well maybe since the Alt A's and option and other exotics are on higher end we will see the same REO activity in the higher end after summer

"Existing-home prices in the Orlando area fell yet again in April, but the number of sales and pending contracts continued to improve from a year ago and the inventory of available homes continued to shrink, as the local housing market feels about for a bottom to its three-year slump."
Declining prices give area home sales a lift - Orlando Sentinel

I think we really are in a generational trend break for housing...many projections will be found to have been too rosy...not because people won't buy enough houses in the mid to long term, but because of the relative price they will pay (read will be able to pay)...

Imagine what would happen if FHA wasn't allowing 3% downpayments. That is the scam. All the banks get to originate loans, collect hefty fees, pass the risk off on the taxpayer, while benefiting from the ability to sell their REOs at above risk-adjusted market rates.

FHA -- making homes affordable. NOT!

The mansion is not "cool" anymore. People have killed it like they killed the SUV. Small is the new sheik and new black. Big toys are gone....forever.

Already seeing that in the ATL. More like BANG...not poof.

@ 1 currency now -yogi - 10:01 am, a previous thread:

As someone who practices a low-income art I hear you. The compensation is not monetary.

The road to HELOC was played with the best intentions...

Hades Happens~

The UK was on rationing till the early 1950's, to put things into perspective of how dire 1948 must have looked...

Meanwhile the NY fed keeps accelerating their treasury purchases. Apparently they're meeting insatiable demand as people get wise to the ponzi scheme. Hoocoodanode?

5/12: 6.007B
5/11: 3.510B
5/6: 6.948B
5/4: 8.500B
4/30: 3.025B
4/27: 7.025B
4/23: 7.00B
4/21: 7.00B
4/16: 1.503B
4/14: 7.300B
4/13: 7.370B
4/8: 2.970B
4/6: 2.530B
4/2: 7.496B
4/1: 6.008B
3/30: 2.499B
3/27: 7.541B
3/25: 7.500B

I hate realtors.

There are several realtor offices near me and I see their smug faces all the time. I want to see them suffer. I wouldn't be surprised to see Lawrence Yun in my elevator some day.

He'll get a piece of my mind.

And the S&P dipped under 900!

Sweet, I forgot this blog was around...they need to get this latest quote up.

Lawrence Yun Watch - Follow the NAR's hack as he denies the housing bubble and crash

Well Fort Irwin is beautiful. Spent some time out there, and that is where I met my wife. Stars are beautiful at night. Love watching the B2s glide over the desert like giant bats too. But I ain't living out there.

And the S&P dipped under 900!

20 EMA ...............875
38% Fib Retr .....830
50 SMA ...............813

Gavshire Hathaway (profile) wrote on Tue, 5/12/2009 - 12:15 pm
Meanwhile the NY fed keeps accelerating their treasury purchases.

How are they ever gonna unload this stuff without taking a hit?

I was looking at this house in Los Gatos.

Loan Totals: $12.6M

Sale Price: $6.9M

Talk about capital implosion...

When the mechanic told me that Barstow was Beverly Hills-adjacent, I knew the borders between and betwixt what used to pass for demarcation zones had been rendered useless in this brave new world of titles and entitlement.

Hmmm. Harley-Davidson mulls further consolidation and abandoning sprawling Pennsylvania plant: Harley considering move from York County - The York Daily Record

Well, my wife and I are buying a house, in Cambridge, MA. We are 'first-time" buyers even though we owned a house back in the 90s. The current owners are not so much as "move up" but "move away"--the guy got a job out of state. This is the only place we looked at that we thought was worth leaving our apartment for--the cost will be about what it would cost to rent in that neighborhood. The house is actually less than some (smaller) condos we looked at in the area. My feeling is that the condo market--at least in this area--has much further to go in terms of correction. Most of what's for sale is overpriced condos. Less desirable neighborhoods around here are getting hammered, few sales. Areas with better housing stock and near the subway are still doing okay.

WHO WILL NOW MY WALLS DEFEND?

I am an ancient city, ruined
But when my city wall was young
Angels passing on their errands
Mingled to and fro among
The people in the market place,
But none could tell their angel race

Now I am a ruined town
Vast and empty, broken down,
The only citizens are those
Who scattered when the harvests froze
And then returned to live in squalor
While overhead the angels hovered

Now my wall is like a sieve
But I am silent and forgive,
I hear the whisper of their wings,
The wind above the rampart sings -
When will they come back again?
Who will now my walls defend?

Pavel
May 12, 2009

Job blowout in UK last Q, UI up to 7.1%, wage growth negative.

No turnaround in UK until banking system is restored or Sterling goes to parity with the Euro.

There is a chain reaction, a negative one. People are moving down and off the property ladder. Renting often makes more sense.

Feedback loops. Viscious cycles.

Angry Saver - yes ... in the monetary inflation environment, everyone was upwardly mobile.

Now with the massive and ongoing destruction of credit, the process reverses. It's push from the bottom on the way up, and pull from the bottom on the way down.

"Vi[s]cious cycles."

Maybe viscid cycles, too.

I have a solution to the cycle problem.

We move the mansion buyers back into the start-up position, and that bumps everyone up.

Instead of being linear, from first time buyers to mansioneers, we need to have it more cyclical.

It's only fair, that way everyone gets a turn to go thru each step. Plus, it ends the clogged pipe problem of mansioneers just staying in the same spot.

The new cycle: entry level to move up to move up to move up to mansion to entry level to.... infinity.

What could be wrong with that?

Was just talking to a friend of mine whose wife is a RE agent and he was saying she has a couple of contracts that aren't closing because the buyers have charged so much credit card debt in the past couple of months that the lender no longer wants to deal with them.

AMF, you are on to something...

How many of these first time buyers will default because of external events ? eg. the loss of a job.

Actually, CR has reported the high delinquency rates of current FHA mortgages, including those that fail without a single payment. FHA is guarantying about a third of all originations, some of which use the 8,000k credit for the down payment. Banks have no skin and collect substantial fees while the taxpayer is getting soaked.

"Vi[s]cious cycles."

The balancing act between vicious and viscous in delicate indeed. It takes poise. Lots of poise.

How about the move-down model? First, you give up your McMansion and move into a smaller house; you lose that, and try for a condo or a good rental. And when that doesn't work, you move back into your old house, which now costs 25 percent of what it did -- with two other families?

If it takes a hundred poise would that be enough? ba-dum!

I wonder how many of these "first time buyers" brought any money to the table. I know that, here in the PNW, the 8K "tax credit" is used as collateral for larger dap loans.

IIRC no one knows how many houses the banks have in a holding pattern without foreclosing them.
Without that data any forecasts of a housing bottom is blowing smoke.
The other big thing as CR suggests is without the buy up boosting the higher end of the market, the below median can stabilize while the top half still needs to .
But if the lower end stabilizes, the spin will be such that many on top will use it to feed their denial.

We seem to have become a nation unable to have a coherent plan for just about anything.
So the housing market has a jumble of poorly thought out quick fixes

dum luk ... yup it's that bottom orange line that I am paying particular attention to.

Elmo is digging in today, showing some resolve. I wonder if Kermit will counter attack at the standard time..

Long haul Home Depot and Lowes might be a good stock. All the new construction will need lots of materials to replace the new age crap with a very limited life.

RD,

Did you catch the Governator rattling his tin cup?

California shortfall $21.3 billion if measures fail
SACRAMENTO, California (Reuters) - California faces a state budget shortfall of $21.3 billion if voters reject budget-related ballot measures during the state's May 19 election, Gov. Arnold Schwarzenegger said on Monday.

In a letter to top lawmakers, Schwarzenegger said that even if voters approve the ballot measures, the government of the most populous U.S. state will face a budget deficit of $15.4 billion.

"Absent swift action, the state will be facing a very serious cash crisis," Schwarzenegger said in his letter, provided by email to Reuters.
California shortfall $21.3 billion if measures fail
| Reuters

People who buy starter homes aren't going to spend big money at the furniture store, remodeling, etc... You need the upper end home buyers for those purchases to be meaningful.

bearly (profile) wrote on Tue, 5/12/2009 - 12:23 pm reply Ignore user Green shoots beginning to wilt. Where's the super-duper miracle-gro - STAT !!

Bearly, this is Dixie at Rampart emergency stand by for Dr. Doom..

Squad 51 , this is Dr. Doom, start an IV of D5W stat....

(it was always an IV of D5w stat- cured everything...)

I wont buy until I have 20% down, and the monthly payment (including taxes, insurance, minus tax credit) is affordable on my single income.

That way my wife income, if she works, goes towards other things like retirement and college savings for our kids.

Just seems silly and stupid to leverage credit to buy a house at a price thats not sustainable on one income when everyone should know housing prices need to come down more and arn't going back up. But then some people are hung up on house price = value, ignoring inflation.

Yes Lowe's and Home Depot might be great stock for the long, long run. .... But better pick the right one! They won't both survive the next 24 months.

blackhat (profile) wrote on Tue, 5/12/2009 - 12:43 pm
"However I doubt modern mcmansion contruction will last 100 hundred years, let alone a 100 months."

What's the matter, bh, you got something against particle board?

MS,

When we go on vacations our rentals are bigger than the house we live in....

As for how the Fed is going to reverse those treasury purchases... That makes me chuckle.

The new HD and Lowes customer won't be able to afford the good stuff and will by the cheapest (Chinese stuff} thinking it will last till the market comes back. Long wait ahead.

"bh, also the floor plans of modern McMansions are not really as well suited to break up into seperate units. In a 5000 Sq ft house it is not unheard of to have 1000 of that as a great room with 15' ceilings, how do you break that part up?"

dunno about breaking them up but they are perfectly suited for communal living.

Vonbek77,

Same here, I have a completely different mentality about houses than my parents, who mortgaged, refinanced, HELOC'd etc, etc.

Wife and I are still renting with one child.

Nova-

Same here.....I always start to wonder why I bought such a small house (1200 sqft) after I return. But there is only two of us (with pets) so I get over it rather quickly. Besides....I don't want to clean anything bigger...with two dogs and two cats it's already like painting the golden gate bridge...as soon as I'm finished I start all over again.....

Gav-

Pretty confident the entire market will fall back as soon as the last of the secondary stock issues are out. That....for me...is the only real explanation of why we got the run up.

Ciao
MS

bh, also the floor plans of modern McMansions are not really as well suited to break up into seperate units. In a 5000 Sq ft house it is not unheard of to have 1000 of that as a great room with 15' ceilings, how do you break that part up?

Rezone, start a business at home: dance studio, beauty parlor, martial arts, light industry.

Joke, but I do know or know of people who run such businesses out of their houses now, usually in the living room or in a separate studio in the back.

UST's ought to be renamed "Donner Bonds" as all the powers that be are doing is feasting upon themselves. Pass the catchup, please.

energyecon (homepage, profile) wrote on Tue, 5/12/2009 - 12:48 pm
RD,
Did you catch the Governator rattling his tin cup?
California shortfall $21.3 billion if measures fail

Possibly the straw that breaks this fleeting bull's back ... (ht R Dawg)

Dang it, all this talk about Barstow makes me want to go to Vegas!

Here in North Jersey, there are no starter homes for first time buyers. All the previous owners of the starter homes cashed in during The Great Real Estate Run-Up and made ridiculous upgrades, added entire second stories to ranches, added bedrooms, 2nd bathrooms, etc. Now those crapshacks located on busy roadways are on the market for $395,000.

Fiduciary Doodie (profile) wrote on Tue, 5/12/2009 - 12:58 pm
swamp otis,
dunno about breaking them up but they are perfectly suited for communal living. So your saying a return to the sixties where we have a bunch of Mansion Families.???

Do you mean like 'The Beverly Hillbillies" or Charles Manson family?

Ben has managed to be evasive about how he contracts the money supply when inflation sets in.

Why wouldn't he just reverse the ops and exchange treasuries for fed notes? That's the ordinary procedure for contracting money supply.

Of course he won't get the prices he paid so there'll be a net expansion over the whole cycle.

"History is hard to know, because of all the hired bullshit, but even without being sure of 'history' it seems entirely reasonable to think that every now and then the energy of a whole generation comes to a head in a long fine flash, for reasons that nobody really understands at the time—and which never explain, in retrospect, what actually happened . . . There was madness in any direction, at any hour. If not across the Bay, then up the Golden Gate or down 101 to Los Altos or La Honda . . . You could strike sparks anywhere. There was a fantastic universal sense that whatever we were doing was right, that we were winning . . . And that, I think, was the handle—that sense of inevitable victory over the forces of Old and Evil. Not in any mean or military sense; we didn't need that. Our energy would simply prevail. There was no point in fighting—on our side or theirs. We had all the momentum; we were riding the crest of a high and beautiful wave . . . So now, less than five years later, you can go up on a steep hill in Las Vegas and look West, and with the right kind of eyes you can almost see the high-water mark—that place where the wave finally broke and rolled back."

nova (profile) wrote on Tue, 5/12/2009 - 1:01 pm reply Ignore user Fiduciary Doodie

not bad.... Then everyone can be Sharon the pain....

oooohhh thats bad....

doodie,

""dunno about breaking them up but they are perfectly suited for communal living."

"So your saying a return to the sixties where we have a bunch of Mansion Families.??? ""

absolutely, already hear tales of it among my old fort myers acquaintances.

sounds like fun actually.

I am still amazed of what's happening in the NYC area. Although there has been some correction about -20%, prices are sticking. Supposedly one can get easy conforming loans for $700K. Realtors maintain that wall street bailouts support the markets and unemployed will flock the city. It seems that the NYC RE market is separate from the rest of the country.

Gavshire Hathaway (profile) wrote on Tue, 5/12/2009 - 12:52 pm reply Ignore user

//The recent runup in the markets wouldn't have been possible with out significant re-leveraging. If/when that begins to unwind, we'll be in a world of hurt. Interesting that the markets seem to be much stickier on the downside than over the past 9 months//

S&P weekly chart looks more like runup post Bear Stearns than past 9 months...remember then the sheeple thought to gov't had things under control...

Rosenberg was quoted (as he packed his bags), no market has EVER bottomed in March, FWIW

.....most young adult blue-collar workers I know are living 4-6 per house. They know of no other way to split it.

Yalt (profile) wrote on Tue, 5/12/2009 - 1:02 pm
Of course he won't get the prices he paid so there'll be a net expansion over the whole cycle.

My original point, exactly.

See post at 12:22 pm. (EDT)

I can't remember when it was last year, but there was a story on the rat population explosion going on in NYC, Paris, and London. I haven't been to NYC yet. Have family in Rochester, so I have been to the state several times, just not the city, and I am not inclined to go anytime soon. Too many people in a small amount of space. I get sick just thinking about it. But for you guys who love it, I salute you. You are braver than me!

Black star,

Most young (under 30) white collar workers that I know are living in similar conditions here in Boston. It's that or live with parents.

Black Star Ranch (profile) wrote on Tue, 5/12/2009 - 1:12 pm

its like America has their own "migrant farm worker" issue with our young BC crowd... Of course i see it in some of the McMansons myself 12 cars in the driveway and on the curb..... All relatives getting kicked or walk away then end up at the relative that has the best chance of keeping their crib...

"Joke, but I do know or know of people who run such businesses out of their houses now, usually in the living room or in a separate studio in the back. "

Sure, that would be a great mixed-use way to go for our new society that we'll need to create, but right now it's such a hassle in 99 percent of communities, because of existing zoning, paperwork, etc. ... It's just not worth all the damn trouble you have to go through to get the green light.

This is the question I would put to anyone expecting a recovery in the housing market:
Who is going to be buying housing at above entry level in the next five years?

To buy, for example, a $600,000 home (a typical 2000 sf suburban SoCal home- even in today's market), you need either $120,000 down and income around $150,000yr to get a resonable loan (and $180,000 down to get the best rates) , or if you want to try for a smaller downpayment, of, say $18,000 you'll need an income well in excess of $200,000. (note- I'm not a loan officer, these are estimates based on my own recent foray into the loan market).

AS Rob Dawg notes above, we'll run out of buyers long before we run out of houses. Actually, since most of the houses coming on the market are "must sell" REOS, the houses will find buyers, just way back down at price levels where those buyers actually exist.

Unknown. Deployments in 2003, 2005, and now

brewcrew (profile) wrote on Tue, 5/12/2009 - 5:00 pm
Here in North Jersey, there are no starter homes for first time buyers. All the previous owners of the starter homes cashed in during The Great Real Estate Run-Up and made ridiculous upgrades, added entire second stories to ranches, added bedrooms, 2nd bathrooms, etc. Now those crapshacks located on busy roadways are on the market for $395,000.

Yes, the DIY McMansions are another issue. People install a granite countertop and think they turn lead into glod.

With 10 years - probably regular Army.

"Sure, that would be a great mixed-use way to go for our new society that we'll need to create, but right now it's such a hassle in 99 percent of communities, because of existing zoning, paperwork, etc. ... It's just not worth all the damn trouble you have to go through to get the green light."

You are assuming a steady state in employment levels in local zoning and enforcement departments. Nobody is going to be waiting for green lights ... they will just start doing it more and more. And the municipalities will look the other way because the alternative is a bunch of homeless on the streets.

OT- (and sure to piss off some)

A tip of the common sense cap to the Trump:

President Barack Obama ended up in the middle of an unlikely controversy this morning — the debate over Miss California’s position on gay marriage.

At a press conference addressing Carrie Prejean’s disputed title in the Miss USA competition, pageant owner Donald Trump compared Prejean’s stated views on gay marriage to Obama’s.

“It's the same answer that the president of the United States gave,” Trump said. “She gave an honorable answer. She gave an answer from her heart.”

In her own remarks moments later, Prejean echoed Trump’s statement, telling reporters: “The president of the United States, the secretary of state, and many Americans agree with me in this belief.”

“It’s been impossible to time the bottom,” said William Stone, chief investment strategist at PNC Financial Services Group

Let's examine the idiocy of William Stone.

First, nothing is certain. However, it seems very, very, very likely that if you buy stocks at above trend valuations, you will most certainly not be buying at the bottom.

One and done indeed. A friend who is a real estate agent in Florida is seeing exactly that happen. First time buyers getting decent deals but that's where it dies. The mid to high end is dead in the water.

Fiduciary Doodie (profile) wrote on Tue, 5/12/2009 - 5:22 pm
And he picks investments too!

Obama also will help you pick the best credit-card plan. He fancies himself to be quite the polymath.

Bloomberg: the Standard & Poor’s 500 Index began its biggest rally since the 1930s after Obama said on March 3 that equities offered bargains for investors with a “long-term perspective.” While the measure fell 3.5 percent over the next week, reaching a 12-year low on March 9, it went on to surge as much as 37 percent.

"Long-term investing" is 2 months?

MBIA CEO Brown Cites ‘Ineligible’ Debt as Source of Loss Relief

Chief Financial Officer Chuck Chaplin said on the call that the quarter was “poor,” with higher-than-expected second- mortgage delinquencies and the profit stemming from an accounting gain related to its lower creditworthiness.

The better-than-expected quarterly results aren’t “sustainable” as the surprise “came entirely from improved mark-to-market conditions” tied to perceptions of its credit quality, Steve Stelmach and Amy DeBone, analysts at FBR Capital Markets Inc., wrote in a report today.

It's a sign of the times that I have to ask, but how do you make a profit from a lowering of your creditworthiness?

"The the fed's balance sheet has indeed expanded, but its holdings of actual treasuries have plummeted."

Navin R. Johnson: Good Lord - I've heard about this - loan juggling! Stop! Stop! Stop it! Stop it! Stop it! Good. Father, could there be a God that would let this happen?

It's a sign of the times that I have to ask, but how do you make a profit from a lowering of your creditworthiness?

The liability on your balance sheet isn't the amount you owe, but the current market value of your debt. If the market thinks you're less likely to pay your debt, you book a gain.

Yeah but ghost, the fed can't reverse it's treasury purchases. Otherwise the yield curve rises, and then they're in a world of hurt on their MBS holdings. Therein lies the death spiral. They've boxed themselves in a corner -- can't stop or the jig is up. All they can do is pray that the economy improves, which it won't. Their actions in propping up zombie banks and allowing them to "earn their way out" at the expense of consumers ensures it.

As I've stated before, I'm not sure bucky survives this one. But I think the default route is more likely than hyperinflation. Nothing eliminates confidence & creates social unrest faster than an unstable currency &/or eliminating a generation's savings.

In my neighborhood we are the ONLY people who do not have multiple member's of our family living with us. But this is not a new scenario...been that way for at least 6 year's.
I fight with my "neighbors" all the time about parking non-working cars in front of my house. I understand it's "public parking" however that doesn't give them the right to abandon cars in front of my house.

I love the look on there faces when the sheriff comes to write out the non-operational ticket and they can't get their story straight...."no I have not moved it.....wait yes I have....no I have not"

All the while a puddle of 10w gather's below the pan......tickets are issued.

They all hate me in any case because I don't ever "appear" to leave and go to work.....like they do.

Ciao
MS

AMF,

"The Jerk" was a hillarious movie. The banksters are pulling an opti-money-grab.

Bernanke is not going to let the financial system implode. And he's going to fight deflation with everything he has too. But that's not the same thing as trying to generate high inflation or even hyper-inflation. Not by a long shot.

yalt-

been that way for as long as I can remember. lower liability=profit

In the skewed world we live in.....

Ciao
MS

"The the fed's balance sheet has indeed expanded, but its holdings of actual treasuries have plummeted."

That shift is simply Gresham's Law in action.

The Fed announces that it will take Treasuries or something worse than Treasuries so the banks naturally stick the Fed with the worse asset.

Hmmh, oil up, copper up, gold up, unemployment rising, credit contracting, ...

I smell "recess-flation"

Boo, hiss, bad Kermit, bad.

re-stag-def-press-flation

energyecon (homepage, profile) wrote on Tue, 5/12/2009 - 9:48 am reply Ignore user
RD,
Did you catch the Governator rattling his tin cup?

Told ya so. Including getting ever closer to my long ago analysis of a $23b shortfall. Props 1A-1E are all failing. Next up; "DIRE WARNINGS" and no doubt a "Washington Monumant" play of epic proportions. The State Parks are sure to be closed for one. That'll teach us.

I will repeat it until everyone understands; California does not have a revenue problem, it has a spending problem.

har har yalt, "S&P stays ahead of the curve..."

they are just going through the motions. they don't even try anymore. amazing the whole world was leveraged to Uranus on the word of those donkeys. there are parts of their web site like "core earnings" of the SP500 that haven't been updated since 2002.

nobody noticed

ostrich people

Its obvious who the zombie bank that needs to be nationalized really is - the NYFed.

Bad digital money has adware.

Angry saver and AMF,

I see navin as todays FB.

All i need is this thermos.

All i need is this thermos and this lamp.

All i need is this thermos, this lamp and this dog....

Fault...De-Fault

Aston Martin Owner Is First to Default on Gulf Sukuk

Investment Dar Co., the owner of half of Aston Martin Lagonda Ltd., missed a payment on $100 million of debt, becoming the first Persian Gulf company to default on Islamic bonds.

Aston Martin Owner Is First to Default on Gulf Sukuk (Update3) - Bloomberg.com

That's the only way it can work, isn't it.

The free market won't touch the toxic asset (or, as M. Whitney called them: "rotting assets"). The Fed takes the bad assets to make the criminal banking warlords solvent.

Whats the endgame?

Does anyone know, or is it just 'wait-and-see what happens'?

"Amazing. I spent 20 years in the food (mfg) industry. We used viscosity measurements all the time."

Samdog, an example of how the universe really operates - not only by linear process but by allusion and metaphor.

I wonder if anyone has ever described rest mass in terms of viscosity, mathematically speaking.

Do Europeans have their own SNL ?

"EU Bank Regulators Plan Stress Tests to Examine Risks (Update3)"
Bloomberg.com:
News

Gavshire Hathaway (profile) wrote on Tue, 5/12/2009 - 10:46 am reply Ignore user
Uh I think Cali has a revenue problem too, caused by the feedback loop of their spending problem on revenues. But maybe I'm nitpicking...

You are correct. Raising the sales tax had exactly the effect I predicted; lower gross revenues. Princess Leia said it best; "The more you tighten your grip, the more star systems will slip through your fingers."

Comrade Coinz,
I am glad I am not the only one this bothers. New renters next to me have three or four cars. Can't tell for sure because one isn't there all the time. Keeps the truck and suv parked on the street and more often than not, in front of my house. Just drives me crazy.

pavel.chichikov (homepage, profile) wrote on Tue, 5/12/2009 - 10:52 am reply Ignore user
"Amazing. I spent 20 years in the food (mfg) industry. We used viscosity measurements all the time."
Samdog, an example of how the universe really operates - not only by linear process but by allusion and metaphor.
I wonder if anyone has ever described rest mass in terms of viscosity, mathematically speaking.

Yes but that leads to some uncomfortable conflicts leading to invalidating one of Einstein's core postulates; acceleration fields are indistinguishable from gravitational fields." Then when you bring up shear effects via viscosity and prove Albert was wrong everyone gets real quiet and looks at you funny. I don't want to go through that again.

Jas Bond, secret agent 006.9... drives an Aston Martin, doesn't he?

"the owner of half of Aston Martin Lagonda Ltd., missed a payment on $100 million of debt, becoming the first Persian Gulf company to default on Islamic bonds."

Trolley-Crash Driver Had Sex Change

i think if someone cut off my willie while i was driving i would crash too....

"RD, Thats the truth! This state needs to cut back on all those hand-out programs. That will help balance the budget. "

Yeah, well the handouts are going to the government workers union members who are so strongly lobbying for passage of 1A. Prison guards making $75,000 per year with a high school education, that kind of handout. I might not have the number exactly correct, but the state has something like (at least) 4000 former government workers retired on over $100,000 a year with full benefits. The number might be higher. And there is a huge wave of similar retirees coming down the pike.

It's the people versus the government workers at this point. And the government workers are going down.

the idea of the fed, who creates money at will, taking a haircut is not appropriate. they made the money themselves. loss / gain on their assets does not apply.

what they are after is ownership and the power and control it confers, not portfolio gains.

portfolio expansion is their aim.

they are not victims here.

they are pulling a trick and creating an asset backed dollar.

to clarify...I don't have a problem with parking cars in front of my house that leave and are operational. I do have a problem when the offending car leaks oil worse than the exxon valdez and the neighbor just denies it to the end. I've taken him outside and shown him the puddle....even went so far as to take him back to the car and "open his eyes up" to the source of that leak.

Makes no difference.....I'm the bad guy.....

Ciao
MS

@vonbek777:

Yes, drives me bonkers. Doesn't bother my wife as much.

@tim waiting for 2012:

I am in SoCal south county. Law enforcement is outsourced to the County Sheriff's department. I am not sure they are violating any parking ordinances, and I don't want to start a feud. Our HA hired Patrol Masters to enforce parking rules, but I never see them around.

If they hadn't brought in the 5th car, I could ignore it.

"Princess Leia said it best"

Well, hell, if you're going to bring up Princess Leia.... we went to Carrie Fisher's show last week.
She was hilarious and even brought out a life-size Princess Leia sex doll.

I will repeat it until everyone understands; California does not have a revenue problem, it has a spending problem.

+1. Plenty of money sloshing around.

I was pointing out the irony today of how Ron Paul's backwards fiscally restrained home state is doing pretty well while California's enlightened European-style big social spending regulated economy is languishing and hemorrhaging.

To be fair a big part of that is really because Texas didn't have a big real estate bubble. But I lived there and that just kind of underscores the point that people learn from experience - people there were still scared because of the early 80s real estate bust. The government didn't stop a real estate bubble from forming; the citizen's hard-won experience most likely did.

It also illustrates why maybe it's good not to have all your local economies synchronized by unified national policy.

Per today's NAR release, median home price is $169K. That's still significantly greater than 2 or 3 times median income.

10% to 25% more declines to go. Now is a great time to sit back and watch home prices continue to fall.

Screw you David Lereah. You helped ruin tens of millions of lives.

sorta OT: Boulder realtors are beginning to lose it now that boulder is crashing. I never ceased to be amazed that they produce such convoluted stats and think that this is path to yielding customers.

The Silver Fern: Boulder Inventory Analysis - A Cascade of Prices

Eventually, one of them is going to stumble on Jim the realtor's method: Tell it like it is, in simple terms (like months of inventory). That guy will clean up.

Currently the number one news story per Google news:

The article requested is no longer available.

At least people have their priorities right //snark
Ridiculous.

Panem et circenses.

California has no option other than to repudiate debts and obligations

I don't follow CA closely, but I'll venture a guess that obligations take a back seat to debt payments.

There is no mathematical possibility of avoiding defaults on near every level.

I don't doubt it intuitively, but is the arithmetic behind your statement somewhere accessible?

Samdog

That is why I short.

Angry Saver (profile) wrote on Tue, 5/12/2009 - 11:08 am reply Ignore user
Per today's NAR release, median home price is $169K. That's still significantly greater than 2 or 3 times median income.

That's actually about right. The US Median household ~$55k. That isn't distributed evenly and neither are median home prices. Consider that 15% of the national data comes from California where 4x median is more the norm. And that isn't just the bubble talking. People stretch more in California for a number of legitimate reasons most revolving around the lower total cost of ownership.

AS - "There have been long, long periods of time (more than a decade) where ten year note yields were < 3.5%"

Anything like this period ? The risk IMO, is anything denominated is USD has the potential to go POOF.

swamp otis (homepage, profile) wrote on Tue, 5/12/2009 - 2:09 pm
"they are pulling a trick and creating an asset backed dollar. "

But, why are they backing it with toxic assets?

It is like a poker table where everyone has a pair of deuces and the dealer has aces. Who will be the first to fold?

The guy who realizes that there are too many deuces in that deck.

CR - Comment on the graphic that illustrates the moveup chain - I think there needs to be a tent as the last image and arrows from every other image.

Tim,
It won't be the last guy to sell... it will be the TAXPAYER holding the bag. All they really need is one player so completely unethical that they are willing to "take one for the team".

Samdog (profile) wrote on Tue, 5/12/2009 - 1:55 pm edit reply Tim waiting for 2012 (homepage, profile) wrote on Tue, 5/12/2009 - 1:49 pm
Investment Dar Co., the owner of half of Aston Martin Lagonda Ltd., missed a payment on $100 million of debt, becoming the first Persian Gulf company to default on Islamic bonds.

Uh oh, I sense a public beheading is in the offing ...

"beheading is in the offing"

Ha ha ha ... I made a funny and wasn't even trying!

pavel -- I guess all that Haiku writing is paying off ...

"The sky is falling! The sky is falling."

You Chicken Little types, aka gun nuts, are boring...

"MSFT is puzzling though.....they are either seeing some really tough times ahead (for it's rev. streams) "

A bet on inflation.
I hadn't seen the MSFT news, I don't pay much attention to them.

Obama's Singing Elf Video - Heavy.com

is that you rahm?

pavel.chichikov wrote on Tue, 5/12/2009 - 9:11 am
Is the March statistic promising or ominous?

Prominous?

An article in today's Washington Post supporting my point yesterday that the shopper is frugal and merchant's margins are being squeezed:

The nation's retailers have begun to embrace the new cost-conscious consumer, developing products they can sell at lower prices without driving themselves out of business in the post-splurge era.

Starbucks dropped the price of a medium iced coffee last week to just under $2. American Eagle cut out the ribbon from the inside waistband of its khakis and lowered the cost. Pottery Barn launched a new "Comfort Collection" sofa that starts at $999.99, which is $300 less than the "Basic Collection" sofa. Even Rock & Republic, whose trendy denim has graced the backsides of celebrities such as Victoria Beckham, recently unveiled a line of recessionista jeans selling for $128, a 29 percent reduction.

Retailers have absorbed the lessons of a ruinous holiday season. Caught with shelves full of unsold merchandise, they slashed prices to draw in shoppers. But the strategy was unsustainable: It decimated profits and resulted in massive layoffs, killing off a number of chains, including Circuit City. Serving recession-era shoppers, retailers realized, would require a long-term strategy featuring lower prices.

"What we have is retailers reacting to a very low-appetite consumer and a consumer that has been now taught to wait," said Michael Silverstein, senior partner at Boston Consulting Group.

Prices Fall To Match A New Frugality - washingtonpost.com

Mike in long island

Wouldnt that drive down the value of the shares?

broward (homepage, profile) wrote on Tue, 5/12/2009 - 11:30 am reply Ignore user

A bet on inflation.
I hadn't seen the MSFT news, I don't pay much attention to them.

No, they see their revenue streams decimated by piracy and freeware. Always remember, Apple can kill MSFT anytime it wants. Apple is the scorpion on the back of the frog. Think of what would happen if with the release of OS X 10.6 Apple also made 10.5 universal free to the masses and it included Open Office. Sure, like the scorpion, there would be negative consequences for Apple but...

Well it looks like Kermit did a Blitzkrieg around Elmo. Shame. Let's see what the rest of the day holds...

Mike -- thanks. In that case, not sure i understand what a shortage of SPY would mean, except maybe that many market makers are on the sidelines...

"The government didn't stop a real estate bubble from forming; the citizen's hard-won experience most likely did."

I'm personally familiar with both the oil bust and recent CA history. The Socal high-end actually got clocked pretty hard in the early 90s, while the median price also took a nice statewide smackdown. Californians are uniquely stupid and averse to basic history in many ways, but not to that degree. Texas has extremely high property taxes, CA has prop 13 and a max rate of 1% (which can of course crawl up to 1.2 or so with additional easement, especially in OC). The governement DID in fact stop it. With no prop 13 and 3%+ rates, things would have been very different.

SD,

"I see how this works in theory, but how do/when do/can they get rid of the junk? "

my contention is they have no intention of divesting the "junk".

they want as much as they can get before people figure it out.

i'm very cynical about the fed, their history, and their motives but i think this scheme as i imagine it is a good alternative to fiat collapse and if it is what they are up to i wish them luck.

"No, they see their revenue streams decimated by piracy and freeware. Always remember, Apple can kill MSFT anytime it wants"

I think you're underestimating inertia of large corporations.

Microsoft used to carry an ungodly amount of cash.
I see the bond issue as a hedge on their cash balance.

Immaculate Recovery?

How long can the Fed keep the perpetual money motion machine operating?

As long as they juggle the jiggle, everything's Jake

Gav,

No problem. It would not surprise me if the economics weren't favorable for creating inventory to lend out given short term rates which could result in a hard to borrow situation.

I just checked Bloomberg. The latest short interest report for SPY is for around 287 million shares. SPY shares outstanding is reported day under the index symbol SXVSO.

^SXV-SO: Summary for SPDRS TRUST SERIES I(Shares Out- Yahoo! Finance

State Street confirms the shares outstanding to be much higher than the Short Int I'm seeing reported on Bloomberg.

https://www.spdrs.com/product/fund.seam?ticker=SPY

We saw similar things after Vietnam -- vets living on the streets, eating out of dumpsters. Tragic.

There may still be a few of those in the hills outside of town, camping out there on the public land and coming in every week or so for supplies and the vets benefits and maybe meds. As recently as ten years ago, I knew for a fact there were still some Viet-era vets up there. Some people slip through the cracks and never climb back onboard for the rest of their lives.

Send that bitch to Iraq...
She had issues. Father was a westpoint retired colonel and she was a daddy's girl. I don't think he ever approved of her marrying a 'soldier', and this was an excuse to get out before she had to be a real wife.

Rob, I'm quite certain that you're incorrect.

Over a decade "competing" with Linux hasn't resulted in significant losses for Microsoft, and Apple is quite literally the same thing, with the exception that it has a spiffy ad campaign.

Hardware-lock-in companies giving away universal software for free ends up the way it ended for Sun, a long slow decline as they stop selling their proprietary hardware, try to give away a port of their operating system to enlarge their user base, and then end up with neither a hardware revenue stream or a software revenue stream.

Apple's way forward from that point would end up with them competing head to head with Amazon. Not a pretty future.