines, the Northeast is down 18.4%, followed by the South (-12.2%), and the West (-11.1%). The Midwest which was the least affected by the bubble on the way up is down the least (-6.1%).
Inventories declined 1.6% to 3.74 million houses available for sale. However the decline was not as much as sales, so the months of supply ticked up to 9.8 months in March from 9.7 months in February. As shown in the second graph (also from Blogger: Page not found, the months of supply metric is off of its highs it reached a year ago above 11.0 months. However, it is still well above normal. For the first six years of this century, the months of supply generally fluctuated between four and five months. Thus relative to the current pace of sales, inventories are about double their level then. As long as inventories remain high relative to sales, housing prices will continue to be under pressure. This means still more evaporation of homeowners equity, and more houses underwater which then leads to more foreclosures, and all the problems they cause for the banks. As pointed out in the front page story in today’s New York Times, the large numbers of people being underwater on their homes has substantially decreased labor mobility. If people cant sell their current home, they can not afford to move to get a new job. In 2008 only 35.2 million people moved to a new home. That was the lowest absolute number of moves since 1962! Given the huge number of foreclosures, the number voluntary moves had to have been significantly less than that. It is probably overstating things to say that we are becoming a nation of serfs who are tied to the land, but the general effect is somewhat similar. Over the long term, labor mobility has been one of America ’s great economic strengths. The decrease in it is one more reason why the economic recovery, when it comes, will most likely be exceptionally anemic.
At this point it's comfortably numb.
YouTube - Pink Floyd The Wall - Pink Floyd - Comfortably Numb
Ethan: We're not living in Germany. What if Granny with the $1200/mo income gets sick?
Or needs to put a new roof on her house? What if her savings is looted. Lots of grannies working here in my village because the income isn't enough to pay all the bills.
We should start promoting the idea that it is socially unacceptable for old people of retirement age to continue working. They are taking jobs away from younger people with families to feed. We need to promote that it is shameful for old people to be steeling jobs from younger folks with kids who really need the money to survive. Hiring old people who don't need medical benefits is the new wage arbitrage and we should see that for what it is. -Michael
So Mike, if someone who is 68 years old and has seen the equity in his house evaporate and his 401K turn into a 201k, they are supposed to sit quitely and starve?
WTF is wrong with some of you?
This thread is about home sales.
So someone posts a comment about GM & Fiat?
No wonder this country is going down the tubes.
Nobody can stay focused on anything !!!
Yun Watch:
Prices for home resales posted their biggest monthly gain since June 2005, and NAR chief economist Lawrence Yun said that some regions are seeing multiple bids on properties. Today’s housing figures indicate that the record-low mortgage rates fueled by the Federal Reserve are stanching the industry’s hemorrhage.
ROTFLMAO!
Ken,
Minor nit with the new post notification: URL is wrong:
BofA CEO Lewis: Excerpts from Testimony
due to addition of nojs=y on the end.
It's good to see the Mortgage Pig® again.
I think it's interesting that some of the salesmen fleeing collapsed mortgage companies are now embedded in the reverse mortgage market.
ghost face, you may be right about it being a tight race. I'm not sure if it matters all that much which collapses first, both are in big trouble. Here is the post that he referenced, see Mish for the graph and table referenced:
Even before the FDIC gets into the business of insuring loan to the PPIP (there will be no losses there according to their accountant Lewis Caroll) it looks like the fund is in pretty bad shape. As a percent of insured deposits it fell to 0.40% at the end of the fourth quarter from 0.76% at the end of the third quarter, and 1.22% at the end of 2007. Since then 26 banks have failed, the same number as in all of 2008. The year end reserve ratio for the fund was the lowest since the second quarter of 1993, a the tail end of the S&L debacle (back then banks and S&L’s had separate funds, but on a combined basis). Given the failures so far this year, there is no doubt in my mind that the reserve ratios have declined sharply since the end of the year. The graph below shows the trend (larger version available at Blogger: Page not found.
Clearly we have not seen the end of bank failures this year. You should count on at least one FDIC pizza party each week for the rest of the year. Just take a look at the table below (also from Blogger: Page not found. At the end of last year there were a total of 252 banks that were listed as troubled by the FDIC, up from 76 at the end of 2007 and 50 at the end of 2006. The assets of troubled institutions has grown even more quickly, to $159.4 billion at the end of 2008, from $22.2 billion at the end of 2007 and just $8.3 billion at the end of 2006. The FDIC historically has been very hesitant about putting banks on the list, for example, none of the biggest disasters of 2008 (Indymac, WAMU, Wachovia) were on the list at the end of 2007. Thus it is extremely likely that this list significantly understates the problem.
None of the big 19 currently undergoing the so called stress tests are on the list. If the results of the tests come out and they say that all 19 passed with flying colors the whole world will rightfully yell WHITEWASH. The AP story yesterday said that the tests are going to take a harder line on whole loans than on securitized investments. This makes no sense to me, except from a political gamesmanship point of view. Somebody will have to be thrown under the bus, and since it can’t be Citigroup (C) or Bank of America (BAC), it will probably be Keycorp (KEY) or Fifth Third (FITB). That would be the only reason to be tougher on whole loans (largely held by the regional banks) than on the securitized stuff (MBS, CDO etc). After all with a whole loan, the banker probably even knows who the borrower is, not so true with the securitized stuff.
If one puts any sort of reasonable loss expectations from the PPIP, it is clear that the FDIC will soon be insolvent. Don’t worry, I’m not trying to start a run on the banks, your checking account will still be there if your bank goes under (up to $250,000). However, the FDIC will need an emergency loan from the Fed or a bailout from Congress to make sure that happens. I have no doubt that such funding would come through. However it is likely to be the next big ticket bailout coming down the line, and it will probably be a doozy.
So, can someone answer me this. Are all the refi's going on, up to the conforming limit, just being sold to Freddie and Fannie. Which in turn are securitizing with sales to the Fed? I was in a vanpool conversation this morning and four out of six were in the process of refi'ing to less than 5.25%, all 30-year fixed. But, I can't figure out if it really just is the gov, through Freddie and Fannie, that is buying all of these loans.
jlr: Yup pretty much
ghostfaceinvestah (profile) wrote on Thu, 4/23/2009 - 9:32 am reply
i don't see how anyone expects the housing market to get better until we fix the housing finance system."
Today and the future mortgage debt market will be the government funded, its growth and even unwind can only be managed through government funding due to the size of the mortgage debt pile. Expect more government sponsored incentives to buy houses and endless mortgage lending rules as the gov't attempts to both spike home sales and keep the budding mortgage fraud industry under control, should make for some interesting times.
A good graph to show would also be a monthly bar graph (as done with the Existing Home Sales graphs) showing the total value of home sales. That would show the amount of money that has left housing as the bubble continues deflating.
I'm one of the shadow inventories... I had planned to sell our relatively large home about now, and use part of the money to trade up our high end rv to a newer model... We have no debt and some funds, but I'm not willing to sell the home in this market... so we are waiting, and so is our rv dealer... Making our small contribution to the contraction in GDP...
The idea that you can live better through debt is a fallacy. Most people would be best off if they never had any debt. You should only use debt to make money, not for consumption - that means buying an appreciating asset, investing in yourself through education or in a business - but you need to make sure that the education will result in a higher paying job and that the business will succeed... When I used to employ minimum wage labor I had several people working for me who had a Master's degree in a useless field, and most of them still had student loans too. What a waste.
The only things that have true value are materials and labor... America is going to continue to have problems as long as there are a large number of people who dont want to work, and who have discovered that they can form a pressure group on the politicians... and the politicians are willing to give them 'free' stuff and pass the cost along in taxes and inflation...
If the country split into a liberal and conservative countries, or if there was a truly conservative country available, I would be moving in a minute...
I don't believe that the NAR's numbers include auction sales. When I say auction sales I mean primarily Williams and Williams and the other companies that auction off REOs, Though foreclosure sales to investors who are renting the properties is also significant (I have have 5 such rentals I have purchased in the past 12 months). The REO auctions probably account for 8% of sales currently in the Denver market, vs. 1% of sales 2+ years ago.
She does Volunteer work at the local hospital when she gets board.
I'm wishin' she'd do a retroactive 60th trimester abortion.
Has it really been saved or the inevitable postponed with a few trillion of other peoples money?
An excellent question. I vote for the latter. Never accept the assumptions of these swine. Who was it that said, "given one faulty assumption I can prove anything?"
It's for our own good of course as we need to save wall street in order to save main street.
Paulson, "We need to have sex to save the friendship."