From Bloomberg:
Government Is `Here to Help’ Subprime Borrowers
By Caroline Baum
Congress is making noises about doing something to help homeowners who can’t meet their mortgage payments hold on to their slice of the American Dream.
…
As a sideshow, our elected representatives will probably spank regulators for not doing more to curb deceptive lending practices and hang executives of subprime lenders out to dry for presiding over the boom-bust cycle.While lawmakers’ intentions may be noble, it’s a pretty safe bet that, left to their own devices, they will muck things up even more.
Just to summarize the storyline to date: During the housing boom of the last five years, people with bad credit histories, many of whom lied about their income and nature of employment, got mortgage loans they weren’t qualified for to buy homes they couldn’t afford. Now that home prices have stopped rising, and the house can’t be refinanced or sold at a profit, Congress wants the taxpayer to subsidize the mortgages so these folks can remain in their unaffordable homes.
What’s wrong with this picture? Surely there were plenty of cases of fraud, as there always are during extended periods of rising asset prices. (The bodies of both victims and perpetrators generally float to the surface when the bubble bursts.) The legal system is capable of prosecuting loan fraud, a federal crime, be it on the part of the borrower (lying about his income) or the lender (misrepresenting the terms of the loan).
…
The percentage of loans entering foreclosure rose to a record 0.54 percent in the fourth quarter, according to a quarterly report from the Mortgage Bankers Association. Delinquency rates rose for all major loan categories, with subprime loans at a four-year high of 13.33 percent.That’s creating a “political firestorm, making it a priority for Congress,” says Andy Laperriere, managing director at the ISI Group in Washington. “Congress may be forced into action in the same way they were forced to do something about accounting issues after (the scandals at) WorldCom and Enron.”
…
Plenty of unqualified borrowers wanted to cash in on the latest get-rich-quick scheme. Who’s to say that a loan with a low, two-year teaser rate wasn’t “suitable” for the purpose of flipping the home in 18 months for a 30 percent profit? Borrowers and lenders should be able to negotiate freely, which doesn’t mean don’t ask (the lender), don’t tell (the borrower).
…
“When transactions go well, no one complains,” Frenkel says. “When they go sour, fingers point in every possible direction.”
BoE Takes Property Blame
http://news.sky.com/skynews/article/0,,30400-1256664,00.html
The group that decides the interest rate deliberately fuelled a consumer boom to boost house prices and personal debt so that “UK Plc” could avoid recession.
I knew this would happen.
Mortgage apps down a bit. From MarketWatch:
Mortgage applications fall 2.7%
Applications for mortgages at major U.S. lenders dropped 2.7% in the past week as interest rates rose, the Mortgage Bankers Association reported Wednesday.
Total applications including purchase loans and refinancing loans – fell 2.7% week-on-week and were up about 18% compared with the same week a year ago.
The number of applications to refinance an existing mortgage dropped 4.5% in the past week after hitting an 18-month high the week before. Refinance applications are up about 40% compared with the same week a year ago. Refis accounted for 45.3% of applications, down nearly a percentage point.
The volume of loan applications to buy a home fell 0.9%. Purchase loans are up about 4% compared with a year ago.
By contrast, U.S. home sales are down about 7% from the same time last year.
CR on why we are seeing an increase in Mortgage Applications.
http://calculatedrisk.blogspot.com/2007/02/mba-purchase-applications.html
A friend i know is looking for condo/townhome in west new york area. I did a search on that area and wow – any decent condo/townhome is greater than 600K. All this with for a “condoshack” which is still 40 mins from midtown and a crappy school district.
To me it seems that the price downturn has not hit that area yet. Anyone with insight into the area care to comment on the state of real estate there?
What goes boom must go bust
Commentary: U.S. housing collapse comes as liquidity dries up
NEW YORK (MarketWatch) — Mortgage marketing campaigns have been changed from “Money? Free!” to “Last four years of W2’s – notarized!”, font sizes have been reduced in print ads, get-rich-on-real-estate infomercials have been moved from prime time to 2am, your brother in law has finally clammed up. Indications, all, that something has changed – really changed – in the housing market.
…
It is said that when men go mad they do so all at once. But they gain their sanity slowly and one by one.
That credit supply is being tightened means we’ve passed the ‘one-by-one’ stage and we’re approaching ‘all-at-once.’
Much more at the link above,
Rich
Yes, we punish our corporate lying execs, but we’ll save the lowly people who lied for hundreds of thousands of dollars for homes they can not afford..
AMERICA, WHAT A COUNTRY! IS GREAT!
Re post #5
Att, prices haven’t dropped much anywhere. People are still under the belief that “it’s different here” and aren’t going to move on price until inventory really piles up. Inventory grew considerably last year and is probably going to be higher at every point this year.
As houses sit on the market and more and more foreclosures appear, then and only then will prices move substantially. While this year is shaping up to be pretty bad, the fact that people are clinging to a false market perception will keep prices from moving down all that rapidly. Look at those West New York condo/townhomes in August and I doubt you’ll see much that starts with 6, but I wouldn’t expect to see a whole lot that starts with 3 either. Maybe in 08….
If they want to bail people out they should make them produce their loan application. If you can prove you were deceived, then maybe you get some assistance. If you lied about your income, you go to jail. I have a strange feeling most people looking for a bailout wouldn’t show up.
Bailout cry babies are looking for free money.
Non-bailout adults are looking for a second job because they’re honest, hard working and want to keep their house.
#5
Because of Wall St. bonuses prices around Manhattan have actually risen, if your friend is looking for a price drops, he/she needs to look away from the city.
I hate to be repetitive, but as long as the themes are going to repeat…
The “buyers” (now homeowners) neither deserve nor really need a financial remedy to get out of this mess, what they need is a legislative remedy, i.e. a change to the forfeiture and bankruptcy laws.
Yes, they were greedy and stupid, but without the banks/lenders throwing lending standards out the window they could not have done the stupid and greedy things they did. It’s called fiduciary responsibility.
Let the borrowers facing default walk away without the burden of having to repay the difference in value between what their property brings on the open market and what they owe, and the people who take it in the shorts are the ones who deserve it most, lenders.
Don’t spend a dime to bail the lenders out.
Maybe the prudent ones[I,we] are the idiots.
Re post #6:
While there’s no doubt that the well of mortgage money is starting to run dry, there is still the matter of massive liquidity in the system.
For the last few years RE was just sucking it up like nobody’s business, but if it can’t, all that money has to find a new place to go.
I have no idea where it’s headed, but I really doubt it’s going to evaporate quickly enough to keep from causing more problems.
I don’t see any single sector ready to take it, so the most likely answer now could be inflation, or worse, stagflation.
Don’t think that thought hasn’t crossed my mind, BC.
#5 re West NY condoshack
I agree with you most NNJ RE with This is the interesting part
His agent told him that take the asking offer. Becasue
1. The asking offer has cash in the bank and mortgage is pre-approved.
2. The 10k above offer has most asset in bonds and stocks and no approved mortgage yet.
3. The 10k above offer might not get an offer because creative mortgage is more diffcult to get. And the co-op board might not approve this mortgage. This is coming from an agent!!!!
4. If 10k above can’t get a mortgage or board approval. THe asking offer might have move on. AND THE AGENT THE FORT LEE MARKET WOULD EITHER STAY FLAT OR GO DOWN. So take the asking offer with mortgage approval now.
Even agents are telling sellers to stay away from creative finaning. And they are actually sellers that sell now because it ain’t getting any better…….
CC
Let the borrowers facing default walk away without the burden of having to repay the difference in value between what their property brings on the open market and what they owe, and the people who take it in the shorts are the ones who deserve it most, lenders.
Don’t spend a dime to bail the lenders out.
I would agree. By saving the borrowers who got into these situations, you’re essentially saving all the lenders. Some pain has to be felt by all this insanity. Sub-prime is just the tip.
I was very shocked to see the amount of foreclosures starting in Morris county. Just goto the Morris County Clerk records search, and search for document type “LPF”. I found a couple in towns like Kinnelon, Morris Plains, and more. If you look at all the linked mortgage docs, you’ll see many people have taken adjustable rate loans 1-2 years ago. Looks like the payments reset and they can’t keep up with them.
-Richie
It’s called fiduciary responsibility.
I was always under the impression that unless the borrower entered into an agency relationship with a mortgage broker there was no fiduciary responsibility owed. Those acting in a “mortgage solicitor” role are in no way fiduciaries.
jb
Last post didn’t come out right. I am posting again. (jb pls delete 15 for me if you can)
#5 re West NY condoshack
I agree with you most NNJ RE with LP 3. The 10k above offer might not get an offer because creative mortgage is more diffcult to get. And the co-op board might not approve his creative mortgage. This is coming from an agent!!!!
4. If 10k above can’t get a mortgage or board approval. THe asking offer might have already move on. AND THE AGENT SAID THAT FORT LEE MARKET WOULD EITHER STAY FLAT OR GO DOWN. So take the asking offer with mortgage approval now.
Even agents are telling sellers to stay away from creative finaning. And they are actually sellers that sell now because it ain’t getting any better…….
still not coming out right. I am posting again. (jb please delete 15 and 17 if you can)
#5 re West NY condoshack
I agree with you most NNJ RE with LP less than 1 M haven’t come down yet. However I know for fact that Middlesex and Monmouth counties have come down 5-10% in 06. It might slowly move towards NNJ.
I know someone in the family just went under contract his 2 bed co-op in fort lee a week ago. LP is 250k. 2 offers came in within a week. One at asking and the other one at 10k above.
This is the interesting part
His agent told him that take the asking offer. Becasue
1. The asking offer has cash in the bank and mortgage is pre-approved.
2. The 10k above offer has most asset in bonds and stocks and no approved mortgage yet.
3. The 10k above offer might not get an offer because creative mortgage is more diffcult to get. And the co-op board might not approve his creative mortgage. This is coming from an agent!!!!
4. If 10k above can’t get a mortgage or board approval. THe asking offer might have already move on. AND THE AGENT SAID THAT FORT LEE MARKET WOULD EITHER STAY FLAT OR GO DOWN. So take the asking offer with mortgage approval now.
Even agents are telling sellers to stay away from creative finaning. And they are actually sellers that sell now because it ain’t getting any better…….
CC
Lindsey,
Take a look at the National Association of Mortgage Brokers (NAMB) model disclosure:
http://www.namb.org/namb/Model_Disclosure_Form.asp?SnID=7081
SECTION 1. NATURE OF RELATIONSHIP
In connection with this mortgage loan we are acting as an independent contractor and not as your agent.
jb
From MarketWatch:
Fremont General inks deal to sell $4B in sub-prime loans
Fremont sees pre-tax $140M loss from sale of $4B in loans
Fremont selling loans at discount due to sub-prime weakness
Fremont General expects deal to close in next several weeks
Fremont General gets $950M in first sale installment
We focus so intently on economics and real estate that we sometimes miss the real news..
From the Scotsman:
Polish authorities seek ban on ‘kilt drunks’
A BAN on “men in skirts” is being considered by authorities in Poland, because of the number of drunken Scots that have been upsetting locals on stag night weekends.
Poland has become a major destination for UK tourists mainly attracted by the cheap beer.
But Scottish visitors have been gaining an unwelcome reputation for showing off the fact that they have nothing on under their kilts.
…
In the city of Wroclaw, in the south-west of Poland, officials are exploring a kilt ban after being horrified by groups of drunk Scottish men who lifted their kilts to strangers to reveal their buttocks.
“Connecticut Democrat Christopher Dodd said his letters to Federal Reserve Chairman Ben Bernanke, Comptroller of the Currency John Dugan and other regulators seek “to clarify what steps these agencies took in the face of the growing crisis of subprime mortgage lending.”
“There are numerous indications and reports that the alt-A market is starting to experience the same kinds of problems we are currently seeing in the subprime market.”
“Dodd said his committee and consumer groups have gotten reports for years about lending abuses in the subprime market. He asked Bernanke, “Can you explain what actions, if any, you have taken in response to these complaints.”
[Edit], Well sir, the copters and the printing presses are set to swing into action as soon as that fat lady sings her first note. The PPT has been very active. However, at this point the desired results have not been achieved.
http://investing.reuters.co.uk/news/articleinvesting.aspx?type=breakingFundsNews&storyID=2007-03-20T212342Z_01_N20384354_RTRIDST_0_USA-SUBPRIME-DODD-UPDATE-2.XML
“Can you explain what actions, if any, you have taken in response to these complaints.”
In response? I’m confused. I thought “easy money” the whole point of the Fed’s actions since 9/11.
jb
jb [24],
Just typical. Different markets, same script, always after the horse has long left the barn.
Congress needs to focus its energy on better industry regulation and oversight, not from saving people from themselves.
FYI, pretty good NYC RE daily email service:
http://server.pinhawk.com/latest.php?nl=62&c=36
We have spent approx $400 billion fighting an enemy that we can not defeat. By the time all is said and done, it may cost us close to $1 trillion in Iraq. Now the hapless, preyed upon [sarcastic] US homebuyer is about to be tossed to the wolves, just in time for 2008 election fodder. Don’t our leaders take an oath to protect our interests and serve the public. Well, if we can spend such a ludicrous amount of $ in Iraq, can’t we offer help to the abused here in our own country?? Get ready, our elected leaders will be serving. This will be the show of all shows, buckle up.
We have spent approx $400 billion fighting an enemy that we can not defeat
Hey Bob, Since we didn’t have the $400B to begin with, we lost nothing. So what if nobody helped us, we borrowed it from other countries. And we don’t have to pay for it either. Our kids and grand kids can pay for it.. It’s for Freedom. Don’t you know the value of Freedom?!
[sarcasm off]
I just don’t understand people anymore. Does anyone read the paperwork the mortgage broker hands you on these things… Its there in black and white.
“Dodd said his committee and consumer groups have gotten reports for years about lending abuses in the subprime market. He asked Bernanke, “Can you explain what actions, if any, you have taken in response to these complaints.”
errrrr …”for years” …
That invites the response so why didn’t YOU do something sooner?
Freedom?
Freedom from responsibilities? Priceless!
Thank you Senator Dodd!
What now???
Hyperinflation or deflation?
Rent,
I hear you. Just like we are still paying for the S & L crisis, our kids/grand kids may be paying for this possible bailout. I hope I’m wrong, my gut tells me otherwise.
This just came through in a daily email summary. The full story is subscription only, so I can’t get it:
Looking for ‘suitable’ language in predatory-lending legislation
Rep. Barney Frank, the Democratic chairman of the House Financial Services Committee, says he wants clear language in legislation to halt predatory lending in the home-mortgage industry. Proposed language has called for requiring “suitable” loans — a term that Frank finds less than suitable. “That just means too much, too little. Let’s look at what we mean. We probably mean … do not lend people more money than they can possibly ever repay. Let’s say that, but let’s not say ‘suitable,'” he said. The Bureau of National Affairs (subscription required) (3/21)
If these “good intentions” go “too far”, they are going to literally destroy the Alt-A market.
Very little of what takes place in the Alt-A market will be classified as “suitable”. Yes, there are exceptions, however, the reason most individuals move to the Alt-A market (I/O, Options, Neg-ams, etc) is because they can not afford to pay back traditional fixed-rate loans.
Many of these individuals are simply relying on (Minsky’s)Ponzi Finance to afford these homes. They never intended to pay back the loan, instead hoping that future (outrageous) appreciation would more than make up for the cost of ownership.
jb
Lending standards got so loose in the past few years that any increase in standards (tightening) at this point is going to take potential buyers out of the market. Fewer buyers means lower demand. We’re already looking at home sales down by double digit percentages, what happens when even more potential buyers are removed from the mix?
What a fine mess..
jb
Yes, we punish our corporate lying execs, but we’ll save the lowly people who lied for hundreds of thousands of dollars for homes they can not afford..
AMERICA, WHAT A COUNTRY! IS GREAT!
If there is any bailout to be had, it will likely be spun as a way to save the homeowner, so the politicians can be viewed in a positive light by voters. The reality will likely be geared toward the lenders and banks.
I wouldn’t worry too much about the government saving the “lowly people”. Remember Katrina?
Hat tip to Ben for the link, from the Boston Globe:
Housing market limps toward vital spring season
The Massachusetts housing market showed signs of bumping along the bottom of a year long slump as it heads into the crucial spring season.
Prices for single-family homes sold in February declined between 4 percent and 5 percent from February 2006, according to two different reports released yesterday by real estate interests. The median house price fell to $325,000 from $339,000, while condo prices slipped just 1.8 percent, to $270,000 from $275,000, according to the Massachusetts Association of Realtors’ monthly housing report.
Separately, Warren Group, which collects data on a larger pool of transactions, reported the median sale price for single-family homes in February falling to $300,000.
Followup on #5 post of mine.
Is actually someone buying in West new york?? I mean the sellers can put a dream price for their condo shack, but there has to be a buyer to realize that price. Does anyone have data on how the sales are doing in that area??
My friend told me that his real estate agent is telling him that West NY is “Hot” and not to expect any bargains. At first I dismissed the agent’s talk as typical RE agent talk, but after looking at the listings in that, I’m in a kinda shock. 600K condoshack seems to be a bargain there, since most of them are asking even much more than that price. What can justify such high price – I mean it is still 40 mins from mid town, a super crap school district. What am I missing??
Wow!
From CNN/Money:
New Century execs refuse to testify in Senate
Executives from New Century Mortgage Corp. refused to testify at a Senate Banking Committee hearing on the widening crisis in the subprime mortgage market, the panel said Wednesday.
Going to pass on a comment from a fellow coworker whom I have a great deal of respect for. His motto, “It’s a house. It’s not an investment. Live in it, take care of it, pick the right one, heck, you might even make some money on it one day, but consider that a GIFT not something expected. If you manage to outpace inflation then you’re doing just fine.”
His opinion on the potential price decline in the northeast is that it really isn’t going to happen, and I’m somewhat in agreement. I showed him the famous NY Times graph that charts the sale of existing homes adjusted for inflation.
Obviously, there needs to be a correction, but it can happen in one of two ways- Time or Money, and he thinks it’s going to be time, and I’m inclined to agree.
He thinks we’re not going to see a correction of much more than 10% give or take. ***HOWEVER*** this would still not bring the overall housing market back into anything approaching equalibrium- rather, prices will basically stay flat or nearly flat for the next 5-10 years. People will be faced with the unfortunate reality that by staying in their house, they are, in essence losing money like a Bank of America savings account that pays a 1% APR.
It won’t hurt your average homeowner smack dab in the middle of the forehead like it would if their neighbors house sold for 30% less than what they paid in 1 year. Rather, it’ll be a slow Chinese water torture, “Hey honey, it’s not so bad – we made a $15,000 profit. Remember when we bought this place for $580,000 nine years ago? That’s $15,000 we made!!”
just another comment from the offline peanut gallery.
Essentially what took place during the 93-98 timeframe (give or take a year on either side).
jb
Agree with JB & Cirrus.
The main question is are we in 89, 90, 91, 92 or 93?
If we are in 93, then I think its a decent Buy point.
Ok, I think we’re starting to see the first push of spring inventory hitting the market. I made a comment regarding this last week, but Clot/KL said they weren’t seeing it in their respective areas. Keep in mind that I’m looking at inventory on an aggregate level.
I’ve got GSMLS inventory (SFH, Condo, Coop) for Bergen, Essex, Hudson, Morris, Passaic, Somerset, Sussex, Union, and Warren up 2.1% in the past week and up 12.6% since Jan 1.
GSMLS Inv.
3/22/06 – 13,779
3/14/07 – 16,535
3/21/07 – 16,888
This is a 2.1% weekly increase, and a 22.6% increase year over year.
jb
marketwatch:
It is said that when men go mad they do so all at once. But they gain their sanity slowly and one by one.
That credit supply is being tightened means we’ve passed the ‘one-by-one’ stage and we’re approaching ‘all-at-once.’
And yet, at the end of the day, the prices in Northern New Haughty are still at the 2005 peak levels. We went to look at an open house in Wayne this past weekend. It was a 3 bedroom split that needed work. The walls were a mess with old puke colors that were scratched and gouged, there was no stove (the house was empty), it smelled, there were some holes in the garage walls, the attic space had no door, there were sheets hanging over some of the closet openings and the deck on the back of the house needed to be repaired and sealed. That’s what I can see in the 15 minutes we spent in this POS.
The realtor just leaned against the kitchen counter as we and other people looked at the house. There was a fair amount of people looking. The realtor appeared to be very nice as she smiled and said hello but didn’t ask us to sign in as they usually do. It seemed as though she didn’t really care. The asking price was (ahem…) $635,000 with over 10,000 in taxes. That would be over $4,000 per month just in PITI. (cough!!!!)
The sellers have apparently entered this seemingly new parallel universe in regard to pricing, and on the other hand, I’ve come to the conclusion that the best we’re going to see is a flat to slightly less decline in price over the next few years. When it comes to money, people won’t give up the house unless they’re in forclosure or dead. That’s what I’ve concluded and if nothing else, I’ve always been pretty good when it comes to intuition.
I don’t see any price reductions of significance as some have reported. Asking $550,000 for a house that was previously listed at $600,000 is not a price reduction. It simply went from pathetic to insulting. The next step down would be ‘unbelievable’, then ‘frustrating’, then ‘the price is high’ followed by ‘well maybe we can make an offer’ and then finally, ‘it looks like it’s priced fairly’. We are waaaaaaaaaaay far away from the last one. Take the 600K and price it at 450K and then you’ve become a serious seller. It’s that simple but I don’t see it happening here; maybe in Mississippi, but not here.
BC, the Cold War cost Trillions and over 100,000 American lives. People said that effort was ‘unwinnable’ as well.
Of course the alternative, not fighting, is worse.
I think we have a limited amount of time to drain the Mideast swamp (the shot clock being a nuke going off in a US city). After that, all bets are off, and Plan B from the US comes into play.
Plan A is no picnic, but compared to Plan B, it’s worth a shot.
I just hope these fascist regimes understand the stakes, and what will happen to them, should one of their zombies set off a nuke in a US city.
“Time or Money, and he thinks it’s going to be time,”
Cirus [41],
Based on that assumption, it will take approx 30-40 years for wages [real] to catch up to 2005 prices.
The only obvious difference between the early 90’s and now is the more widely used regular ARM’s and then the more exotic loans. These are what fed the outrageous price increases because otherwise many buyers would not have been able to afford the increases using a 30 yr fixed with 20% down. It could play out like it did it did in the 90’s but it could be quicker than alot of people think, especially if credit standards tighten and people can’t refinance out of those loans. I think by Spring 2008 you’ll know which scenario we are seeing.
Subprime bailout talk might actually backfire. Those 2.2 million aren’t the only “homeowners” out there. Just as non-homowners will be pissed, anyone who worked to take a regular loan or lives beneath their means, or even has already paid off their mortgage is going to be annoyed that those who overstretched could be given “free money”.
Shadenfraude works in many directions.
The main question is are we in 89, 90, 91, 92 or 93?
I’ll let you know in 2010. :)
jb
“BC Bob Says:
“Time or Money, and he thinks it’s going to be time,”
Cirus [41],
Based on that assumption, it will take approx 30-40 years for wages [real] to catch up to 2005 prices.”
I think it will be more painful than in the early ’90’s. The run up was steeper and more dramatic, and there was much more money out there. Now the money is being cut off. That said, this is the housing market, not stocks, a turn around takes more time. What I hear is a lack of patience.
Un [47],
All I was comparing was the costs of Iraq to the possibility of some RE bailout here. You know how this will be played out in our liberal msm. I agree with your point. However, what the hell are we doing in Iraq while Iran and North Korea proliferate.
I too have been questioning real NJ wages for some time now. For the life of me I can’t figure out how people can afford 800K houses with $20K+ taxes.
So after some digging I found this NJ DEPT of Labor site.
If these are the real wage numbers; look out captain, ICEBERG AHEAD!
http://www.wnjpin.net/OneStopCareerCenter/LaborMarketInformation/lmi23/index.html#WageData
Now for the legal mumbojombo: blah blah blah.
Use of any data from these tables must cite the source as
The New Jersey Department of Labor and Workforce Development
High-flying US fund manager Jim Rogers summed up the impending crisis like this:
“You can’t believe how bad it’s going to get. It’s going to be a disaster for many people who don’t have a clue about what happens when a real estate bubble pops. Real estate prices will go down 40-50% in bubble areas. There will be massive defaults. And it’ll be worse this time because we haven’t had this kind of speculative buying in U.S. history.”
Then he added ominously, “When markets turn from bubble to reality, a lot of people get burned.”
==================
Jimmy bob!
BOOOOOOOOOOOOOOYAAAAAAAAAAAAAAAA
Bob
“…look out captain, ICEBERG AHEAD!”
Jump SHIPPPPPPPPPPPPP!
BOOOOOOOOOOOOOOYAAAAAAAAAAA
Bob
#47, UnR,
Of course the alternative, not fighting, is worse.
I hate to get into a political debate here.
There was/is a way smarter way to handle the mid-east (which btw, is not the same as the ol’ mid-west). You don’t just go guns blazing in a foreign land with no budget against an invisible enemy.
If anyone has a nuke, that would be a sure way to make them fire it. And if they don’t, this attitude will inspire them to make one.
MISERY 2008!!!!!!!!!!!!
Keep dream’en u grubbers….want more then get a second job or work in retirement.
NO MAAS!
BOOOOOOOOOOOOOOOYAAAAAAAAAAAAAAA
Bob
The main question is are we in 89, 90, 91, 92 or 93?
My pick is that it is 1989 (2005=1987)
About 10 years of flat prices.
People mnove to NJ from Manhattan, Brooklyn and Staten island….follow those prices to see how much they have to spend after they sell there and move here….
I know everyone here loves CNBC..
http://www.cnbc.com/id/17720509
jb
If u learn anything from this blog retain this.
Richard Russell sums up it up best.
RULE 3: RICH MAN, POOR MAN: In the investment world the wealthy investor has one major advantage over the little guy, the stock market amateur and the neophyte trader. The advantage that the wealthy investor enjoys is that HE DOESN’T NEED THE MARKETS. I can’t begin to tell you what a difference that makes, both in one’s mental attitude and in the way one actually handles one’s money.
The wealthy investor doesn’t need the markets, because he already has all the income he needs. He has money coming in via bonds, T-bills, money market funds, stocks and real estate. In other words, the wealthy investor never feels pressured to “make money” in the market.
The wealthy investor tends to be an expert on values. When bonds are cheap and bond yields are irresistibly high, he buys bonds. When stocks are on the bargain table and stock yields are attractive, he buys stocks. When real estate is a great value, he buys real estate. When great art or fine jewelry or gold is on the “give away” table, he buys art or diamonds or gold. In other words, the wealthy investor puts his money where the great values are.
And if no outstanding values are available, the wealthy investors waits. He can afford to wait. He has money coming in daily, weekly, monthly. The wealthy investor knows what he is looking for, and he doesn’t mind waiting months or even years for his next investment (they call that patience).
But what about the little guy? This fellow always feels pressured to “make money.” And in return he’s always pressuring the market to “do something” for him. But sadly, the market isn’t interested. When the little guy isn’t buying stocks offering 1% or 2% yields, he’s off to Las Vegas or Atlantic City trying to beat the house at roulette. Or he’s spending 20 bucks a week on lottery tickets, or he’s “investing” in some crackpot scheme that his neighbor told him about (in strictest confidence, of course).
======================
I’ve wanted to say this for a while.
The generation that lived through the Depression shunned mortgages like the plague – or, at least, in my family they did.
My father built our house in 1956 for $20,000, all cash, with an assist from my grandmother. When he was building it, everyone in the family was nagging him to put in a second bathroom least he regret it for the next 50 years, but he had a budget, and that was that. My aunt and uncle lived in a whole series of rental houses while they were saving up, and they weren’t poor by any means – my uncle owned a very successful tavern. But there was a real onus on borrowing – like asking for a handout. The mentality of the Depression babies was that debt was bad; debt could lead to foreclosure. I’m sure in that post-war era, a lot of the returning GIs had government-sponsored mortgages, but I don’t remember anyone ever talking about a mortgage.
All this talk about subprime mortgages and a serious wave of foreclosures …in resonates in terms of the stories they used to tell about the Great Depression.
Re posts 17 and 20:
JB, sorry for my lack of clarity.
By fiduciary responsibility I am referring to the obligation brokers, or at least their managers, owe to the shareholders/owners of the banks/lenders and to take care that they can continue as an ongoing concern. I can understand why that isn’t clear because the discussion focuses on the borrower/lender relationship.
Brokers are salesman, so I don’t expect them to be watching out for the people they are trying to make money off of, but they need to conduct their business in such a way as to be able to open their doors tomorrow.
http://www.nytimes.com/2007/03/18/realestate/keymagazine/318RElead.t.html?pagewanted=1&ref=keymagazine
>>The only obvious difference between the early 90’s and now is the more widely used regular ARM’s and then the more exotic loans. These are what fed the outrageous price increases because otherwise many buyers would not have been able to afford the increases using a 30 yr fixed with 20% down.
yes and i don’t see the trend reversing itself as it’s a new parameter that’s entered the system fundamentally altering it. i’m not saying today’s prices won’t reverse somewhat but to expect them to revert to mean is wishful fantasy. the key ingredient is interest rates. the higher they go the more it costs to borrow regardless of loan product so watch this metric to gauge future patterns.
“The only obvious difference between the early 90’s and now is the more widely used regular ARM’s and then the more exotic loans.”
I think there ARE other obvious differences, and the biggest one is that for the past five years there has been an immense amount of speculation in real estate by average joes and mom/pop investors. In previous real estate busts, the general population wasn’t leveraged up to the gills with properties that they didn’t live in, as is the case now. In this RE bust, people will suddenly find themselves needing liquidity NOW, and they will not need to sell their own home in order to get it. This is why I believe that we will be seeing a significant price adjustment during the next two years, rather than price stagnation alone (as has been more typical in the past).
Lindsey,
Misunderstanding on my part. I assumed that we were talking about the borrower/lender relationship.
I do agree, however I can see the argument developing that these brokers submitted loans that met the necessary underwriting criteria set by the bankers. The bankers set the minimum standards, and the brokers did their part to sell loans that met that criteria.
Are the salesmen to blame? Or is it the creative folks who determined the criteria/standards/underwriting for these programs?
jb
“Are the salesmen to blame? Or is it the creative folks who determined the criteria/standards/underwriting for these programs?”
I’d say it’s the latter. If a salesman, who is trying to make a living, is permitted, both by statute/regulation and by the business criteria of his or her employer, to sell a certain product, it’s simply not realistic to expect him or her not to do so out of an excess of scruple. Regulation can occasionally be good, and this is an instance in which this is true – more so than usual, because where you have a wild west financing environment, what it really boils down to (and this is highlighted by your original post up top, jb) is the worst type of “capitalism”.
Where there is any sort of bailout in this situation (whether directly to lenders, or indirectly by initially giving the bailout to borrowers), you have the following:
Privatization of profit and socialization of loss.
This is the most perverse sort of incentive system one can have, and it will only ensure further dangerous speculation on the part of lenders. (Frankly, the bankruptcy bill has somewhat similar perverse incentive results, but has the side effect of screwing the little guy in more obvious ways).
#64 good article.
I’m not sure exactly who at the banks is to blame, but I know that is where the fault lies.
I was given a fun book once called, “Duh! The Stupid History of the Human Race” and at the end it had a chapter about how it takes smart people to make the really stupid moves.
The example was Chernobyl where the engineers who knew that there was some play in the specs kept pushing the envelope until they had a meltdown. If they were stupid and simply did what the specs said, then there is no meltdown, but they were smart… until they weren’t.
I think this is a case where lots of people thought they were smart enough, but really they weren’t.
I seem to be noticing an odd misconception that ARM loans were created with the borrower in mind. As an affordability tool perhaps?
ARMs were created by the lenders in order to protect the lender or holder of the loan from the risk of rising interest rates. By making a mortgage adjustable, the lender has essentially passed the interest rate risk directly to the borrower. The increase/differential in rates between a ARM and Fixed product of the same duration is the price the borrower pays for not having to bear the interest rate risk.
I’m sure CF can do a much better job describing the dynamics behind this, and how the prices/value of these mortgages will rise and fall along with current rates.
I wouldn’t call an ARM exotic as much as I’d call it a general fleecing. Borrowers thought they were getting a deal by choosing an ARM, because the rates were lower. Borrowers didn’t realize that the bankers were pushing an enormous risk into their lap. While a banker can hedge interest rate risks, do you really think a borrower is savvy enough to do the same?
jb
BTW, I would not say that the salesman are to blame for the big picture problem, just every little one that adds up to the big one. Now they may have done it out of ignorance, but they don’t get a total pass, and once again, it comes back to those who are supposed to be in charge.
The salesman can get fired, so can managers and creative types, the institution needs to bear the cost of the mistakes it allowed its people to make. I know it doesn’t often happen that way.
67#
I think the blame should start with greenspan for keeping the fed funds rate so low and then in the midst of the bubble chating up what a great deal arms are.
2) then the bankers and “investors” who provided the funding for loans and thn securitzed them into bonds
3) government for not having proper regulations to prevent this bubble. If the governmet is going to insure depostis in banks, it hold provide stricter lending guidlines and regulations. Also for having so much documentation needed to sign when you tke out a mortgage your eyes glaze over. Why not simplify.
4) The media for denying there was a bubble
and for talking about your house as an investment. It is never an investment it is an expense. If you can rent it out for more then your expenses then it s an investment. If you ownn and live in it thn it is an expense.
5) Our schools/local school boards/gov regulations for failure to require the teaching of basic fiancial literacy.
6) Our food supply. Our food is so loaded with corn syrup and other artificial crap we are kept in a perpetual state of numbess, only perking up when we shove more garbage, uh food in our mouths.
[71]
Exactly Greenspan’s angle while promoting ARM’s as the fed cut rates. He screwed the masses and protected the institutions.
Gary (46)-
600K to 450K won’t happen in one fell swoop. I don’t know and don’t care how fast prices will fall, but if you’re gonna master the art of the LOD bunker-hunker, you will need to be more patient.
IMO (and many others here), things have moved much more rapidly than anyone previously expected. Whatever the rate of price decline is right now, it IS accelerated.
[73]
Bang on, Bob.
patient [66],
You hit the nail on the head. Back in the late 80’s you were required to put $ down, 20 % or pmi. You dealt with a banking/mortgage lending institution not a hedge fund. The abuse/fraud was not close to this circus. Also, you did not have multiple properties being flipped like we change underwear. That market turned with the recession. This insanity has imploded on its own. Wait until a recession hits. This fiasco will be much worse than the late 80’s. Not only a return to the mean but probably an overshoot on the downside.
James Bednar, #71 one of the best posts I have read here.
Exactly Greenspan’s angle while promoting ARM’s as the fed cut rates. He screwed the masses and protected the institutions.
Just look back to the S&L crisis to find a great example of what happens when lenders can’t appropriately manage interest-rate risks.
jb
Clotpoll,
I’m just a grasshopper LOD bunker-hunker…
you all will be amused to hear that we put an offer (lowball by 10%) on a house, which offer was summarily rejected. We submitted a new offer with a 24 hour expiration date, this time knocking only 6% of LP, but listing 5 things about the house that we thought were lacking and could be had in a similar house for what the sellers’ LP was. They countered at 0.6% below LP and we walked.
The following week, the house three doors down came on the market, at the same LP as the house we had made the offers on. It is the SAME HOUSE (1910 grand Victorian, same floor plan, same plot size/shape, etc.), but it has the 5 features that we had listed as missing in the other house. It got snapped up before we could move, but the result was that the folks in the first house came back and offered LP minus 4%. We rejected. The same day they came back at LP minus 5%. We rejected. If they come back and try to accept our offer of LP minus 6%, we will tell them that that offer expired and is no longer available. We are more convinced than ever that we will either get the house/price we are VERY happy with, or we will happily continue to wait.
Hope this gives y’all a little bit of vicarious amusement.
Just to continue on that path. I know I made it seem like the borrower is bearing the full weight of the interest-rate risk, but that isn’t the case. The fact that these loans have rate caps and reset periods means that the lender does bear some portion of this risk as well.
jb
>>I wouldn’t call an ARM exotic as much as I’d call it a general fleecing. Borrowers thought they were getting a deal by choosing an ARM, because the rates were lower. Borrowers didn’t realize that the bankers were pushing an enormous risk into their lap
whether borrowers realized the increased risk or not, by and large it’s been a smart decision as those who’ve been in 5-year ARM’s compared to 30-year fixed rates have saved money on interest payments.
Blame????
Are you kidding me??? I love the way our society makes excuses for ones actions.
“Screwing the little guy”? Come on!! Didn’t the person taking out the note sign for it? Or did the bank have a gun pointed at his head making him sign for it.
I guess it doesn’t matter that the person taking out the loan lied about earnings and provided less then honest information.
It is called personal accountability and integrity. NOT being a LYING THIEF stealing money that you know dam well you can’t afford and don’t plan on repaying.
Do the terms of the loan matter if it was an ARM, high interest rate or a fixed rate loan? NO, you still signed for it. You knew that you were getting yourself into.
I forgot money grows on trees and flipping houses.
>>I think the blame should start with greenspan for keeping the fed funds rate so low and then in the midst of the bubble chating up what a great deal arms are.
in the fed’s defense, they can’t dictate where money is allocated. that’s a function of the markets. i’d put more blame on lack of regulation and the tax free deduction clinton enacted in the late 90’s.
>>Hope this gives y’all a little bit of vicarious amusement.
i wouldn’t say amusement. remember this is business. you as the buyer want the lowest price. the sellers want the highest. there’s no way of knowing where you or they are coming from until you start negotiating and learning more about each other. you offered -10% at first, then -6%. you moved 4% even before you started negotiations. that would tell me as the buyer you have strong interest. personally i would’ve lowered 2% as the seller and hoped to settle at 3-4% off list. .6% is absurd. why bother lowering at all?
The noose around the FBs is getting tighter with every passing month. When it gets harder for the marginal buyers to get a mortgage, the sellers can’t sell.
Foreclosures will have a detrimental effect on comps. Imagine the effect if they were included the NAR statistics….. disastrous.
Also, I have been reading recently on people who are having to decline job offers because they find out they are upside-down and cannot sell to relocate.
Damn my house…damn my glass prison!
whether borrowers realized the increased risk or not, by and large it’s been a smart decision as those who’ve been in 5-year ARM’s compared to 30-year fixed rates have saved money on interest payments.
You seem to have missed the point.
jb
FOMC statement out in a few, I’m sure you are all as excited as I am.
jb
“i wouldn’t say amusement. remember this is business.”
I get a certain amount of amusement out of business, I guess. They pulled the “too offended to negotiate gambit” on our first offer. With the way things are deteriorating, I doubt we’d even buy at 10% off at this point. We may have signaled that we were eager, but we’re not now, and that seller may find themselves selling at minus 15% before long. They’re certainly the eager ones now.
“Also, I have been reading recently on people who are having to decline job offers because they find out they are upside-down and cannot sell to relocate.”
Oh my. I guess that means I’ll be writing a lot more relo provisions.
>>You seem to have missed the point.
not at all. it’s a related point.
those who’ve been in 5-year ARM’s compared to 30-year fixed rates have saved money on interest payments
Okay, let’s stick with your point. WHat happens at year 5? Sell?
“by and large it’s been a smart decision as those who’ve been in 5-year ARM’s compared to 30-year fixed rates have saved money on interest payments.”
Except that many of them are now getting foreclosed. In this case, Greenspan gave terrible advice to borrowers because RE was the only thing keeping the economy afloat. Paul Krugman pointed it out at the time (though it should have been obvious), and Krugman’s been proven right and Greenspan wrong.
“Okay, let’s stick with your point. WHat happens at year 5? Sell?”
Presumably, right? Otherwise you’re f’ed. And if you’re upside down at the time? You’re f’ed.
“I seem to be noticing an odd misconception that ARM loans were created with the borrower in mind. As an affordability tool perhaps?”
JB you describe the product correctly but I am describing the affect of the product and the way it is sold to would be buyers:
“You can’t afford the house at 30 yrs, consider this 5 yr arm? That monthly payment is a little high? How about a 3 yr ARM?”
“The Fed isn’t going to suddenly raise rates. You can always refinance if they do and prices are going to continue to rise”
Every loan is different and the smart borrower chooses the vehicle that works best for him or her.
and if the “smart borrower” is nowhere to be found, the stupid borrower abounds.
http://www.bloomberg.com/apps/news?pid=20601109&sid=an4wlQaDRorE&refer=home
Lets not forget about the folks that used ARM’s when rates were on the way down in the late 90’s. How could you go wrong?
Wall Street Journal
Mortgage Meltdown
By ANDY LAPERRIERE
March 21, 2007; Page A19
[edit]
Even if bad loans are more widespread than previously expected, many housing bulls say, the impact on the housing market and the economy will be minimal because total losses due to foreclosures will be a small percentage of outstanding mortgage debt and a still smaller share of the economy. A similar argument holds that bad loans won’t lead to a broader foreclosure problem because the average American has plenty of equity in his home.
Foreclosure losses as a share of the economy will be small and most homeowners have a comfortable amount of equity in their homes. In fact, about one-third of homeowners have no mortgage and own their homes outright, but they are not the reason home prices have been driven to the stratosphere. Home prices — like all prices — are set at the margin. It was the marginal buyer, particularly the subprime borrower and housing speculator, who drove prices higher. The easing of lending terms increased the demand for homes, and since the supply of homes is relatively fixed (or inelastic), this increase in demand quickly translated into higher prices. As the loose lending practices are inevitably reversed — and there is a wide chasm between current lending practices and prudent lending terms — fewer people will be able to afford to buy a house, which will reduce demand and push home prices lower.
It’s not the size of foreclosure losses as a share of the economy that matters, it is the effect those losses have on the availability of credit. When banks (and investors in mortgage-backed securities) begin suffering losses, they inevitably pull back. This is why so many subprime companies have gone bankrupt virtually overnight; investors balked at buying subprime loans except at a steep discount, which produced immediate losses. In effect, their ability to profitably finance new loans was eliminated.
What’s more, the bank regulators are only now beginning to tighten lending standards and will be under increasing pressure from Congress to do more. After growing by nearly 50% in the first half of 2006, nontraditional loan growth has turned negative since the bank regulators issued new guidelines last September. The CFO of Countrywide recently told an investor conference that 60% of the subprime loans the company is making won’t meet proposed federal rules likely to take effect during the summer. The concern that tighter lending standards could reduce access to financing is the reason a widely watched survey of homebuilders conducted by the National Association of Homebuilders dropped earlier this week.
The report by Credit Suisse estimates mortgage originations could drop 21% during the next year or two because of tighter credit standards. Coupled with high inventories of unsold homes and the additional supply likely from distressed sellers, this drop in demand could produce an unprecedented nationwide decline in home prices. Merrill Lynch estimates prices could drop as much as 10% this year. A price drop of this magnitude would lead to a vicious cycle in the housing market and pose a major risk to economic growth. And, of course, it would create a raging political firestorm.
[edit]
fed rate unchanged
boooya – cuts in the future?
From the FOMC:
http://www.federalreserve.gov/boarddocs/press/monetary/2007/20070321/
The Federal Open Market Committee decided today to keep its target for the federal funds rate at 5-1/4 percent.
Recent indicators have been mixed and the adjustment in the housing sector is ongoing. Nevertheless, the economy seems likely to continue to expand at a moderate pace over coming quarters.
Recent readings on core inflation have been somewhat elevated. Although inflation pressures seem likely to moderate over time, the high level of resource utilization has the potential to sustain those pressures.
In these circumstances, the Committee’s predominant policy concern remains the risk that inflation will fail to moderate as expected. Future policy adjustments will depend on the evolution of the outlook for both inflation and economic growth, as implied by incoming information.
Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; Timothy F. Geithner, Vice Chairman; Thomas M. Hoenig; Donald L. Kohn; Randall S. Kroszner; Cathy E. Minehan; Frederic S. Mishkin; Michael H. Moskow; William Poole; and Kevin M. Warsh.
FED: Housing “adjustment” ongoing
From MarketWatch:
FOMC keeps rates at 5.25%, drops reference to possible hike
The Federal Open Market Committee on Wednesday kept its benchmark federal funds rate unchanged at 5.25% and dropped a reference to the possibility of future tightening. The Fed repeated that “some inflation risks remain,” but took out the reference to “the extent and timing of any additional firming.” Instead, the FOMC said “future policy adjustments” will depend on the outlook for inflation and growth. In the statement, the Fed said that recent indicators have been mixed and said the adjustment in the housing sector is ongoing. The Fed said that core inflation reading “have been somewhat elevated” but said that inflation pressures are likely to moderate. The Fed has chosen to hold interest rates steady since last June. The decision was expected by traders and economists on Wall Street.
This constant “Fed Watching” is starting to get out of hand. (Directed at “the market”):
THERE ARE OTHER THINGS TO WATCH, PEOPLE! It’s like the last year and a half has only been about the Fed and nothing else. OMG Bernake took a piss – SELL SELL SELL! Wait… wait… They said “inflation” and “the” and “whereas” in the same sentence, BUY BUY BUY!
Starting to get ridiculous the amount of reliance people are putting on these damned FOMC minutes and statements. Data and opinions can be had elsewhere so why do we put all our trust and faith in them and them alone?
Insane – Dow, NASD, S&P all up nearly 2% on the “news” (that everybody already knew…)
Edit – sorry, accidentally looking at Mar 19- Mar 21 period.
Up nearly 1%
Edit – sorry, accidentally looking at Mar 19- Mar 21 period.
Up nearly 1%
Seems as if the market will take anything and interpret it as an optimistic sign after the past few weeks.
Probably this statement:
Fed said that core inflation reading “have been somewhat elevated” but said that inflation pressures are likely to moderate.
No mention of possible rate increases due to inflation through the mention of monitoring the rate of inflation.
From the APP:
Dwek associate admits to fraud
A new twist in the Solomon Dwek fiasco.
Mortgage broker Joseph Kohen admits helping Solomon Dwek attempt to defraud $20 million from PNC bank.
Just in case you are interested in seeing the $25 million check, the APP has got it posted.
No, it doesn’t look like the one from Publishers Clearing House.
http://www.app.com/assets/pdf/B366190321.PDF
jb
“Data and opinions can be had elsewhere so why do we put all our trust and faith in them and them alone?”
[107],
Who the hell is really listening, the American public. Hah. I guess it’s much easier/comforting to throw our blind faith/judgement into to the hands of the experts who have their hand in our back pockets??
Why did John Dillinger really rob all those banks??
“…but said that inflation pressures are likely to moderate”
yeah that will happen.
#114, well said!
K, the US market is rallying after the soporific FOMC statements. Note the dollar getting hammered against the euro too.
MLS ID#: 2319478
It was list for 860,000 from 09/2006. In Jan/2007 reduced to 760,000. Then Feb, relist to 860,000 and now reduced to 830000.
dream team [116],
The dollar is toast. It’s the last item that is supporting our economy at this time…..and of course, new govt jobs and the services industry.
The titanic has no rudder…
http://www.itulip.com/forums/showthread.php?t=292
>>Okay, let’s stick with your point. What happens at year 5? Sell?
most i know have refi’d a few times into other ARM products with ever lower rates. as i said so far they’ve saved a good chunk of change the last 6-7 years or so not being in a 30-year fixed and now they can get back into one at say 6%. not bad.
anecdotal evidence of spring rebound?
watched a 2/1 house asking $515k sit for a few months this winter. went off for a while. now it’s back on the market with a new realtor and $30K more asking.
If you try and don’t succeed, just ask more.
30k is a nice round number. how’s that for bouncing along the bottom?
get your bids in folks.
I would have to disagree with you just a little. ARMs are affordability loans. Depending on the interest rate environment, a person’s horizon in a home…an ARM makes perfect sense. In a normal upwardly sloping yield curve, the rates on the 2 to 7 year ARMs can be significantly different than a 30 year rate. Now take into consideration that your “time horizon” in a home is within that 2 to 7 year range (you could be an investor, speculator, anticipate moving, need more room, etc.) an ARM makes perfect sense. NOTE: that’s only in an upwardly sloping interest rate environment which is definitely not where we have been in the past few years. The thought is to get a loan that matches the length of time you plan on staying in the property. Of course situations changes and you can easily get screwed but it can be worth your while. And yes, you can sell the house before reset.
It is correct in that its a way for the banks to transfer a lot of the risk to the borrower.
On Another Note….
The problem as I see with bailing out borrowers is the criteria for bailing someone out. If its an over extended borrower; should a subprime borrower get bailed out on a $430k loan just as quickly as an over extended prime borrower on a $1.5 million house? They both took out 3 yr ARMs just got different rates.
On another site read an interesting thought on possible bail out….it went something like calling it corporate welfare….the corporates (i.e.. mortgage companies, execs) received all of the benefits (sold stock, million$ salaries, etc.) in the good years and now we (via taxes, etc) have to pay for the mess that’s happening now. There’s no need for me to pay for any type of bailout is my thought.
njpatient (81)-
What will happen when they decide to get real on their price…then also decide that they will sell to anyone BUT you?
Sometimes, when you win, you lose.
That brings up the scenario of a quicker fall: You are in your 5 or 3yr ARM, option ARM etc; lending standards tighten; you can’t refinance; you have to try to sell into a falling market. Granted this won’t be everyone’s situation, but undoubtedly it will be some people’s and the number of people is what will determine the amount of added downward pressure on prices. God forbid we have a recession.
BC, dream (114, 116)-
I’m sharpening my pickaxe and shovel. Also doing a lot of lat pulldowns at the gym lately.
Anybody got a hardhat with a flashlight?
>>boooya – cuts in the future?
depends on how other central banks act. their movements will strengthen or weaken our currencies and more or less decide our course.
twice shy, check out this POS in westfield for $639k mls#2379989. would love to get some of what they’re smokin.
Richard (129) – since I know you keep tabs on the area, what is your opinion on Cranford? (Westfield’s poor cousin?)
clotpoll [124]
No way to stop them from shooting themselves in the foot yet again, I suppose, but that being said, at this poing we’ve lost interest in the house even if it comes down to minus 10%. It needs too much work, and by the end of the year we’ll be in a position where we don’t need to shop for bargains.
point, that is. Not sure what a poing is.
would love to get some of what they’re smokin.
How does that saying go, “Aim for the stars, but settle for the moon”?
jb
Interesting piece from MarketWatch:
Did the Fed change anything?
U.S. stock markets rallied late Wednesday after the Federal Open Market Committee released its policy statement, with strategists pointing to a change in one sentence in the statement as a signal that the Fed is no longer predisposed to raising rates.
And it’s only a slight leap of the imagination to go from a Fed that’s completely neutral about where rates are likely to go next to a Fed that’s aggressively cutting rates. Nothing would please investors more than lower rates.
But did the Fed actually signal a change in its policy? Is the Fed now neutral about where interest rates are going? Opinions are “mixed,” as the Fed likes to say.
…
It’s ironic that the Fed messed up its communication so soundly after calling a special two-day meeting to talk about how to communicate better.
jb,
Do you think the fed will start talking down investor misconception?
“twice shy, check out this POS in westfield for $639k mls#2379989.”
Richard:
Thanks for ruining my dinner. I haven’t seen many listings by that RE agency or that listing agent.
Where the heck is an 877 area code? Not that it matters. Southside no less. Ghastly. There are other POS listings to highlight, but this one’s a classic. Belongs in the Hall of Shame.
>>what is your opinion on Cranford?
i like cranford. i have a couple of friends over there. overall i find the people to be more down-to-earth and the housing prices are much more reasonable. the commute is one step closer to NYC and the schools are decent. prices for like activities for the kids are much more reasonable. example. soccer goes for $55 in cranford. you get a uniform and the kids have fun kicking the ball around and learning a few things. in westfield they hired some former member of the brazil national soccer team. you get to lay out $600 for the privilege of learning from him.
>>at this poing we’ve lost interest in the house even if it comes down to minus 10%.
that’s what everyone needs to learn about houses. they’re commodities. while no two are exactly alike there typically isn’t enough to treat them as some unique thing. if you like one chances are you’ll soon find another one you like more. sellers always think their house is more special than potential buyers.
Richard (137)-
I coach travel soccer in the N Hunterdon area. We’re in the same league as Westfield. We kicked their a$$…bad. That Brazilian guy is a freaking lunatic. Jumping up and down and shouting in Portuguese gibberish is not coaching. I wouldn’t hire him to teach my dog a trick.
BTW…not only was the Westfield team awful, but when we played them at their home field, they hadn’t lined the field, the goals weren’t anchored and they didn’t pay the ref. It also appeared that they had let the grass grow and watered it in order to slow the pace of play. I played soccer for almost 30 years and have had a coaching license for 20…I’ve never seen a team- at any level- “doctor” a field that way or be so unready to host a game.
$600 they charge for this? Those parents are fools to cough it up.
“$600 they charge for this? Those parents are fools to cough it up.”
What Clot is really saying is that he is underpaid.
BC (141)-
Damn right. And…I tell my kids to keep an eye on the precious metals sector; that’s why they call me the Moneymaker (LOL).
All disclaimers. Trying to turn 9 y/o’s into gold bugs should be a disqualifier for coaching…or investment counseling.
877 is a toll free code.