Bond market getting all jiggly again...CDS have hit a five week high
Credit-Default Swaps Rising to Five-Week High: Credit Markets - Bloomberg.com

CalculatedRisk wrote:

I expect the NY Times will get it right

that would be a refreshing change for them

CR, you helpfully pointed out how imprecise the CS seasonal adjustments are:

Case-Shiller House Price Seasonal Adjustment and Comparison to Stress Tests 

"The seasonal adjustment appears pretty good in the '90s, but it appears insufficient now. I expect that the index will show steeper declines, especially starting in October and November."

The market ignores the SA for precisely this reason: it is essentially noise around the NSA.

Good morning from the front porch of the back of beyond...

ratio over 65

if it rises through 65 it would indicate the financial storm is back.

Jan 24, 2010 Signs of the Times Bob Hoye 321gold ...inc ...s

tg wrote:

if it rises through 65

I been watching. Silver is taking one on the chin!

I figure the correction is still on. Get the shekels ready.

I keep forgetting that a NC city is still worse off than Dallas. I have friends and relatives in NC, and they are in pretty nice and stable areas so easy to forget.

Dallas still down more than the FHA 3.5% down payments though.

OT

"
The nexus of that growth often comes down to real estate: Who owns it, who gets the sweet deals on it, who gets ousted, and who among Communist Party officials and their developer cronies pockets the big bucks from the infrastructure, business and residential projects that have turned China into a monumental construction site.

The equation of the Chinese growth story that is changing the world (and keeping U.S. Wal-Mart customers happy) is unforgiving: Ten percent annual expansion is the guarantor of the Communist Party’s hold on power and so everything will be done to sustain it. Agonized debate (think U.S. health care reform or Afghan deployment) is not for China. Bulldozers are more its thing.

The thrill of living in China is this very short distance between words and action. Few Western executives are immune to the frisson. Forget Indian democratic dithering! Nowhere else are projects so intimate with their execution.
"

OP-ED COLUMNIST; A Woman Burns - NY Times

Wal-Mart karma!

I know a guy who has been talking about this spread for at least 25 years and I don't think has made a buck trading it. However, he did buy gold at about $800/ oz in the ''70s (?) and still has it. As for the spread, you might as well try to predict the pork belly natural gas spread, you have a better chance of getting that one right...

traderwalt wrote:

the pork belly natural gas spread

"the pork belly natural gas spread"

actually, in my life the pork belly natural gas spread is a constant.
the more pork belly products I eat, the more natural gas I get. and vice versa.

josap wrote:

Could this mess just die?

Hi Josap. I'm still new at this. So it is just now sinking in with me how lacking in transparency our nation's residential real estate data are. Home ownership plays such a significant role in our economy—and it's one of the few tangible ways in which average Americans have been able to feel invested in the economy. But I am beginning to realize how easy it would be--for any entity that might find it in their best interest to do so--to manipulate these numbers. It surprised me that the National Association of Realtors report that was released yesterday seems to have as much weight as it apparently does. I would think that the NAR is not exactly an objective party in the real estate market. It is sensible to assume that Case Schiller would be more objective than the NAR, but it also seems that Case Schiller might not be set up yet to reliably pick up and report on nuances that are unique to a market that is trying to “unwind” itself. The more I see, the more inclined I am to credit the “recreational” residential real estate sites-- Zillow, MLS, Trulia, Cyber Homes, etc. with providing some of the most objective and “real time” data available to us. What do you smart people think?

Pearl

If you can get listing and sales numbers from a multipul listing service, those will be right. You have to be a member though in some places.

here are the reports for Maricopa County, Az. That includes Phoenix Metro.

ARMLS

This is the main page and you can get to several reports from here. Free and you don't have to be a member.

tncubsfan wrote:

What the hell?

Cue Slumdog.....

Juvenal Delinquent wrote:
Real estate is so last decade.
Fake estate is much more 2010...

CalculatedRisk wrote:

I'm not confident in their methodology and seasonal adjustment.

I have to say: I'm worried about all seasonal adjustments in the current environment. Most of the SA coefficients have built-in time constants, and I'm not optimistic that the coefficients change sufficiently fast in response to the step function that we have just experienced.

I could be wrong of course, and it's been on my list to explore the models for longer than I'd care to admit. (Resolution: skip posting, get modeling.) FYI for other adaptive filter geeks: Mathematica has some builtin.

As soon as the Fed stops buying and Admin lets the credits expire we'll see what happens to house prices. Until then it's all like the wizard behind the curtain.

"Real estate is so last decade."

.....right you are. Having paid for this pile of sand "last decade", I've saved about $170,000 in house payments since. If I were to do it again, I'd wait for the right time - prolly about 6-8 months from now.

bearly wrote:
As soon as the Fed stops buying and Admin lets the credits expire we'll see what happens to house prices. Until then it's all like the wizard behind the curtain.
The era of fake estate shall be over, the lyin' will lie down with the damned, and we will bleat our words and plow into shares...
I ain't holding my breath.

but jd it is/was such a good ride for the cds cdos and all its kin.

Could you imagine the Unabankers testifying to the FCIC, when they were asked why they took 100 cents on the dollar for securities worth a scintilla of that?

If only Lloyd Bonafide had replied ... "heck, we offered to tear them up, but that isn't the same as taking less than 100%"

noob goldberg wrote:
Now they're almost done blowing one in Treasuries. Not that we really need those.
Well, I always wanted a treasury!

Pearl wrote:

as everything unwinds, "insiders" are not going to be able to purchase homes (at various stages in the foreclosure process) at give-away prices?

Well that always happens. The lenders package 10 or 20 houses, sell to an investor at about 20 cents on the dollar. Happens every time we have a bust in real estate. That helps clear the really low end properties. The investors buy up other properties cheap, most never hit MLS. You can find great deals at the lenders on builder spec houses as well, they have construction loans that never changed over to regular mortgages.

The right has 'Avatar' wrong - latimes.com

I really wonder if investors are buying. It seems to me knife catchers mostly buying. The dynamics still are not right as I see it to rush to invest when prices will still come down. Another game of some sort?

josap wrote:

most never hit MLS.

If they never hit MLS, are these homes still going to be included in comparable sales data on appraisals? Maybe such properties should not be included during "normal" times--but they should be included during times like this. Distressed properties are the norm. But banks would be vested in keeping prices artificially high until they can dump all of their inventory, right?

Cinco-X wrote:

The right has 'Avatar' wrong - latimes.com

That was a fun movie, but I really wish someone would design better 3D glasses for those who are already wearing glasses. It was like watching the movie through a pair of toilet paper rolls.

Lobbyist Ben Dover wrote:

I really wonder if investors are buying. It seems to me knife catchers mostly buying. The dynamics still are not right as I see it to rush to invest when prices will still come down. Another game of some sort?

Their 15 year returns may very well exceed that of a 15 year bond. We'll know for sure in, say, about 15 year, though we'll have a pretty good idea in 12.

I really wonder if investors are buying. It seems to me knife catchers mostly buying.

Yesterday's total NYSE volume dropped 30%. Nasdaq volume dropped 25% below the previous day's level. Doesn't look like the big boys played the rally - at least to me.

Pearl wrote:

If they never hit MLS, are these homes still going to be included in comparable sales data on appraisals? Yes, through county recordings.

Maybe such properties should not be included during "normal" times--but they should be included during times like this. Distressed properties are the norm. But banks would be vested in keeping prices artificially high until they can dump all of their inventory, right?

Yes, but they can't hold everything. Try as they might.

noob goldberg wrote:

That was a fun movie, but I really wish someone would design better 3D glasses for those who are already wearing glasses. It was like watching the movie through a pair of toilet paper rolls.

I saw it in a theater with stadium seating and in IMAX. Definitely try to see it in IMAX; the glasses were better (similar to some old Elton John glasses) and the wrap around screen made the experience much better, IMNSHO-

Cinco-X wrote:

(similar to some old Elton John glasses)

Did everyone wear Donald Duck suits, too?

Elvis wrote:

Did everyone wear Donald Duck suits, too?

It was dark, and I arrived late-

put the youtube away

We took our towels and Don't Panic buttons to see Hitchhiker's Guide.

People looked at us sort of oddly.

Angry Voters

The election of Scott Brown to the Senate was not just a repudiation of health care reform although that may be a potential consequence. It cannot have been an endorsement of the Republican Party since Brown spent the entire campaign doing his best not to mention his party affiliation. It wasn’t a rejection of President Obama since a majority of the MA voters still support him. President Obama got it right when he said that Brown rode the same wave of anger into office that also elected him. That is true; it was definitely anger that drove voters, but what was the source of the anger? Was it anger at the financial sector and their bonuses? Or was it anger at the politicians who gave them access to the public purse and made the bonuses possible? Or was it anger at the complete failure of the political class to address the larger issue of the economy and jobs?

Cinco-X wrote:
Snark! right?
Lord, don't I wish it was a snark... Additionally, we can give the unemployed government jobs, then they won't be unemployed. And if they're still poor, we'll just pay them more.

..... just for fun - look at tgt

Eric wrote:

The special effects were great, but in general, the movie was tiresome.

I assume you consumed the in advance of entering the theatre. Otherwise I'd have been throwing a sizable quantity of popcorn at you for stinking up the theatre

Eric wrote:

The special effects were great, but in general, the movie was tiresome.

Yes, it was tiresom because we had seen the exact plot in about 4 different movies. Only this time it was in trippy colors and 3D. I kept waiting for somebody to lean over their dragon with their arms out saying "I'm the King of the World" or whatever Leo said on the Titanic.

skunk works

Juvenal Delinquent wrote:

skunk works

I can imagine the fun of watching that movie whilst munching on a few funky mushrooms, myself.

Although much inappropriate giggling would probably have resulted.

I've rebelled against fantasy, it's not nearly as interesting as reality.

Perhaps the government intervention could be thought of in terms of a retaining wall. The question is, will it hold?

Slideshow: Hills Of Rivermist 'Slope Failure' - Photos - KSAT San Antonio

No permit for failed wall

Centex, the Texas-based developer that Pulte Homes acquired last year, did not have a permit for “an improperly constructed retaining wall” that collapsed Sunday, causing damage to at least three homes and forcing the evacuation of dozens of families, according to city officials.

Elvis wrote:

Yes, it was tiresom because we had seen the exact plot in about 4 different movies.

It really was "Dances with Smurfs". I had read that description when it first came out, but after seeing it, that phrase pretty much nails it.

It seems as though the spreadsheets are no longer freely downloadable. A registration is now required.

Or am I doing something wrong?

Juvenal Delinquent wrote:

I've rebelled against fantasy, it's not nearly as interesting as reality.
That's sorta my beef with drama; who needs that crap after 50 hours a week working?

The problem with giving the poor money is that they then compete for goods with the nearly poor, driving up prices and making all of their lot's poorer.

....just offer em some cake and be done with it

i've never heard him. pretty good stuff.

Eric wrote:

I'm not in college any more, so, yeah...............

Well, there's no accounting for regional variations. Maybe you found some mythical IMAX theatre that doesn't frown on such shenanigans

The first time I heard him, I was driving south on the 99, after a backpacking trip in Sequoia NP, and I was incredulous for about an hour, until I caught on. He eventually took it nationwide as far the callers were concerned, outrage is where you find it.

It's not funny to laugh about "I'm fallen and I can't get up..." to me anymore. I had a personal experience the other day helping an elderly lady (83?) who fell on the pavement trying to get into her car and she said those words as she was lying on the pavement looking at me. She split her head open a little bit and was clearly embarrassed. After about 15 minutes she got into her car and drove off; claimed she had very strong bone density... so I wasn't going to force her not to drive.

Cinco-X wrote:

The top 1-3% could certainly stand to pay some more. However, don't extend that to the top 20%, since I'm in there and can't afford to part with any more. It's expensive to live here in the NE.

Well, if we removed money from the top 20% they wouldn't be competing with each other for goods, which would drive down prices, thus reducing living expenses and making everyone better off.

EDIT: Oh, and I'm seriously ing here.

ResistanceIsFeudal wrote:

the key to stability (without military force or fascism, and fear and terror to keep the rebels in line) doesn't seem to be a magic number, nor equality, but a reasonable distribution that minimizes the inequities, which in turn results in price stability and more of a unified sense of culture.

Ding! Ding! Ding! Ding! Ding! Ding! Ding!

(OT) Cinco-X said: "The problem under Louis XVI was that the poor constituted somewhere between 60-80% of the population or even more (someone else can look it up). We're heading that way, but we're not there yet."

That number was about 80% and they were heavily taxed, while the rich paid little in taxes. We're so far away from that situation that I don't see how we'll ever get there.

Sebastian

Cinco-X wrote:

Ding! Ding! Ding! Ding! Ding! Ding! Ding!

Where are the Dongs? The Munchkins are not with you unless you bring the Dongs. It brings up an interesting question about the male Munchkins sexuality, of course.

Cinco-X wrote:
However, don't extend that to the top 20%, since I'm in there and can't afford to part with any more. It's expensive to live here in the NE.
LOL. That's exactly how they (the 1-3%) feel. And it's also damn expensive to live in Greenwich CT, especially with a summer home and an apartment in Manhattan to pay for.

Cinco-X wrote:

Thanksfully we have essentially no debt.

You must not be a taxpayer. Good for you.

Luke: How did the economy die?

Obi-Wan: A young debti named Tax eVader, who was a pupil of mine until he turned to evil, helped the Empire hunt down and destroy the debti knights. He betrayed and murdered the economy. Now the debti are all but extinct. eVader was seduced by the dark side of the Farce.

The SA data in this series are useless. Only the NSA data is any good, and it showed a decline.

I am not even sure how to interpret seasonality in a house price series. A transaction series, yes, but not a price series.

To the person sitting there underwater on their mortgage, the SA price has no meaning.

food foraging in the NP would be limited to (in season) onions, thimbleberries, strawberries, miner's lettuce, and maybe a few other things. You would starve to death depending upon living off the land there.

Yoda: Debt is a natural part of life. Rejoice for those around you who transform into the Farce. Mourn them do not.

Juvenal Delinquent wrote:

You would starve to death depending upon living off the land there.

You are speaking merely of those resource poor NP in CA I believe. Other NP are chalk full of food. A veritable feast.

... by the by - - that's roughly double normal TGT volume for this time of day

Sebastian wrote:

That number was about 80% and they were heavily taxed, while the rich paid little in taxes.

While corp tax rates are high, after allowable deductions and special IRS rules, they pay very little percentage wise. I would say we are pretty much there. Warren said he paid less in taxes than his secretary.

Slumdog wrote:

I have nothing further to add on this topic

trading in general?

As you like it...

noob goldberg wrote:

and job and income creation are nearly invisible.

Is that the good invisible or the bad invisible. Because there are a lot of perks if you have the superpower of invisibility.

Slumdog wrote:

I have nothing further to add on this topic.

I added to it last topic, for those who where wondering about DSI.

When we interview people, we send them up to the white board to "teach us" what they know. If they can't do it, we assume they don't really know it.

Don't out drive your headlights...

(OT) josap said: "While corp tax rates are high, after allowable deductions and special IRS rules, they pay very little percentage wise. I would say we are pretty much there. Warren said he paid less in taxes than his secretary."

"...In 2001, the latest year of available data, the top 5 percent of taxpayers paid more than one-half (53.3 percent) of all individual income taxes, but reported roughly one-third (32.0 percent) of income.
The top 1 percent of taxpayers paid 33.9 percent of all individual income taxes in 2001. This group of taxpayers has paid more than 30 percent of individual income taxes since 1995. Moreover, since 1990 this group’s tax share has grown faster than their income share.
Taxpayers who rank in the top 50 percent of taxpayers by income pay virtually all individual income taxes. In all years since 1990, taxpayers in this group have paid over 90 percent of all individual income taxes. In 2000 and 2001, this group paid over 96 percent of the total...."

js-1287: Fact Sheet: Who Pays The Most Individual Income Taxes?

Sebastian

Grand Canyon, Zion, Cascades, etc. virtually all the big beautiful NP's in the west, have very little in the way of natural food sources.

SNAFU wrote:

intimate with their execution.

interesting choice of words. Its amazing what you can do when you don't have to deal with things like "due process". I think while it is easy to go gaga over Chinese growth rates- what makes that possible is also what makes things like the Cultural Revolution possible and the 10's of millions who have died in famines. It is easy to look at the last 25 years and say how wonderful that is - but I think to be balanced you have to look at the entire record from 1949.

ResistanceIsFeudal wrote:

Obi-Wan: Yeah, so was I, but eVader used his powers to build a bigger lightsaber than yours. Sorry dude. If it makes you feel better, he calls her a cheap slut when he's out drinking with Palpatine.

Luke: But Obi-Wan, Han Solo calls me a cheap slut and it really turns me on. That doesn't help me at all. It just gets me hotter.

traderwalt wrote:

know a guy who has been talking about this spread for at least 25 years and I don't think has made a buck trading it.

just a thought- if you are buying gold as a hedge against the collapse of the monetary system wouldn't silver be a better bet? After all you want something of low denominational value to transaction with on a day to day basis. Even a half gold coin is $550. Hard to have change made for that.

crazyv - That was a good catch last night that 30 yr. mortgages actually last about 5, therefore the risk is lower with <5% 30 yr. fixed rates for banks.

However, in our new immobile society, I wonder if that will not work so well for them.

Captain Morgan said:

Don't out drive your headlights...

I'm having that printed up and framed. Thanks.

HAL: I've just picked up a fault in the DSI unit. It's going to go 100% failure in 72 hours.

I traced slumdogs ip address back to Cramer's office. His "enlightening" trading calls finally make sense.

crazyv wrote:

Even a half gold coin is $550. Hard to have change made for that.

Take a coin to your local shop and ask if you can get paid in cash, and what price they are paying. They can probably pay cash far beyond an ounce.

Pawn shops and coin shops generally have quite a bit of cash in hand. I have a coworker who always sells like this, gets decent but not great spreads as well. I have not sold in this manner.

But I agree with the sentiment of your post. I suppose 1/10 ounce gold coins would work as well, but don't recall what the spread is like on them.

just a thought- if you are buying gold as a hedge against the collapse of the monetary system wouldn't silver be a better bet? After all you want something of low denominational value to transaction with on a day to day basis. Even a half gold coin is $550. Hard to have change made for that.

• Excellent point IMO! That's why I've been buying 1 oz. silver coins instead of any gold coins! I figured in a financial collapse that transacting with these coins would be much easier. Of course if society collapses to this extent it may not matter what you are bartering with, the other guy may slit your throat and steal everything you have!

Cinco-X wrote:

These accounting rules--which require banks to price assets to illiquid market bids, even when cash-flows are unimpeded--turn a problem in the financial system into a catastrophe.

typically Forbe's like. The real root of the problem as far as the banking system is concerned is why they should be holding any assets that require a mark to market calculation. That treatment is more appropriate to trading operations and should never have been part of bank in the first place. The only appropriate accounting treatment for a bank is and has always been the lower of cost or its impaired value.

josap wrote:

The lenders package 10 or 20 houses, sell to an investor at about 20 cents on the dollar. Happens every time we have a bust in real estate.

this is the core conundrum - do you allow some people to get very rich through the liquidation process but get it done quickly- or do you try an avoid that and have the unwind take a long time.

Case Shiller House Price Seasonal Adjustment

Hey Ken,

I want to add a picture of a bulldozer as a tile. How do I do that?

damn, there went the slumdog prophecy

SNAFU wrote:

independents will likely be most significant group in 2012

May be as early as 2010 Nov.

Nixon's "silent majority"?

I find the discussions of using precious metals as post collapse money academic and outdated. Were events to devolve to a point where paper money fails we go straight to a subsistence barter economy.

enjoying the movie script collaboration, Kevin Smith couldn't have done better himself.

If you have toilet paper and food, I imagine the rest works itself out in time.

I thought most of our discussions were academic!

Oxtail wrote:

Vote for Bloomberg if you don't think the bank bailouts were big enough?

That's a possible concern, though he's an able administrator and has been an effective mayor. What bothers me most about MB is the determination to fill a third term. Wouldn't initially have suspected him of latent Imperialism, but now . . . ?

traderwalt wrote:

I believe that much of it is a byproduct of copper and lead production.

I think this is the case, very certain in regards to lead. Gold is also byproduct of copper mines.

crazyv wrote:

do you allow some people to get very rich through the liquidation process but get it done quickly

But don't you think it could happen even more quickly if there were not these deals made in the shadows? In other words--aren't these "back room" deals sort of prolonging everything? I wonder if these deals are not giving everyone a false sense that we are in recovery mode, when in all likelihood , we really haven't even come close to the bottom in many areas? (Maybe?)

Cinco-X wrote:

It's like having sex with an ugly woman or driving a beater-car through an ice-storm: it can still be a lot of fun, no matter what your friends say.

That's what the women say about you, too.

Elvis wrote:

It's like having sex with an ugly woman or driving a beater-car through an ice-storm: it can still be a lot of fun, no matter what your friends say.

That's what the women say about you, too.

Except of course I didn't say that; fix your quoting or pipe down-

noob goldberg wrote:

I turn the lights off on the beater car and use the paper bag for the girl.

Good plan! I like it

salutations from the front lines

Inventory is up, just slightly but still up. Nevertheless, re agents are still whining that they'd be selling if they had anything decent to sell. All the competition is for 3/2s under 175K. If the property is under 1200 sqft, has off street parking, is located in the south markets, or is less then a full 3/2, it's sitting and sitting. The price sweet spot seems to be between $95 to $120 /sqft depending on location, size, and HOA/MR fees. This tells me that buyers are looking at rent parities and not for future appareciation. That said, Mcmansions outside of the foothills rent very cheap at around $50/sqft or under.

There were neighborhoods where any property listed was jumped on making it feel like we had 0 availability. That began to correct in mid Dec and it's still ongoing. I know this from personal experience as I made 7 offers during 2009. One finally stuck just before Xmas and I'm waiting on acceptance from the lender, it's a short sale. I am not holding my breath.

The price drops by sellers in the pricey midtown areas are still coming in as they have been since late 08. $/sqft has resumed it's slow trending down. Cash still wins though flippers seem to be fixiated on properties they can pick up for less then 60k which might resale for $160k. The good deals were in mid 08. 2009 seems have been filled latecomers who have missed the window.

km4 wrote:

I'm neutral on Bloomberg but would probably vote for him because am totally disgusted with status quo corrupt GOP and Dems and this country needs a change from these assclowns.

Cut out the middleman and vote for the oligarch directly - think of the savings!

Share of AGI:
Top 1% = 15.3%
Bottom 50% = 13.6%