Looking forward to competing to buy a house against someone that can really afford it not some space cadet moron who does not understand the value of anything. The number of buyers has got to be shrinking big time so anyone with solid finances and a downpayment should be sitting in a good position to knock down these absurd phoney house prices.
The pool of qualified buyers has got to be tiny. Subtract those that have an existing property and can't stomach selling at a realistic price -plus- those smart enough not to catch a falling knife and home buyers will be rarer than honest politicians.
Does anyone know where I could find mortgage statistics for California? Seems almost impossible to locate... I'm trying to get some basic stuff, like % of outstanding loans that are ARMs, I/O, prime, non-prime, subprime, etc. I have a little data on recent orginations but nothing on outstanding. Ideally, I'd like to get data by region (e.g. San Francisco / Silicon Valley) rather than CA as a whole. I can cobble together a few bits and pieces here and there but it's not easy. Any ideas? Thx.
barely, I was expecting some sort of credit tightening when I made my predictions for housing in '07. So I'm not ready to change my view of the impact on prices. My view is pretty bearish:
My estimate is prices will fall nominally by 1% to 3% nationwide by all measures (OFHEO, NAR).
I think tightening of lending standards just make things 2-3 month faster. You don't need to wait until the guy defaults on mortgage, the house is just not sold.
Dusting off my 80s memories... when do you think we'll start reading in the MSM about the 'benefits' of 'Contract For Deed' again? That is the other side of the 'credit tightening' coin.
God I thought I'd never see one of those again... they were all the rage early 80s then died circa Depeche Mode Personal Jesus .
I am far more bearish, on prices, as long as 10Y rates don't plummet to 1%.
Tighten credit and squeeze the FBs to foreclosure. Then the lender REO race against each other begins - to drop prices low enough to get noticed so the asset doesn't linger on the books begins.
I would guess he must have been dragged kicking and screaming to that place. If he went voluntarily, watch out.
This is the economist who wrote a month back
More evidence that the housing market has stabilized, consistent with the recent policy stance of the Federal Reserve.
and then used went on to cite a lot of data, which showed slight improvement
Seasonally adjusted new home sales were up 4.8% in December compared with November and up 14.4% from their low in July. That leaves them down only 11% from December 2005:
Building permits, a reliable leading indicator that had been uniformly bearish, were up 5% in December over November, leaving them down 24% year to year. Housing starts are now up 11% from their low in October, down 18% year to year:
And then called everyone who differed with his rosy outlook as "not calling it as it is" and making claims to to support their stance as they "expected to see housing continue to deteriorate"
Granted, there's plenty of noise in these monthly data, and mild weather may be helping. So if you firmly expected to see housing continue to deteriorate, you could claim not to be impressed by the last two charts. But if you were expecting to see housing stabilize, as I was, you'd call the series just as they are.
I do not doubt his integrity. He is from the heart of the RE bubble - San Diego - and most likely got caught up in it, and became oblivious to his biases .
renterfornow, likewise. But, we'd better not hold our breath. I've seen NO indication SoCal prices are breaking YET. Freddie's announcement was telling ONLY in the delayed execution of its directive until fall,'07, some seven months & a full selling season from now. I'm sure you're well aware CA, NV, FL, & 20 other states have yet to sign on to the TOOTHLESS CSBS (FED) non-tradional mtg. guidelines 3+ months after CSBS released them (which was two months after the FED & 5 other federal agencies signed them, which was nine months after the FINAL r.e. lending hearings that confirmed the urgent need for real controls.)
My guess is, funny money mtg. lending still is widely used in CA & is likely to continue on a somewhat reduced scale for as loooong as they can find some overly greedy souls to buy them. All this means to me is it's unlikely I'll be buying THIS year.
FYI my favorite question I now ask at every open house I attend is, what were comparable houses in the neighborhood selling for in 2002? Best of luck.
WASHINGTON (Reuters) - U.S. banking regulators plan to issue guidance on the subprime mortgage market as early as Thursday afternoon, two sources familiar with the matter told Reuters on Wednesday.
The guidance will be issued by agencies including the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency. The guidance is likely to allow the public to comment for at least 60 days on controversial mortgages provided to consumers with poor credit histories, the sources said, speaking on condition of anonymity.
Great, we get to go through the whole guidance thing.......
.......AGAIN
But the good news is we can all get in on the comment period. We really need to get a lot of comments submitted, decision makers really notice when a lot of "Joe six packs" start writing. They REALLY hate being on the radar screen of the general public.
Like all good Jedis I think Hamilton is just now sensing the power of the 'Dark Force'... a few days ago he wrote an unusually disturbing piece on how the San Diego city & county workers' pensions are all tangled up in hedge fund risk.
I knew some of that was going on but it was quite an eye popping account of just how much risk we are layering over what average folks believe to be their safe nest egg.
It really is everywhere. If you keep rolling the dice you are going to eventually roll craps. If not soon, later.
Couple all this risk to the lousy numbers yesterday & the 'temporary' market plunge and it would be hard NOT to be on a recession 'watch'.
Where is David Lereah? The always-look-on-the-bright-side chief economist of the National Association of Realtors got a fair amount of media play yesterday, when he used a mild monthly bump-up in existing home sales to declare that the bottom of the housing market had been reached last September. But today, with new home sales going off the cliff (in the West, new home sales in January were 50 percent lower than a year ago!), he's nowhere to be seen...
Ron, Countrywides rate sheet for CA. The 80/20 (and 100% 1 loan) stated only goes down to 640 FICO now and the pricing is much higher than it used to be (pricing more appropriately to risk). Stated wage earner adds another .250.
Still ridiculously loose, but compared to the last 2 years it has tightened considerably and priced better to risk.
100% financing up to $1,250,000 (80% 1st up to $1,000,000 and 20% 2nd up to $250,000) with full income documentation. - ron
So a question I've always wondered is what kind of income would you need to qualify for something like that? And what kind of rate would you pay?
Make it easy... say 80/20... on a total of $1MM. To get 6.5% 30 year FRM... would you have to show stable income of $300K? Less? More?
I ask that because I was always told payments should never be more than a quarter of your gross or a third of your take home.
Excel tells me the above circumstance would produce PMTs=$6,320/month or about $75K/year. Somebody making $300K could expect a take home close to $200K (more or less, depending on exclusions).
There are a lot of houses in bubble land costing $1MM or more and not many people making $300K or more.
And lastly, how has that changed from last year say verses NOW.
When they do they DTI calculations, it is gross not net. And they are allowing between 50-60% DTI.
Plus you are seeing why stated income is so bad, people getting around DTI calculations by stating higher income to meet the requirements. Since before, the cost of money of a stated income loan was neglibly higher than full doc.
So Cal the guy with $300K income with a 60% DTI... if he has no other loans or assets... or say they wash... qualifies for only $180K (debt 60% of gross income)? Or would that be $500K (gross income 60% of max debt levels)?
But not the full million.
I mean somebody fill in the hypothetical so I can see why this blows up on people.
I believe it can, I just want to see how.
If you couldn't tell, the last time I bought a house was during Reagan's re-election campaign. I wouldn't do well in today's BNW... I'll have to go off and find a bear cave if I ever move.
The median income (Household)in San Jose is around $74K and the median home price is close to $750K. It doesn't take much to understand why the no doc 100% LTV loans are so popular here in Calif and why property values have been pushed to unreasonable levels. Its also understandable why the neighbor's only want to sell at the 05 prices! LOL
Saw Jim Cramer tonight in Hardball with Chris Matthew. He has suddenly turned VERY bearish- on the economy, and HOUSING, and the sub prime problems not being contained.
...Saw Jim Cramer tonight in Hardball with Chris Matthew. He has suddenly turned VERY bearish...
Oh gawd... now that's almost enough to make ME bullish!
dryfly, in one of his books Mauldin stated that public pensions across the country are engaged in the same flaky activities as San Diego, only theirs have yet to become public. That's yet another one of my depression dominos.
dryfly, I thought I had already turned you into a mortgage underwriter. Sigh.
The DTI is total monthly debt service to gross monthly income. Total monthly debt service is auto, installment, credit cards etc. monthly payments, plus PITI on the mortgage (principal, interest, taxes and insurance).
So take your $6320 monthly P&I, plus something for T&I, say $1300, for a total payment of $7620. Assume no other debt. Gross monthly income of $12,700 ($152,400 annual) would give you a DTI of 60%. Your borrower with $300K ($25K monthly) would have a DTI of 30%.
Of course, "assume no other debt" is just something underwriters say while they're emptying the bong water.
Cramer (on Hardball) was talking about deflationary conditions right now (he mentioned commodities other than gold). Said the Fed needs to cut the discount rate to save things.
When making your projections for california there are some consideratios i haven't heard mentioned.The new '07 listing form from CAR has a box to check if any seller concessions were made.details if any go in the "comments" block.also at a seminar put on by REAA of the north bay this month(new local appraisers association)the woman giving the seminar asked for a show of hands by those appraisers who described the market as "declining" in their appraisals.there were about 100 appraisers attending,all raised their hands.so how DO you sell 100% loans to an investor group in an officially declining market?Oh yeah,Fraud.
Cramer (on Hardball) was talking about deflationary conditions right now (he mentioned commodities other than gold). Said the Fed needs to cut the discount rate to save things.
Interesting. Cramer is smarter than he looks I sometimes think. I wonder if he realizes things are getting hairy and doesn't want to take the credibility hit he took after the tech bust.
Now if Kudlow joins in we know the apocalypse is fast at hand.
A margin call might do that to a person maybe Cramer eats his own cooking.
And it was only 400 points in a +12K market... who cleans up his studio if they have a week where it drops 2K? It can happen - animal spirits and all that.
4shzl, The Citigroup stake in NEW appears to be passive and owned by one of their mutual fund or wealth management unit. The real Citi news is their rescue financing with ACC (Ameriquest) in which they are going to step in and become the lead warehouse lender and get an option to buy the orgination and servicing business at (what is probably) a Don Corleone kind of price.
Cramer (on Hardball) was talking about deflationary conditions right now (he mentioned commodities other than gold).
Fascinating. Cramer and Mathews were talking about William Jennings Bryan and his "Cross of Gold" speech tonight, which was a subject here the other night.
Jimbo's pucker factor has gone WAY up.
Don't discount Cramer because of his public persona. He's a shrewd operator.
The best source for slicing/dicing California statewide and metro-specific mortgage data is LoanPerformance but they only give info to the media for free. You have to pay (probably a lot) for data.
Last year they said that 35% of all live mortgages in the Bay Area were interest only (!!!). I guess after four years where 70% of originations were IO, running at 10+% turnover, that's what happens...
Anyone think the SEC will issue guidelines that prevent the booking of accrued (non-cash) interest added to loan balances as earnings for lenders?
I know they gave guidance on booking unbilled revenues that way. Look at EDS in 2001. Their stock got cut from $75 to $9 on the restatements and charges and much lower forward revs & earnings.
Antoine, that info will be released tomorrow AM (8:30 ET). Here is the release schedule. Perhaps someone is guessing ... otherwise that data should still be embargoed.
Don't know if any of you saw Roach on Charlie Rose's program last night. He said that, over the weekend, he revised his 2007 GDP estimate down to 2.2%, then went on to say the durable goods report disturbed him.
The Fed's job is to lower wages. period. (not to fight inflation)
So if instead of asking for a raise people can just state higher income and they get higher mortgagae and they bid higher for a house which raise the home price in the area which allow people to take HELOC and spend it - the Fed is just happy and everyone win.
Looks like Citi wants to play in subprime (NEW and Argent) without being burned by the negative PR of an outright purchase. Balls were probably well in motion before the recent subprime blowup and this is the best they can manage given the current environment.
"Of course, "assume no other debt" is just something underwriters say while they're emptying the bong water."
In Los Angeles County public schools where people want to send their children are few and far between. So, "assume" at least 15 to 20k per child in private school tuition.( If the schools are any good you wouldn't believe how little you get for 1.25M.) People are incredibly stretched, with little cushion.
People are incredibly stretched, with little cushion.
Well, somebody just needs to tell them that during globalization there will be winners and there will be losers. We can't all be winners. I'm tired of all those whining middle-classers that just can't see the bigger picture with free trade. It's called retraining, duh! That guy with the well paying manufacturing job? He just needs to go back to school and get an advanced degree in something more marketable. How about a Masters in Applied Math and then some more graduate school for financial engineering? That ought to give him a couple more years of relevance. Besides, since when did the pursuit of happiness ever become a right in this country? Geez, give me a break!
Ah, retaining. May father did retrain in the late 1980s to become a machinist after realizing that he could not compete with Jose and Miguel doing outdoor grounds maintenance.
He found some work, but it was never stable. Most of the companies wouldn't let him learn on the newer equipment, they just wanted somebody to mill metal or grind out thousands of bearings.
Laid off in his late 50's he took 3 rounds of unemployment while looking for work, and made it to early retirement on Sec Sec.
The Fed's job is to lower wages. period. (not to fight inflation)
The Fed's war against inflation is aided by the insourcing of millions of low cost workers (which the Fed does not control). The wage stagnation is concentrated in the lower 50% of the wage-earners.
The definitive source is Loan Performance. It will cost you some money probably to get the data, but that's probably the highest quality data you will get.
retraining is one of the bong things that is supposed to be answer of the elites to those who lose out on the globalization, thing is one you get past things that need a lot of capital to do, then any country can turn out PHDs or programmers or doctors ect.
The west held on for so long because we had the captial, now we don't
Looking forward to competing to buy a house against someone that can really afford it not some space cadet moron who does not understand the value of anything. The number of buyers has got to be shrinking big time so anyone with solid finances and a downpayment should be sitting in a good position to knock down these absurd phoney house prices.
Here is the press release for the Citi/Argent conditional purchase:
ACC Capital Holdings Announces Citigroup Relationship
This is a very important point, CR. Have you re-considered your '07 price predictions yet in anticipation of this recent tightening.
The pool of qualified buyers has got to be tiny. Subtract those that have an existing property and can't stomach selling at a realistic price -plus- those smart enough not to catch a falling knife and home buyers will be rarer than honest politicians.
Here's what is probably the best place to get a counterpoint for our bearish view:
Bankstocks.com
Does anyone know where I could find mortgage statistics for California? Seems almost impossible to locate... I'm trying to get some basic stuff, like % of outstanding loans that are ARMs, I/O, prime, non-prime, subprime, etc. I have a little data on recent orginations but nothing on outstanding. Ideally, I'd like to get data by region (e.g. San Francisco / Silicon Valley) rather than CA as a whole. I can cobble together a few bits and pieces here and there but it's not easy. Any ideas? Thx.
All: Professor Hamilton goes on Recession watch
barely, I was expecting some sort of credit tightening when I made my predictions for housing in '07. So I'm not ready to change my view of the impact on prices. My view is pretty bearish:
My estimate is prices will fall nominally by 1% to 3% nationwide by all measures (OFHEO, NAR).
Best to all.
PaloAltoRenter, you can try VFSV
http://www.viewfromsiliconvalley.com/index.html
I think tightening of lending standards just make things 2-3 month faster. You don't need to wait until the guy defaults on mortgage, the house is just not sold.
But there is no principal difference.
TJ, also subtract the flippers and investors, the add a big motherload of inventory...
oops, "then add"
Dusting off my 80s memories... when do you think we'll start reading in the MSM about the 'benefits' of 'Contract For Deed' again? That is the other side of the 'credit tightening' coin.
God I thought I'd never see one of those again... they were all the rage early 80s then died circa Depeche Mode Personal Jesus
.
I am far more bearish, on prices, as long as 10Y rates don't plummet to 1%.
Tighten credit and squeeze the FBs to foreclosure. Then the lender REO race against each other begins - to drop prices low enough to get noticed so the asset doesn't linger on the books begins.
15% in '07.
All: Professor Hamilton goes on Recession watch
Wow.
I would guess he must have been dragged kicking and screaming to that place. If he went voluntarily, watch out.
This is the economist who wrote a month back
More evidence that the housing market has stabilized, consistent with the recent policy stance of the Federal Reserve.
and then used went on to cite a lot of data, which showed slight improvement
Seasonally adjusted new home sales were up 4.8% in December compared with November and up 14.4% from their low in July. That leaves them down only 11% from December 2005:
Building permits, a reliable leading indicator that had been uniformly bearish, were up 5% in December over November, leaving them down 24% year to year. Housing starts are now up 11% from their low in October, down 18% year to year:
And then called everyone who differed with his rosy outlook as "not calling it as it is" and making claims to to support their stance as they "expected to see housing continue to deteriorate"
Granted, there's plenty of noise in these monthly data, and mild weather may be helping. So if you firmly expected to see housing continue to deteriorate, you could claim not to be impressed by the last two charts. But if you were expecting to see housing stabilize, as I was, you'd call the series just as they are.
I do not doubt his integrity. He is from the heart of the RE bubble - San Diego - and most likely got caught up in it, and became oblivious to his biases .
renterfornow, likewise. But, we'd better not hold our breath. I've seen NO indication SoCal prices are breaking YET. Freddie's announcement was telling ONLY in the delayed execution of its directive until fall,'07, some seven months & a full selling season from now. I'm sure you're well aware CA, NV, FL, & 20 other states have yet to sign on to the TOOTHLESS CSBS (FED) non-tradional mtg. guidelines 3+ months after CSBS released them (which was two months after the FED & 5 other federal agencies signed them, which was nine months after the FINAL r.e. lending hearings that confirmed the urgent need for real controls.)
My guess is, funny money mtg. lending still is widely used in CA & is likely to continue on a somewhat reduced scale for as loooong as they can find some overly greedy souls to buy them. All this means to me is it's unlikely I'll be buying THIS year.
FYI my favorite question I now ask at every open house I attend is, what were comparable houses in the neighborhood selling for in 2002? Best of luck.
From Reuters:
Page expired - MSN Money
Subprime guidance to be issued Thursday
WASHINGTON (Reuters) - U.S. banking regulators plan to issue guidance on the subprime mortgage market as early as Thursday afternoon, two sources familiar with the matter told Reuters on Wednesday.
The guidance will be issued by agencies including the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency. The guidance is likely to allow the public to comment for at least 60 days on controversial mortgages provided to consumers with poor credit histories, the sources said, speaking on condition of anonymity.
Citigroup buys 5% of NEW. Significance?
http://xml.10kwizard.com/filing_raw.php?repo=tenk&ipage=4709391
Great, we get to go through the whole guidance thing.......
.......AGAIN
But the good news is we can all get in on the comment period. We really need to get a lot of comments submitted, decision makers really notice when a lot of "Joe six packs" start writing. They REALLY hate being on the radar screen of the general public.
Like all good Jedis I think Hamilton is just now sensing the power of the 'Dark Force'... a few days ago he wrote an unusually disturbing piece on how the San Diego city & county workers' pensions are all tangled up in hedge fund risk.
I knew some of that was going on but it was quite an eye popping account of just how much risk we are layering over what average folks believe to be their safe nest egg.
It really is everywhere. If you keep rolling the dice you are going to eventually roll craps. If not soon, later.
Couple all this risk to the lousy numbers yesterday & the 'temporary' market plunge and it would be hard NOT to be on a recession 'watch'.
CFC 80/20 loans:
Our 80/20 Program features:
100% financing up to $1,250,000 (80% 1st up to $1,000,000 and 20% 2nd up to $250,000) with full income documentation.
100% financing up to $815,000 (80% 1st up to $650,000 and 20% 2nd up to $165,000) with no income documentation.
No mortgage insurance (PMI) required.
Loan types include Fixed Rate, Fixed ARMS, and Interest Only Products.
This is funny:
A good reason for markets to be nervous
Where is David Lereah? The always-look-on-the-bright-side chief economist of the National Association of Realtors got a fair amount of media play yesterday, when he used a mild monthly bump-up in existing home sales to declare that the bottom of the housing market had been reached last September. But today, with new home sales going off the cliff (in the West, new home sales in January were 50 percent lower than a year ago!), he's nowhere to be seen...
How the World Works - Salon.com
http://www.cwbc.com/PdfFiles/WLDBC%20CA.pdf
Ron, Countrywides rate sheet for CA. The 80/20 (and 100% 1 loan) stated only goes down to 640 FICO now and the pricing is much higher than it used to be (pricing more appropriately to risk). Stated wage earner adds another .250.
Still ridiculously loose, but compared to the last 2 years it has tightened considerably and priced better to risk.
100% financing up to $1,250,000 (80% 1st up to $1,000,000 and 20% 2nd up to $250,000) with full income documentation. - ron
So a question I've always wondered is what kind of income would you need to qualify for something like that? And what kind of rate would you pay?
Make it easy... say 80/20... on a total of $1MM. To get 6.5% 30 year FRM... would you have to show stable income of $300K? Less? More?
I ask that because I was always told payments should never be more than a quarter of your gross or a third of your take home.
Excel tells me the above circumstance would produce PMTs=$6,320/month or about $75K/year. Somebody making $300K could expect a take home close to $200K (more or less, depending on exclusions).
There are a lot of houses in bubble land costing $1MM or more and not many people making $300K or more.
And lastly, how has that changed from last year say verses NOW.
Anyone know?
Dryfly,
When they do they DTI calculations, it is gross not net. And they are allowing between 50-60% DTI.
Plus you are seeing why stated income is so bad, people getting around DTI calculations by stating higher income to meet the requirements. Since before, the cost of money of a stated income loan was neglibly higher than full doc.
cal:
thanks for the feedback!
So Cal the guy with $300K income with a 60% DTI... if he has no other loans or assets... or say they wash... qualifies for only $180K (debt 60% of gross income)? Or would that be $500K (gross income 60% of max debt levels)?
But not the full million.
I mean somebody fill in the hypothetical so I can see why this blows up on people.
I believe it can, I just want to see how.
If you couldn't tell, the last time I bought a house was during Reagan's re-election campaign. I wouldn't do well in today's BNW... I'll have to go off and find a bear cave if I ever move.
dryfly:
The median income (Household)in San Jose is around $74K and the median home price is close to $750K. It doesn't take much to understand why the no doc 100% LTV loans are so popular here in Calif and why property values have been pushed to unreasonable levels. Its also understandable why the neighbor's only want to sell at the 05 prices! LOL
Saw Jim Cramer tonight in Hardball with Chris Matthew. He has suddenly turned VERY bearish- on the economy, and HOUSING, and the sub prime problems not being contained.
And on China- very negative. Hmmmmm
IMO guidelines for tighter standards might not even matter. If a loan goes thru to a risky borrower who is going to buy the paper.
...Saw Jim Cramer tonight in Hardball with Chris Matthew. He has suddenly turned VERY bearish...
Oh gawd... now that's almost enough to make ME bullish!
dryfly, in one of his books Mauldin stated that public pensions across the country are engaged in the same flaky activities as San Diego, only theirs have yet to become public. That's yet another one of my depression dominos.
dryfly, I thought I had already turned you into a mortgage underwriter. Sigh.
The DTI is total monthly debt service to gross monthly income. Total monthly debt service is auto, installment, credit cards etc. monthly payments, plus PITI on the mortgage (principal, interest, taxes and insurance).
So take your $6320 monthly P&I, plus something for T&I, say $1300, for a total payment of $7620. Assume no other debt. Gross monthly income of $12,700 ($152,400 annual) would give you a DTI of 60%. Your borrower with $300K ($25K monthly) would have a DTI of 30%.
Of course, "assume no other debt" is just something underwriters say while they're emptying the bong water.
TJ
I am not fond of Cramer either, but it adds more poison to a brew that is increasingly looking grim and toxic.
Perhaps Greenspan was right- for once in his life.
Oh gawd... now that's almost enough to make ME bullish!
Cramer and Greenspan?
I just revised my personal 2007 GDP growth forecast to +5.5%.
Sarcasm aside people
they are basically saying what everyone on the blog has been saying.
Cramer (on Hardball) was talking about deflationary conditions right now (he mentioned commodities other than gold). Said the Fed needs to cut the discount rate to save things.
Bernanke knows if he cuts the buck drops- he can't- yup Cramer whined about deflation and said the fed needs to cut.
But he seemed 'alarmed' and 'depressed' not so 'everything is coming up roses'.
When making your projections for california there are some consideratios i haven't heard mentioned.The new '07 listing form from CAR has a box to check if any seller concessions were made.details if any go in the "comments" block.also at a seminar put on by REAA of the north bay this month(new local appraisers association)the woman giving the seminar asked for a show of hands by those appraisers who described the market as "declining" in their appraisals.there were about 100 appraisers attending,all raised their hands.so how DO you sell 100% loans to an investor group in an officially declining market?Oh yeah,Fraud.
dryfly, I thought I had already turned you into a mortgage underwriter. Sigh.
Would you trust an engineer to do underwriting? Heck my wife won't even let me near the check book.
Cost engine crankshaft gears, fine. Cost socks, no. Mortgages & household budgets... LOL.
Cramer (on Hardball) was talking about deflationary conditions right now (he mentioned commodities other than gold). Said the Fed needs to cut the discount rate to save things.
Interesting. Cramer is smarter than he looks I sometimes think. I wonder if he realizes things are getting hairy and doesn't want to take the credibility hit he took after the tech bust.
Now if Kudlow joins in we know the apocalypse is fast at hand.
Maybe Cramer is thinking twice about his " Buy low sell higher? That's a fairey tail. Buy high sell hogher!" remarks that tool made.
skytrekker
But he seemed 'alarmed' and 'depressed'
A margin call might do that to a person maybe Cramer eats his own cooking.
cramer wants lower overnight fed rates to help the market. His rant about how the poor are never going to get a loan etc is quite a laugh!
A margin call might do that to a person maybe Cramer eats his own cooking.
And it was only 400 points in a +12K market... who cleans up his studio if they have a week where it drops 2K? It can happen - animal spirits and all that.
cramer wants lower overnight fed rates to help the market. His rant about how the poor are never going to get a loan etc is quite a laugh!
Makes sense to me. I expect there will soon be a whole chorus of well-placed whiners demanding their FedPut.
Tanta,
"while emptying the bong water."
Hunter Thompson is smiling at your literary genius.
4shzl, The Citigroup stake in NEW appears to be passive and owned by one of their mutual fund or wealth management unit. The real Citi news is their rescue financing with ACC (Ameriquest) in which they are going to step in and become the lead warehouse lender and get an option to buy the orgination and servicing business at (what is probably) a Don Corleone kind of price.
Cramer (on Hardball) was talking about deflationary conditions right now (he mentioned commodities other than gold).
Fascinating. Cramer and Mathews were talking about William Jennings Bryan and his "Cross of Gold" speech tonight, which was a subject here the other night.
Jimbo's pucker factor has gone WAY up.
Don't discount Cramer because of his public persona. He's a shrewd operator.
Palo Alto Renter,
The best source for slicing/dicing California statewide and metro-specific mortgage data is LoanPerformance but they only give info to the media for free. You have to pay (probably a lot) for data.
Last year they said that 35% of all live mortgages in the Bay Area were interest only (!!!). I guess after four years where 70% of originations were IO, running at 10+% turnover, that's what happens...
Anyone think the SEC will issue guidelines that prevent the booking of accrued (non-cash) interest added to loan balances as earnings for lenders?
I know they gave guidance on booking unbilled revenues that way. Look at EDS in 2001. Their stock got cut from $75 to $9 on the restatements and charges and much lower forward revs & earnings.
Did anyone see the info. that personal expenditures dropped 0.95% in Jan or so. Biggest drop since '54???
The Citigroup stake in NEW appears to be passive and owned by one of their mutual fund or wealth management unit.
Sounds like Sallie Krawcheck wants to start her new job with a display of her knife-catching abilities. LOL
Did anyone see the info. that personal expenditures dropped 0.95% in Jan or so.
Link, please?
Antoine, that info will be released tomorrow AM (8:30 ET). Here is the release schedule. Perhaps someone is guessing ... otherwise that data should still be embargoed.
Best to all.
Don't know if any of you saw Roach on Charlie Rose's program last night. He said that, over the weekend, he revised his 2007 GDP estimate down to 2.2%, then went on to say the durable goods report disturbed him.
Today's GDP revision showed that the price index for personal consumption decreased 0.9%. Maybe someone confused that with PCE.
OTOH, if the PCE is, in fact, down 1% -- that would be a real bombshell. The BEA has done it before; maybe they've done it again.
This article claims that in the Bay Area, 29 percent of 2005 originations were option ARMs, and another 43 percent were interest only.
I am pretty sure I read that the 2006 Bay Area IO+ARM number was 80%, but I can't google up the source now.
"while emptying the bong water."
and soon they'll be scraping for the residue for the last hit...
"stated income" is just what the Fed wants.
The Fed's job is to lower wages. period. (not to fight inflation)
So if instead of asking for a raise people can just state higher income and they get higher mortgagae and they bid higher for a house which raise the home price in the area which allow people to take HELOC and spend it - the Fed is just happy and everyone win.
Found a source of some of Fremont's trouble. In Florida no less, who would of thought?
Business: Developer faces cash crisis
Looks like Citi wants to play in subprime (NEW and Argent) without being burned by the negative PR of an outright purchase. Balls were probably well in motion before the recent subprime blowup and this is the best they can manage given the current environment.
Not sure they can have it both ways though.
Thanks for the recommendations. I tried the SF Fed and the public policy institute of CA. They have a couple of reports but no real data...
"Of course, "assume no other debt" is just something underwriters say while they're emptying the bong water."
In Los Angeles County public schools where people want to send their children are few and far between. So, "assume" at least 15 to 20k per child in private school tuition.( If the schools are any good you wouldn't believe how little you get for 1.25M.) People are incredibly stretched, with little cushion.
People are incredibly stretched, with little cushion.
Well, somebody just needs to tell them that during globalization there will be winners and there will be losers. We can't all be winners. I'm tired of all those whining middle-classers that just can't see the bigger picture with free trade. It's called retraining, duh! That guy with the well paying manufacturing job? He just needs to go back to school and get an advanced degree in something more marketable. How about a Masters in Applied Math and then some more graduate school for financial engineering? That ought to give him a couple more years of relevance. Besides, since when did the pursuit of happiness ever become a right in this country? Geez, give me a break!
Ah, retaining. May father did retrain in the late 1980s to become a machinist after realizing that he could not compete with Jose and Miguel doing outdoor grounds maintenance.
He found some work, but it was never stable. Most of the companies wouldn't let him learn on the newer equipment, they just wanted somebody to mill metal or grind out thousands of bearings.
Laid off in his late 50's he took 3 rounds of unemployment while looking for work, and made it to early retirement on Sec Sec.
The Fed's job is to lower wages. period. (not to fight inflation)
The Fed's war against inflation is aided by the insourcing of millions of low cost workers (which the Fed does not control). The wage stagnation is concentrated in the lower 50% of the wage-earners.
PaloAltoRenter,
The definitive source is Loan Performance. It will cost you some money probably to get the data, but that's probably the highest quality data you will get.
Mozo Maz
I am in my 50s and I can relate.
dr strangemoney
retraining is one of the bong things that is supposed to be answer of the elites to those who lose out on the globalization, thing is one you get past things that need a lot of capital to do, then any country can turn out PHDs or programmers or doctors ect.
The west held on for so long because we had the captial, now we don't