The report isn't all negative. Goldman believes "the brunt of the price decline is behind us" and the outlook is uncertain: "the cloudy policy outlook adds to our already considerable uncertainty of where house prices will ultimately bottom".
Let me give this a try: "Housing prices are artificially propped through government programs so it's very difficult to know what the bottom will be once they sunset. But they've fallen a whole bunch already, so don't worry."
No big surprise at all. They are supporting the concept of recycled foreclosures coming a long with all the rest of the screwed loans defaulting. At best we may be at the half way point to the bottom.
All that money, and only a temporary 5% boost? Well, I guess that's not the least effective government intervention ever.
On the contrary, they got what they paid for -- they wanted to stop the decline at some level, to put the perception of a bottom. Trick will be to have it stick around -- now it's the bank's turn to carefully manage their foreclosure stock to keep from flooding the market and knocking out this perception. Side effect: lots of free rent for free loaders.
This must be the remake of the Wolf and three Pigs
The first little pig builds a house of straw. The wolf said "Let me in, Let me in, little pig or I'll huff and I'll puff and I'll blow your house in!"
"Not by the hair of my chinny chin chin", said the little pig. But of course the wolf did blow the house in and ate the first little pig.
Re last thread, national emergency declared because of H1N1: NPR news reported a few minutes ago that the declaration enables the Secretary of H &HS to waive certain rules having to do with Medicaid and Medicare, which apparently will help hospitals deal with a possible surge of patients. At least that's how I understood the report. Of course, that may not not be all that the declaration implies or means.
Seriously folks, when does it get better?
.
I agree with mp, it's gonna be quite a while in ground zero.
Personally, I'm bearish until something culls humans from the herd through war, plague, or famine and/or UE gets high enough that people start performing acts of civil unrest or civil disobedience. Until we get to that part, I'm with you and mp in the Ground Zero call.
Why do all of these reports assume another 5-10% slide in housing and then a rebound? Where is house price appreciation going to be coming from? Don't they realize that the credit pipeline is choked full as it is with unpayable debts? And incomes are dropping like a stone in real terms....
All we are waiting for is for interest rates to rise (not anytime soon) to kick the remaining legs out of the real estate market....whether that takes place in one year, 5 or even 10 makes no difference as far as the long term prospects for real estate prices going forward which is down for a long time.
Real estate does not bottom nor recover durably for at least a generation, if ever.
I can't get this out of my mind, and I'm not sure where or why this is happening tome, but if I post this song, it may go away... guess I was brainwashed on the radio at some point ... thanks for your support:
I have one friend and her husband who are likely going to buy a house before the tax credit runs out. A 'great deal' that they'll be able to use the tax credit on their down payment. Frustrated that they've been outbid a couple of times, though.
Another friend , who'd lost his job, got a 'great deal' with a temporary modification on his house in NC, lowering his payments. Frustrated that he drives up to DC each week to earn $12/hour at a bike shop, though.
Real estate does not bottom nor recover durably for at least a generation, if ever.
It all comes down to absorption for the current problems, both residential and commercial.
Whether higher interest rates in the future lead to higher or lower real estate values will depend on what else is happening in the economy and whether inflationary expectations create more real estate investment.
Wow, I'd say this is EXACTLY the same as CR's view, although GS's version isn't quite as well supported or articulated. CR, you should have been making the big bucks at GS!
BTW, does anyone have any idea on WHY GS would be coming out publically with a forecast like this? What are their vested interests?
The strange thing is that GS doesn't seem to be particluarly supportive of government housing support programs. Or am I just reading my own biases into their position?
Any discussion of a RE recovery is folly given the massive govi prop job. The govi is essentially buying all the paper while providing borrowers with both easy terms and the down payment!
A year ago (last September), the experts said this:
"The U.S. may post a $565 billion budget deficit next year, and risks of an even wider shortfall are on the ``high side' amid the possibility of more economic stimulus packages and rescues of financial institutions, Goldman Sachs Group Inc. said. The estimate is $100 billion more than Goldman's previous prediction for the year starting Oct. 1 and exceeds the Congressional Budget Office's forecast for a $438 billion shortfall, Edward McKelvey and Alec Phillips wrote in a note published yesterday.
Yeah, thats nice, because the gubermint did such a good job of raising incomes by 5%...Whaaaaaaaaaaa????
You mean the gubermint didn't raise everybody's income by 5%???
But...sputter...but, but....that just doesn't make sense. Houses are foreclosing and we're in a financial crisis because of unaffordable mortgages....so the gubermint keeps house prices up!!!??!?
Nah, not even the gubermint could be that lame...
or could they?????
I am going to a haloween party dressed as a banker. So far my costume will be:
Suit, tie, a bunch of fake money coming out of my pockets.
Miniature model of the capitol building in D.C. in my pocket
a begging box with "NEED MONEY" on one side, with a different label on the other side which I can flip around to, "BRIBES" (I'll be passing out candy from the box)
A name tag with AIG or Goldman Sachs or BoA on it.
Wow, I'd say this is EXACTLY the same as CR's view, although GS's version isn't quite as well supported or articulated.
I got through quite a few classes rewording other people's work,...just saying. It's actually the smartest thing to do if you're lazy and you can steal from someone really really good.
The most important factor for is how the jobless recovery plays out. The housing bubble was a substrate for a great deal of delusional self-employment which was connected to NINJA loans and unrealistic incomes, thus, the jobless recovery will ignore the reality of millions of people that started up little micro homebubble services. Thus and hence and to-the-point, will continue to tighten the budget and jobs will remain scarce in the real world, as demand for employment skyrockets .... Amen
"The Associated Loyalists of Marshfield held their meetings at the Marshfield mansion of Dr. Isaac Winslow, today known as the Historic 1699 Winslow House. At the time of the formation of the group in 1774, all three members of the Marshfield Board of Selectmen were loyalists, Isaac Winslow, Abijah White and Ephraim Little (my great 8X-grandfather). The Plymouth Patriots were threatening to tar and feather those in Marshfield who did not recant their Loyalist views, or drive them off their farms. Patriots from Duxbury planned to kidnap Marshfield resident Nathaniel Phillips, a "principal loyalist," but he evaded capture. The Patriots did kidnap Marshfield Loyalists Paul White, Dr. Stockbridge and Elisha Ford, and carted them to the "Liberty Pole" in Duxbury. There they were "forced to sign recantations" of their Tory sentiments, likely in response to mob violence. The Third Company of Associators of the Loyal American Association included Marshfield's Ephraim Little."
“and our working assumption is a further 5% to 10% decline by mid-2010.”
Well, well, well. Looks like the government's 8K credit successfully herded a lot of people who were content sitting on the sidelines into purchasing a house in which they will be underwater in only 9 months.
Yesterdays report stated the median house price was $174,900 for september. Assuming a 7.5% decline that is an over $13K. Of course, if you need to sell add another ~7% in seller costs.
Today purchasers will be the walkaways in the next few years.
In case anyone is interested in reading a good book, I recommend Jess Walter's new novel "The Financial Lives of The Poets." It is an extremely witty, devastatingly honest portrait of a post-TARP middle class family.
I am reading it now, and wondering if the author is a reader/poster on CR, because it reads like some of the greatest, snarkiest, and most accurate comments here--and even has Haiku and references to Joe Fraiser.
Beyond the economic use of a house, housing prices have always been inflated to some extent through tax policy and in the past decade ("the bubble") through a massive supply of money from Wall Street that dwarfed last years "intervention". What was it, 50-75% puffed up through the money supply?
I don't really care how much they support it as long as they are consistant and somewhat predictable.
We don't necessarily have as much bad policy as we have no policy - we're waiting.
There's a connection between consumer spending and economic markets that eventually bust under certain conditions," he said. "Right now we'll see a slowdown in spending that will put us back on the track the U.S. was on in the 1950s and 1960s. We can see that these problems are cyclical.
""The increase in house prices and the increased use of credit cards was accompanied by low growth in real wages, as had been the case for two decades. In order to achieve the American Dream, average American families, were going into more debt given the low growth in incomes, factoring in inflation"
BTW, does anyone have any idea on WHY GS would be coming out publically with a forecast like this? What are their vested interests?
There's a lot of misconception about how Goldman works. It isn't a monolith. It's a culture of internal competition. Traders and trading desks at GS compete against other traders at GS. They compete for opportunity (volatility), capital (leverage) and bonuses. Some people at Goldman actually do get paid to create good research.
The vampire squid metaphor relates to a culture of dog-eat-dog. Everything for me, and screw you. The culture has reached a zenith and is heading down. Most of the people at GS know it deep inside, and that's why they're so short-sighted and greedy.
instead i hang around a 55 gallon drum, ablaze, under the overpass with my fellow age 55 plus "forced" retirees passing the bottle of ripple round.
You're lucky. You could be marrying Ms. Kardashian
"Radar Online reported that if the duo were to split, Khloe reportedly wants a flat sum of approximately $500,000 for each year they were married in addition to $25,000 a month in general support. She has also reportedly requested that she receive their new house, which the couple will be purchasing soon.
In addition to outright cash, Khloe has reportedly requested a new luxury vehicle at the end of every lease cycle, $5,000 a month for shopping, $1,000 for beauty care and Lakers courtside tickets for her entire family.
"There is a tremendous amount of love between the two, and that will prevail in the end," a Radar source claimed. "It might get rocky at times, but Lamar and Khloe are very much in love."
5 to 10% sounds like the outcome of throwing at a dart board. So if house prices are inflated by 5% because of the interventions and they should fall another 5 to 10%, then we are to believe that sans stimulus we would have had a bottom in the housing market. $8000 and an extra 50 basis points might be having some impact, but I can state most assuredly that better than 10% unemployment and the slaughtering of income in middle to upper middle class is having the greater impact on house prices and will continue to do so.
all depends on what happens to interest rates. If they go from 5% to 6% income has to rise by 11.7% to hold the mortgage payment constant as percent of income. Seems like with 3% down, historic low rates and the $8,000 tax credit qwe are already scrapping the bottom of the barrel. I think I will take the bet that rates will rise by 1% before incomes increase by 11.7%
... that better than 10% unemployment and the slaughtering of income in middle to upper middle class is having the greater impact on house prices and will continue to do so.
Without having seen the report, I assume that the impact of lower mortgage rates was found to have a minor impact† on prices and that the abnormally limited supply of foreclosures is not counted as a government measure to boost house prices. I mean max 10%/$8k refundable tax credit could account for more than that entire difference when used.
I do wonder what they considered FHA's contribution to be.
I am surprised to not see a mention of how far prices would overshoot in proportion to how quickly the foreclosure pipeline is processed. Also that they didn't consider how the FTHB would alter future demand.
† Mortgage rates: whether from a low difference between current and assumed ex-govt mortgage rates, or the large number of cash buyers
mock, don't sell yourself short. You're at least as smart as any of the yeahoos we have now, especially if you're running for office here in Washington state.
Seattle is further behind in busting, so I don't see them increasing from today in 2 years time.
San Francisco is dependent on high salaries from VC funded startups, which are in turn funded by an exuberant stock market.
Pittsburgh probably didn't bubble as high, and is probably well into bursting. With their combination of legacy manufacturing, education exporting, and good infrastructure/connections I could see them being one of the leading cities.
Don't know enough about the key factors the rest. But by the time the bust is over, real estate will not be popular for a long time. It might never be as popular on the same scale for another 50-100 years.
I guess there is also the unspoken caveat, nominal vs real or income-related house prices. Other than overshooting downward, and some underdamped follow-up possibly, I expect house prices to just be stagnant. Taxes are going to be moving on up, corporations are going to be looking for margin growth instead of revenue growth, and we're on the way to a US economy where exports play a much larger role (or imports play a smaller one)
"Radar Online reported that if the duo were to split, Khloe reportedly wants a flat sum of approximately $500,000 for each year they were married in addition to $25,000 a month in general support. She has also reportedly requested that she receive their new house, which the couple will be purchasing soon.
That's why you always get married after you have money, especially when you're thinking of marrying such a homely gal.
ECRI's leading home price indicator turned up from around February 09. Six months later the C/S index moved higher subsequently. Since ECRI's leading HP indicator has consistently moved higher, we can expect home prices to continue to climb from here. It makes more sense to follow ECRI's time-tested leading indicators than any other source or coming up with your own ecclectic and untested indicator mix. Let alone GS who prognosticated crude to go to 200$ back in July 08. What followed was crude 32$.
MFO
I give west coast cities a credit because of Asia's likely influence in the new century. Take your pick between Los Angeles or San Francisco being the locus of business among Asia, Latin America, and the US.
As to Pittsburgh, it is the midwest. It's resurgence (and Rochester's) have been predicted so many times, that it is just natural to take the under.
I'm sure this has been said...but why is my governemnt interested in raising the cost of my shelter?
Humans value a loss twice as much as a gain, in general.
That and the people long housing/investments with housing as collateral, are more important to politicians.
Probably some stupid people that think they can fix the prices easily in there too.
I know I've definitely put some people on their back foot by questioning such policies in terms of expensive-housing.
Mork from Ork
ECRI's models are not econometric in nature, nor are they time tested in any environment other than 1950s to present. Their leading and coincident indicators continue to diverge. They have been calling for positive employment growth within 2-3 weeks for the past 2 months. If you look at their economic indicators, it can currently be broken down into Stock Prices, and Sentiment. The credit environment today in the USA is unlike any other in the last 60 years. The context has changed. Furthermore, with abnormal government intervention the meaning of some indicators has changed. ECRI | Resources
I mean really, their HPI would have told you to buy in February 2007. You really want to trust that the HPI is offering a reliable sign, when the series only goes back to 1973? When was the last time the Federal Reserve bought $1.75tn of agency MBS and debt, guaranteed interbank lending while using aggressive lending to drive LIBOR down. When was the last time the supply of homes on their way through foreclosure breached 7 million? When was the last time the Federal government offered up to $8000 to purchase a house? When was the last time the FHA offered 3.5% down, over 100% LTV mortgages? If those programs continue and expand indefinitely, then sure nominal house prices will go up but the real price of homes are unaffected. Given the deficit hawks though, I would expect them to sunset.
You would be a fool to not see how the context surrounding those indicators has changed, and will continue to do so.
“Thomas Jefferson, along with James Madison worked assiduously to have an 11th Amendment included into our nation’s original Bill of Rights. This proposed Amendment would have prohibited ‘monopolies in commerce.’ The amendment would have made it illegal for corporations to own other corporations, or to give money to politicians, or to otherwise try to influence elections. Corporations would be chartered by the states for the primary purpose of ‘serving the public good.’ Corporations would possess the legal status not of natural persons but rather of ‘artificial persons.’ This means that they would have only those legal attributes which the state saw fit to grant to them. They would NOT; and indeed could NOT possess the same bundle of rights which actual flesh and blood persons enjoy. Under this proposed amendment neither the 14th Amendment of the US Constitution, nor any provision of that document would protect the artificial entities known of as corporations.”
—Dr. Michael P. Byron [8]
I still think they will need to tank the markets first for political cover.
Posted by Christina Romer on October 23, 2009 at 7:15 PM EDT
As a teacher, I should have realized that many people have trouble with the distinction between growth rates and levels. As noted in a new article by the Christian Science Monitor, I made the uncontroversial statement in testimony yesterday that fiscal stimulus has its greatest effect on economic growth over the period where it is ramping up most quickly. This statement seems to have caused some confusion and misunderstanding.
When we go from no stimulus to substantial tax cuts, increases in government spending, and aid to state governments, this has a large effect on the growth rate of real GDP – just as when you press hard on your car’s accelerator and go from 0 to 60, you have a great change in your speed. This sense of acceleration is exactly what we have been experiencing since the start of the year. Fiscal stimulus has been steadily increasing, raising GDP growth by between 2 and 3 percentage points in the second quarter and between 3 and 4 percentage points in the third quarter. Because GDP was falling rapidly before the stimulus, the contribution of the Recovery Act to growth has changed what would have been a continued rapid decline in GDP to only a modest decline in the second quarter, and changed what probably would have been a further decline into what is now widely expected to be a moderate increase in the third quarter. We expect that stimulus will continue to have a positive effect on growth in the fourth quarter of 2009 and well into 2010, though, by design, not by as much as it did in the second and third quarters of 2009. As a result, we expect the largest effect of the stimulus on the levels of GDP and employment to occur well after the largest effects on growth rates.
At some point, the stimulus plateaus at a high level. That is important too. Such continued stimulus may not add much to growth, but it is keeping the levels of GDP and employment much higher than they otherwise would have been – just as keeping pressure on the accelerator keeps the car going at 60 mph.
If you take your foot off the gas, the car goes from 60 back down to a slow crawl – a serious case of deceleration. Taking stimulus off in an economy where private demand has not adequately recovered could lead to negative GDP growth and a fall in the level of both GDP and employment. This is something I think we can all agree would be detrimental to the U.S. economy and American families
Are you a relatively benevolent banker? If so you may consider bringing a tub of KY so the masses can prepare themselves prior to prostrating themselves on the ground before you and the govt abuse them in whichever manner suits your fancy. Naturally, if you're not so benevolent you can still bring the tub of KY - just add sand.
Why do all of these reports assume another 5-10% slide in housing and then a rebound?
Who said anything about a rebound? After price supports come off another 5-10% down, which provided that rents and incomes dont fall to much more, would put prices squarely around historical norms of Price to income and price to rent. After the final 5-10% down, prices will at most move up in line with inflation, after 5 years or so, they might start to increase at the rate of nomial GDP, but no more than that. However, given the number of people who are already underwater or at the edge (including all those people who bought with FHA 3.5% down) another 5-10% down addds lots to the flood zone.
If the housing market has bottomed, that would be negative news. The "expensive = good/positive, inexpensive = bad/negative" value judgment for home prices has got to go!
All that money, and only a temporary 5% boost?
Well, I guess that's not the least effective government intervention ever.
And weakened the USD against other major currencies by how many percent, o' wise Goldman?
And we believe Goldman why?
Because Goldman are kings among the smart amoral scumbags LIARS.
YouTube -
In my shoes my toes are busted,
got a good job at the dollar store....
I've seen better days...
And the bottom dropped out!
Someday this war's gonna end...
I ain't got much to lose...
Seriously folks, when does it get better?
I agree with mp, it's gonna be quite a while in ground zero.
Someday this war's gonna end...
$14 trillion times 5% equals TARP exactly.
The report isn't all negative. Goldman believes "the brunt of the price decline is behind us" and the outlook is uncertain: "the cloudy policy outlook adds to our already considerable uncertainty of where house prices will ultimately bottom".
Let me give this a try: "Housing prices are artificially propped through government programs so it's very difficult to know what the bottom will be once they sunset. But they've fallen a whole bunch already, so don't worry."
No big surprise at all. They are supporting the concept of recycled foreclosures coming a long with all the rest of the screwed loans defaulting. At best we may be at the half way point to the bottom.
any protests in NJ? I would think people would be wanting to break something.
Goldman Sachs Still Paid for Swaps on Redeemed Bonds (Update2)
http://www.bloomberg.com/apps/news?pid=20601109&sid=al5.EHL9NEBQ
Nemo wrote:
On the contrary, they got what they paid for -- they wanted to stop the decline at some level, to put the perception of a bottom. Trick will be to have it stick around -- now it's the bank's turn to carefully manage their foreclosure stock to keep from flooding the market and knocking out this perception. Side effect: lots of free rent for free loaders.
Nobody plays both sides of a trade better than Goldman.
Yahoo! 404 - Page Not Found
This must be the remake of the Wolf and three Pigs
The first little pig builds a house of straw. The wolf said "Let me in, Let me in, little pig or I'll huff and I'll puff and I'll blow your house in!"
"Not by the hair of my chinny chin chin", said the little pig. But of course the wolf did blow the house in and ate the first little pig.
Re last thread, national emergency declared because of H1N1: NPR news reported a few minutes ago that the declaration enables the Secretary of H &HS to waive certain rules having to do with Medicaid and Medicare, which apparently will help hospitals deal with a possible surge of patients. At least that's how I understood the report. Of course, that may not not be all that the declaration implies or means.
Of course, that may not not be all that the declaration implies or means.
I'm sure the MSM was instructed not to mention "martial law" and "forced quarantine", although I'm sure those options are now legal.
Eric wrote:
It also included the reconstruction of the English language to now refer to them as: "Meet-A-Cop" and "Business-Free" days.
Re: "cloudy policy outlook adds to our already considerable uncertainty of where house prices will ultimately bottom".
Goldman doesn't know crap about bottoms -- they should consult a
"I'm sure the MSM was instructed not to mention "martial law" and "forced quarantine", although I'm sure those options are now legal"
didn't you hear that the shot you get introduces nausea if you read sites such as CR or castigate Wall Street. It's a grand conspiracy I tell you!!
I used to have a Magic 8 Ball that sometimes gave that answer. Eventually it broke.
Government policy? Eventually that will be found to be broken also.
Citizen AllenM wrote:
Personally, I'm bearish until something culls humans from the herd through war, plague, or famine and/or UE gets high enough that people start performing acts of civil unrest or civil disobedience. Until we get to that part, I'm with you and mp in the Ground Zero call.
sportsfan wrote:
Goldman did a great job of predicting the housing bubble.......
"The Coming Plague"...good read, nonfiction, accessible to lay and still relevant. Scare the holy poo out of all of you.
Why do all of these reports assume another 5-10% slide in housing and then a rebound? Where is house price appreciation going to be coming from? Don't they realize that the credit pipeline is choked full as it is with unpayable debts? And incomes are dropping like a stone in real terms....
All we are waiting for is for interest rates to rise (not anytime soon) to kick the remaining legs out of the real estate market....whether that takes place in one year, 5 or even 10 makes no difference as far as the long term prospects for real estate prices going forward which is down for a long time.
Real estate does not bottom nor recover durably for at least a generation, if ever.
WSJ reports Capmark Financial to file BK as soon as this weekend...
Doc Holiday wrote:
Actually, they did. They were shorting everything they could short while others were still dancing.
Collecting on swaps on redeemed bonds does seem a little over the top, though.
I can't get this out of my mind, and I'm not sure where or why this is happening tome, but if I post this song, it may go away... guess I was brainwashed on the radio at some point ... thanks for your support:
YouTube - Toto -Hold the Line
Allen C wrote:
Preplanned BK with all the government fixin's or a "real"/Lehman-style BK?
I have one friend and her husband who are likely going to buy a house before the tax credit runs out. A 'great deal' that they'll be able to use the tax credit on their down payment. Frustrated that they've been outbid a couple of times, though.
Another friend , who'd lost his job, got a 'great deal' with a temporary modification on his house in NC, lowering his payments. Frustrated that he drives up to DC each week to earn $12/hour at a bike shop, though.
More info...
Capmark: Bankruptcy Over Firesale? | Real Insight. Real Estate.
Hell To Pay wrote:
It all comes down to absorption for the current problems, both residential and commercial.
Whether higher interest rates in the future lead to higher or lower real estate values will depend on what else is happening in the economy and whether inflationary expectations create more real estate investment.
Wow, I'd say this is EXACTLY the same as CR's view, although GS's version isn't quite as well supported or articulated. CR, you should have been making the big bucks at GS!
BTW, does anyone have any idea on WHY GS would be coming out publically with a forecast like this? What are their vested interests?
"What are their vested interests?"
Apple polishing of the Gov actions and setting up the fear of more dropping prices if they don't extend tax credits.
The strange thing is that GS doesn't seem to be particluarly supportive of government housing support programs. Or am I just reading my own biases into their position?
There, fixed that for ya.
Any discussion of a RE recovery is folly given the massive govi prop job. The govi is essentially buying all the paper while providing borrowers with both easy terms and the down payment!
A year ago (last September), the experts said this:
"The U.S. may post a $565 billion budget deficit next year, and risks of an even wider shortfall are on the ``high side' amid the possibility of more economic stimulus packages and rescues of financial institutions, Goldman Sachs Group Inc. said. The estimate is $100 billion more than Goldman's previous prediction for the year starting Oct. 1 and exceeds the Congressional Budget Office's forecast for a $438 billion shortfall, Edward McKelvey and Alec Phillips wrote in a note published yesterday.
The federal budget deficit tripled to a record $1.4 trillion for the 2009 fiscal year that ended last week, congressional analysts said Wednesday.
MySpace - IMEEM - what's on your playlist? | MySpace
Yeah, thats nice, because the gubermint did such a good job of raising incomes by 5%...Whaaaaaaaaaaa????
You mean the gubermint didn't raise everybody's income by 5%???
But...sputter...but, but....that just doesn't make sense. Houses are foreclosing and we're in a financial crisis because of unaffordable mortgages....so the gubermint keeps house prices up!!!??!?
Nah, not even the gubermint could be that lame...
or could they?????
Pavel,
This is just a rumor I am starting, but I heard that one of the first actions will be quarantining FoxNews for the duration.
That would be an excellent start.
Just keep the "deficit" in perspective. The "deficit" is FY expenditures minus revenues. It does not reflect encumbered obligations.
I am going to a haloween party dressed as a banker. So far my costume will be:
Can anyone think of additional gags to do?
Pet
Rob Dawg wrote:
How does one keep a trillion dollar black hole in perspective?
Rob Dawg wrote:
translation: how tightly are tied down for the duration? sorry for being crass, that happens when I get angry.
Wow, I'd say this is EXACTLY the same as CR's view, although GS's version isn't quite as well supported or articulated.
I got through quite a few classes rewording other people's work,...just saying. It's actually the smartest thing to do if you're lazy and you can steal from someone really really good.
Can anyone think of additional gags to do?
Well, if it's around your lawyer buddies, a Cease and Desist order, or a picture of Sheila?
MSM = CR + 6 months.
GS = CR + 6 weeks.
The most important factor for
is how the jobless recovery plays out. The housing bubble was a substrate for a great deal of delusional self-employment which was connected to NINJA loans and unrealistic incomes, thus, the jobless recovery will ignore the reality of millions of people that started up little micro homebubble services. Thus and hence and to-the-point, 
will continue to tighten the budget and jobs will remain scarce in the real world, as demand for employment skyrockets .... Amen 
"The Associated Loyalists of Marshfield held their meetings at the Marshfield mansion of Dr. Isaac Winslow, today known as the Historic 1699 Winslow House. At the time of the formation of the group in 1774, all three members of the Marshfield Board of Selectmen were loyalists, Isaac Winslow, Abijah White and Ephraim Little (my great 8X-grandfather). The Plymouth Patriots were threatening to tar and feather those in Marshfield who did not recant their Loyalist views, or drive them off their farms. Patriots from Duxbury planned to kidnap Marshfield resident Nathaniel Phillips, a "principal loyalist," but he evaded capture. The Patriots did kidnap Marshfield Loyalists Paul White, Dr. Stockbridge and Elisha Ford, and carted them to the "Liberty Pole" in Duxbury. There they were "forced to sign recantations" of their Tory sentiments, likely in response to mob violence. The Third Company of Associators of the Loyal American Association included Marshfield's Ephraim Little."
A year ago (last September), the experts said this: "Blah, blah, blah..."
obviously, GS analysts didn't factor in the $787B stimulus package passed the following February.
Allen C wrote:
It just means we haven't reached the capitulation stage yet. That will happen. A rebound will follow, albeit from lower levels.
It's happened before and it will happen again. This time really isn't that different, just bigger.
“and our working assumption is a further 5% to 10% decline by mid-2010.”
Well, well, well. Looks like the government's 8K credit successfully herded a lot of people who were content sitting on the sidelines into purchasing a house in which they will be underwater in only 9 months.
Yesterdays report stated the median house price was $174,900 for september. Assuming a 7.5% decline that is an over $13K. Of course, if you need to sell add another ~7% in seller costs.
Today purchasers will be the walkaways in the next few years.
Well, if it's around your lawyer buddies
I don't talk to my lawyer buddies any more. Who would want to go to a party with a bunch of lawyers, anyway? Lame.
In case anyone is interested in reading a good book, I recommend Jess Walter's new novel "The Financial Lives of The Poets." It is an extremely witty, devastatingly honest portrait of a post-TARP middle class family.
I am reading it now, and wondering if the author is a reader/poster on CR, because it reads like some of the greatest, snarkiest, and most accurate comments here--and even has Haiku and references to Joe Fraiser.
Only 5%? At least they have a credible source.
Beyond the economic use of a house, housing prices have always been inflated to some extent through tax policy and in the past decade ("the bubble") through a massive supply of money from Wall Street that dwarfed last years "intervention". What was it, 50-75% puffed up through the money supply?
I don't really care how much they support it as long as they are consistant and somewhat predictable.
We don't necessarily have as much bad policy as we have no policy - we're waiting.
poic (profile) wrote on Sat, 10/24/2009 - 9:16 am
Can the World Agree on a Stimulus Exit Plan?
seems like we already have, .........by defualt............its called
default
O H Chick wrote:
I just started a book called, "Collateral Damage" by Charles R. Geisst
Good shit, it is:
Credit and Consumption; Wed and Unemployed - ABC News
There's a connection between consumer spending and economic markets that eventually bust under certain conditions," he said. "Right now we'll see a slowdown in spending that will put us back on the track the U.S. was on in the 1950s and 1960s. We can see that these problems are cyclical.
""The increase in house prices and the increased use of credit cards was accompanied by low growth in real wages, as had been the case for two decades. In order to achieve the American Dream, average American families, were going into more debt given the low growth in incomes, factoring in inflation"
"I don't talk to my lawyer buddies any more. Who would want to go to a party with a bunch of lawyers, anyway? Lame. "
me either
instead i hang around a 55 gallon drum, ablaze, under the overpass with my fellow age 55 plus "forced" retirees
passing the bottle of ripple round
*instead i hang around a 55 gallon drum, ablaze, under the overpass with my fellow age 55 plus "forced" retirees
passing the bottle of ripple round *
Quit bragging.
Time for me to get some real work done.
Don't wallow too much in the
By all means stay away from the
instead i hang around a 55 gallon drum, ablaze, under the overpass with my fellow age 55 plus "forced" retirees passing the bottle of ripple round
yeah, that sounds soooo much better than hookers and blow...
sportsfan wrote:
bankerwannabe wrote:
There's a lot of misconception about how Goldman works. It isn't a monolith. It's a culture of internal competition. Traders and trading desks at GS compete against other traders at GS. They compete for opportunity (volatility), capital (leverage) and bonuses. Some people at Goldman actually do get paid to create good research.
The vampire squid metaphor relates to a culture of dog-eat-dog. Everything for me, and screw you. The culture has reached a zenith and is heading down. Most of the people at GS know it deep inside, and that's why they're so short-sighted and greedy.
Citizen AllenM (profile) wrote on Sat, 10/24/2009 - 9:02 am
"..Seriously folks, when does it get better?
I agree with mp, it's gonna be quite a while in ground zero.
Someday this war's gonna end... "
someday maybe...but probably not in my lifetime
the paradigm is broken and
it appears that there is much rot to be found from roots to top leaves
the ruling elite cant be satisfied with any amount of wealth concentration
and most of the lower classes want to be just like their masters
and so are more than willing to turn a blind eye toward unethical behavior
if they believe it leads, via a shortcut ,to wealth
the volkers, william blacks, brooksley borns, joe stiglitzs, liz warrens, simon johnsons etc of the world have been marginalized
and they and their followers dont seem to understand wee have to organize
i realize im a fool
but have just about decided to run for political office next fall
on the platform ive mentioned so many times here
i really dont want to do it....im hoping a group of smarter, younger candidates
not affiliated with the dems nor repubs... etc will step forward
"quit bragging", said sdtfs
ok ok its not a 55 gal drum its a small mop sized pail
uh and the bottle of ripple...actually weve stooped to drinking sterno
Errrr, at the right moment you can whisper into a cute little ear, "I'm too big to fail."
instead i hang around a 55 gallon drum, ablaze, under the overpass with my fellow age 55 plus "forced" retirees passing the bottle of ripple round.
You're lucky. You could be marrying Ms. Kardashian
"Radar Online reported that if the duo were to split, Khloe reportedly wants a flat sum of approximately $500,000 for each year they were married in addition to $25,000 a month in general support. She has also reportedly requested that she receive their new house, which the couple will be purchasing soon.
In addition to outright cash, Khloe has reportedly requested a new luxury vehicle at the end of every lease cycle, $5,000 a month for shopping, $1,000 for beauty care and Lakers courtside tickets for her entire family.
"There is a tremendous amount of love between the two, and that will prevail in the end," a Radar source claimed. "It might get rocky at times, but Lamar and Khloe are very much in love."
Mock, if you're waiting for someone smarter (or more honest) than you to step forward, you'll be waiting a long time.
I like work, I could watch it all day!
5 to 10% sounds like the outcome of throwing at a dart board. So if house prices are inflated by 5% because of the interventions and they should fall another 5 to 10%, then we are to believe that sans stimulus we would have had a bottom in the housing market. $8000 and an extra 50 basis points might be having some impact, but I can state most assuredly that better than 10% unemployment and the slaughtering of income in middle to upper middle class is having the greater impact on house prices and will continue to do so.
all depends on what happens to interest rates. If they go from 5% to 6% income has to rise by 11.7% to hold the mortgage payment constant as percent of income. Seems like with 3% down, historic low rates and the $8,000 tax credit qwe are already scrapping the bottom of the barrel. I think I will take the bet that rates will rise by 1% before incomes increase by 11.7%
... that better than 10% unemployment and the slaughtering of income in middle to upper middle class is having the greater impact on house prices and will continue to do so.
Q.E.D. ~
barfly thanks for the compliment but im really impressed with the people ive met here at CR
the smarter people are all round me...i got an education here
i wrote some pretty dumb stuff back in 05 when i first shot my mouth off here
and still do make many mistakes
i believe there are many "associates" here be they
liberal
or conservative
or what ever their political leanings could join together
but
if we could agree that
we will only accept small donations from voters in our district
and committ to representing the will of our constituency
whether we personally agree with the voters or not
represent the people...represent our consituentcy
then congress could have a new birth
*(only exception...the constitution, and esp bill of rights is not subject to opinion, expedience or popularity
mock turtle (profile) wrote (in reply to...) on Sat, 10/24/2009 - 12:34 pm
the smarter people are all round me...i got an education here
The smarter people are all around me too! Funny how that works!
Without having seen the report, I assume that the impact of lower mortgage rates was found to have a minor impact† on prices and that the abnormally limited supply of foreclosures is not counted as a government measure to boost house prices. I mean max 10%/$8k refundable tax credit could account for more than that entire difference when used.
I do wonder what they considered FHA's contribution to be.
I am surprised to not see a mention of how far prices would overshoot in proportion to how quickly the foreclosure pipeline is processed. Also that they didn't consider how the FTHB would alter future demand.
† Mortgage rates: whether from a low difference between current and assumed ex-govt mortgage rates, or the large number of cash buyers
Hoopajoops LTD wrote:
These are not gags but hyper-reality, a regular feature on this board, I think..
mock, don't sell yourself short. You're at least as smart as any of the yeahoos we have now, especially if you're running for office here in Washington state.
CNN calls it as it sees it:
The average home price is forecast to plummet over the next two years. But these 7 cities are predicted to post gains.
Top bet: San Francisco
Agree with San Fran, Seattle, Oakland,
Disagree with Pittsburgh, Rochester (NY),
Ambivalent: Memphis, Birmingham
This must be the remake of the Wolf and three Pigs
Why yes it is ........
YouTube - Green Jello "Little Pig, Little Pig"
That's what I often get as well when I shake my Magic 8 Ball.
Seattle is further behind in busting, so I don't see them increasing from today in 2 years time.
San Francisco is dependent on high salaries from VC funded startups, which are in turn funded by an exuberant stock market.
Pittsburgh probably didn't bubble as high, and is probably well into bursting. With their combination of legacy manufacturing, education exporting, and good infrastructure/connections I could see them being one of the leading cities.
Don't know enough about the key factors the rest. But by the time the bust is over, real estate will not be popular for a long time. It might never be as popular on the same scale for another 50-100 years.
I guess there is also the unspoken caveat, nominal vs real or income-related house prices. Other than overshooting downward, and some underdamped follow-up possibly, I expect house prices to just be stagnant. Taxes are going to be moving on up, corporations are going to be looking for margin growth instead of revenue growth, and we're on the way to a US economy where exports play a much larger role (or imports play a smaller one)
That's why you always get married after you have money, especially when you're thinking of marrying such a homely gal.
I'm sure this has been said...but why is my governemnt interested in raising the cost of my shelter?
ECRI's leading home price indicator turned up from around February 09. Six months later the C/S index moved higher subsequently. Since ECRI's leading HP indicator has consistently moved higher, we can expect home prices to continue to climb from here. It makes more sense to follow ECRI's time-tested leading indicators than any other source or coming up with your own ecclectic and untested indicator mix. Let alone GS who prognosticated crude to go to 200$ back in July 08. What followed was crude 32$.
MFO
I give west coast cities a credit because of Asia's likely influence in the new century. Take your pick between Los Angeles or San Francisco being the locus of business among Asia, Latin America, and the US.
As to Pittsburgh, it is the midwest. It's resurgence (and Rochester's) have been predicted so many times, that it is just natural to take the under.
Comrade Rally Monkey wrote:
Humans value a loss twice as much as a gain, in general.
That and the people long housing/investments with housing as collateral, are more important to politicians.
Probably some stupid people that think they can fix the prices easily in there too.
I know I've definitely put some people on their back foot by questioning such policies in terms of expensive-housing.
Hoops,
this is a minor point, but get a bow tie instead, and consider suspenders...it's a look favored by serious wankers on Wall Street.
Mork from Ork
ECRI's models are not econometric in nature, nor are they time tested in any environment other than 1950s to present. Their leading and coincident indicators continue to diverge. They have been calling for positive employment growth within 2-3 weeks for the past 2 months. If you look at their economic indicators, it can currently be broken down into Stock Prices, and Sentiment. The credit environment today in the USA is unlike any other in the last 60 years. The context has changed. Furthermore, with abnormal government intervention the meaning of some indicators has changed.
ECRI | Resources
don't forget the sacred harvard ring so that the peasants of the party may kiss it.
good summary on the (mis)leading indicators...
Since ECRI's leading HP indicator has consistently moved higher, we can expect home prices to continue to climb from here.
Really?
ECRI don't pay the stinkin' mortgage. Jobs and income do. And what direction have they've been heading?
I mean really, their HPI would have told you to buy in February 2007. You really want to trust that the HPI is offering a reliable sign, when the series only goes back to 1973? When was the last time the Federal Reserve bought $1.75tn of agency MBS and debt, guaranteed interbank lending while using aggressive lending to drive LIBOR down. When was the last time the supply of homes on their way through foreclosure breached 7 million? When was the last time the Federal government offered up to $8000 to purchase a house? When was the last time the FHA offered 3.5% down, over 100% LTV mortgages? If those programs continue and expand indefinitely, then sure nominal house prices will go up but the real price of homes are unaffected. Given the deficit hawks though, I would expect them to sunset.
You would be a fool to not see how the context surrounding those indicators has changed, and will continue to do so.
Mork from Ork
It's a wild guess, but is your first name Lakshman?
Crystallizing Public Opinion, by Edward Bernays.
Amazon.com: Crystallizing Public Opinion (9781417915088): Edward L. Bernays: Books
**
$1000 at Amazon... Free at Scribd**
Crystallizing Public Opinion - Edward Bernays
Google books had a $500 specialized botany book, "Somatic hybridization in crop improvement" for free too.
“Thomas Jefferson, along with James Madison worked assiduously to have an 11th Amendment included into our nation’s original Bill of Rights."
Let us now praise famous men. But let us remember that they are only flesh and blood.
I still think they will need to tank the markets first for political cover.
Posted by Christina Romer on October 23, 2009 at 7:15 PM EDT
As a teacher, I should have realized that many people have trouble with the distinction between growth rates and levels. As noted in a new article by the Christian Science Monitor, I made the uncontroversial statement in testimony yesterday that fiscal stimulus has its greatest effect on economic growth over the period where it is ramping up most quickly. This statement seems to have caused some confusion and misunderstanding.
When we go from no stimulus to substantial tax cuts, increases in government spending, and aid to state governments, this has a large effect on the growth rate of real GDP – just as when you press hard on your car’s accelerator and go from 0 to 60, you have a great change in your speed. This sense of acceleration is exactly what we have been experiencing since the start of the year. Fiscal stimulus has been steadily increasing, raising GDP growth by between 2 and 3 percentage points in the second quarter and between 3 and 4 percentage points in the third quarter. Because GDP was falling rapidly before the stimulus, the contribution of the Recovery Act to growth has changed what would have been a continued rapid decline in GDP to only a modest decline in the second quarter, and changed what probably would have been a further decline into what is now widely expected to be a moderate increase in the third quarter. We expect that stimulus will continue to have a positive effect on growth in the fourth quarter of 2009 and well into 2010, though, by design, not by as much as it did in the second and third quarters of 2009. As a result, we expect the largest effect of the stimulus on the levels of GDP and employment to occur well after the largest effects on growth rates.
At some point, the stimulus plateaus at a high level. That is important too. Such continued stimulus may not add much to growth, but it is keeping the levels of GDP and employment much higher than they otherwise would have been – just as keeping pressure on the accelerator keeps the car going at 60 mph.
If you take your foot off the gas, the car goes from 60 back down to a slow crawl – a serious case of deceleration. Taking stimulus off in an economy where private demand has not adequately recovered could lead to negative GDP growth and a fall in the level of both GDP and employment. This is something I think we can all agree would be detrimental to the U.S. economy and American families
The White House Blog | The White House
adornosghost
outstanding
Hey Hoops,
Are you a relatively benevolent banker? If so you may consider bringing a tub of KY so the masses can prepare themselves prior to prostrating themselves on the ground before you and the govt abuse them in whichever manner suits your fancy. Naturally, if you're not so benevolent you can still bring the tub of KY - just add sand.
And to think higher home prices is a BAD thing, no?
What a retarded, corrupted system we have.
Hell To Pay wrote:
Who said anything about a rebound? After price supports come off another 5-10% down, which provided that rents and incomes dont fall to much more, would put prices squarely around historical norms of Price to income and price to rent. After the final 5-10% down, prices will at most move up in line with inflation, after 5 years or so, they might start to increase at the rate of nomial GDP, but no more than that. However, given the number of people who are already underwater or at the edge (including all those people who bought with FHA 3.5% down) another 5-10% down addds lots to the flood zone.
"The report isn't all negative."
If the housing market has bottomed, that would be negative news. The "expensive = good/positive, inexpensive = bad/negative" value judgment for home prices has got to go!