If you look very closely at the second graph you can see a green shoot!

Before you can plant a green shoot, first you must dig a hole...

CR, didnt GM put out an estimated recovery plan and what they planned to sell each quarter back when they were getting bailout monies in Nov/Dec? how'd that ever stack up to reality?

if we include bicycle sales, we might break the 10M mark.

I suggest we include all modes of personal transport:
motorcycles
bicycles
unicycles
tricycles
scooters
wheelchairs
skateboards
the mighty segway

Profit!

dafox (profile) wrote on Wed, 7/1/2009 - 1:59 pm

CR, didnt GM put out an estimated recovery plan and what they planned to sell each quarter back when they were getting bailout monies in Nov/Dec? how'd that ever stack up to reality?

Think Obama's unemployment graph vs. reality... invert and change the axis' labels.

I can't wait for the elation when October sales are reported. The green shoots will really be in bloom then when we have a 0.1% YoY increase in auto sales. I had a professor once who used to clamor about people not caring about their current situation, what truly mattered was the first derivative of their situation. Perhaps he was on to something.

12 million SAAR looks like a long range sustainable volume...although volume probably won't reach that number for at least a year. Just a WAG...

"That 125% LTV refi plan is idiotic. That said, for the life of me, I can't figure out why anybody would use it. I would think that in most cases walking away from a 25% negative equity position would make more sense than getting a new loan with a lower rate. "

Many people want to stay in their home come hell or high water. It's an emotional decision not one driven purely by logic. Americans are optimistic by nature.

OT--Lear files for bankruptcy

It wouldn't suprise me if the next shoe to drop in residential real estate was a great wave of people walking away from their homes. Why not do it? Especially if your neighbor up the street is going to do it too. People are such slaves to their credit scores. Why not max out the cards, stop paying the mortgage, stash away whatever cash you can and live without credit for 7 years or so.

"Why not max out the cards, stop paying the mortgage, stash away whatever cash you can and live without credit for 7 years or so."

~~~~

coming sooner than you think ...

I'm all for the great walk away...........seems like a great solution for everyone involved. 'cept for the bankers of course, but they need to suffer sooner or later. Afterall, they were supposed to be the grown up in the room when this party was still rocking.

And 125% isn't nearly enough for most underwaters here in S. Fla. You'd have to
get to 150% before you'd make a dent. And why would anybody do that? Unless the interest rate is reduced to 1%!!!!!!

175% would help a significant number "help" being very broadly defined to include
a lot of hurt!

In other words. . . . It's tooooooo laaaate.

Buy a car get a house !

great plan for Cali or Florida !

~~~~~

seven years without credit is a long time.

I'm in my 5th right now. It hasn't been so bad.

LargeMouthBassTurd (profile) wrote (in reply to...) on Wed, 7/1/2009 - 2:07 pm

It wouldn't suprise me if the next shoe to drop in residential real estate was a great wave of people walking away from their homes. Why not do it? Especially if your neighbor up the street is going to do it too. People are such slaves to their credit scores. Why not max out the cards, stop paying the mortgage, stash away whatever cash you can and live without credit for 7 years or so.

Oh no. "Walking away" is so 2007. It is 2009 and the new meme is "default in place." Just stop paying, passive aggressive relations to inquiries, defer repairs, don't pay taxes. The banks don't have the resources to go after you unless you stand out.

"Why not max out the cards, stop paying the mortgage, stash away whatever cash you can and live without credit for 7 years or so."

Carleton Sheets is working on the informercial as I type.

The coming greater credit crunch, will kill auto sales ...

If you are in a foreclosure state, don't forget to hide from the process server!

lawyerliz (profile) wrote on Wed, 7/1/2009 - 2:16 pm

Ford has gone down less than everyone else except what Volvo?

Volvo is Ford, Liz. The 7k Volvo sales are flat and essentially meaningless. I personally like Volvos. I'd love to pick up a V70R but the brutal reality is that there is no room for the nameplate or even the product line under a parent in the new auto world.

Who needs analysts...taken from analysts see 10m cars topic..

creditcriminalslovetarp (profile) wrote on Mon, 6/29/2009 - 7:04 pm editreply
unless the credit spigot opened up for subprime shoppers with 130% ltv because of underwater car loan and high dti, I would say the numbers will not be that great.
The spin will make it sound good...

Short month might dampen green shoots...I looked at dealer credit application counts just now and it doesn't seem significantly better than May. Dealers over a 100 apps was steady with May having a couple more. Dealers over 60 apps was similar etc....

green shoots would be a good band name right now.

OT: Crabtree and Evelyn goes to BK. Their statement:

The pressure of repaying debt forced the company to file for bankruptcy, Acting President Stephen Bestwick said in a court filing.

Not the fact that we mismanged the company, it was those danged debt payments that FORCED us.

Doesn't Crabtree sell soaps and lotions? I never could understand how they
made any money.

I always had thoughts of getting together a group of friends and maxing out each others cards 1 at a time. No legal relationship of course, just a handshake deal so that the banks couldn't come after you. You'd just rotate who was currently running up the debt, so at least 1 friend always had good credit and $100,000 or so of available credit to support the rest of the group. Once the cards maxed out, he'd file bankruptcy and live off the credit of the next guy in line. Sounds silly, but so is walking into a Home Depot, filling out half a sheet of paper and being given the ability to walk away with up to $30,000 of merchandise on the spot. Oh how we'll long for the days of easy credit now that banks are slowly coming back to their senses.

Retail Ponzi BK wave, ride it if you can...

But I'm sure the math changes quite a bit if you were to get transfered or lose your job no? So its not really a moral issue so much as an issue of convenience? Consider it a rent payment until something better arises?

Many people want to stay in their home come hell or high water. It's an emotional decision not one driven purely by logic. Americans are optimistic by nature.

poic,

I have a hunch that kind of emotional decision was predicated on rising prices, not plummeting prices and a life of debt peonage.

Of course we are all peons to the banksters.

Copyright that one!

I want the t-shirt!

Maybe we should have Bankster Rap

Talk about a bad influence on society.

walking into a Home Depot, filling out half a sheet of paper and being given the ability to walk away with up to $30,000 of merchandise on the spot.

Have a B-I-L that's done that, twice now. He and his wife, savage burn on Lowe's, HD, DIY Warehouse (back when). He got a free house out of it.

He's almost done with his second 7 years of purgatory, plans to do it again, this time with new furniture.

Why not max out the cards, stop paying the mortgage, stash away whatever cash you can and live without credit for 7 years or so.

This is the reason why student loans are not dischargeable. Too many students would backpack, surf, or wandering around abroad for seven years after BK'ing their debts.

Would be interesting to see this graph population adjusted, since we need to go all the way back to 1967 to find a number that low. Is likely you'd have to go all the way back to the 50s or earlier on a population adjusted basis.

If there was a great mortgage payer revolt - I'm talking millions of people, that just stopped paying for 3-5 months, just to let the banks know who could be in charge if we wanted to.

Like that would matter. They're not marking bad loans down now.

BelieverJeff,

The only way to coordinate such an effort would be through a forum or social networking site, and it would probably be some kind of legal offense to plan it. Probably terrorism laws, too.

Coinz,
Like the Goldman Sachs email intranet? RICO? Patriot Act?

apologies to my irish brother Bono and the rest of the U2 band

Get your boots revised

the future is amiss
winds blow with a twist
never seen a recession like this
can you see it to?

credit is falling everywhere
rockets hit the housing fair
satan loves the bombscare but he won’t scare you

sexy green shoots
get on your shoots yeah

free me from a dark dream
Housing first then treasuries(?)
all the congress are screaming but the ghosts aren’t real
here’s where you gotta be
love and frugality
laughter is eternity if joy is recovery

you don’t know how beautiful

the fed is left to blow it up
the front yard weeds are growing up
women are the future of credit investigations
i’ve gotta a subprime loan you’ve got prime
i don’t wanna talk about war between loan modifications

sexy green shoots
get on your shoots etc.

Taxpayers FREAKOUT

i don’t wanna talk about the defaulting modifications

Bernankes in the wrong/found/Bonham lives
let me hit the bong/bong/ housings going down I don’t wanna drown because were all subprime
let me hit the bong/bong/bong/bong

or at least CSC

YouTube -

He and his immediate family left shortly after, mentioning that many stayed behind. When I worked around to "Why did they stay?" he replied: Because they believed that it simply could not get any worse.

November 9, 1938 - Germany.
July 15, 2009 - California.

"It can't get any worse."

"It can't get any worse."

~~~~

Who said "it can't get any worse"

No one on this thread, not for very long anyway ...

Liz liz liz, you gotta stop living in the past.

AngrySaver,

Re: people under water will walk away.

Up here in the Bay Area here are a few datapoints of people not walking away.

My landlord. Bought a new home in 2005 roughly and kept the home we are renting planning to gift it to their children eventually. They are roughly 200k under-water on their new home and no intention of selling.

Current co-worker under-water on current 800k home after putting 20 percent down from previous house sale and putting a large amount into renovations. No intention of selling either due to children being in local schools.

Old co-worker. Bought condo @ mid 400k, currently worth low 200k. No intention of selling.

My old boss owns a home in Mill Valley and took all equity out back in 2004 time frame to invest in real-estate. Under-water on current home, lost most of investment homes to foreclosures and short-sales. No intention of walking away.

I don't think many people get how many house-owners truly want to stay in their homes come hell or high water.

lawyerliz (profile) wrote on Wed, 7/1/2009 - 2:48 pm

STILL no fear on the streets, Dawg?

This one won't trigger violence. You have to understand the California demographic. There's the comfortable. There's the working poor. There's the elite. It isn't a continuum and there is no upward mobility but lots of downward mobility. This is the reverse of 1940-1980 and isn't accidental nor unexpected. We've also been decanting the most productive citizens to other places for a generation. Pile on the Federal balance of payments problem and the evisceration of the State is hardly surprising.

An important lesson from both Galbraith's 'The Great Crash' and Egan's 'The Worst Hard Time' is the psychology of an economic depression. People - business owners, investors, farmers - would repeatedly decide that "it can't get any worse". Then it did. Again and again. Optimism slowly crushed by repeated disappointment.

A broker called today, all upbeat and asking what opportunities I saw. I thought about this lesson but only said the market is disconnected from the underlying realities.

@ poic: I know 2 cases of folks contemplating the walk-away (ruthless default), one in Sonoma and one in SV.

Both have suffered salary cuts (one was 10%, don't know the other.).
They have independently told me that their salary cut caused a large perspective shift. I suspect that a sizable change in salary would change ideas about walkaways from $800K house when nearby residences are $400-500K.

Mr. Sparkle,

Please put your homepage in your profile.

TIA

@energyecon - I haven't really updated my blog in many weeks for various reasons. But I'll put the page is in the profile anyway!

STILL no fear on the streets, Dawg?

I'm not in CA, but it'd take at least a few years of college grads not getting jobs before the devil makes work for idle hands. People over 40 aren't going to take to the streets, and anyone else who can will simply try to escape before the SHTF. What you will see is neighborhoods simply rotting away slowly. Look at Michigan for similarities. That really is the miracle of America - escape. If people can escape, that will lessen the chances of violence. But the monuments of abandon are a reminder of that miracle.

I suppose these two graphs are relevant as well:

Registered Vehix & Licensed driver
Passenger Car + Trucks per Driver

if there were some taking to the streets to be done, I'd take to them. But who exactly would I picket?

Ummm, what's to stop people from starting a new "account" with these IOU things, write checks and bills with the account, and keep one's real money in a different bank (or the Sealey?) Then sit back and see what happens.

"I'm not in CA, but it'd take at least a few years of college grads not getting jobs before the devil makes work for idle hands."

Here in the Los Angeles area, something like half of high school students actually graduate. That failed half is a larger population than the number of college grads. How do you employ people who cannot read at an eighth-grade level or do simple math?

We're going to have build more fast-food chains and chase out the illegals just to keep these kids employed. Not gonna happen? Well, then what? We're already sitting on a powder keg.

@poic

Unfortunately, this being California, "Hell or high water" is not a remote possibility.

mhdoc, it takes literally minutes to remove links..why anyone would drive traffic to an alternative website without getting paid is beyond me....I would immediately become Buy.com - Computers, Electronics, Digital Cameras, Books, DVDs, Music, Games, Software, Toys, Sports affilliate...

lawyerliz (profile) wrote on Wed, 7/1/2009 - 3:19 pm

All Cali needs now is an earthquake!

This always confused me. You and my mom are going to have a hurricane. My aunts, uncles and cousins are going to have winter. We 'Fornicators may have a quake. The math favors California.

lawyerliz you read my mind. honduras(sp?) had one yesterday i think a 4. something. i dread hurricane season for the same reason, i tell everyone plan of 2 weeks min. for kit. we havent got the money for anything, wish the government would/could understand that, we do not have the money.

Are you in Honduras? 4 something is not bad. Honduras in on the Ring of Fire, right?

We are beyond that in Florida for houses now worth under 300k. Most of my clients
still have a job.

May still be true for stuff worth over 300k now, that used to sell for 600k. Etc.
The middle is mostly still not moving at all.

mhdoc, I would think so. Personally, I've vowed to minimize my tax bill by buying second-hand from Craigslist, or from tax-free online sites while they last! It's my own personal tax rebellion.

Oh that online sales tax exemption is going away .

The problem is still budgeting. Every state is going to overestimate how much revenue the out-of-state sales tax will bring in. The spending-greater-than-income problem doesn't disappear by simply coming up with new revenue sources. Never has, never will.

"mhdoc, I would think so. Personally, I've vowed to minimize my tax bill by buying second-hand from Craigslist, or from tax-free online sites while they last! It's my own personal tax rebellion."

We've been finding amazing deals on Craigslist getting parts for a kitchen/bathroom remodel for our next house.

Brand-new never used half-size Sub-zero fridge/freezer combo at 70% off.
French hand-made porcelain farm-style sink 60% off.
Various never used bathroom fixtures from someone else's house remodel for on average 80% off. Again European made very high quality.

Home Depot can't compete against the prices we are finding.

Gee, Miami is not on that poor city list.

But Boston and Balto are.

Maybe the budget year is just different.

"Good comments. Does it follow that the more taxes are imposed the more people move to the cash economy via Craigs list? "

Craigslist is good for used and local and snooping around until you find the thing you want, not so good for new and national and being able to it whenever you want it, and in your size, and having it delivered.

More of a replacement -- not a real replacement, but more of one -- for online stores are the specialty marketplaces that exist on the largest enthusiast sites. My wife belongs to a giant fibre arts site (Ravelry) that has well over 100,000 members. If you're looking for anything related to knitting, that's the place to go. And all between private citizens, so tax free.

We'd need about 100 of those, for all specialties, large and well-publicized, to make a real dent in traditional, taxed retail. But then they'd be such big targets that... you know. And even if not... somebody has to buy new sometime.

Gee, we plan to remodel the bathroom to make it easier to get in the bathtub. I've never looked at Craig's list even. Need a handicapped type of bathtub.

energyecon, i once looked at compiling the data, but it was a clustefk, especially when one considers how many layers of political subdivisions there are. From my parents' house in SC, there are six political entities with taxing power that are running deficits: federal, state, county, city, sewer, and school. The latter four all increased their fees or property taxes with hardly any notice; property tax calculations are a black hole. Oh and the natural monopolies (e.g. electricity and phone) are also jacking fees to make up for huge overcapacity.

BofA is going to accept IOUs through July 10.

yesterday the banks seemed dazed and confused about the ious it seemed they thought cali had enough money to the end of july! i thought dont they read the paper, then i remembered if it isnt about mj it dont count.

Wonder who's on the hook for CA CDSs? Wait, don't answer that... let me get a mirror.

[We 'Fornicators may have a quake. The math favors California. ]

CA is an embarrassment - A national disgrace.

It often requires more (and costlier) maintenance to keep older automobiles running, and I think it is reasonable to assume that low sales of new vehicles may contribute to an increase in the average age of vehicles on the road (see: R. L. Polk & Co. ). For me, the question here is - how much more revenue will organizations in the auto maintenance and replacement part businesses earn?