"With rising rates toward in May I don't think it will hold. "
Undoubtedly a number of people counting on financing will fall out, many purchasers do not lock rates until near close. Though more will be affected as more foreclosures hit the market, fewer will want to catch the knife if the knife is still seen as falling.
What's the correlation and magnitude of change between existing home sales and pending home sales? What's the demographics of the contracts pending (first time homebuyers, etc.)? What is the relaitonship of pending sales to actualing closings of those designatied as pending?
We need a fix on this mortgage crisis soon. Besides people suffering the bank is not looking so hot as well. A restructure of forces is needed and the time is now. I agree that a lot of the sales fall through. Why would they increase? Maybe it's to weed out applicable applicants.
Fiduciary Doodie (profile) wrote on Tue, 6/2/2009 - 10:08 am edit reply "Even with the assumption of higher rates the loan never hits its 125% cap. The loan currently has accrued about $40,000 of negative amortization. By 2014 it would accrue another $45,000, making the final balance $585,388 (115% of the original loan). In order to get the loan to hit the 125% cap by 2012 the accrual rate would need to jump today to 10% and say there for the next 3 years.*
Of course, none of this is to say that Wells Fargo is out of the woods. They are essentially stashing away on their balance sheet tens of billions of neg-am loans that will recast into 20-year fixed rate mortgages in 2014 and 2015. Talk about a payment shock. (Although, it is important to note that the minimum payment automatically increases by 7.5% a year. If rates were to stay low this could mean that borrowers would eventually start paying more than their interest only payment and paying down their loans. My guess though is that these automatic increases will get people walking away from their homes before the recast date. Who wants to pay $3000 a month on a home that's underwater? Any way you look at it, it’s a mess.)"
Wow!.... So will go into the next election cycle...hmmmmm
10's of BILLIONS at one firm that passed the stress test, makes me question the stress test now, even the more adverse...
It's the tax credit. I hear it every day at work. Wont help move houses over 500k, though, since those buyers need over 150k income and are phased out of the benefit. No move up buyers, either, cuz the houses being sold are already empty.
Bloomberg is aggressively pumping the MoM numbers. Why not stick to the YoY numbers to take out seasonal noise? Similarly, who are the retard analysts that came up with that lowball forecast? They also just paraded out some shill that wants to increase the homebuyer credit to $15 to help young people. Hey asshole, I'm young, and you can take that $15k tax credit and shove it. How about you let prices correct so I can afford a house and not be a debt slave for life?
Wonder why the market rallied yesterday? Maybe because AXP, MS, JPM, and Prologis are all issuing equity this week.
There was a time when the "$100,000 club" referred to San Francisco city workers making six figures. These days, it refers to the 480 retired city workers or their survivors who are knocking back $100,000 or more a year in pension money.
The highest-paid is Bruce Malkenhorst, who, as the former city manager of the tiny industrial town of Vernon (Los Angeles County), earned $600,000 a year.
His retirement pay: $499,674. Which he continues to collect, even as he's under indictment for allegedly stealing city money.
By the way, Malkenhorst's son, Bruce Jr., now has his dad's old job.
There has been a lot of discussion on pending vs. closing data at the Seattle Bubble Blog. So far for Seattle at least, rising pending numbers have not translated into increasing closings.
Analyst are trying to low ball every estimate so the suprise is on the upside.....this really means nothing unless you're a lemming that think any analyst knows what he's taliking about.
I know several people in the housing and auto markets. They have recently indicated on numerous occasions that individuals have come in and signed contracts by when the loan documents come back they can’t qualify for financing.
OK....sales up...prices WAYYYYY Downnn...and more job losses breed more foreclosures. Get the picture? It's a stepping stone headed to the lower step and so on. We will eventually hit bottom.....in a year or 3. Cheers......Life Sucks right now
Someone posted about the FED buying stocks yesterday. I did hear (in 2006 or so) that the Japanese CB tried the same thing back in the 90's around the Nikkei 20k level. Don't know if that is true but I wouldn't be surprised if it was tried before.
I agree that the MoM figures rather than YoY figures are not a very good indicator. Of course sales will be up in April over March! If I used MoM sales data in one of my corporate meetings I'd get funny looks and maybe a talking to about it.
Also, the analysts low ball estimates are a joke! Most of these analysts couldn't find their way out of a paper bag. I need to become an analyst so I can give some super low estimates and ride the market higher on these "green shoots" numbers. What a scam.
Someone posted about the FED buying stocks yesterday. I did hear (in 2006 or so) that the Japanese CB tried the same thing back in the 90's around the Nikkei 20k level. Don't know if that is true but I wouldn't be surprised if it was tried before.
I'm starting to lose faith in the bear mantra. This market keeps charging forward and we're all concerned over a 100 bp move in TNX that is pushing mtg rates to levels considered near record lows only two years ago.
LIESMAN: Why are you saying-- I mean, you're saying that buying $300 billion of debt by the Fed is not monetizing?
GEITHNER: Absolutely not. Again-- the-- no conflict between the Fed's responsibilities for a financial stability, the measures they've taken to help make sure that there's liquidity for markets. We're (UNINTEL) this process of adjustment in the financial system and their long term obligation to help-- help keep inflation low and stable. And I'm completely confident in their ability to do that.
The Economy Is So Bad that...
14.Indians and chinese are migrating to Africa and antarctic for "better prospects"
15.Suzuki and Hyndui are largest automakers....
16.Tata nano is considered "necessity".Many celebrities are going through arduous weight reduction program to fit into this small car.
17.New dollar is backed by cocain,heroin and all other narcotics.Drug dealers are new lawmakers.
18.Goldman Sachs and rest of finacial firms are writing new global derivatives on "Drug and Opium procurement program for distressed dopes " aka "DOPPDD".
19.Handcarts,cycle rikshaws,bullock carts and horse carriages are common sight on roads.
20.Non Motorised Two wheeled Propulsion Vehicle(NMTWPV)i.e. bicycle sales have zoomed to 2 million per month....
21.USA president now speaks chinese and fluent in host of other world languages.
22.Americans at last know there are other countries in world besides their own.
23.French are selling champagne in polythene packs and rubber balloons.
24.Ben Bernake,Paulson,Geitner are working as magicians in villege fairs..
25.General motors is renamed as GMT and is biggest manufacturer of Government-Motorised-Toilets....
26.USA ,atlast,stopped military aid to pakistan on account of "no returns"
26.Bankers are running illegal betting parlours.
27.Hummers are being used to carry manure and water
28.Bank officials are told to retain their customers at any cost.Their training program includes:crying,making emotional talks,holding feet of customers etc etc.
29.Divorce lawyers are commiting sucides by hundreads...
30.Micheal Jckson has changed his/her colour to original black.It seems he/she was tarred and feathered in Saudi arabia for some unknown reason.He/she has also cut his/her nose permanently.
31.Dick cheny and Bush have opened "Gym" in spanish quarters.They are selling condoms as 'side trade'to their customers.
32.F.B.I. has been renamed as "Fxxxxd Bureau of investigation" and they are actively pursuing criminals involved in illegal dog fights/tortoise races
33.Stock exchange and Federal reserve has become swimming pools.Only caveat it they are filled with sewage water.
34.Britney spears has atlast purchased descent innerwears.Madona is playing role of hero's mother in Indian Hindi,tamil and telugu movies.Madonna has also learned to chew paan and betulnut all day.
35.Homeless peoples are respected...(need i say more?)
36.Students are going back to china to learn "new technologies"
37.Chinese at last learned to pronounce"Recession" not "Lecession"
In theory the 8k gets split between seller and buyer. Could the owner of a rental building sell to all his tenants in December and agree to buy back in January plus 4k?
In related news, last January, firefighters reported 3 consecutive months of declining forest fires. In July, air conditioning vendors reported a surprising rise in business, despite the weakening economy.
Ignoring seasonality in a highly seasonal business is deception, pure and simple. Moreover, the Yun mouthpiece "cautions" about "greater variability" in the measure. Are his "cautions" supposed to add credibility?
Caution: the NAR is full of baloney, and not to be trusted.
The other index, the dollar index is the one that is going to matter. Consider differential of borrowing between last year that this and rough-hand the rate of return our foreign creditors will demand, and consider where you as a foreign nation would want your reserves...
/snip
The U.S. may borrow a record $3.25 trillion this fiscal year ending Sept. 30, almost four times the $892 billion in 2008, according to Goldman Sachs. The U.S. budget deficit is projected to reach a record $1.75 trillion for the same fiscal year, according to the Congressional Budget Office.
“Heightening concern over foreigners’ willingness to fund the huge U.S. budget deficit has knocked safe-haven demand for the U.S. dollar down significantly,” John Kyriakopoulos, Sydney-based head of currency strategy at National Australia Bank Ltd., wrote in a research report.
RockyR (profile) wrote on Tue, 6/2/2009 - 7:41 am
I'm starting to lose faith in the bear mantra....
Perhaps our thesis is wrong...
The first bear market rally in the 1930s was +48% and went on to lose another 70% from there over the next 3 years including 5 more double digit rallies in that period.
RockyR (profile) wrote on Tue, 6/2/2009 - 10:41 am
I'm starting to lose faith in the bear mantra. This market keeps charging forward and we're all concerned over a 100 bp move in TNX that is pushing mtg rates to levels considered near record lows only two years ago.
Perhaps our thesis is wrong...
Yeah, but those mortgage rates now, would be unbearable. Stimulus economies become instantly stimulus dependent. Tarponomics is the most efficient business practice possible. You push the button, you get the treat. No work, no risk.
Or you could look at Japan Who had a almost a 40% rally before falling another 60-70% over the next year and half. This was in the face of steady exports and currency.
.......this non-news item isn't even worth my ire. More bids on properties (that are already overvalued) will increase loan denials by further not meeting appraisals.
Dollar Falls on Speculation U.S. Debt Will Undermine Currency
June 2 (Bloomberg) -- The dollar dropped to its lowest level against the euro this year on speculation record U.S. borrowing will undermine the currency.
The 16-nation euro gained for a fourth day versus the greenback as the Russian government said emerging-market leaders may discuss the idea of a supranational currency. The pound strengthened to $1.65 for the first time since October.
Probably the only way to get home prices going up would be to gradually let the air out of the U.S. currency.
Affordability is not the only game in town. In other words, it wouldn't necessarily take rising salaries or incomes to make housing prices stabilize and then rise.
If people thought that the currency was heading for steady decline, all things real would appreciate in value.
Residential real estate would stabilize and rise first.
It would take longer for commercial real estate, due to the vast overbuild.
"Russian President Dmitry Medvedev may discuss his proposal to create a new world currency when he meets counterparts from Brazil, India and China this month, Natalya Timakova, a spokeswoman for the president, told reporters by phone today. Medvedev first proposed seeking alternatives to the U.S. dollar as a reserve currency in March. "
I do believe that Russia and China have been buying large quantities of gold, and therefore wonder that if they create a new world currency backed with a gold standard, if that would put a nail in our currency coffin?
A lot of homes are falling out of contract both because of financing problems and because buyers are getting a clue that prices are not done falling.In my "fortress" town of sebastopol the median dropped 31% YoY april to april,and it is a subject of conversation at the checkout line.OT, more than 25% of the $1mm houses for sale on CL here are for sale by Agent/Owners...and some prime vineyard land is coming on the market.
I went to my tax appeal today, and I want to thank CR and all the merry posters for all their
helpful comments over the year or so that I've been here.
The first 3 people were quite well prepared, and the supposedly independant hearing examiner was really mean to them. One had a paid for timely appraisal. One had pictures. One supplied proof he bought for less which the guy grudgingly conceded was helpful.
I mean comps for the relevant time period really are high. So we went with cap rates, and the Case Shiller index which I wouldn't have know of without CR. And also stated the high prices were not proof of value, but proof of
fraud as all the larger square feet houses were in foreclosure, except one. Confirmed by the broker.
Not that I'm that great verbally usually, but the examiner tried to be mean once when my guy testified that
he only paid 120k for the property, and the guy sneered that that was 8 years ago. Yeah I said, that just under 16% a year. That's Bernie Madoff territory, a ponzie.
My client was happy & the broker met someone in his area, which might mean some business for him.
One other bearish point to make. The first time we hit rates on the ten year under 4% it was Early 08. I believe. The market was over 12000 on the Dow. QE returns are diminishing.
I imagine that there are some decent housing deals around the country right now. Not money makers, but if you want to own a home and start a family, the market makes more sense now than it has for years.
I've been following prices in parts of FL and there really are some good deals (>50% off) especially compared to the stupidity of Northern NJ.
In my "fortress" town of sebastopol the median dropped 31% YoY april to april,and it is a subject of conversation at the checkout line.
I tried explaining to someone at HUD how the $8K tax credit - FHA combination was going to blow out the median metrics faster than even the foreclosures. He looked at me kind of blankly. I don't think he understood what a "median" actually was.
" The 2year/10 year spread is back to near record levels at 275 basis points.
The 2year 5 year spread is 160 basis points this morning and I do not believe it has been that wide in 20 years.
Update: Someone just told me that the 2year/5 year at 160 basis points is a 40 year wide."
Conclusion? Harder to force down the long end of the curve. More QE needed, which will lead to more money printing, leading to a weaker dollar, leading to higher rates to attract lenders, leading to more QE... vicious circle.
I don't see hyperinflation or even high inflation. In fact, I think the TIPs market has it right - low growth and low inflation. I see Japan.
I could be wrong though. That's why I moved to TIPs. Jas thought I was a dope. He could be right ultimately, but the inflation insurance was dirt cheap especially against the < 3% yields on his non-inflation protected treasuries. Hubris.
TIPs won't make you rich, but neither will wall street.
Tim waiting for 2012 (homepage, profile) wrote (in reply to...) on Tue, 6/2/2009 - 11:02 am reply Ignore user Take a name. Very good indicator. Showing risk aversion and inflation worries. Not good.
Funny you garner that from your reading of the stats, but our illustrious FED "doesn't know the reason behind the widening spread"...
Reading the comments, plenty of healthy skepticism. However, March and April SA and NSA #s above 2008 YOY. Not shabby in my non-realtor opinion. How many months of improving YOY #s would mean improvement overall?
The 60s finally frothed over from the LBJ "guns and butter" economy. Inflation was cooked in, which is why Nixon tried to impose controls. Then the 70s had the oil price shocks. They rippled through everything. That was the real inflationary force.
The developer, Charlotte-based Crescent Resources, said last year it would move ahead with the speculative project, even though three other unfinished Buckhead office towers had no tenants. But with prices and demand for office space pulled down by the recession, Crescent, like some other developers, now finds itself in a financial bind. Metro Atlanta Business News | ajc.com
"Conclusion? Harder to force down the long end of the curve. More QE needed, which will lead to more money printing, leading to a weaker dollar, leading to higher rates to attract lenders, leading to more QE... vicious circle."
The FED can control short term rates. easily. Long term rates are dictated by the market. Hyperinflation is coming but only after we bottom in asset prices. Still a lot of capital being destroyed. 18 MO -24 MO we will see prices really spike. Inflation will come quick and that is why I like TIPS for people who can't watch the market everyday and for older people who can't stand the volatility in PMs. Gold for people under 50 and Tips for people over 60 IMO.
Why this quite frank NY Times editorial got pigged so early in life is a tragedy. Only 67 comments. In the early days of CR it would have gotten over 500 comments.
"NY Times Editorial: Foreclosures: No End in Sight
A continuing steep drop in home prices combined with rising unemployment is powering a new wave of foreclosures. Unfortunately, there’s little evidence, so far, that the Obama administration’s anti-foreclosure plan will be able to stop it.
...
One of the biggest problems is that the plan focuses almost entirely on lowering monthly payments. But overly onerous payments are only part of the problem. For 15.4 million “underwater” borrowers — those who owe more on their mortgages than their homes are worth — a lack of home equity puts them at risk of default, even if their monthly payments have been reduced. They have no cushion to fall back on in the event of a setback, like job loss or illness.
...
There will be no recovery until there is a halt in the relentless rise in foreclosures. Foreclosures threaten millions of families with financial ruin. By driving prices down, they sap the wealth of all homeowners. They exacerbate bank losses, putting pressure on the still fragile financial system. Lower monthly payments are a balm, but they are no substitute for home equity. And until more Americans can find a good job and a steady paycheck, the number of foreclosures will continue to rise."
....don't mind me, I received my bimonthly shot yesterday and am just thinking out loud here........if the value of the dollar decreases, wouldn't that reflect in a natural rise of market indices? AND, how would it also reflect in home prices? Would homes be falling even faster if it didn't take as many "dollars" to purchase after the constant ongoing devaluation of those dollars?
.....and commodities.........how do you correlate a diminishing manufacturing level of quality to prices that are holding constant? Example: 16 oz. of dish soap costs $1 (.063-cents per oz). A major brand costs 9-cents per oz. but is less diluted. I suggest that household/consumer costs are increasing twofold: a diminishing level of product consistancy/weight/raw product amount AND having to purchase using a constantly devaluating dollar.
I guess I don't believe the oil rally and over the last week or so the gold rally. Equities led the rally and commodities followed (exception of copper). IMO the real gold rally will far outpace the gains in equities.
In the latest appellate order, the Indiana Pension Funds early this morning were granted a motion to appeal directly to the U.S. Court of Appeals, bypassing District Court, as had been the desire of Chrysler and Fiat. While undoubtedly a last ditch effort before the June 15 deadline, after which Fiat can walk away if there is no closed deal, the action will hopefully derail Gonzalez' steamrolling of over 300 objections, which early yesterday were overruled as he proceeded to approve the 363 sale motion.
In his order, Gonzalez was brief and to the point: "The Court certifies that an immediate Appeal of the Sale Opinion, the TARP Opinion and Sale Order is appropriate because this case involves a matter of public importance, and an immediate appeal may materially advance the progress of this case."
Example: 16 oz. of dish soap costs $1 (.063-cents per oz). A major brand costs 9-cents per oz. but is less diluted.
Exactly that is the criticism of the CPI is that it doesn't count for prices staying the same for less consumer goods. That is why TIPS for people who plan on living more that 10-15 years is probably not a good idea because your real losses due to inflation could be huge.
“In addition, the relationship between contracts on pending home sales and closings on existing-home sales is taking longer than in the past for several reasons,” he said. “Mortgage processing time has increased, it is taking many months to close on those homes requiring short sales with lender approval, and some sales are falling through at the last moment.”
I have noticed this in SW Florida. You drive up and down every street in Cape Coral and you see 5,6,7 houses empty on every block. MLS has the houses pending listed forever and they are dead properties because they accept no more offers on them and many of them fail to close.
Bankruptcy judge rules on Lennar Newhall Ranch buyback
The tangled saga of the Newhall Ranch housing development took another twist today, when a U.S. Bankruptcy Court judge said he might allow the project's former owner to buy some of it back.
Judge Kevin J. Carey ruled in Delaware that Lennar Corp. could purchase a 15% interest in the Santa Clarita Valley project and other properties for $140 million -- if creditors endorsed and the court approved the deal.
Florida-based Lennar, the nation’s second-largest home builder, had sold a stake in Newhall Ranch to the California Public Employees’ Retirement System for $970 million in 2007. The 15,000-acre tract north of Los Angeles is one of the few remaining parcels of its size left in Southern California.
Lennar’s purchase, if approved, could leave the builder well-positioned to construct homes as the housing market recovers. CalPERS and other equity holders would see their investments wiped out in the deal.
Oh yeah and those in managed futures or commodity funds three words "Refco Capital Markets", I sold my commodity funds at a loss last week they performed horribly and sold the Gold ETF after holding it since 2004. Going to get physical.
I'm curious about the PHSI data. I've read in a bunch of places that a lot of transactions are taking longer than usual to close. Couldn't this fact alone contribute to a rise in PHSI, since the deals are staying in the pipeline longer? It seems to me that if deals are taking longer to close, a rise in PHSI should not necessarily predict a corresponding rise in actual deals closing, but merely reflect that during a given month more deals are in a "pending" state. Am I wrong about this? Also--would I be correct in thinking that last week's spike in mortgage rates probably killed a lot of deals in the pipeline--so that the last months' PHSI may include a larger than normal number of pending deals that will never actually go through? I'm suspicious about the quality as a predictor of these PHSI numbers, but I don't have the technical chops to say anything authoritative about my suspicions. Maybe somebody with the chops could say whether I'm right or wrong to be leery of these data.
Michael (profile) wrote on Tue, 6/2/2009 - 11:01 am replyIgnore user16,303 X 12 = 195,636
How many plants does Chrysler need to have open to make 200k vehicles a year?
Wrong company Michael. Diamler makes Mercedes Benz.
The Chinese won't move it offshore. They will use this as a wedge to buy more tech and industrial companies. Then tonce they have lulled us into believing them to be our friends - they willl buy Kansas.
I'm starting to lose faith in the bear mantra. This market keeps charging forward and we're all concerned over a 100 bp move in TNX that is pushing mtg rates to levels considered near record lows only two years ago.
Perhaps our thesis is wrong...
Retail sales and consumer spending continue to weaken, so long as this continues the thesis is valid.
I read both the articles you linked (Kasriel and Accrued Int.)
I'm still trying to decide if both theories can't be right simultaneously:
-contraction in the shadow banking system causing deflation in housing, MBSs, ABSs, etc..
-expansion in the money supply causing inflation in commodities, PMs, etc...
Both make sense and are not mutually exclusive. But if both are true, what's the impact on the dollar and LT interest rates? Most people think of those in terms of the money supply, but the shadow banking unwind is going to have an affect as well.
That is why TIPS for people who plan on living more that 10-15 years is probably not a good idea because your real losses due to inflation could be huge.
Tim,
Making money from money (in real terms) is harder than most think. It's becomes even more difficult when assets are richly valued. PMs have been big winners, but that makes me suspicious. Consider, CPI is up ~ 20% in the past six years while gold is up ~ 300%.
I never lost money harvesting profits. Only opportunity. And most times, in hindsight, the opportunity turned out to be fleeting. Now more than ever, we have a casino eCONomy. I'm a strong believer that there are no long term winners in a casino other than the house (wall street and the gov't).
Perhaps I'm just getting frustrated trying to apply rationality to an irrational world. Thank you for the data.
Just keep in mind the nature of bear market rallies is that they tend to continue so long as people don't believe in them. They're essentially fueled by denial of their validity and bearish naysayers.
Once the bears finally capitulate and jump on board or just give up that's when these things tend to end.
To use a Hoosier-state basketball analogy, the Indiana Pensioners just hit a three at the buzzer to tie it up and send it into overtime.
No idea who will ultimately win this one, but the Hoosiers get the question into the appellate courts, who will now weigh in on the bankruptcy judge's application of the law in this case.
Could be an exciting overtime, if the Hoosiers keep droppin' threes like that. But, live by the three, die by the three.
Apologies to those uninitiated to the thrils of Indiana ball. (Watch the movie with Gene Hackman again.)
At the end of May, Ford vehicle inventories totaled 350,000 (equivalent to 56 days’ supply). This
level was 41,000 vehicles lower than at the end of April and 210,000 vehicles lower than a year
ago.
Given tightly controlled inventories and the strength of its new products in the market, Ford is
increasing second quarter North American production by 10,000 vehicles (to 445,000). Ford also
announced it plans to build 460,000 vehicles in the third quarter, an increase of 42,000 vehicles
compared with third quarter 2008.
At 70k miles last month on my 2001 2dr Blazer 4wd auto track I replaced my intake manifold and other gaskets my self. Did a complete tuneup with all new parts and changed all the fluids for under $300. A couple years ago I installed a $1k Pioneer GPS sound system with 6.1 inch touch screen. The truck still looks almost show room new and now runs again like brand new. I like the truck because it is loaded, it doesn't have ON Star that would keep track of my whereabouts, The seat belt light doesn't harass me to put it on, which I don't, and it doesn't have a black box in it for insurance purposes either. I will not be buying a new car for at leas 5 years.
The 8k tax rebate is ONLY FOR THE PURCHASE OF NEW HOMES FROM A BUILDER.
I repeat
The 8k tax rebate is ONLY FOR THE PURCHASE OF NEW HOMES FROM A BUILDER
This alone shows how little the gov't cares about homeowners. The 8k tax rebate was enacted ONLY for the benefit of campaign contributors---the homebuilders. If they gave a rat's ass about actual human beings they'd offer the rebate for the purchase of ANY home.
With rising rates toward in May I don't think it will hold.
Sold! To us!
I'm suspicious of this increase because it seems at odds with the mortgage application data.
Tim,
But that's another month of pumping...
"I'm suspicious of this increase because it seems at odds with the mortgage application data. "
Cash buyers / vulture investors.
Yun advising caution? Saying 'don't get too excited' ?
Wow....bizzaro world indeed
Edit: Dow gonna falter and plunge today ?
Or have we Bears really missed that start of the New Bull Market ?
/snark
This is no news. Home sales are expected to go up in April over March. If they dropped, that would be very bad news.
I'm kind of surprised by Yun's subdued response. He's normally a cheerleader.
$1358000 6br 4ba LOS GATOS ESTATE HOME - TENNIS COURT & POOL *** BANK OWNED *** (los gatos)
craigslist | Page Not Found
Lots of Million dollar plus homes on Craigslist. Jeez couldn't afford an ad? Lots of Lambos on craigslist too.
"With rising rates toward in May I don't think it will hold. "
Undoubtedly a number of people counting on financing will fall out, many purchasers do not lock rates until near close. Though more will be affected as more foreclosures hit the market, fewer will want to catch the knife if the knife is still seen as falling.
Feel better about stopping out of my shorts yesterday.... I think if I try that again I'll try long-dated puts....
"I'm suspicious of this increase because it seems at odds with the mortgage application data. "
Cash buyers / vulture investors.
Also I wonder if they count it as a "pending sale" when a squatter moves in to a property.
Guy probably has a gun to his back.
What's the correlation and magnitude of change between existing home sales and pending home sales? What's the demographics of the contracts pending (first time homebuyers, etc.)? What is the relaitonship of pending sales to actualing closings of those designatied as pending?
We need a fix on this mortgage crisis soon. Besides people suffering the bank is not looking so hot as well. A restructure of forces is needed and the time is now. I agree that a lot of the sales fall through. Why would they increase? Maybe it's to weed out applicable applicants.
Best regard,
Michael Fridman
The “MAN” Experience
Shill,
your previous post is incredible: Healdsburg Housing Bubble: Reset Chart from Credit Suisse has a Major Error
Fiduciary Doodie (profile) wrote on Tue, 6/2/2009 - 10:08 am edit reply "Even with the assumption of higher rates the loan never hits its 125% cap. The loan currently has accrued about $40,000 of negative amortization. By 2014 it would accrue another $45,000, making the final balance $585,388 (115% of the original loan). In order to get the loan to hit the 125% cap by 2012 the accrual rate would need to jump today to 10% and say there for the next 3 years.*
Of course, none of this is to say that Wells Fargo is out of the woods. They are essentially stashing away on their balance sheet tens of billions of neg-am loans that will recast into 20-year fixed rate mortgages in 2014 and 2015. Talk about a payment shock. (Although, it is important to note that the minimum payment automatically increases by 7.5% a year. If rates were to stay low this could mean that borrowers would eventually start paying more than their interest only payment and paying down their loans. My guess though is that these automatic increases will get people walking away from their homes before the recast date. Who wants to pay $3000 a month on a home that's underwater? Any way you look at it, it’s a mess.)"
Wow!.... So will go into the next election cycle...hmmmmm
10's of BILLIONS at one firm that passed the stress test, makes me question the stress test now, even the more adverse...
We need a fix on this mortgage crisis soon.
Let's just pass a law that it doesn't exist anymore.
Signed,
King Canute
"What's the demographics of the contracts pending (first time homebuyers, etc.)?"
No hard evidence, but word is a ton of FTHB, due to the tax credit.
has to be the tax credit
"We need a fix on this mortgage crisis soon."
Accelerating foreclosures would be a good start, clean out the system and get it over with.
It's the tax credit. I hear it every day at work. Wont help move houses over 500k, though, since those buyers need over 150k income and are phased out of the benefit. No move up buyers, either, cuz the houses being sold are already empty.
Bloomberg is aggressively pumping the MoM numbers. Why not stick to the YoY numbers to take out seasonal noise? Similarly, who are the retard analysts that came up with that lowball forecast? They also just paraded out some shill that wants to increase the homebuyer credit to $15 to help young people. Hey asshole, I'm young, and you can take that $15k tax credit and shove it. How about you let prices correct so I can afford a house and not be a debt slave for life?
Wonder why the market rallied yesterday? Maybe because AXP, MS, JPM, and Prologis are all issuing equity this week.
... and soon those FTHBs will be underwater...
And by "soon"... I mean "now"!
S.F. retirees' solid-golden years
There was a time when the "$100,000 club" referred to San Francisco city workers making six figures. These days, it refers to the 480 retired city workers or their survivors who are knocking back $100,000 or more a year in pension money.
The highest-paid is Bruce Malkenhorst, who, as the former city manager of the tiny industrial town of Vernon (Los Angeles County), earned $600,000 a year.
His retirement pay: $499,674. Which he continues to collect, even as he's under indictment for allegedly stealing city money.
By the way, Malkenhorst's son, Bruce Jr., now has his dad's old job.
S.F. retirees' solid-golden years
Bloomie delayed is showing a 2.75 yield curve. Ties the record?
There has been a lot of discussion on pending vs. closing data at the Seattle Bubble Blog. So far for Seattle at least, rising pending numbers have not translated into increasing closings.
NWMLS: Mark Any Accepted Offer on a Short Sale as “Pending” | Seattle Bubble — News & discussion about real estate & the housing bubble in the Seattle area.
Analyst are trying to low ball every estimate so the suprise is on the upside.....this really means nothing unless you're a lemming that think any analyst knows what he's taliking about.
"It's the tax credit. I hear it every day at work. "
That would confirm what I have been hearing. Plus it has worked in other countries.
Just another way to helicopter in money - Treasury provides tax benefit through deficit spending, Fed monetizes debt.
It's the 8k tax rebate. First time buyers are biting.
I know several people in the housing and auto markets. They have recently indicated on numerous occasions that individuals have come in and signed contracts by when the loan documents come back they can’t qualify for financing.
MLM,
King Canute reference is a deep pull. Are you suggesting that, as Canute, not even or maybe only God can stay back the tide of FC's?
OK....sales up...prices WAYYYYY Downnn...and more job losses breed more foreclosures. Get the picture? It's a stepping stone headed to the lower step and so on. We will eventually hit bottom.....in a year or 3. Cheers......Life Sucks right now
First, repeat after me: s-e-a-s-o-n-a-l-i-t-y.
Second, CR is right to ignore affordability. Recall that the NAR changed the formula so comparisons to past years are suspect.
There's the rub. Don't think that more than 1% increase after that is taken into consideration a month from now
Bloomberg.com:
Personal Finance
starting to look like the gains in mortgage rates are a bit "sticky".
I agree the $8k tax credit is pushing buyers to make the move. Cashback at closing is back and endorsed by Uncle Sam.
Someone posted about the FED buying stocks yesterday. I did hear (in 2006 or so) that the Japanese CB tried the same thing back in the 90's around the Nikkei 20k level. Don't know if that is true but I wouldn't be surprised if it was tried before.
I agree that the MoM figures rather than YoY figures are not a very good indicator. Of course sales will be up in April over March! If I used MoM sales data in one of my corporate meetings I'd get funny looks and maybe a talking to about it.
Also, the analysts low ball estimates are a joke! Most of these analysts couldn't find their way out of a paper bag. I need to become an analyst so I can give some super low estimates and ride the market higher on these "green shoots" numbers. What a scam.
Someone posted about the FED buying stocks yesterday. I did hear (in 2006 or so) that the Japanese CB tried the same thing back in the 90's around the Nikkei 20k level. Don't know if that is true but I wouldn't be surprised if it was tried before.
As always, the cure is more disease.
I'm starting to lose faith in the bear mantra. This market keeps charging forward and we're all concerned over a 100 bp move in TNX that is pushing mtg rates to levels considered near record lows only two years ago.
Perhaps our thesis is wrong...
LIESMAN: Why are you saying-- I mean, you're saying that buying $300 billion of debt by the Fed is not monetizing?
GEITHNER: Absolutely not. Again-- the-- no conflict between the Fed's responsibilities for a financial stability, the measures they've taken to help make sure that there's liquidity for markets. We're (UNINTEL) this process of adjustment in the financial system and their long term obligation to help-- help keep inflation low and stable. And I'm completely confident in their ability to do that.
ShadowInventory i have expanded your list,
The Economy Is So Bad that...
14.Indians and chinese are migrating to Africa and antarctic for "better prospects"
15.Suzuki and Hyndui are largest automakers....
16.Tata nano is considered "necessity".Many celebrities are going through arduous weight reduction program to fit into this small car.
17.New dollar is backed by cocain,heroin and all other narcotics.Drug dealers are new lawmakers.
18.Goldman Sachs and rest of finacial firms are writing new global derivatives on "Drug and Opium procurement program for distressed dopes " aka "DOPPDD".
19.Handcarts,cycle rikshaws,bullock carts and horse carriages are common sight on roads.
20.Non Motorised Two wheeled Propulsion Vehicle(NMTWPV)i.e. bicycle sales have zoomed to 2 million per month....
21.USA president now speaks chinese and fluent in host of other world languages.
22.Americans at last know there are other countries in world besides their own.
23.French are selling champagne in polythene packs and rubber balloons.
24.Ben Bernake,Paulson,Geitner are working as magicians in villege fairs..
25.General motors is renamed as GMT and is biggest manufacturer of Government-Motorised-Toilets....
26.USA ,atlast,stopped military aid to pakistan on account of "no returns"
26.Bankers are running illegal betting parlours.
27.Hummers are being used to carry manure and water
28.Bank officials are told to retain their customers at any cost.Their training program includes:crying,making emotional talks,holding feet of customers etc etc.
29.Divorce lawyers are commiting sucides by hundreads...
30.Micheal Jckson has changed his/her colour to original black.It seems he/she was tarred and feathered in Saudi arabia for some unknown reason.He/she has also cut his/her nose permanently.
31.Dick cheny and Bush have opened "Gym" in spanish quarters.They are selling condoms as 'side trade'to their customers.
32.F.B.I. has been renamed as "Fxxxxd Bureau of investigation" and they are actively pursuing criminals involved in illegal dog fights/tortoise races
33.Stock exchange and Federal reserve has become swimming pools.Only caveat it they are filled with sewage water.
34.Britney spears has atlast purchased descent innerwears.Madona is playing role of hero's mother in Indian Hindi,tamil and telugu movies.Madonna has also learned to chew paan and betulnut all day.
35.Homeless peoples are respected...(need i say more?)
36.Students are going back to china to learn "new technologies"
37.Chinese at last learned to pronounce"Recession" not "Lecession"
In theory the 8k gets split between seller and buyer. Could the owner of a rental building sell to all his tenants in December and agree to buy back in January plus 4k?
In related news, last January, firefighters reported 3 consecutive months of declining forest fires. In July, air conditioning vendors reported a surprising rise in business, despite the weakening economy.
Ignoring seasonality in a highly seasonal business is deception, pure and simple. Moreover, the Yun mouthpiece "cautions" about "greater variability" in the measure. Are his "cautions" supposed to add credibility?
Caution: the NAR is full of baloney, and not to be trusted.
Dollar Declines as Nations Mull Reserve Currency Alternatives - Bloomberg.com
The other index, the dollar index is the one that is going to matter. Consider differential of borrowing between last year that this and rough-hand the rate of return our foreign creditors will demand, and consider where you as a foreign nation would want your reserves...
/snip
The U.S. may borrow a record $3.25 trillion this fiscal year ending Sept. 30, almost four times the $892 billion in 2008, according to Goldman Sachs. The U.S. budget deficit is projected to reach a record $1.75 trillion for the same fiscal year, according to the Congressional Budget Office.
“Heightening concern over foreigners’ willingness to fund the huge U.S. budget deficit has knocked safe-haven demand for the U.S. dollar down significantly,” John Kyriakopoulos, Sydney-based head of currency strategy at National Australia Bank Ltd., wrote in a research report.
/endsnip
RockyR (profile) wrote on Tue, 6/2/2009 - 7:41 am
I'm starting to lose faith in the bear mantra....
Perhaps our thesis is wrong...
The first bear market rally in the 1930s was +48% and went on to lose another 70% from there over the next 3 years including 5 more double digit rallies in that period.
Where's Otis with an earnings report?
Dr. Bernanke, the President is on line one. He's wondering what's going on with the 10 year.
Dr. Bernanke, will you pick up the phone?
RockyR (profile) wrote on Tue, 6/2/2009 - 10:41 am
I'm starting to lose faith in the bear mantra. This market keeps charging forward and we're all concerned over a 100 bp move in TNX that is pushing mtg rates to levels considered near record lows only two years ago.
Perhaps our thesis is wrong...
Yeah, but those mortgage rates now, would be unbearable. Stimulus economies become instantly stimulus dependent. Tarponomics is the most efficient business practice possible. You push the button, you get the treat. No work, no risk.
Rocky R RD
Or you could look at Japan Who had a almost a 40% rally before falling another 60-70% over the next year and half. This was in the face of steady exports and currency.
.......this non-news item isn't even worth my ire. More bids on properties (that are already overvalued) will increase loan denials by further not meeting appraisals.
Dollar Falls on Speculation U.S. Debt Will Undermine Currency
June 2 (Bloomberg) -- The dollar dropped to its lowest level against the euro this year on speculation record U.S. borrowing will undermine the currency.
The 16-nation euro gained for a fourth day versus the greenback as the Russian government said emerging-market leaders may discuss the idea of a supranational currency. The pound strengthened to $1.65 for the first time since October.
Probably the only way to get home prices going up would be to gradually let the air out of the U.S. currency.
Affordability is not the only game in town. In other words, it wouldn't necessarily take rising salaries or incomes to make housing prices stabilize and then rise.
If people thought that the currency was heading for steady decline, all things real would appreciate in value.
Residential real estate would stabilize and rise first.
It would take longer for commercial real estate, due to the vast overbuild.
Bear market rallies during the Great Depression.
November 1929 - April 1930: +48%
June 1930 - September 1930: +12%
December 1930 - February 1931: +21%
May 1931 - June 1931: +27%
October 1931 - November 1931: +35%
July 1932 - September 1932: +72%
Bear market rallies during the Great Depression - Morningstar
"Russian President Dmitry Medvedev may discuss his proposal to create a new world currency when he meets counterparts from Brazil, India and China this month, Natalya Timakova, a spokeswoman for the president, told reporters by phone today. Medvedev first proposed seeking alternatives to the U.S. dollar as a reserve currency in March. "
I do believe that Russia and China have been buying large quantities of gold, and therefore wonder that if they create a new world currency backed with a gold standard, if that would put a nail in our currency coffin?
A lot of homes are falling out of contract both because of financing problems and because buyers are getting a clue that prices are not done falling.In my "fortress" town of sebastopol the median dropped 31% YoY april to april,and it is a subject of conversation at the checkout line.OT, more than 25% of the $1mm houses for sale on CL here are for sale by Agent/Owners...and some prime vineyard land is coming on the market.
yield curve 2.76. Do they keep intraday records?
ac [I'm suspicious of this increase because it seems at odds with the mortgage application data]
CASH TRANSACTIONS, BABY!
I went to my tax appeal today, and I want to thank CR and all the merry posters for all their
helpful comments over the year or so that I've been here.
The first 3 people were quite well prepared, and the supposedly independant hearing examiner was really mean to them. One had a paid for timely appraisal. One had pictures. One supplied proof he bought for less which the guy grudgingly conceded was helpful.
I mean comps for the relevant time period really are high. So we went with cap rates, and the Case Shiller index which I wouldn't have know of without CR. And also stated the high prices were not proof of value, but proof of
fraud as all the larger square feet houses were in foreclosure, except one. Confirmed by the broker.
Not that I'm that great verbally usually, but the examiner tried to be mean once when my guy testified that
he only paid 120k for the property, and the guy sneered that that was 8 years ago. Yeah I said, that just under 16% a year. That's Bernie Madoff territory, a ponzie.
My client was happy & the broker met someone in his area, which might mean some business for him.
Perhaps I'm just getting frustrated trying to apply rationality to an irrational world. Thank you for the data.
The 2year/10 year spread is back to near record levels at 275 basis points.
The 2year 5 year spread is 160 basis points this morning and I do not believe it has been that wide in 20 years.
Update: Someone just told me that the 2year/5 year at 160 basis points is a 40 year wide.
[hat tip]
One other bearish point to make. The first time we hit rates on the ten year under 4% it was Early 08. I believe. The market was over 12000 on the Dow. QE returns are diminishing.
Take a name. Very good indicator. Showing risk aversion and inflation worries. Not good.
"More bids on properties (that are already overvalued) will increase loan denials by further not meeting appraisals. "
HVCC is having an impact, for sure.
I imagine that there are some decent housing deals around the country right now. Not money makers, but if you want to own a home and start a family, the market makes more sense now than it has for years.
I've been following prices in parts of FL and there really are some good deals (>50% off) especially compared to the stupidity of Northern NJ.
I'm seriously considering moving.
In my "fortress" town of sebastopol the median dropped 31% YoY april to april,and it is a subject of conversation at the checkout line.
I tried explaining to someone at HUD how the $8K tax credit - FHA combination was going to blow out the median metrics faster than even the foreclosures. He looked at me kind of blankly. I don't think he understood what a "median" actually was.
" The 2year/10 year spread is back to near record levels at 275 basis points.
The 2year 5 year spread is 160 basis points this morning and I do not believe it has been that wide in 20 years.
Update: Someone just told me that the 2year/5 year at 160 basis points is a 40 year wide."
Conclusion? Harder to force down the long end of the curve. More QE needed, which will lead to more money printing, leading to a weaker dollar, leading to higher rates to attract lenders, leading to more QE... vicious circle.
hyperinflation coming.
Ghost,
I don't see hyperinflation or even high inflation. In fact, I think the TIPs market has it right - low growth and low inflation. I see Japan.
I could be wrong though. That's why I moved to TIPs. Jas thought I was a dope. He could be right ultimately, but the inflation insurance was dirt cheap especially against the < 3% yields on his non-inflation protected treasuries. Hubris.
TIPs won't make you rich, but neither will wall street.
Tim waiting for 2012 (homepage, profile) wrote (in reply to...) on Tue, 6/2/2009 - 11:02 am reply Ignore user Take a name. Very good indicator. Showing risk aversion and inflation worries. Not good.
Funny you garner that from your reading of the stats, but our illustrious FED "doesn't know the reason behind the widening spread"...
Geithner: "We believe in a strong dollar ... "
CommodityCharts.com: Free Futures and Commodities Charts
" ... and also in the tooth fairy."
Greater Risk over Next Five Years – Inflation or Deflation?
Northern Trust
Global Economic Research
June 1, 2009
http://web-xp2a-pws.ntrs.com:80/content//media/attachment/data/econ_research/0906/document/ec060109.pdf
Deflation Argument
Tuesday, May 05, 2009
Inflation: Not this ship, sister
Accrued Interest: Inflation: Not this ship, sister
In my "fortress" town of sebastopol the median dropped 31% YoY april to april,and it is a subject of conversation at the checkout line.
Yeah, but what about the MoM median price? I bet it's up by 1 or 2%! That's what analysts and the talking heads would look at.
Basel too,
just went through Mean, Median and Mode with my 3rd grader 3 weeks ago on his homework. He knows, says a lot about HUD.
"I don't see hyperinflation or even high inflation. "
No one saw it coming in the 70s either. Were the conditions set for classic inflation then? A wage/price spiral?
This won't be wage/price spiral inflation either. It will be cheapening the currency style stagflation or hyperinflation.
The problem with TIPS is they depend on the government-sanctioned measures of inflation.
Reading the comments, plenty of healthy skepticism. However, March and April SA and NSA #s above 2008 YOY. Not shabby in my non-realtor opinion. How many months of improving YOY #s would mean improvement overall?
Wall*St - Scaling the wall of worry.
No worries!
The 60s finally frothed over from the LBJ "guns and butter" economy. Inflation was cooked in, which is why Nixon tried to impose controls. Then the 70s had the oil price shocks. They rippled through everything. That was the real inflationary force.
The developer, Charlotte-based Crescent Resources, said last year it would move ahead with the speculative project, even though three other unfinished Buckhead office towers had no tenants. But with prices and demand for office space pulled down by the recession, Crescent, like some other developers, now finds itself in a financial bind.
Metro Atlanta Business News | ajc.com
Given the rise in interest rates since April, this report means less than Jack squat particularly given that almost all will NOT close as a result.
You can have hyper-inflation in markets as well as other area's. It's already started IMO.
Ciao
MS
"Conclusion? Harder to force down the long end of the curve. More QE needed, which will lead to more money printing, leading to a weaker dollar, leading to higher rates to attract lenders, leading to more QE... vicious circle."
The FED can control short term rates. easily. Long term rates are dictated by the market. Hyperinflation is coming but only after we bottom in asset prices. Still a lot of capital being destroyed. 18 MO -24 MO we will see prices really spike. Inflation will come quick and that is why I like TIPS for people who can't watch the market everyday and for older people who can't stand the volatility in PMs. Gold for people under 50 and Tips for people over 60 IMO.
Why this quite frank NY Times editorial got pigged so early in life is a tragedy. Only 67 comments. In the early days of CR it would have gotten over 500 comments.
"NY Times Editorial: Foreclosures: No End in Sight
A continuing steep drop in home prices combined with rising unemployment is powering a new wave of foreclosures. Unfortunately, there’s little evidence, so far, that the Obama administration’s anti-foreclosure plan will be able to stop it.
...
One of the biggest problems is that the plan focuses almost entirely on lowering monthly payments. But overly onerous payments are only part of the problem. For 15.4 million “underwater” borrowers — those who owe more on their mortgages than their homes are worth — a lack of home equity puts them at risk of default, even if their monthly payments have been reduced. They have no cushion to fall back on in the event of a setback, like job loss or illness.
...
There will be no recovery until there is a halt in the relentless rise in foreclosures. Foreclosures threaten millions of families with financial ruin. By driving prices down, they sap the wealth of all homeowners. They exacerbate bank losses, putting pressure on the still fragile financial system. Lower monthly payments are a balm, but they are no substitute for home equity. And until more Americans can find a good job and a steady paycheck, the number of foreclosures will continue to rise."
....don't mind me, I received my bimonthly shot yesterday and am just thinking out loud here........if the value of the dollar decreases, wouldn't that reflect in a natural rise of market indices? AND, how would it also reflect in home prices? Would homes be falling even faster if it didn't take as many "dollars" to purchase after the constant ongoing devaluation of those dollars?
.....and commodities.........how do you correlate a diminishing manufacturing level of quality to prices that are holding constant? Example: 16 oz. of dish soap costs $1 (.063-cents per oz). A major brand costs 9-cents per oz. but is less diluted. I suggest that household/consumer costs are increasing twofold: a diminishing level of product consistancy/weight/raw product amount AND having to purchase using a constantly devaluating dollar.
I guess I don't believe the oil rally and over the last week or so the gold rally. Equities led the rally and commodities followed (exception of copper). IMO the real gold rally will far outpace the gains in equities.
from zero hedge:
In the latest appellate order, the Indiana Pension Funds early this morning were granted a motion to appeal directly to the U.S. Court of Appeals, bypassing District Court, as had been the desire of Chrysler and Fiat. While undoubtedly a last ditch effort before the June 15 deadline, after which Fiat can walk away if there is no closed deal, the action will hopefully derail Gonzalez' steamrolling of over 300 objections, which early yesterday were overruled as he proceeded to approve the 363 sale motion.
In his order, Gonzalez was brief and to the point: "The Court certifies that an immediate Appeal of the Sale Opinion, the TARP Opinion and Sale Order is appropriate because this case involves a matter of public importance, and an immediate appeal may materially advance the progress of this case."
Example: 16 oz. of dish soap costs $1 (.063-cents per oz). A major brand costs 9-cents per oz. but is less diluted.
Exactly that is the criticism of the CPI is that it doesn't count for prices staying the same for less consumer goods. That is why TIPS for people who plan on living more that 10-15 years is probably not a good idea because your real losses due to inflation could be huge.
“In addition, the relationship between contracts on pending home sales and closings on existing-home sales is taking longer than in the past for several reasons,” he said. “Mortgage processing time has increased, it is taking many months to close on those homes requiring short sales with lender approval, and some sales are falling through at the last moment.”
I have noticed this in SW Florida. You drive up and down every street in Cape Coral and you see 5,6,7 houses empty on every block. MLS has the houses pending listed forever and they are dead properties because they accept no more offers on them and many of them fail to close.
Bankruptcy judge rules on Lennar Newhall Ranch buyback
The tangled saga of the Newhall Ranch housing development took another twist today, when a U.S. Bankruptcy Court judge said he might allow the project's former owner to buy some of it back.
Judge Kevin J. Carey ruled in Delaware that Lennar Corp. could purchase a 15% interest in the Santa Clarita Valley project and other properties for $140 million -- if creditors endorsed and the court approved the deal.
Florida-based Lennar, the nation’s second-largest home builder, had sold a stake in Newhall Ranch to the California Public Employees’ Retirement System for $970 million in 2007. The 15,000-acre tract north of Los Angeles is one of the few remaining parcels of its size left in Southern California.
Lennar’s purchase, if approved, could leave the builder well-positioned to construct homes as the housing market recovers. CalPERS and other equity holders would see their investments wiped out in the deal.
Bankruptcy judge rules on Lennar Newhall Ranch buyback | L.A. Land | Los Angeles Times
That's a big hit for PERS. I imagine PERS is still holding this asset on the books at $970 million.
Daimler U.S. sales drop 33.4% in May
U.S. sales fell 33.4% to 16,303 vehicles from 24,480 a year ago.
Oh yeah and those in managed futures or commodity funds three words "Refco Capital Markets", I sold my commodity funds at a loss last week they performed horribly and sold the Gold ETF after holding it since 2004. Going to get physical.
On auto sales. When is the US gov't going to pump up GM and buy their workers a shiny new Cadillac?
That's a big hit for PERS. I imagine PERS is still holding this asset on the books at $970 million.
How many other pension funds have the same problem? Maybe not as big, but compared to the size of the fund it might as well be.
16,303 X 12 = 195,636
How many plants does Chrysler need to have open to make 200k vehicles a year?
I'm curious about the PHSI data. I've read in a bunch of places that a lot of transactions are taking longer than usual to close. Couldn't this fact alone contribute to a rise in PHSI, since the deals are staying in the pipeline longer? It seems to me that if deals are taking longer to close, a rise in PHSI should not necessarily predict a corresponding rise in actual deals closing, but merely reflect that during a given month more deals are in a "pending" state. Am I wrong about this? Also--would I be correct in thinking that last week's spike in mortgage rates probably killed a lot of deals in the pipeline--so that the last months' PHSI may include a larger than normal number of pending deals that will never actually go through? I'm suspicious about the quality as a predictor of these PHSI numbers, but I don't have the technical chops to say anything authoritative about my suspicions. Maybe somebody with the chops could say whether I'm right or wrong to be leery of these data.
re: 300 objections overruled.
Means nothing, as the quality is not stated. Is there an example of one that was "steamrolled"?
Michael (profile) wrote on Tue, 6/2/2009 - 11:01 am replyIgnore user16,303 X 12 = 195,636
How many plants does Chrysler need to have open to make 200k vehicles a year?
Wrong company Michael. Diamler makes Mercedes Benz.
Chinese company buying Hummer. How long til all production moves offshore.to China or Africa?
Ford down 24% too
The Chinese won't move it offshore. They will use this as a wedge to buy more tech and industrial companies. Then tonce they have lulled us into believing them to be our friends - they willl buy Kansas.
AXP taking a hit. I guess selling shares to pay back TARP is dllutive. Hoocooda...
Tim-
try RJI, RJA, RJN........Rogers funds backed by Norwegian Gov't. Credit risk is pretty minimal.
Ciao
MS
"Chinese company buying Hummer. How long til all production moves offshore.to China or Africa? "
I'd give it two.
weeks.
I'm starting to lose faith in the bear mantra. This market keeps charging forward and we're all concerned over a 100 bp move in TNX that is pushing mtg rates to levels considered near record lows only two years ago.
Perhaps our thesis is wrong...
Retail sales and consumer spending continue to weaken, so long as this continues the thesis is valid.
"Chinese company buying Hummer. How long til all production moves offshore.to China or Africa
No, word is they are moving it to Oral, Indiana.
@Dum Luk,
I read both the articles you linked (Kasriel and Accrued Int.)
I'm still trying to decide if both theories can't be right simultaneously:
-contraction in the shadow banking system causing deflation in housing, MBSs, ABSs, etc..
-expansion in the money supply causing inflation in commodities, PMs, etc...
Both make sense and are not mutually exclusive. But if both are true, what's the impact on the dollar and LT interest rates? Most people think of those in terms of the money supply, but the shadow banking unwind is going to have an affect as well.
nova,
why Kanasa? Texas please. People's Republic of Texas has a nice ring to it.
--bh
Kansas because they want the farmland. And the Wizard of OZ was a very influential movie in China.
That is why TIPS for people who plan on living more that 10-15 years is probably not a good idea because your real losses due to inflation could be huge.
Tim,
Making money from money (in real terms) is harder than most think. It's becomes even more difficult when assets are richly valued. PMs have been big winners, but that makes me suspicious. Consider, CPI is up ~ 20% in the past six years while gold is up ~ 300%.
I never lost money harvesting profits. Only opportunity. And most times, in hindsight, the opportunity turned out to be fleeting. Now more than ever, we have a casino eCONomy. I'm a strong believer that there are no long term winners in a casino other than the house (wall street and the gov't).
Perhaps I'm just getting frustrated trying to apply rationality to an irrational world. Thank you for the data.
Just keep in mind the nature of bear market rallies is that they tend to continue so long as people don't believe in them. They're essentially fueled by denial of their validity and bearish naysayers.
Once the bears finally capitulate and jump on board or just give up that's when these things tend to end.
To use a Hoosier-state basketball analogy, the Indiana Pensioners just hit a three at the buzzer to tie it up and send it into overtime.
No idea who will ultimately win this one, but the Hoosiers get the question into the appellate courts, who will now weigh in on the bankruptcy judge's application of the law in this case.
Could be an exciting overtime, if the Hoosiers keep droppin' threes like that. But, live by the three, die by the three.
Apologies to those uninitiated to the thrils of Indiana ball. (Watch the movie with Gene Hackman again.)
Rocky: Have faith brotha...this is a huge Bear market rally...
Just hold out a little longer...we're gonna drop like a stone...
EDIT: AC - Amen Man....Amen
At the end of May, Ford vehicle inventories totaled 350,000 (equivalent to 56 days’ supply). This
level was 41,000 vehicles lower than at the end of April and 210,000 vehicles lower than a year
ago.
Given tightly controlled inventories and the strength of its new products in the market, Ford is
increasing second quarter North American production by 10,000 vehicles (to 445,000). Ford also
announced it plans to build 460,000 vehicles in the third quarter, an increase of 42,000 vehicles
compared with third quarter 2008.
Ford's May 2009 Results
Sales down 24%, but market share increases again.
At 70k miles last month on my 2001 2dr Blazer 4wd auto track I replaced my intake manifold and other gaskets my self. Did a complete tuneup with all new parts and changed all the fluids for under $300. A couple years ago I installed a $1k Pioneer GPS sound system with 6.1 inch touch screen. The truck still looks almost show room new and now runs again like brand new. I like the truck because it is loaded, it doesn't have ON Star that would keep track of my whereabouts, The seat belt light doesn't harass me to put it on, which I don't, and it doesn't have a black box in it for insurance purposes either. I will not be buying a new car for at leas 5 years.
"they willl buy Kansas. "
They can have the CRE. Kansas farmland can't be sold to foreign entities, I'm pretty certain.
The 8k tax rebate is ONLY FOR THE PURCHASE OF NEW HOMES FROM A BUILDER.
I repeat
The 8k tax rebate is ONLY FOR THE PURCHASE OF NEW HOMES FROM A BUILDER
This alone shows how little the gov't cares about homeowners. The 8k tax rebate was enacted ONLY for the benefit of campaign contributors---the homebuilders. If they gave a rat's ass about actual human beings they'd offer the rebate for the purchase of ANY home.
Total credit market debt as a percentage of GDP has risen from 130% of GDP in 1952 to 350%
of GDP today. The various bailout and stimulus schemes enacted in the last year will drive
this percentage above 400% in the near future. When a country allows this much debt to
accumulate versus its GDP, they have done something seriously wrong. The country’s
politicians, business leaders, and citizens have all contributed to this disaster.
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