From Bloomberg:
U.K. House Prices Decline, Worst Streak Since 1995
U.K. house prices fell for a third month in November, the worst performance in more than a decade, and services growth slowed, increasing speculation the Bank of England will cut interest rates tomorrow.
The average cost of a home in Britain declined 1.1 percent to 194,895 pounds ($400,000) from a month earlier, a report by HBOS Plc showed today. Prices last fell for three months in a row in 1995. Services from banking to travel grew at the slowest pace in four years last month, according to an index by the Chartered Institute of Purchasing and Supply.
…
House prices rose 6.3 percent in the quarter through November from a year earlier, down a 2007 peak of 11.1 percent in March, HBOS said.“It’s looking pretty grotty out there,” said Geoffrey Dicks, chief U.K. economist at Royal Bank of Scotland Group Plc in London. Today’s housing figures are “yet another indicator that the economy has taken a sharp turn for the worse.”
Wow!
Obligatory slacking excuse: I’m in FL, will be here until Saturday.
From Bloomberg:
Orange County Funds Hold SIV Debt on Moody’s Review
Orange County, California, bankrupted in 1994 by bad bets on interest rates, bought structured investment vehicles similar to those that caused a run on funds invested by local governments in Florida.
Twenty percent, or $460 million, of the county’s $2.3 billion Extended Fund is invested in so-called SIVs that may face credit-rating cuts, said Treasurer Chriss Street. In all of its funds, the county holds a total of $837 million of SIV debt, including $152 million in its $3.5 billion of money-market funds that isn’t under ratings review, said his spokesman, Keith Rodenhuis.
Orange Country joins a growing list of state and local governments at risk of losing money from investments sold as high-yielding havens that have been contaminated by the collapse of the subprime mortgage market. Florida, Connecticut, Massachusetts, Montana, Maine and King County, Washington also have disclosed investments in SIVs.
“We’ll find out real quick if we have a problem,” said the county’s former Treasurer John Moorlach, who is now a county supervisor. “But for now I need to be patient and wait and see.”
From the Times Trenton:
Drugmaker prescribes job cuts
Bristol-Myers Squibb issued a warning in July it would have to swallow some bitter medicine.
Today, the pharmaceutical company will reveal the dosage when it announces how many people will lose their jobs.
With approximately 4,200 employees in Mercer County, and more than 7,000 throughout Central New Jersey, Bristol-Myers’ decision could have significant effects locally. After weathering several storms over the past two years, including battling generic competition to its blood thinner Plavix and the dismissal of former Chief Executive Peter Dolan, the streamlining new CEO James Cornelius talked of in July will begin to take casualties among the work force.
…
Barbara Ryan, an analyst with Deutsche Bank who covers Bristol- Myers, said yesterday she expects about 10 percent of the company’s worldwide work force of 43,000 will be cut. “I think they are going to be global cutbacks,” she said. “We’re expecting a significant restructuring will be announced.”
AS I remeber wasn’t Spain in peril of a bubble bursting also.Has anyone read or heard anything.Morning Grim hope weather is
good.
From Reuters:
Wall St firms subpoenaed by NY prosecutors
New York state prosecutors have sent subpoenas to Wall Street firms seeking information related to the packaging and selling of debt tied to high-risk mortgages, the Wall Street Journal reported, citing people familiar with the matter.
The subpoenas, sent by the New York attorney general Andrew Cuomo’s office, request information from Merrill Lynch & Co., Bear Stearns Cos and Deutsche Bank AG, people familiar with the matter told the Journal.
A spokesman for the attorney general’s office declined to comment on the report.
The investigation is examining how adequately investment banks reviewed the quality of mortgages before packaging them into products that were then sold to investors, the people told the Journal, adding that the subpoenas also requested information about how the debt was pooled into securities, including the banks’ relationship with credit-rating firms.
INfo 2440129 thx.
Move over subprime… From Reuters:
http://www.reuters.com/article/bondsNews/idUSN0452941320071204
Expected losses for troubled mortgages known as Alt-A loans are now more than double earlier forecasts and losses for subprime bonds originated in 2006 may climb to 20 percent or more, analysts said on Tuesday.
Moody’s Investors Service on Tuesday raised its forecast for expected losses for U.S. mortgages known as “Alt-A” residential mortgage debt. Loss estimates for Alt-A bonds reviewed by Moody’s increased by an average of 110 percent from initial expectations, with some loss estimates up by as much as 270 percent, Moody’s said in a report.
Alt-A mortgages are made to borrowers with credit scores above subprime but who have other risky attributes, such as no proof of income or lack of an equity stake in the property.
“Alt-A performance has not been very good,” said Jonathan Polansky, a managing director at Moody’s Investors Service, during a panel discussion at a bond conference on Tuesday.
Cuomo looking for some good PR.Good luck to
Cuomo trying to figure this stuff out. The banks who put them together can’t get a handle on them.He is just grandstanding.A##hole!
mike,
1 Van Buren
(Short Sale)
Was withdrawn once, here is the combined history:
MLS: 2440129/2376236
OLP: $272,000
LP: $189,000 (Reduced 30%)
DOM: 290
JB [6],
Enjoy that Fla. weather.
Can Cuomo include the rating agencies in that subpoena? Come to think of it, just confiscate the blackbox.
test
What gets you stuck in moderation?
1)Cuomo
2)Fla.
3)Rating Agencies
4)Blackbox
??
GRim 10 thx I have been inside you wouldn’t believe this pos.I will wait it out 130 the most on that one.272 was insane even in good market.
From MarketWatch:
Citigroup has biggest exposure to riskiest loans: analyst
Analysts at CIBC World Markets on Wednesday lowered their profit outlook for Citigroup Inc., saying the Wall Street giant has the largest exposure to the highest-risk U.S. mortgage markets. “High [loan-to-value] mortgage loans is the greatest risk pool of U.S. consumer loans, and Citigroup has the single highest exposure to it,” CIBC said in a research note. The analysts estimated that Citigroup will incur losses on such loans in the range of $4 billion to $6.5 billion in 2008, or between 31% and 51% of its third-quarter 2007 total loss reserve. As a result of higher estimated provision for losses, CIBC cut its 2008 profit estimate for Citigroup by almost 10% to $2.95 a share.
BC,
Confisca.te
Fannie Mae cutting its dividend by 30%;
http://www.latimes.com/business/la-fi-wrap5dec05,1,145971.story?coll=la-headlines-business
Also, mortgage apps up in the last week by a large number (22% or so), particularly refi’s.
Evidence on the Nov. rate resets forcing ARMs to seek an alternative?
Here’s a beauty of a price-drop…
MLS #2420623
3bd 2 ba cape in madison OLP 675K
DOM 161
LP 569K!
over 100k price drop… now all they need to do is drop it another 100k and they’ll be in the ballpark
Rate cut?
WASHINGTON (MarketWatch) – Hiring in the U.S. private sector expanded at a faster pace in November, according to the ADP employment report released Wednesday. Private payrolls grew by 189,000 in November following a revised 119,000 gain in October, ADP said. The report suggest the labor market remains a source of strength in the economy. The increase is well above economists expectations for job growth of only 60,000 in November. The Labor Department will release the unemployment report on Friday.
Bost…Friday is the lever on the jobs…
Bob,
Payroll will come negative. Fed will cut rates. Payroll will be revised to 200K :)
chi,
I agree. Nobody pays attention to ADP. After all, the bls is our govt. We are fixated on birth/death stats.
RoadTripBoy Says:
December 5th, 2007 at 1:46 am
[NB: This is a lengthy rant but there are some questions embedded within . . .]
Any comments or feedback on this [lengthy!] post are appreciated.
RTB: I right there with you. Emotionally, you want to be with the liberals/democrats because in many ways it appears that they have the moral high ground. However, the older and more cynical you become, you realize what I have termed “feel good” legislation is either hopeless pandering or logistically impossible/biased/flat out unfair. You strike the right chord imo because you suggest, as many of us feel, that the main political protagonists of both parties ultimately serve only the ultra-weatly or provide intoxication for the upwardly stagnant.
I hate to say something so presumptuous, but in many ways to be liberal is actaully quite naive…..because again, while it appears that there is a moral high ground afforded to such a position, when you realize all of the incidental detritus that attaches itself to you in the processs, common sense dictates a recalibration of what is one’s moral compass.
[reposting to the current thread]
I don’t understand the interest rate freeze plan. If it is in the interest of the banks to freeze the adjustable rates instead of forcing foreclosures, then why does the Government need to be involved? If the banks are unwilling to freeze rates on their own then what incentives are the Government giving them to do so now?
Does a five year rate freeze at unprofitably low rates imply a promise by the Fed to keep rates low so the banks can make a decent margin?
JB,
1st, Enjoy Florida, at this time of year it is the only time the weather is somewhat enjoyable. I have the sun poisoning scars to prove that.
But… could you give us a little look at there houseing situation. It seems that is ground zero.
Chi,
I agree to an extent, but I feel the good intentions of the liberals get skewed by the conseratives, and common sense is lost along the way.
KL
18 re 3 br in Madison
Perhaps there something wrong with me, but aren’t these people seriously delusional to have a house on the market for 161 days and not think there is something seriously wrong with their price? I just sold a house and I knew after we had no showings for the first ten days that we needed to do something and fast.
Maybe they are waiting for Prince Charming to ride in and rescue them.
#24 I don’t support a rate freeze, but the argument that could be made for it is that it is like waving that yellow flag at NASCAR, everyone slow down, no one panic that by “helping someone” you will let someone else gain an advantage. When it is all said and done all the lenders will still be in business (of course), and 17 or 18 people nationwide will have been helped by the billion $ plan.
Job Cuts?
Just talked to a former Marketing Director, Merrill. They have recently let go, either outright or severance, 3,000 with more to come. The individual stated that Morgan just did the same, approx 3,000-3,500. Neither have hit the wires. All done under the radar.
#28 BC Not surprised, and I am sure this was in the works for a while, something I had tried to get across to pret in the past.
When the big boys on the street, do these big layoffs, there is a whole vetting process that they have to work through. Only after the process is approved by HR and the lawyers, can the layoffs commence.
“Does a five year rate freeze at unprofitably low rates imply a promise by the Fed to keep rates low so the banks can make a decent margin?”
Stan[24],
It all about the banks building up their capital base. The fed is seeking a plan to save the banks, lowering rates. The banks can get back to borrowing short and lending long, high quality loans. In essence, rates will go down but lending requirements will continue to get stiffer. It’s all about building back capital ratios.
3b,
It done in small segments, bit by bit. The last thing an IB wants is headlines regarding massive layoffs.
[31],
It’s
From the Times of London:
How’s this for cynicism?
From The Times
December 5, 2007
Bankers say sophisticated investors have only themselves to blame as values fall
Christine Seib
Senior executives from four of the world’s biggest investment banks blamed investors yesterday for not reading the warnings attached to complex investments that have plunged in value after the credit crunch.
http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article3001218.ece
From the Telegraph in the UK:
Merrill forecasts gloom for US economy
By Tom Stevenson
Last Updated: 1:52am GMT 05/12/2007
US interest rates will plunge from 4.5pc to 2pc as the American economy suffers its first consumer recession since 1991, Merrill Lynch has forecast.
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/12/05/cnmerrill105.xml
Thanks BC. This sounds like a recipe for more inflation to me.
From Reuters in the UK:
Tight Lending to Increase 2008 Global Defaults -Dresdner
Wed Dec 5, 2007 6:02am GMT
FRANKFURT (Reuters) – Tighter bank lending will help push global high-yield default rates as high as 5 percent within 12 months from about 1.5 percent now, Allianz’s (investment bank Dresdner Kleinwort said on Tuesday.
Banks in Europe and the United States will become much more discriminating about the companies they lend to next year because they already face huge demands for funding and support, Willem Sels, head of credit strategy at Dresdner Kleinwort, told a journalist briefing.
“Banks are at the bottleneck of the liquidity situation,” Sels said.
Companies which have weak relationships with banks, those with a high amount of debt leverage and a short maturity profile, as well as those operating in cyclical industries may find that they will not be able to roll over their funding next year and may be pushed into default, he said.
Sels said credit rating agency forecasts that default rates for global high-yield bonds could rise to about 3.7 percent in 12 months’ time from 1.5 percent currently may be too low when liquidity constraints are taken into account.
http://uk.reuters.com/article/bankingFinancial/idUKL048933120071205
Reuters: Lower Wall St bonuses, layoffs to hurt NYC housing
NEW YORK (Reuters) – Plentiful jobs and big bonuses in the financial sector have supported home prices in New York City’s richest borough even as other once red-hot property markets have cooled. But with financial markets hitting a rough patch this year, even tony Manhattan could feel some pain.
More at: http://www.reuters.com/article/reutersEdge/idUSN2862445820071205?sp=true
From the WSJ:
Expectations Vary for Fed’s Move
Unusual Forces Complicate
Decision About a Rate Cut;
A Quarter or Half Point?
By GREG IP
December 5, 2007; Page A3
With their forecast of economic recovery again endangered by economic turmoil, Federal Reserve officials next week are likely to deliver their third “insurance” interest-rate cut this year.
How big a cut and what to say in the accompanying statement are likely again to be difficult decisions, as they were on Oct. 31 when the Fed cut its short-term interest-rate target to 4.5% and issued a statement suggesting no more rate cuts were likely.
Futures markets expect at least a quarter-percentage-point rate cut and see a two-thirds probability of a half-point cut. Fed officials will likely consider the larger cut, but some might find it hard to justify when just a few weeks ago they thought they were finished cutting rates.
Some analysts say the Fed is more likely to deliver a quarter-point rate cut and drop from its statement last month’s characterization of risks of weaker growth and higher inflation as equally balanced. That would implicitly leave the door open to additional easing, without leading investors to presume further cuts were coming.
Analysts also believe the Fed could improve the functioning of financial markets with either an additional cut in the discount rate — at which the Fed lends directly to banks — or by lengthening the terms of such loans.
The difficulty of next week’s decision relates to the unusual forces weighing on the economy. Mounting losses at financial institutions related to complex mortgage instruments have sent stocks down, and made investors reluctant to buy all sorts of new debt, including mortgage-backed securities. Loan losses have eaten into bank capital at the same time banks have been forced to expand their balance sheets to absorb assets from defunct off-balance-sheet operations.
Banks are still able to lend: their capital will comfortably exceed regulatory requirements in all but the most dire scenarios. But they are less willing to make loans, possibly because the economy is getting weaker or because they anticipate more pressure on their capital ratios.
Banks are even reluctant to lend to each other; the London interbank offered rate — the rate charged on short-term dollar loans, primarily between European banks — has shot up, especially for loans extending beyond year end.
Fed officials’ main concern isn’t the current economy, though recent data have been on “the soft side,” as Chairman Ben Bernanke said last week. Rather, it’s that banks and other lenders, having already tightened mortgage-lending terms, will do the same with loans to small and medium-size businesses as well as credit cards and other consumer credit. Fed officials don’t believe banks’ reluctance to lend will go away after Dec. 31. And Mr. Bernanke warned that could “impose additional restraint on activity in housing markets and in other credit-sensitive sectors.”
http://online.wsj.com/article_print/SB119681606229313739.html
From the WSJ:
Fannie Mae Reports Drop
In Mortgage Holdings
By JAMES R. HAGERTY
December 5, 2007 8:21 a.m.
Fannie Mae’s holdings of mortgages and related securities in November declined to about $723 billion from $732 billion a month earlier, the company disclosed in materials prepared to promote a planned sale of $7 billion of preferred stock.
The decline in the portfolio matches a similar trend at rival Freddie Mac and reflects the need to conserve capital in the face of rising credit losses at the government-sponsored providers of funding for home mortgages. The companies haven’t been buying mortgages fast enough to make up for those that are paid off or sold.
Fannie and Freddie also guarantee payments on mortgages that back securities held by other investors, and that business has continued to grow. At the end of October, Fannie’s guaranteed $2.336 trillion of mortgages, up 12% from a year earlier.
Robert Lacoursiere, an analyst at Bank of America, forecasts that losses at Fannie will total nearly $2 billion in the 12 months ending next Sept. 30. Fannie and Freddie are having to build up provisions for loan losses and write down the value of some loans and securities as falling home prices cut the value of collateral.
From the WSJ:
Fannie Mae Hurries to Raise $7 Billion
Fannie Mae announced plans to raise $7 billion through the sale of preferred stock, as the government-sponsored mortgage investor rushes to bolster its capital in the face of rising losses on home loans.
The company also said it plans to reduce its dividend to 35 cents a share from 50 cents, starting in next year’s first quarter.
The announcement came less than a week after rival Freddie Mac halved its dividend and raised $6 billion through a sale of preferred shares that attracted strong demand from investors. Despite a severe housing slump that has caused scores of small-to-midsize lenders to close down this year, Fannie and Freddie can still raise funds, largely because investors assume that the U.S. government would bail them out in a crisis.
Fannie said the preferred stock will not be convertible into common shares and may be sold in one or more offerings this month.
[snip]
Fannie and Freddie have been increasing the fees they charge for guaranteeing loans that back mortgage securities. They also have announced in recent days additional fees, or surcharges, that will raise the cost of some new mortgage loans. The surcharges, likely to be passed on to consumers, will affect certain loans purchased or guaranteed by the companies after March 1, 2008. Some lenders already are starting to apply them.
These surcharges affect mortgage borrowers who have credit scores below 680, on a standard scale of 300 to 850, and who are borrowing more than 70% of the property’s value. For example, someone with a credit score of 650 would pay a surcharge of 1.25% of the loan amount for a mortgage to be sold to Fannie. On a $300,000 loan, that would mean extra fees of $3,750 for the borrower. This fee could be paid in cash or in the form of a higher interest rate than would normally apply.
http://online.wsj.com/article/SB119680522386413543.html?mod=US-Business-News
“I hate to say something so presumptuous, but in many ways to be liberal is actaully quite naive…..because again, while it appears that there is a moral high ground afforded to such a position”
I’ve never understood the liberals-as-moral-high-grounders argument, in part because I think it makes a naive presumption about the motivations of liberals, but more importantly because folks who let the Christian Coalition determine their nominee every four years (see Huckabee, Mike, and before him Bush, George) aren’t well-positioned to be calling out on morals or pandering.
That being said, I’d love to flush out all the “morality” crap from politics. I’m fine cutting out the robbing from the poor to give to the rich, the robbing from the rich to give to the poor (both resulting in robbing the middle class to give to the rich and poor), just as I’m all for cutting out the “family values”/Christian Coalition/gov’t-in-my-bedroom junk, just as I’m for cutting out the gov’t determining whether I can carry a gun or what kind of movie I’m permitted to watch.
http://www.bloomberg.com/apps/news?pid=20601087&sid=a5PJ56devNt8&refer=home
“BlackRock, hired by the state Nov. 30 to review the fund, had at least six bankers going through its holdings last weekend to develop the plan presented yesterday, Stavrakos said.”
When you see the accountants and money counters entering the state building in Trenton, you’ll know NJ’s in trouble.
They’re calling in the pros to deal with the stinkiness.
njpatient 41 I think I have the party for you libertarian.
pat NJ is in trouble already that would just seal the coffin.
The prices are falling everywhere but hope is on the horizon. I do not know what the UK will be doing, but in the US they are trying to freeze subprime rates, and the feds are dropping the interest rates yet again, maybe this will give us some relief.
Totally off topic, but I felt like a naive college freshman this morning having just learned today that in 33 states, it’s perfectly (and federally!) legal to descriminate on the basis of real or perceived sexual orientation and gender in the workplace.
Awesome!!!!
“Homosexuality is a choice. … Being black is not.”
-Rick Scarborough, an East Texas Baptist minister and evangelist
You know what else is a choice? Being an east Texas baptist minister and evangelist, and yet we found it reasonable to federally protect descrimination against that…
“It’s looking pretty grotty out there,”
“Grotty,” I love it and can’t wait to work it into a conversation later today.
“the feds are dropping the interest rates yet again, maybe this will give us some relief.”
[45],
The problem is not current interest rates. Historically, fixed mortgage rates are close to their lows. Of course not close to their teaser induced rates. The main issue is an overpriced/overbought asset. Lowering interest rates does not help an inslovent John Q. How does lower rates wipe the debt deck clean?
http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article3001218.ece
Citigroup and UBS told the MPs that their losses on sub-prime mortgage-related products exceeded the profits that they had made from the high-risk loans.
Bill Mills, chief executive of Citigroup’s Europe, Middle East and Asia (Emea) investment banking business, told the MPs that “[Citi-group’s] losses greatly exceed the profits we’ve made on [sub-prime] business over several years”.
#48 BC Bob: low interest rates, lots of inventory, and yet where is the demand?
45.
If you think that is going to work, buy some Rolaids
Interplay between Paulson’s plan and Faniie Mae:
http://www.minyanville.com/articles/C-fre-fnm/index/a/15104
Lower rates = higher inflation = debt is less in real dollars.
Grim, Clot,
How long does it usually take for the sale price from a transaction to become public? And where is the best place to look to find the price? I know sale prices show up in tax records but it probably takes some time for them to propagate to those systems.
Any help here would be much appreciated. There is a closing happening 12/14 that, based on the sale price, we may make an offer on another house in the neighborhood.
Good article HHEHEHE. This part is particularly troubling:
One challenge will be to craft a deal minimizing lawsuits from investors in bonds backed by the mortgages being rewritten, analysts said. Democratic Representative Mike Castle of Delaware has proposed legislation offering a “safe harbor from legal liability” to mortgage servicers.
“Stan Says:
December 5th, 2007 at 11:03 am
Lower rates = higher inflation = debt is less in real dollars.”
AND, with so much of our debt held by nationals of other nations, and other governments themselves, it reduces the value of those holdings.
Big deal it is also legal in New York!!! Being a Straight White Male makes it is impossible to get a job or a promotion at many firms.
Cirrus Says:
December 5th, 2007 at 10:53 am
Totally off topic, but I felt like a naive college freshman this morning having just learned today that in 33 states, it’s perfectly (and federally!) legal to descriminate on the basis of real or perceived sexual orientation and gender in the workplace.
Awesome!!!!
This is off topic but it is one of the best headlines I have ever seen:
British police arrest “dead” canoeist
http://www.reuters.com/article/worldNews/idUSL0513231720071205
“British police arrest “dead” canoeist”
shore guy,
Weekend at Bernie’s?
John Says:
December 5th, 2007 at 11:23 am
Big deal it is also legal in New York!!! Being a Straight White Male makes it is impossible to get a job or a promotion at many firms.
Cirrus Says:
December 5th, 2007 at 10:53 am
Totally off topic, but I felt like a naive college freshman this morning having just learned today that in 33 states, it’s perfectly (and federally!) legal to descriminate on the basis of real or perceived sexual orientation and gender in the workplace.
Awesome!!!!
________________________________________________
(1) It is not legal to discriminate on the basis of gender in the workplace, nor is it legal to discriminate on the basis of sexual orientation in NYC. It is also illegal to discriminate against whites and males in the workplace on the basis of those statuses–it is race and gender as categories that are protected classes, not specific races or a specific gender. I think perhaps what Cirrus means is that it’s not illegal to discriminate in many states or municipalities on the basis sexual orientation or “gender dysmorphia” / transsexualism.
(2) If being a Straight White Male makes it impossible to get a job or a promotion at many firms, then why do straight white males have the highest employment rates of any demographic group in this country?
re. Mojo Jojo’s question above — I’d like to also know if folks think the lag time for closing vs. recording of sale is pertinent. I found some sale prices for October for the area I’m interested in and was wondering if these are an accurate snapshot to use in terms of comps.
From CNN:
“Fannie” gets more spankin’
http://money.cnn.com/2007/12/05/news/companies/bc.apfn.fanniemae.losses.ap/index.htm?postversion=2007120509
MOJO
What’s the address?
KL
house 45
“in the US they are trying to freeze subprime rates, and the feds are dropping the interest rates yet again, maybe this will give us some relief.”
Who the hell is “us”?
Thank you Mr. Bush for bailing out my 4th Q 401k statements so I can enjoy opening up my statements in January.
Thank you Mr. Bernake for telegraphing your rate cuts from all the way back in July so I had a chance to roll over my 3-6 month cds into 1 to 2 year cds.
Thank you Wall Street for letting me get into some high yielding stocks since August that I now can enjoy appreciation and a 7% dividend at the 15% tax bracket.
Thank you internet high fliers who crashed in 2001 for allowing me to max out my 401K from 2002 to 2007 in order to get 5 years of great gains.
And most of all Thank You all your subprime sludge who drove housing to insane levels from 2002 to early 2007 for making me now look like a genius for not buying into the frenzy and staying in my POS prebubble split while everyone around me traded up!!
There is just so much to be thankful for his year that if the bubble heads need a five year low rate to keep them in their 200K underwater homes till at least 2013 who am I to stand in their way. I hope they get to enjoy the mega property taxes, electricity bills and heating and repair costs that come with their mcmansion and the fact that no one is foregiving principal so they still get the pleasure of spending paying off a 700K loan on a house worth 500K.
If they want relief give them a pack of rolaids, some prep h and a few food stamps. That is about as much as I am willing to pay for.
“in the US they are trying to freeze subprime rates, and the feds are dropping the interest rates yet again, maybe this will give us some relief.”
Who the hell is “us”?
ChiFi: I respect your positions on a lot of issues. Which is why I’m a bit surprised that you seem unwilling to distinguish between naivete and idealism. The latter is as powerful a motivating force in America’s history as any other. The former, for example, makes people believe BS like the myth of the welfare queen, or that there was a pre-9/11 connection between al Qaeda and the Baathists in Iraq and Syria.
And I echo NJPatient’s sentiments, adding a dash of heat to the notion: who the f*ck made morality a political imperative? It certainly wasn’t the liberals. There’s a big difference between acting moral and talking about moral acts.
Mike: Liberals ARE pro-liberty. I know you aren’t suggesting the opposite, but Libertarians, given the choice between the common good and corporate profits almost uniformly choose the latter. That’s the course they’ve chosen in the pro-big-government GOP era.
For the record: A child of former Freedom Riders (so I know what Idealism can accomplish in American polity) whose not registered with either party, thanks for asking.
Commence with the brickbats.
Jamey Says:
December 5th, 2007 at 12:38 pm
ChiFi: I respect your positions on a lot of issues. Which is why I’m a bit surprised that you seem unwilling to distinguish between naivete and idealism.
J: if you are defining “idealist” as a well-informed optimist…fine…otherwise the distinction may only be semantics.
It’s snowing down here in Princeton. The old cornstalks in the subsidized business park/farms are getting covered.
Beautiful day for some perspective on greater good vs. greater evil.
“Gold is for optimists. I’m diversifying into canned goods.”
http://www.atimes.com/atimes/Global_Economy/IL06Dj01.html
68
lol
gold is handy in a portfolio in certain circs, without question. as far as kettle’s oft-cited concern regarding the collapse of the fiat currency, gold in the portfolio won’t help, only gold in the basement will. I’ll still take the canned goods, bottled water and shotgun, though.
That’s one hysterical article, though!
“It’s snowing down here in Princeton.”
Pat[67],
Are you sure that it is not shredded documents from Merrill?
Moody’s just said that it now sees capital shortfall at MBIA as “somewhat likely”. Sent all financials into a tizzy.
it’s snowing up here in midtown, too
gee, gosh, golly – oil supplies down, and yet OPEC decides to hold the line and not increase production. Now, why would they not want to increase production????
What type of sale is this? This appeared in the Westfield Leader (local paper) in the “recent Home Sales” column.
Sellers (they actually list the people’s names) to Old Republic National Title Insurance, 138 Greene Pl, $784,000.
The next sale listed is the same property
Old Republic National Title Insurance to Buyers (different names), 138 Greene Pl, $665,000.
but for $119,000 less?
OT
“Comcast Corp., the biggest U.S. cable- television provider, fell the most in five years in Nasdaq Stock Market trading after cutting its 2007 forecasts for sales, new customers and cash flow.”
“Cable and satellite companies are attracting fewer new subscribers because of a slump in housing construction and rising foreclosures, said Craig Moffett, an analyst with Sanford C. Bernstein & Co.”
“For the last two years, the entire pay TV industry enjoyed super-normal growth as a result of the housing bubble,” said Moffett, who recommends investors buy Comcast shares and doesn’t own any. “We’re now seeing growth rates fall back to, or below, historical norms.”
“Comcast will lose basic video subscribers to phone rivals such as Verizon Communications Inc. in the next two years, Angelakis said. New York-based Verizon is winning customers from cable providers as it spends $23 billion to build its FiOS fiber- optic network for high-speed Internet and TV service.”
http://www.bloomberg.com/apps/news?pid=20601087&sid=aPabkDDfKqO0&refer=home
“Federal Reserve officials, who are forecast to lower their main interest rate next week, are signaling that they are looking for additional ways to increase credit to companies and consumers.”
“The Fed may lower the discount rate — what it charges banks for short-term direct loans — by a quarter-point more than the benchmark rate after Vice Chairman Donald Kohn and San Francisco Fed President Janet Yellen publicly expressed frustration that previous rate cuts haven’t encouraged banks to lend to one another.”
“The Fed has to re-liquefy the markets to reduce the risk of a financial accident,” said Lou Crandall, who used to work at the New York Fed and is now chief economist at Wrightson ICAP LLC, a Jersey City, New Jersey-based research firm that focuses on government debt.
“The Fed could draw on its 1999 template, when it addressed potential money shortages during the 2000 computer-system changeover, Cecchetti said. The Fed sold options on almost $500 billion of repurchase agreements for standby financing. None were exercised.”
“Also, officials at the Fed’s Board of Governors and regional banks prepared a paper in 2000 identifying “alternative instruments” for policy. One possibility is to lend to “strong financial institutions” at a rate equal to the federal funds rate, the document says.”
http://www.bloomberg.com/apps/news?pid=20601087&sid=auOuHrLQfwSg&refer=home
The freezing of interest rates is a great boon to the sub-primers. If you take two identical home loans, say for $300,000. One fixed at 6% and another that was supposed to be 3% for two years then reset, but which will now be 3% for a total of seven years (after a 5 year rate freeze), here is how things shake out over the first seven years of the two loans:
The responsible 30 year fixed loan borrower will pay: $32,419.74 in principal, $117,915.31 in interest and will owe $267,580.26 on the loan.
The sub prime borrower will pay: $48,681.85 in principal, $57,297.42 in interest and will owe $251,318.15 on the loan.
By being irresponsible and biting off more than they could afford, the sub-prime borrower will save $60,617.89 in interest and will owe $16,262.11 less on the loan.
How on earth does this even approach a rational policy?
For this interested, John Edwards is calling for a 7 year rate freeze, stating “Homeowners facing foreclosure should have the rightto lower rates”. (italic mine) Sorry for no story link, just Reuters headlines right now.
This should make for a fun election year. Any guesses as to the most absurd bailout proposals we’ll see?
ChiFi,
Thanks for responding to my post. I don’t think I would agree that being liberal is equivalent with being naive. I think one’s naivete can permeate one’s point of view on any topic regardless of which side of the political spectrum. For example, I have heard some people say many times about the homeless, “why don’t they just go get a job instead of begging for money”. Such a question, in my mind, speaks to the person’s naivete about the plight of the homeless (mental illness being a large barrier for many to getting a job).
In addition to cynicism as one grows older I also think that one grows to appreciate more complexity and ambiguity to the world and its many issues. Suddenly, “help the poor people” doesn’t seem like the no-brainer it used to.
#77 –
i’d like to hear what hillary, obama, rudy, and romney have to say about it.
Rhymingrealtor,
The listing is 2423765. Thanks in advance for any information you can provide.
Not to take sides but I would bet on the dems haveing the most absurd but the rep
haveing the plans that do the least but sound good.I like the latter as I can’t get no bailout at all.
Clinton’e economic adviser on CNBC today echoed plan in play now for most part.
I second the question on 138 Greene Place. I think I saw that property–new construction after a teardown. It was on the market at $750K for what seemed like years.
#76 shore guy: Form what i understand, i do not hink the subprimers rates were that low (3%).
I read in yesterday’s WSJ, where supposedly alot of these teaser rates were starting at 8%.
Also, looking for address on 2457204 in Peapack-Gladstone. Thx.
MBIA Capital Shortfall May Be `Likely,’ Moody’s Says
http://www.bloomberg.com/apps/news?pid=20601087&sid=a1p9rb4Owe_w&refer=home
I had a short on these dudes last week but bought out after that Paulson clown popped off about his “fantasy” plan and it jumped 10%. Note to Paulson, keep your mouth shut clown.
John,
Can you please disclose the source of the info about Jim Simons fund?
My financial advisor told me with SB account, it asks for 5 million plus to get in.
#75
We actually have the Verizon guys on our street right now installing the FIOS cables. I am absolutely floored that they would bother with a dead end street that has about 10 houses on it. If Verizon’s deal is better than Comcast, we’re going with them.
Five things:
http://www.minyanville.com/articles/index.php?a=15108
RTB:
Most people’s views of a belief system mature and change through life. It doesn’t matter if it’s politics or religion.
The same cynical stage (which is really just the point when a person understands that self-interest is always involved in transactions) occurs in religion, relationships, and even careers.
The question is where do you want to be when you grow up? On the old side changing things for the better, or on the new side as a convert, then trying to change things?
Think of the older people who go back to their religions long after realizing they didn’t believe every word in the Bible, or some other crazy “building block” of their religion. Are they hippocrites? Some of them are the most active in charities and community.
Sometimes, you have to do what seems to be the best option at the moment, based on the most positive force outweighing the bad stuff (and of course, considering your OWN self-interest!).
MOJO
Remind me again about the 12/14 closing I will check again for you. The other address you were looking for 9 Main street.
Regarding idealism, liberalism and the like. There are people IMO who believe they know how they would react, deal, handle certain situations that have never come their way. I come from a family with some genuises, some mental illness, some physical disabilities, some homosexuality and some run of the mill everyday folk. I find tunes change when it is you and yours. The ability to sing the tune when not faced with the situation is rare, but is claimed to be common.
KL
HEHE…you are over an hour late. See my earlier post. Can’t believe Dow is still up 160 points. I fully expect that one day we will come in and the S&P will be down over 100 points and the DOW down 1,000 points.
xialou, a $5M min doesn’t surprise me. I was shocked when I heard of this possible loophole. Those guys don’t need anymore money since I believe a decent amount of the $35B they manage is their own personal money. I guess a 35% CAGR for 20 years helps one’s bottom line.
rhyming,
Thank you kindly! Will post a reminder on the 14th.
Also agree with your comments on when situations hit close to home.
“I fully expect that one day we will come in and the S&P will be down over 100 points and the DOW down 1,000 points.”
I keep waiting too but it seems everybody wants to look on the bright side.
Clinton to give her bailout plan CNBC shortly.If anyone interested.
#79
given current circs we should also be interested in what Huckabee says.
#46-
“You know what else is a choice? Being an east Texas baptist minister and evangelist, and yet we found it reasonable to federally protect descrimination against that…”
Just thought I’d give a heads up and say how much I love this sentence.
CLOSED!
Here are the details you are looking for. I will not unveil the address, but Grim can verify the details.
Town: Basking Ridge, NJ
MLS: 2438743
OLP: $629,000
Final LP: $475,000
Lowball Offer: $400,000
SP: $450,000
2001 SP: 379,000
1997 SP: 218,000
’95 to Present YoY appreciation: 6%
’01 to Present YoY appreciation: 3%
Note: Seller paid an additional $15,000 towards closing costs. It is not falling apart and in very good condition. House was updated in ’05 with new deck.
TJ [99],
3%, yoy, from 2001 in BR? Oh my.
Subprime people paid an insane amount to close which was rolled into the loan and the average person only stays in their home 7 years plus the break is only for five years.
Shore Guy Says:
December 5th, 2007 at 1:51 pm
The freezing of interest rates is a great boon to the sub-primers. If you take two identical home loans, say for $300,000. One fixed at 6% and another that was supposed to be 3% for two years then reset, but which will now be 3% for a total of seven years (after a 5 year rate freeze), here is how things shake out over the first seven years of the two loans:
The responsible 30 year fixed loan borrower will pay: $32,419.74 in principal, $117,915.31 in interest and will owe $267,580.26 on the loan.
The sub prime borrower will pay: $48,681.85 in principal, $57,297.42 in interest and will owe $251,318.15 on the loan.
By being irresponsible and biting off more than they could afford, the sub-prime borrower will save $60,617.89 in interest and will owe $16,262.11 less on the loan.
How on earth does this even approach a rational policy?
#98,
TJ, awesome!!
TJ Congrads looks like you got a good deal.
Enjoy your new home!
Chi: If you’re going to move the goalposts like that, a least put some casters under them.
91 KL
“I find tunes change when it is you and yours.”
Yep.
http://news.yahoo.com/s/ap/20071205/ap_on_go_pr_wh/mortgage_crisis
Delightful. But isn’t that why lenders offer FIXED rate loans?
So, where’s MY 3% loan?
http://joykenyonvenker.com/listings.asp?listing_id=1087950379
TJ
g+d bless!
“So, where’s MY 3% loan?”
Imagine how citi feels…
Gee, that actually brightened my day, NJPatient.
Jamey [106],
Yeah, it is amazing. They are making payments on time for 2-3% loans. Quite an accomplishment. In conjunction with the freeze, change cc rates to 2-3% and cut car loan payments in half. Maybe if we freeze for 10 years, we can also increase our savings rate. Maybe this is what Paulson had in mind, when he told the Chinese that if they loosen their currency bands, we will increase our savings rate.
2008 Motto- Freeze and Inflate in 8.
Just heard Hillary wants federal tax money to create an 8 million dollar fund that counties can borrow against to help homeowners…also looks like she wants some legislation that would limit pension funds from suing banks
wow.
so some hard working responsible fellow who paid off his little POS 10 years ago and didn’t use it as an ATM is going to have to bail out some freak who levered up to buy a $600K house for $900K, and what will his reward be? No pension for you!!
Thanks, Hillary
Once is a mistake in judgement….twice is a trend….
http://www.bloomberg.com/apps/news?pid=20601109&sid=a23TEhKtQhm8&refer=home
What do you think the number of saved ARMers is going to be?
What is this big fuss about bailout? Today 30 year fixed is at 5.59% (bankrate.com).
Come on guys, that is still historic low. I wonder the whole bailout discussion is just to get a spot on TV.
there may be a lot of hype around it now, and all efforts may not be that heroic, but it is not for the to spare the little guy for sure…it’s all for the banks, politics (don’t want to leave office in recession or worse, just leave it for the next guy) saving wall st. No talk of why they really don’t want the price of homes to be affordable, or why they don’t want foreclosures….tax revenue.
HH (111)
Eight MILLION? That won’t even cover my block in modest Leonia, the Athens of New Jersey.
Or is that a Dr. Evil-type accounting error?
#110 BC Bob: And your predictions for house prices in 08? Saved, hammered?
I’m of two minds here….You know every bailout is gonna ‘us’ something…but folks….when are the banks going to be regulated??? They should have caps on loan interest rates….I know it sound communistic…but penalties and interest can really hurt a brutha!
By freezing loans at the intro rate, the Bush WH is abrogating our Constitutional right to bear A.R.M.s.
121….that was awesome.
Jamey…hilarious.
117…I need to follow-up but I think it is correct.. right now I on a conf call (mute) im, this blog, and have CNBC in the backround…I need to slow down
Anyone keeping track of how many jobs will be lost from the NY area?
Citi Estimated to 45K but thats nationwide
UBS 1,500+
Morgan Stanley 500+
Credit Suisse 300+
Lehman Brothers
Bear Stearns
New York Times
Estimated 40,000 jobs could be lost in New York soon.
House prices in our area need to fall 25 to 30% or so.
It has nothing to do with rates, rates are low. Until that happens, its a stand off between buyers (the few truly qualified that are out there),and sellers who will not accept that 05 is over, and we are into 08.
Makes no sense to buy a POS cape at 500K with a low interest rate,w ehn its worth no more than 325K, its always teh underlying value of the asset, not the financing mechanism.
No matter what happens down the road, the price you originally pay can never be refinanced.
Adding to the list of companies that announced job cuts.
Citi Estimated to 45K but thats nationwide
Countrywide Financial 10,000 to 12,000 jobs.
UBS 1,500+
Morgan Stanley 500+
Credit Suisse 300+
Bank of America
Lehman Brothers
Bear Stearns
New York Times
Lehman Brothers
IndyMac Bancorp
Estimated 40,000 jobs could be lost in New York soon.
NJ is also in a bad position with Pharma.
Pfizer Inc and the No. 1 biotechnology company, Amgen Inc, are in the process of major restructuring, including dramatic workforce reductions.
Anyone still think NY is immune to a housing drop?
njpatient the homeowner who paid off his cape will be rewarded with a 900K sale
Citigroup shares drop on credit, job cut fears
http://www.usatoday.com/money/industries/banking/2007-11-26-citi-cost-effective_N.htm
NEW YORK (AP) — Citigroup (C) shares dropped Monday and traded below $30 for the first time in more than five years amid mounting concern about mortgage losses and possible further job cuts.
The nation’s largest bank, bracing for big credit-related losses in the fourth quarter, is looking to lower costs.
“We are engaged in a planning process in anticipation of our new CEO, and our business heads are planning ways in which we can be more efficient and cost-effective to position our businesses in line with economic realities,” Citi spokeswoman Shannon Bell said Monday.
She was responding to a report on CNBC that “massive” layoffs were planned.
“Any reports on specific numbers are not factual,” she said.
Citigroup, which has about 320,000 employees, earlier this year reduced its workforce by 17,000 before the credit crisis.
Its shares fell $1.00, or 3.2%, to close at $30.70 after dropping as low as $29.75, its lowest level since Oct. 2002. They have lost close to half their value in 2007, having begun the year at $55.70.
The bank is still looking for a new CEO, after Charles Prince stepped down as chairman and chief executive Nov. 4, the same evening the bank announced that it will likely write down the value of its portfolio by another $8 billion to $11 billion in the fourth quarter.
In the third quarter, Citi’s subprime mortgages and its exposure to financial instruments tied to those mortgages led to a loss of about $6.5 billion.
Prince was replaced as chairman by former Treasury Secretary Robert E. Rubin and as interim CEO by Sir Win Bischoff, chairman of Citi Europe who has said he doesn’t want the job permanently.
Prince hasn’t been the only Citigroup executive to leave the bank since it warned of big losses in early October.
Tom Maheras, co-CEO of investment banking, and Randy Barker, head of fixed income trading, left in mid-October when Vikram Pandit was promoted to lead a unit that combined the markets and banking segment with alternative investments. Pandit had been put in charge of alternative investments in the spring when Citigroup bought the hedge fund he co-founded.
And nearly two weeks after Prince’s resignation, chief risk officer Dave Bushnell announced his retirement. Bushnell was a 22-year Citi veteran whom Prince promoted to chief administrative officer in September, saying he would only be senior risk officer for a “transitional period of time.” Jorge A. Bermudez, who has been with Citi for 30 years, took Bushnell’s place.
BC (28)-
Merrill started chopping in July. I had to help one of the cuttees dump his house fast.
BC (30)-
“It’s all about the banks building up their capital base.”
Is it ever! FFR headed under 3%…and fast. Gross called this one last December.
Can anyone say “deflationary credit collapse” three times without becoming tongue-tied?
#130 Clot: And your take on housing next year? (I believe major declines in prices). As always your insight is truly appreciated.
Mojo (53)-
Don’t wait for it to hit the papers. Get to the county clerk’s office and get the pink sheet on it, maybe a week or two after the listing agent confirms for you that the property has closed.
Newspapers could take 6-8 weeks to publish the record.
3b (131)-
My ’08 call remains the same: Armageddon.
#133 Clot: Thanks as always.
BC (58)-
“British police arrest “dead” canoeist”
Again, life imitates Monty Python:
DEAD PERSON: I’m not dead!
MORTICIAN: Here — he says he’s not dead!
CUSTOMER: Yes, he is.
DEAD PERSON: I’m not!
MORTICIAN: He isn’t.
CUSTOMER: Well, he will be soon, he’s very ill.
DEAD PERSON: I’m getting better!
CUSTOMER: No, you’re not — you’ll be stone dead in a moment.
MORTICIAN: Oh, I can’t take him like that — it’s against regulations.
DEAD PERSON: I don’t want to go in the cart!
CUSTOMER: Oh, don’t be such a baby.
John (64)-
You forgot the Vaseline:
“If they want relief give them a pack of rolaids, some prep h and a few food stamps. That is about as much as I am willing to pay for.”
Don’t worry…these poor schmucks are gonna FK anyway. None of them will make it two years, much less five. If they FK at two years out, by year five they will be well on the way to re-established credit.
clot classic
Jamey (65)-
The only Freedom Riding I’m interested in doing these days will involve toting an AK and a couple of .357s.
http://blogs.wsj.com/deals/2007/12/05/paulsons-siv-subprime-rescue-plans-a-convoy-to-disaster/
December 5, 2007, 1:29 pm
Paulson’s SIV, Subprime Rescue: A Convoy to Disaster?
Posted by Dennis K. Berman
Is the “convoy” steaming towards America?
For decades, Japan pursued a “convoy system” for its banking regulation, forcing some of its larger and healthier banks to absorb some of the bad loans of weaker brethren. The approach worked fine for a long time, until the convoy –overloaded with years of mispriced debts — ground Japan’s economy to a terrible halt.
It’s worth remembering the convoy as Treasury Secretary Hank Paulson steers his own ship into the credit crisis.
Paulson has been a forceful advocate for helping rectify both the SIV and home mortgage crises.
For the structured investment vehicles (SIVs), Paulson’s approach is about liquidity. As he sees it, the intrinsic value of much of the SIV books are in fine shape, and only an outflow of liquidity has imperiled the market. By creating a Super-SIV to hold that paper in the interim, the SIV assets will eventually return to their rightfully valued place.
The mortgage approach is similar, as it plans to freeze the worst economic outcomes (potential foreclosures) so the system will have more time to come up with less bad outcomes (less-costly workouts).
In both cases, Paulson hopes to essentially temporarily suspend the market. Is this a refreshing pause? Or perhaps a path to a new kind of convoy-dom, which delays an inevitable re-pricing of securities?
We’ve culled a selection from past Journal reporting on the Japanese economic meltdown. You decide if we’re headed that way or not.
Ray (74)-
That sounds like a possible 1031 exchange purchase made through the title company as a designated intermediary.
As to the price difference, who knows?
Thanks Clot! So it will be end of year before I know the sale price if it closes 12/14? I was hoping to put in the offer the week before the holdays. If that is the earliest, I will adjust my schedule and make the offer after the New Year.
Also, you said you cover Somerset county. Do you cover Morris at all?
tj (98)-
You da man.
patient (104)-
Makes you wonder what Dubya’s position on medical marijuana will be when someone in his family is suffering with cancer.
Compassionate conservatism? Yeah, right.
More like a kinder, gentler machine-gun hand.
Hunter (111)-
“…also looks like she wants some legislation that would limit pension funds from suing banks…”
That has to be a misprint. No Dem would ever agree to putting any kind of limit on the plaintiff bar.
looks like the Alt-A crowd were not invited to the party :)
>>
whose credit scores are below 660 out of a possible 850 and haven’t risen by 10 percent since the loan was issued will be given priority.
http://www.bloomberg.com/apps/news?pid=20601087&refer=home&sid=asetzdsdmBUE
135 clot
he’s not alive – they nailed his feet to the canoe
Mojo (141)-
See if the listing agent will just tell you the price when that house closes. No reason they shouldn’t.
I cover Morris, but I do not work with buyers or sellers I meet on this board. I’d be happy to refer you to a good agent there, though. Just give me your e-mail thru Grim if you’re interested.
D’OH!!!
http://finance.google.com/finance?q=NYSE:ACA
patient (146)-
That’s not very Christian…
clot 144…my husband heard it on Maria B/cnbc interview with Hillary.
Hunter (150)-
I’d like to see Maria & Hillary in a bitch-slap contest.
Clot here is the link to the interview
http://www.cnbc.com/id/22116919
patient (148)-
In the blogosphere, ACA is commonly referred to as “The Big Shitpile”.
“Clotpoll Says:
December 5th, 2007 at 5:38 pm
patient (146)-
That’s not very Christian…”
I was just parroting something I heard on the teevee once….
clot – how far does ACA’s market cap have to fall before it becomes “The Little Shitpile”?
so does ACA’s implosion mean that all of the SIVs are vastly more f’ed than before?
Clot (138):
(Jamey: Opens mouth, takes deep breath. Holds.Raises index finger as if to make a point. Slowly exhales audibly. Lowers arm.)
Oh, never mind.
117 Jamey Says:
correction…after listening it looks like 5-8 billion
#139 “the intrinsic value of much of the SIV books are in fine shape, and only an outflow of liquidity has imperiled the market.” He is out of his mind and all of these pathetic attempts to correct the situation do nothing but broadcast to the world how desperately scared and out of control they really feel. All this fluff about rescuing the dolts who were too stupid to read the contracts they signed is just the magician on stage diverting your attention from what’s really going – they’re trying to save the banks before they fail.
I wonder how much this “Paul-e-shor-son” bailout will cost the US tax payer? Whatever it is I’ll be shore to deduct it from my 2008 tax bill!
I’m finally coming to the sad realization that it pays to be an f-ing idiot in this country.
TJ-#98
You’ve brought some sanity back to market.
Big congratulations and enjoy.
SS (160)-
And, an idiot can become President.
patient (155)-
Sick, yet funny.
159 Out
I think that’s exactly right.
I hate BUSH and everyone that thinks he is a decent President….there I said it.
“I’m finally coming to the sad realization that it pays to be an f-ing idiot in this country.”
That’s mostly right. There are a lot of idiots, and there are some people who make good money f-ing them. So I would reform your above statement to add its corrollary (you only need to put the article on the other side of the gerund), thus: “I’m finally coming to the sad realization that it pays to be f-ing the idiots in this country.”
165
*clink*
(I’ll drink to that)
“President Bush Thursday is set to unveil details of a plan to help head off a wave of mortgage foreclosures hitting homeowners whose adjustable-rate loans are resetting to monthly payment they can’t afford.”
“Under terms of an agreement hammered out between the administration and lenders, interest rates would be frozen for five years on certain subprime mortgages, congressional aides said.”
“Loan servicers, who collect payments from homeowners on behalf of investors who hold the mortgages — often through complex securities — have been reluctant to freeze rates because of possible liability from investors who would have to accept lower returns on their bonds. It’s not clear how the Bush administration’s plan would overcome those concerns.”
[EDIT] Very funny, how the hell do you think they will overcome that concern? Print and transfer the cost to the US taxpayer.
http://www.msnbc.msn.com/id/22116043/
Clot [130],
Yes, I know. I was only alluding to the most recent cuts at Merrill, within the past few weeks. “Under the radar”
BC (169)-
Where’s pret? Did he get sacked?
Oh, I forgot…he’s in real estate investment. Closest thing there is to a job for life. :)
clot…look at quote from 168 BC bob. Here is where Hillary wants to protect the liability..you can hold the mortgage rate, pay less on the cdo, and we won’t let you sue…i.e pension funds etc
“Loan servicers, who collect payments from homeowners on behalf of investors who hold the mortgages — often through complex securities — have been reluctant to freeze rates because of possible liability from investors who would have to accept lower returns on their bonds. It’s not clear how the Bush administration’s plan would overcome those concerns.”
#165,
I love Bush, he’s our greatest president!!!
Hunter (171)-
And in about six months, the only mortgage available will be a 30-fixed…only FICOs over 720 need apply.
We should all practice saying “deflationary credit collapse”…or maybe just adopt the acronym: DCC.
Can someone please tell me how a loan servicer, who does not own a loan, can modify a loan against the financial interests of the person or persons who do own the loan? It is like an apartment superintendent lowering the rent for people against contrary to the contract between the tenants and the landloard without getting the landloard’s permission.
# 173 “And in about six months, the only mortgage available will be a 30-fixed…only FICOs over 720 need apply.”
Good!
credit cards are next…
Frank…way to make a stand!
i HATE U
…funny about those credit cards, my husband and I were talking about when we were in college…no one had a credit card, and if you did it had a $500 limit. Now students are living of of them. Too much money, given too freely, to keep the cost of things up and easy money so we buy more crap. Like I tell my 11 year old, you can’t have everything you want, when you want it…go rake some leaves
Tanta has a brief update on the proposed ARM rate freeze.
http://calculatedrisk.blogspot.com/
TJ (#98)
Congrats!! What a nice catch and a great example of what is to come.
If you don’t mind revealing, about how long did it take the house to be on the market for the asking price to come down from original LP to final LP?
Thanks,
Afe
TJ
Congrats….great move. You got the cash, you make the rules !!!
Hunter (178)-
“Too much money, given too freely, to keep the cost of things up and easy money so we buy more crap.”
Inflate to perpetuate growth…until, all of a sudden, inflation stops stimulating growth.
Then, everything goes bust.
A couple of tid-bits for this evening.
Mr. Kudlow is saying that the recession is R.I.P. re: the revised GDP numbers for 3rd quarter, and comtinued Fed rate cutting.
And in my towns local newspaper, a renting couple aks if now is a ggod time to buy, as they hear it was not.
The response from the realtor, ” the problems affecting th real estate market do not apply to Bergen Co, prices are only down .5 from last year,and that just shows the market is getting back to normal from its rapid increase of the last 4 years.”
“Not only that, but prices in the following Bergen Co towns are increasing again, Fairview, Glen Rock, Hillsdale, New Milford, Park Ridge, River Edge, River Vale, Harrington Park, Norwoord, Montvale, and Rutherford. In addition prices are steady in all other areas in Bergen.”
So there you have it form your Ask The Realtor Column in the local paper, everything is fine, and of course its a great time to buy.
This is a home I know very well. I knew the original owners and have watched it for almost 2 years now.
Listed for $359,000 in early 2006 sold 4/2006 for $350,000 did’nt see anyone move in.
Listed for 440,000 in 8/2006 withdrawn 9/2006
Listed for 390,000 in 10/2006 expired 12/2006
Still no one has ever moved in,
Listed 12/2007 $250,000 3rd party approval needed.
KL
Now, this scares me. Keith, over at Housing Panic, has started calling for armed revolution. From today:
“The Federal goverment, instead of prosecuting mortgage fraudsters, is looking to bail them out.
At this point HP’ers, a revolution against the state would be called for.
We are no longer a nation of laws. We’re a nation of anarchy and lawlessness.”
I have nothing but disregard for this shrieking, Ron Paul-loving dolt, but I guess strange times make strange friends.
If I try to communicate with this guy on his blog, will I get put on some sort of watchlist?
#183 Oh I almost forgot, prices are also going up in both Saddle Rivers.
“If I try to communicate with this guy on his blog, will I get put on some sort of watchlist?”
If you mean some sort of watchlist that you’re not already on, then no.
patient (186)-
If I get pinched by the FBI, I’m telling them you’re the person who’s egging me on. ;)
KL [184],
WOW.
If you really want to get Keith at housingpanic riled up, post a comment along the lines of “I think we should give amnesty to all undocumented workers”. He has oceans of anger and he directs a good chunk of it towards illegal immigrants. I agree with a lot of his message but he has a lot to learn about message delivery.
jmac (189)-
Agreed. Whatever his problem is, the bitter, persecuted loser at the core of his being distorts what is sometimes a good message that he’s trying to get out.
Clotpoll. re: A 1031 exchange – Thanks, I just googled that. It felt like I opened a door to a secret club. They were all laughing because I pay taxes.
TJ
Congrats….now grieve the taxes!!
Ray (191)-
Once you’ve gotten a feel for 1031s, don’t come back here and join the crowd that thinks there’s no real money to be made in RE.
My Dad spent the last 20 years of his life “laddering” from one investment property into another, never owing cap gains on any of the transactions. When he died, the tax liability went away, as his final properties passed to my Mom with a stepped-up basis. They were then subsequently sold with no taxable gain.
Grim where you been? Paulson send out a gov’t sponsored cyber attack?
Looks like the Bush bailout plan is much ado about nothing.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aUt8lwaz9tbw&refer=home
I don’t know about your opinions , but I think this is a slap in a face to all honest and responsible people.
Am not mean person but I sure hope it fails !!
Reduce prices’s, they are over inflated, homes will sell!!!
Could a move bee motivated by election year?
Bush’s bail out plan is no big deal, the average subprime mortgage had a 7-9% teaser that was to adjust to a 9-11% loan that none of the people could afford anyhow and the houses are underwater so bank does not want them anyhow. Bottom line most of them overpaid 50 to 100K and they are still out the money and they are still paying 1-3% more than a 30 year fixed anyhow. Plus all those record foreclosures announced today are still going to hit the market. I am with S&P that we are going down till 2010. However, this is a good step to prevent another million homes from hitting the market during a glut of homes for sale.
Thank you John!!!
197#, john, these folks are paying 7-9% rate, which is much higher than standard 30 year rate. in addition, they bought at the peak price. it is moral for government to give them some relief for the sake of overall economy. Assume they are over paied 50K to 100K, they will be get even after 2 to 3 years if the house price starts to move up again.
bottom line: interest rate is falling, foreclosure is freezing, 200k jobs per month is adding, wall street bonus is coming, gasoline is getting cheaper… pant up folks.
The quants at Goldman are already constructing the model to make money off of this freeze. BTW, doesn’t “The Subprime Freeze” sound like a movie about pulling a con job, sort of like “Ocean’s Eleven”? Or maybe it’s an old song, like an old blues shuffle.
Couldn’t log on all day until now.
What I don’t understand: Some of the press reports say that the banks and mortgage servicers wanted a shorter freeze, variously reported as a year or two, or a year to 3 years.
So why is Paulson pushing for 5 years?
Didn’t someone else want 7? Was that the head of the FDIC??
201, demos want 7 years. those homeowners wants 30 years…
especially those who bets against real estate. SRS down 5 bucks more.
>I don’t know about your opinions , but I think this is a slap in a face to all honest and responsible people.
184:
Clot, you’re heavily armed, right? Mind if I store some stuff in your garage during the revolution?
Jamey (204)-
Define “stuff”.
Che Guevara thong bikinis, plans for a car that runs on water, that sorta thing …
(206)-
I was more hoping for dry powder, Krugs, ducats, bullion, RPG’s and ammo.
Clot 207,
So you have room for a small tactical nuke??? it fits in a suitcase, it wont take much room, i promise!
So lets me see –
Subprime folks get thrown a bit of SWAG and get to stay in homes they lost money on. Wall Street Folks and upper class folks with fat 401Ks and brokerage fund accounts are up a lot percentage wise in just the last two weeks than the subprime folks will ever make in their lifetime on those money pits they bought, who got bailed out?
We live in an interesting society, A wall street IB Banker gets a million dollar mortgage at 7% is in the 40% tax bracket gets a $2,800 a month tax write for his own house will be the first to complain when a 400K subprime person rates stays at 8% instead of 10%. Basically saving the subprime person who barely puts food on the table a whooping $800 a month, but even better for the most part under Bush’s plan the bank mainly eats the $800 a month, while you and I get to pay extra taxes to cover the IBankers $2,800 a month write off on his two bedroom condo.
As someone already asked, anybody heard from grim, anybody seen black helicopters around his house? or perhaps he won a free trip to cuba?
He was in Florida no? Perhaps he was gagged, bagged and put on a go fast boat to Gitmo?
Hahahahaha…this brightened up an otherwise dismal day. Enjoy!
Opportunity is Knocking Hard at Your Door!!
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#201 scribe…hard to imagine at this point but 5 years from now is another big election. this has politics all over it.
The quants at Goldman are already constructing the model to make money off of this freeze.
That’s an easy one. The lawyers.
Holders of super senior tranches will sue.
Marginal borrowers who are on the border line, but get left out of the rate freeze deal will sue claiming the cut off point was arbitrary, they really should have been included amd/or were discriminated against
Just a thought..what are two things that have outpaced inflation in the last 10-15 years and have gov’t profits all over them? College and housing (with the extra added bonus of then gaining more property taxes, that is two for one) …yet another creative way of taxing you. They now tap your social security check if you owe Fed Student loans as well. It’s not for the people any longer, it’s more soprano like…proverbial gun to your head
Vodka (208)-
Just like “24”. Cool.
Sean (211)-
I think today’s blog outage was a DOS attack engineered by Treasury.
The GS folks are busy today figuring out how to defuse Andrew Coumo so he does not pull an Elliot Spitzer and crucify them on the way to the governors mansion.
Clot you stole my bit #194
Had trouble logging in all day.
So, it’s not just subprime, d’huh:
Below, from Marketwatch:
http://blogs.marketwatch.com/greenberg/2007/12/straight-talk-on-the-mortgage-mess-from-an-insider/
DOS, DOD, FBI, CIA, HUD, GS, BAC, Fannie&Freddie
They now have all our email addresses and will be after all of us for perpetuating and predicting this RE abyss.
The bailout won’t work. Look at Slide #7 in the attached link to the presentation Countrywide CEO made in September 07. 58% of foreclosures are because of drop in income. Only 1.4% are because of mortgage resets.
http://tinyurl.com/29oodd
220 ..thanks ..Herb said taht homes in CA would have to drop 50% in asking price…..what are your opinions about pricing in NYC/NJ areas??
The whole bailout plan is a smoke and mirror plan. The vast majority of people will think the Govt. is helping other people in trouble. But ask people who are actually in trouble and you get the feeling it just gives them a few months breathing room before they are kicked out on the street.
I am guessing that a majority of people being helped won’t keep their homes up to the 5 year mark.
The funniest thing is that Paulson was calling the bottom of the housing market this spring, while his buddies at Goldman were shorting the cr*p out of the same stuff they packaged and sold to investors, and calling for a 30% decline in private.
For argument sake, say I have a $400K subprime mortgage at 8%. Monthly nut is $2935. If it adjusts to 12%, it’s a $1180 increase. However if the house declines 30% in 5 years, I am still paying $4115/month, even though I could buy the same house for $280K 5 years later and pay just 50% of the reset mortgage amount. Once people will realize this, they will walk away from their houses en masse, declare bankruptcy and come back in 5-7 years. I wouldn’t want to stand in the way of these stampeding elephants.
hey! we’re open for business.
I had to content myself with pestering grim on email.
bi Says:
December 6th, 2007 at 3:21 pm
Assume they are over paied 50K to 100K, they will be get even after 2 to 3 years if the house price starts to move up again.
Bi, your assumption (given the current fundamentals) is the same as saying that the Titanic might rise again.
what a day!
http://finance.yahoo.com/charts#chart8:symbol=xhb;range=1d;compare=srs;charttype=line;crosshair=on;logscale=on;source=undefined
Every time bi posts I feel like I am making contact with an alternate universe.
An ever optimistic, continually smiling and gently naive universe.
It almost makes me want to swaddle him.
http://news.yahoo.com/s/nm/20071206/bs_nm/usa_economy_housing_dc;_ylt=AvmQCm5B2kw3cnPlbuqpz3us0NUE
NEW YORK (Reuters) – Housing markets from Punta Gorda, Florida, to Stockton, California, will crash and suffer price drops of more than 30 percent before the housing crisis is over, a report from Moody’s Economy.com said on Thursday.
On a national level, the housing market recession will continue through early 2009, said the report, co-authored by Mark Zandi, chief economist, and Celia Chen, director of housing economics.
The report paints a worsening picture of the hard-hit housing sector, which is in the midst of its worst downturn since World War II.
While activity will stabilize in 2009, it will not be until 2010 before a measurable improvement in sales, construction and pricing will emerge, the report said.
House prices are forecast to fall 13 percent from their peak through early 2009. After accounting for incentives home sellers are offering buyers, effective declines peak-to-trough will total well over 15 percent, the report said.
Punta Gorda, Florida, and Stockton, California, are the hardest hit markets in the U.S., with price declines from peak-to-trough forecast at 35.3 percent and 31.6 percent, respectively.
“This is the most severe housing recession since the post-World War II period,” Zandi told Reuters.
These markets have been hard hit due to several reasons, namely the exiting of investors from the areas, a fair amount of subprime mortgage loans causing an increase in foreclosures and overbuilding by home builders, Zandi told Reuters.
Home sales, however, should hit a bottom in early 2008, which will mark a 40 percent drop from peak-to-trough.
“The housing market’s most fundamental problem is it is awash in unsold inventory,” the report said.
In addition, the housing downturn will take a large toll on the rest of the economy. During the height of the boom in 2004-05, housing contributed nearly a percentage point to annual real gross domestic product, or GDP, growth.
In the current downturn, housing will subtract more than one percentage point from U.S. economic growth this year, and a percentage point and a half in 2008, with the effect on growth seen most pronounced next spring and early summer.
“The intensifying housing recession is expected to weigh on the broader economy, but not break it,” the report said.
The Moody’s Economy.com’s report, titled “Aftershock: Housing in the Wake of the Mortgage Meltdown,” said that when house prices hit their nadir, some 80 of the nation’s 381 metropolitan areas will experience a double-digit peak-to-trough price decline.
Price declines, however, will vary in degree throughout the nation, with more than a 15 percent peak-to-trough expected around Washington and Detroit.
Significant declines are also expected throughout most of Arizona, California, Florida and Nevada. During the housing market’s heyday, speculative activity was rampant in these areas, causing prices to surge much higher than other regions.
The Northeast corridor, and markets such as Boise, Idaho, along with Denver and Salt Lake City, will experience between 5 percent and 15 percent declines. In the rest of the industrial Midwest and parts of the Mountain and Pacific Northwest, prices will fall more modestly.
While some point to rising default rates in the subprime mortgage market, which caters to borrowers with poor credit histories, as the root cause of the problems plaguing the housing market, Moody’s Economy.com said an unwieldy supply of unsold homes is the prime factor.
The U.S. Census Bureau said that, as of the third quarter of 2007, there were close to 2.1 million vacant unsold homes for sale, equal to 2.6 percent of the stock of owner-occupied homes.
A well-functioning housing market has a substantial amount of inventory, but in the quarter century between the early 1980s and mid-2000s, the vacancy rate stayed near 1.7 percent.
The difference between the two vacancy rates provides a good estimate of the amount of excess inventory in the market, which currently totals nearly 750,000 homes and is by far the highest level of excess inventory in the post-World War II period, Moody’s Economy.com said.
Moody’s Economy.com, which is based in West Chester, Pennsylvania, is an independent subsidiary of Moody’s Corp and provides economic research and consulting services to businesses, governments and other institutions.
bi [228],
Serious question. Are you delirious or feebleminded, or some combination thereof? When you view long term trends, daily/weekly or even monthly action is meaningless. When a stock, bond, commodity or currency is down over 60% fron its high, only a dolt would cheer positive action on any given day. Do you realistically think a stock will go into a whirlwind decline without popping its head up?
Please do us all a favor, stop commenting on price action on a day to day basis. Come back and bark, howl, chirp or whatever a FB does, when everything you comment on breaks its 200 day moving average. Until then, don’t subject us to your repetitive, boring, moronic posts.
HE (219)-
Sorry. Funny thing is, I wasn’t entirely joking. You never know…
Found a 3/2 in Teaneck today on NJMLS.com:
OLP earlier this year, according to a posting by Rich here back in 11/7 was $399k; sold in 2/05 for $375k; assessed at $338k according to Zillow; LP this week $299k–preforeclosure.
Called the agent today to make an appointment to view it–already has a contract on it, with three more offers if this one falls through (this could be puffery).
So prices in some towns appear to finally be creeping down a bit, but there are some sideliners still chomping at the bit, ready to make the leap if the price even approaches reasonable.
lisoosh (228)-
“It almost makes me want to swaddle him.”
I want to swaddle him, too…in duct tape.
230#, bob, today is a monumental day. it is the start of the end of current housing down trend. seriously. even though the interest/unemployment rates are low, a lot of buyers are still at the side line.
the biggest fear in housing is the time bomb of massive foreclosure. but bush difused it again.
But if you buy some time, which this plan will, you’ll be able to coax the previous homeowners, who are now renters, to get back and buy, while keeping inventory off of the market to stabilize prices. And you need lower rates, to incentives buyers. And you’ll get them.
# 221 ..OHHNOOOOO ORANGELLO ATTACK????
“Home must be worth more than the mortgage”
Checkmate.
237 – And did I hear correctly that the homeowner must have no more than 3% equity in the house?
That would mean that only those with 0-3% equity are eligible, a pretty tough window to reach, and who does the valuation in this market?
Just a comment re: Citi … this train wreck will most certainly get much worse, and their lame-a** statement saying “no (layoff) numbers are factual” is so inept and transparent it’s funny.
Of course they’re going to cut deep, do you think those Abu Dhabi folks just threw in for 7 and change without assurances (wink nod) there’d be a good heaping of Citi carcasses cutting down the expense base?
They learned their lesson last spring, 17k barely moved the needle; now everyone’s expecting 45k, and they ain’t exactly in a position to disappoint. Plus, a 50% drop in the stock price is doing serious damage to senior exec options, and if you know Wall St you know they’ve got CYA down quite well.
The icing on the cake, word is employees are instructed to attend one-and-only-one Holiday Party this year…lol
Sounds like someone has a leaky water-wing, about 1,000 miles out in the Atlantic.
Steve [244],
When the smoke clears, at least 60k will be gone, approx 20%. The firm is operating like a dysfunctional family. The CEO position at Citi would normally be the most coveted job in banking. The top dawgs on WS are avoiding it like the plague. If their name was Enron they would be now be swimming naked about 1,000 miles out in the Atlantic.
“230#, bob, today is a monumental day.”
bi,
Step up and get long/short, press the pedal, come back in 6 months with a progress report. I sincerely, not sarcastic, hope you make $, not to be confused with make money (Where is Make?]
bi,
Is this what you are babbling about?
http://finance.yahoo.com/charts#chart1:symbol=xhb;range=2y;charttype=line;crosshair=on;logscale=on;source=undefined
Clot,
I’d put nothing past the Plunge Protection Team. From lying out their mouths with their “we want a strong dollar bs”, to the Super SIV, to today’s dog and pony show they are throwing more propaganda at this intractable mountain of debt than they did at the terrorists.
This is a good read:
http://www.minyanville.com/articles/Fed-banks-debt-liquidity/index/a/15121
BC (246)-
I think I saw Make picketing in front of the Garden today, yelling “fire Isiah”.
HE (248)-
When I first saw the inverted triangle in that article, I thought it referred to a Ponzi scheme.
Funny…it’s kinda the same thing as what the author was getting at.
hehe [248],
It was a perfect game of musical chairs regarding the PPT; Kohn, Bernanke, Saudi increasing, Goldman negative on gold/bullish the dollar, Canada/BOE cutting rates. I was wrong by 3 days. I thought they would begin their shenanigans the Friday after T-Giving.
Goldman wants a rate cut, the fed relays their concern regarding the dollar/gold. Goldman pulls a 360 and is now “officially” negative gold. What do you think they are doing as their customers take their advice and dump gold? Goldman yanks the puppet strings and the fed cuts. Weimar anybody?
HE (248)-
The PPT is gonna have a nice little run here for awhile. There seems to be a well-correlated effort to both talk and manipulate the situation to their advantage. However, to quote Gertrude Stein: there’s no THERE there.
I caught Cramer tonight, yammering about buying some AUY and ABX as portfolio insurance.
As he said that, I thought to myself that I should be about 6-8 weeks away from putting my entire portfolio into gold.
All disclaimers.
BC (251)-
Goldman’s probably buying all the gold they can get their hands on.
BC (245),
Yep, sounds about right, I’d say.
Unfortunately I know some multi-decade veterans who really have no idea the mess heading their way. Lots of folks in denial across the board… someone needs to ride through the offices yelling “The Consultants are coming! The Consultants are coming!”
But then again, why spoil Xmas. There’ll be plenty of time to slash n burn in 08; that’s better than the Bear folks got, aced 1 month before bonus time with just a fraction of their payout. Never ceases to amaze.
Hey, let’s just call up Barbara, I’m sure she can hook them all up with a phat pad out in PA.
Clot/BC,
GS trading against client accts? Say it ain’t so!
In a past life, created/licensed indices out to structured desks. Anytime we had a hot new product in the pipeline, all the usual suspects would come up, to partner… can’t tell you how many times colleagues swore never to work with GS- it was just known, they were not to be trusted. Even the most ironclad NDA, those guys were sketchy.
MS, ML, JPM, Citi, plenty of players you could trust on a handshake. GS, get out the pumice soap and scrub!
If there’s any such thing as Karma, someday those guys will get taken out at the knees. I won’t be shedding a tear.
Toll Brothers Sees Some Relief
From Bush Plan but Issues a Grim Forecast
By MICHAEL CORKERY and JOHN SPENCE (WSJ)
December 7, 2007
Toll Brothers Inc., which yesterday reported that it suffered its first quarterly loss in its two decades as a public company, expects a small amount of relief from the Bush administration’s housing rescue plan.
The Horsham, Pa.-based builder issued a gloomy forecast for 2008, making it clear that it doesn’t expect a major improvement soon. Chief Financial Officer Joel Rassman said the company expects revenue to fall in 2008. The company declined to offer a profit forecast citing “numerous uncertainties related to sales paces, sales prices, mortgage markets, cancellations, market direction” and other factors.
Toll, which focuses on luxury houses and condos, is the latest home builder to post a quarterly loss as home sales have all but frozen in some communities and prices are plunging. The Dow Jones Wilshire U.S. Home Construction index, which includes Toll and the other large builders, is down 53% since Jan. 1, although the index rose 3.3% yesterday, after President Bush announced his plan to freeze interest rates on certain mortgages…
“By many measures fiscal 2007 was the most challenging of the forty years that Toll Brothers has been in business,” Mr. Toll said in a written statement.
…The company expects to deliver between 3,900 and 5,100 homes next year, with the average price ranging from $630,000 to $650,000. Mr. Rassman said he expects the average price to fall over the year. Toll delivered 7,023 homes in its fiscal year ending Oct. 31, with an average selling price of about $697,500.
Unlike most builders, Toll has held its prices, even at the risk of a slower sales pace. Part of Toll’s strategy is to hold on to valuable land instead of building less profitable homes on it.
…Analysts question how long Toll can hold out on this strategy as the market deteriorates. Mr. Toll answered yesterday: “We are not at a point where we are ready to discount what we consider prime ground,” he said. “I can’t say how long it will be.”