From CNN/Money:
Double-digit home price drops coming
Over the next few years, more than three-quarters of the nation’s housing markets will suffer a decline in home prices. Many will experience double-digit hits in a forecast that has worsened considerably in recent months.
According to an analysis conducted by Moody’s Economy.com, price declines will exceed 10 percent in 86 of the 379 largest housing markets. And 290 of the cities will experience price drops of 1 percent or more. All are median prices for single-family houses.
Nationally, Moody’s is projecting an average price decline of 7.7 percent. That’s a jump from the 6.6 percent total price drop that the company was forecasting in June and more than twice that of last October’s forecast of a 3.6 percent price decrease.
…
Six of the nation’s 10 biggest cities face price declines of 1 percent or more with Phoenix, at a 17.8 percent loss, undergoing the worst reversal. The San Diego area will suffer through a 10.9 percent fall, Los Angeles (down 10.6 percent), New York, (down 5.3 percent), San Jose, (down 4.4 percent) and Philadelphia (down 3.1 percent) will also fall.
…
Here are the forecasts for the nearest MSAs:
Newark-Union, NJ – Down 15.4% by 2008.Q4
Edison, NJ – Down 13.3% by 2008.Q4
Nassau-Suffolk, NY – Down 12.3% by 2009.Q1
New York-White Plains-Wayne, NY/NJ – Down 5.3% by 2008.Q4
Allentown-Bethlehem-Easton PA/NJ – Down 3.3% by 2008.Q4
Philadelphia, PA – Down 3.1% by 2008.Q3
Man Dow almost back to the start of the day, house prices dropping, where’s Bernanke with another rate cut?!?!
Wait till Tomorrow… Now, unless we have 300 points gain every day, people will be asking for rate cut – and will get it.
From yesterday’s SIFMA conference on MBS Due Diligence:
Lunch speaker: John Ryan
Executive Vice President
Conference of State Bank Supervisors
The interesting part is on Page 4, where he talks about a centralized licensing database where consumers would be able to look up mortgage bankers and brokers to see if there were any enforcement actions. Would be similar to the CRD – the securities industry’s central database for licensed personnel in the securities industry. Scheduled to launch on 1/2/08, and “it will allow companies and individuals to be tracked across state lines and over any period of time.”
http://www.sifma.org/Conferences/2007/due_diligence/pdf/SIFMADueDiligencePres91807.pdf
Can someone please explain to me what the 10:31 is? Supposedly it’s a law that states that no taxes are due on first time sale of a property with less than $250K profit.
Thanks
From Minyanville:
Pointing the Housing Blame at a New Target, the Homeowner
The housing bubble that was fueled by multi-decade low interest rates priced many people out of their dream homes. But instead of settling for less or renting, people went after their American dream with a vengeance – taking out adjustable-rate, interest-only or, even worse, negative-amortization loans. Good things end, and great things end with a big bang; the burst of the nationwide housing bubble has left many with shattered homeownership dreams and financial despair.
And now the blame game starts. It must be the builder who charged too much for the house, or the “blood-sucking” mortgage broker who facilitated a loan, or the bank for extending credit we should never have had. Now, there’s a new extreme – the investors who purchased mortgages with thousands of others from financial institutions.
The blame falls on us, homeowners, and none of the above. Though we want to blame the financial institutions for coming up with these products, as long as loan terms were fully disclosed, it is our responsibility to make the right financial decisions, not theirs. Any product can be dangerous if not used responsibly. Even a hair dryer, if used while taking a shower, could lead to untimely death. The financial products (i.e. mortgages, home-equity loans, credit cards) are electrified by compounding, and if not used appropriately, could lead to financial distress.
Though some would like to – and many will – plead ignorance, it is disingenuous. With the exception of outright fraud, buyers knew they were biting off more than they could chew. They knew interest rates would reset and mortgage payments could increase, or at least it was their job to find out before they committed to the biggest purchase of their life. But that was in the future, and they lived in the now. The future is today, and there is a price to pay. Buyers need to stop blaming everybody but themselve and own up to mistakes.
I disagree totally. Yes, I do think people were stupid and deserve what they get.
I think blame though rests purely on the banks, because of them smart people were forced to make their saved dollars compete with fake ones. You can’t blame dummies armed with ARMS for making a rigged game.
“I think blame though rests purely on the banks”
It’s a whole chain of idiots starting with the borrowers going all the way to the investors who bought the loans. Anyone who touched the loans are to blame.
What about MSM? They were blowing big horn on benefits of homeownership, rates are at historic buy, real estate is best investment etc…
When was the last time the Fed cut rates 50 bp while we’re barely 2% off all-time highs?
Unless the banks and hedgies are holding billions and billions of worthless mortgages? So what if inflation ramps up (official stats conveniently capture a portion of actual inflation) and the dollar be used as toilet paper?
Suppose the NFL made some new ‘innovative steroid’ legal for players to use.
2 years later the players grow boobs and their hair falls out. What would be the point in saying ‘they (players) should have known better’?
From Bloomberg:
Bernanke Opposes Bigger Mortgages for Fannie, Freddie
Federal Reserve Chairman Ben S. Bernanke opposed a push to allow Fannie Mae and Freddie Mac to buy mortgages higher than $417,000, saying it may undermine efforts to strengthen regulation of the two largest U.S. mortgage finance companies.
A proposal in Congress to increase the limit “would be ill- advised if it has the practical effect of reducing the incentives to achieve meaningful” regulatory tightening over the companies, Bernanke said in a Sept. 17 letter to Representative Barney Frank of Massachusetts, Chairman of the House Financial Services Committee.
Frank and other Democrats, seeking to reverse the biggest housing market slump in 16 years, have called on the Bush administration to allow Fannie Mae and Freddie Mac to buy bigger mortgages and expand their $1.5 trillion investment portfolios. The companies’ regulator announced today it will allow the companies to annually increase their purchases of home loans and mortgage bonds by 2 percent.
Bernanke in the letter written two days ago said easing restrictions on the companies could prove to be “ill advised,”
Bernanke giveth, Bernanke taketh away…
jb
grim (10)-
So, Bernanke gets all conservative and prudent when talk turns to raising the conforming limit above 417K.
What a joke. I guess these guys feel like they can’t level with public and just admit that our whole financial system has become a giant floating craps game.
Not that I don’t like a good game of chance…
aaron,
i don’t think that’s a good analogy –
people have access to their own financial records – they know how much they make and how much they spend. they were also aware that rates could go up and that prices could go down – they just assumed that rates would go down, and prices up. so your analogy should include that there was a warning label that said it’s possible you will grow boobs and you will be bald –
the first line of defense has to be caveat emptor –
The banks are primarily at fault. The more exotic mortgages are in essence interest rate derivatives. So you have complex derivatives sold to average Joes who are lucky if they balance their check book at the end of the month. How can the average person understand the risks of that type of mortgage? It should have fallen to the “professionals” to market products appropriately. Take IO mortgages. Unless you earn significant bonuses, or own a business, or have some other reason to have “lumpy” cash flow throughout the year, why do you need or want an IO mortgage? The lender shouldn’t extend that type of loan unless you fall into one of those situations.
It’s a whole chain of idiots starting with the borrowers going all the way to the investors who bought the loans.
This mess can’t be blamed on any individual sector. There is plenty of blame to go around to everyone involved.
Politicians who piggybacked on “the creation of wealth” and “ownership society” for their own political gain.
Brokers who peddled these snake oil loans
Buyers who were too blinded by “McMansion wishes and caviar dreams” to actually bother reading the loan docs.
Ratings agencies who saw too much profit in slicing, dicing and repackaging loans and stamping them with high ratings
That Minyanvill site has some funny stuff:
5. Point/Counterpoint: The Fed Rate Cut Will Help Save Our Home
Point
The Fed Rate Cut Will Help Save Our Home
By Richard Jones
Thank you Fed Chairman Ben Bernanke, thank you! With yesterday’s 50 basis point cuts in both the Federal Funds and Discount rates, we finally are able to see some welcome respite on the horizon. Why, banks even followed suit almost immediately by lowering their prime rates 50 basis points as well. Yes, relief is finally here!
I don’t mind telling you, the little missus and I were worried. In 2002 we took out a $500,000 Option ARMS mortgage, an adjustable rate mortgage with the option of making interest only payments for the first five years with a five-year incremental step-up in payments.
Everything was looking fine for the first five years. Our initial monthly payment on the Option ARMs mortgage was around $1,600. Over the past five years it has slowly crept up to $2100. That extra $500 is beginning to hurt. In August, however, our mortgage lender sent us a note telling us what the 2008 payment is going to be. Prepare to grab the seat of your pants: $4,100!!!! That’s right, $4,100!!! Who can afford a payment like that?!?!
Even worse, thanks to what they call “negative amortization,” whatever that means, they say our original loan balance of $500,000 is now $535,000!!! How did that happen?!?! Obviously we were worried. That kind of mortgage payment would ruin us. We’d have to sell… assuming we could find a buyer. And I don’t even know that we could sell for a price that covers the $535,000 mortgage!
Well, thanks to Big Ben we’re back in business, baby. Our refinancing papers are already in! We’re going to take down a fixed-rate mortgage this time at a payment we can handle. See, thanks to the Federal Reserve, things usually work out just fine. My wife and I can sleep at night. Thank you Fed Chairman Bernanke! Now, I’m going to buy Alan Greenspan’s new book, he’s the one who started this whole thing.
Counterpoint
Mr. Jones, I’m Afraid There’s a Little Problem With Your Refinancing Application
By Darren Salisbury, Loan Officer
Is this Robert Jones? I meant Richard, sorry. Richard Jones at 233511 Magnolia Stone Haven Wintergardengreen Court Acres Estates? Ok, good. Wow, uh… Mr. Jones, I, uh, I hate to be the bearer of bad news here, but there seems to be a slight problem, with, ah, with your refinancing application. No, no we got the $500 processing fee check, no problem there. That’s not refundable, by the way, just want to be clear on that. Right. Yeah, it, uh, just kind of looks like we’re not going to be able to approve this refinancing package.
Yes, I’m sure. Whoa, absolutely, I agree $4,100 a month is way, way too high for a house in, ah, where are you? Right, Magnolia Stone Haven Wintergardengreen Court Acres Estates. Hey, did the developer ever finish the community pool and recreation facilities there? Wow, I’m surprised at that. They were the same developers as Crystal Glen Squire Thirstwood Cove Hammock Lake and they finished the community pool and rec center on that development six or eight months before they abandoned it. Well, on the bright side, with the Fed rate cut and all, maybe they’ll come back and finish it. Would certainly help the resale value.
Yes, I checked on that and unfortunately you’re outside the GSE guidelines and, look, if it ain’t GSE it ain’t gettin’ done these days. Have you tried taking in some boarders, maybe raising some cash by renting out the east wing? Sure, but you have, what 5,600 square feet there, right? Ok, just a thought. Well, good luck with everything. If it gets down to the wire for you, give me a ring back. My brother-in-law handles distressed property sales.
C’mon, Bush and Bernanke are just to help every ‘merikan live the dream & rent, errr I mean own their own home!
A chicken in every pot and bailouts for the banks if they don’t meet profit projections!!!
It doesn’t matter that the Central Banking Party is borrowing against the future earnings of generations 50 years out, we’ve got a Party to run here ;-)
(Back to reality) Wonder how many suckers, errr…foreign investors are gonna snap-up U$GOV T-Bills now?!?
Happy Dayz R’ Here Again! LOL
TCM, at the end of the day it is the same. The steroids ruin the players that take them and ruin the game for those who don’t.
Craps game is a poor analogy, in this case odds are easily computed and the rules of the game never change.
Do any of you here seriously think that borrowers have learned their lesson and won’t use poison loans if they are available? What about lying about unverified income?
What possible constructive use is there to blaming borrowers?
T C M, we’re of a mesh: I bought a home. I took out a mortgage. I read the contract and parsed all the opaque prose. I asked questions about stuff I didn’t understand. I didn’t borrow more than I could afford to pay — and arrived at this figure by doing worst-case-scenario calculations — nor did I borrow at terms I could never live up to.
The banks are not at fault for the actions of stupid consumers, just as an idea is not responsible for the actions of its believers.
End of story. Anyone who assumes that the blame lies elsewhere is an ass.
Renting-
How about Realtors looking at nice big commissions checks based on X% of sales looking to increase to prices and directing business to appraisers who would play along?
With that said, I can’t blame them for trying to maximize their earnings, but they played a big part in this run-up of prices.
John
“This mess can’t be blamed on any individual sector. There is plenty of blame to go around to everyone involved.
Politicians who piggybacked on “the creation of wealth” and “ownership society” for their own political gain.
Brokers who peddled these snake oil loans
Buyers who were too blinded by “McMansion wishes and caviar dreams” to actually bother reading the loan docs.
Ratings agencies who saw too much profit in slicing, dicing and repackaging loans and stamping them with high ratings.”
What we have here is a *TOTAL* cultural meltdown, led by liars and fraudsters that would sell their mothers for a quick million tax-free.
Not to worry though, before this is over *ALL* ‘merikans will get a dose of nasty medicine that still may not cure a nasty economic catastrophe on the horizon.
Then again this is a global problemo, so perhaps the guy with the biggest stick will prevail in the end?
At least that’s what the DemoRAT/GOPher/Supra-Elite seem to be hoping for from the looks of things…
I love watching the whole thing play out. Glad I’m not a buyer or a seller today.
To the genius who was talking about the 28% pop in HOV y’day (like he bought it)…. how about the 10% drop today, followed by another 12% drop in after-hours?
Ara is spending all his money on hair-gel…that’s your contrary indicator.
My money is in outsourced frozen curry dinners.
“I love watching the whole thing play out. Glad I’m not a buyer or a seller today.”
Same here, except I have this problem what to do with wads of U$D in CDs now that the dollar being purposely devalued.
Once that U$D avg. hits 78 I’ve pulling EVERYTHING out of Citi and transfer it into Swiss government bonds, I already diversified into physical Gold/Silver back in 2003 when I recognized the USGOV/FED wasn’t going to allow the market reset, and pushed the U$ into another hyper-inflationary bubble (Dot-Com > Housing).
I guess everyone hates a saver that refuses to play a game rigged against them :-(
Hey, kali — now that is a ‘good’ problem to have…If things really get bad you are going to want to be liquid and possibly not in the US….Switzerland is a likely destination.
JB,
Since you went back to the Grim monicker you seem… different.
More giddy, playful and open with your opinion.
I… I don’t know if I like it.
Rich
Yeah, I’ve been watching for a dead cat bounce on the U$D and almost pulled everything out last Friday before Helicopter Ben switched over to B-52s ;-)
I’m still hoping for a last final gasp to 81+ on the average, but have 78 as my low number.
It’s starting to look like the dayz of 81 are long, long gone though…Amero anyone?!?
Kali (28)-
Next stop on the index, 60.
“Next stop on the index, 60.”
Yeah, it looks like I was the victim of irrational exhuberance!
If history has taught me anything, it is never expect the banking system to the do the right thing when it comes to currencies and markets.
The financial game is SOOooo rigged it makes Atlantic City look honest! LOL
“For most market observers, the half point “cut” scenario, which coming into today was seen as only an 11% chance, seemed a long shot as investors perceived the Fed as being in between a rock and a hard place, sandwiched in a box between the Dollar and the Economy. Would Helicopter Ben really risk branding itself as a feeble inflation fighter by aggressively cutting rates? While some may still believe that the Fed is data dependent, and that they will wait and see what happens with future economic data, today’s action seems wildly out of whack with what is still 4% GDP growth, wildly out of whack with Oil at $81, wildly out of whack with Gold near $735; yet it is all highly consistent with a man who only a few years ago was quoted as talking about using the printing press as a mechanism for the lender of last resort.”
“Welcome to Weimar Revisited! Forget about any ‘Moral Hazard,’ and forget about the purchasing power of those hard earned Dollars. Clearly, that is the message that the Fed is sending to the International community with today’s action. Now, with the US Dollar on the verge of all time record lows against most major currencies, is it possible that today’s aggressive rate cut will be seen as anything but an Admiral Farragut style “Damn the torpedoes, full speed ahead” decree of a global “we don’t care” weak dollar policy?”
http://www.financialsense.com/Market/wrapup.htm
Everyone is ragging on poor Ben B. You guys are not giving him enough credit. He did the right thing (and I’ll bet he lobbied hard for that unanimous vote). But IMO this is what he’s doing:
“You think I can make all of the problems go away? Fine, let’s find out if this nice big rate cut will bring us back to 2005. But if this doesn’t work, or spurs inflation, that’s it.”
We all now that both of those things will happen. And I’ll bet he won’t cut again.
Dollar?
September 18, 2007 spot price of $723.21, a return of 13.77% so far this year.
2006 year end gold price of $635.70, a return of 23.92% during 2006.
2005 year end gold price of $513.00, a return of 17.77% during 2005.
2004 year end gold price of $435.60, a return of 4.40% during 2004.
2003 year end gold price of $417.25, a return of 21.74% during 2003.
2002 year end gold price of $342.75, a return of 23.96% during 2002.
2001 year end gold price of $276.50.
“We all now that both of those things will happen. And I’ll bet he won’t cut again.”
Too bad he’s already killed the dollar, in some games you don’t get change your bet after the hand has been dealt…
If Helicopter Ben thinks he’s seen the worst of the “liquidity” crisis, just wait until sdavers like me that are actually cash-positive pull them out of the U$ banking system and put them in safe non-U$ investments.
I’d say between that and foreign investment in T-Bills drying up and blowing away, the only thing Bernanke has saved with that .50 drop is the Cramer and his hedge fund buddies that will now be able to unload bad bets and get their money *OUT* of the U$ economy before it crumbles…
Got Gold?
“I would call Charlotte the new Atlanta”
I thought this was supposed to be an upbeat article. Yeech
http://www.bloomberg.com/apps/news?pid=20601103&sid=a_JIZyb3zZec&refer=us
Few Asian Nations Will Celebrate `Bernanke Put’
http://www.bloomberg.com/apps/news?pid=20601039&sid=aiYdrMHae0WQ&refer=home
a
I’d be curious to know what our ‘inside’ man’s opinion is on this cut, but assume he really can’t give it.
WSJ
The Fed and Character
September 19, 2007; Page A20
The Federal Reserve pulled no punches yesterday with its decision to cut the fed funds rate by 50 basis points to 4.75%. The unanimous statement from the Fed’s Open Market Committee was equally as definitive, leaning clearly on the side of those willing to risk more inflation in order to protect the economy from recent disruptions in the credit markets.
The equity markets rejoiced, posting their biggest daily gain of the year. Inflation-sensitive indicators were less thrilled, with the yield on the long (30-year) bond rising 26/32s to 4.75%, oil climbing above $82 a barrel, and gold reaching new heights at $733 an ounce. In the optimistic case, the Fed’s move will ease the credit crisis, increase the demand for money by reviving economic confidence, and help avoid a recession without triggering more inflation. We can only hope it does.
The point we’d like to stress today concerns the Fed and its credibility — or to put it more tartly, its character. It is easy for a central bank to cut rates and ease money. At least in the short term everybody loves a good time, as yesterday’s equity euphoria showed. The harder task is being willing to tighten money amid the business and political criticism that inevitably follows. That’s the true test of a central banker’s mettle.
We’ve argued that the Fed hasn’t shown that character in many years, which is a major reason it found itself this week having to choose between the risk of higher inflation and a potential recession. A central bank that stresses preserving the value of the currency when it isn’t popular will have more credibility to ease money when it really needs to.
This is the abiding lesson of the Paul Volcker era at the Fed, in contrast to the current decade. As Chairman Ben Bernanke looks beyond today’s crisis to what he wants his own legacy to be, we hope he’ll make a restoration of the Fed’s character his main priority.
Emigrantdirect has dropped the rate on its “My Way” CD to 4.55%. The online savings rate on its Web site is still 5.05%.
Has anyone noticed any other cuts in online savings or money market rates or CDs today?
Well, I’m not the only one liquid person in CDs, Money-Market et al. that is preparing to pull out of the U$D – I personally know of several people with millions of U$D that are in the the process of doing it, some at the advice of investment council.
And U$ T-Bills are the biggest joke going within investment circles, because the financial numbers reported are so skewed and manipulated only a grade-school child could believe them!
When the U$D drops below the historical low, the bank runs will be legend, I am certainly *NOT* going to part of that nightmare.
Then again with the savings rate at the lowest level since the great depression, perhaps no one with actual money in an account will be left to withdraw?!? LOL
This is coming from a person that until the last 5 years would *NEVER* have taken his money out of the USA.
Question for the realtors: Is there any reason a realtor would only list a property on realtor.com and not NJMLS.com? Isn’t the whole idea of getting a property sold therefore being on the NJMLS.com site?
Please enlighten…thanks.
From The Telegraph in the UK:
Saudi Arabia has refused to cut interest rates in lockstep with the US Federal Reserve for the first time, signalling that the oil-rich Gulf kingdom is preparing to break the dollar currency peg in a move that risks setting off a stampede out of the dollar across the Middle East.
]snip[
The risk is that flight from US bonds could push up the long-term yields that form the base price of credit for most mortgages, the driving the property market into even deeper crisis.
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/09/19/bcnsaudi119.xml
UPDATE 2-Moody’s cuts IndyMac Bancorp to junk status
Wed Sep 19, 2007 4:34pm EDT
(Adds CEO interview, closing price)
By Jonathan Stempel
NEW YORK, Sept 19 (Reuters) – IndyMac Bancorp Inc (IMB.N: Quote, Profile, Research), a mortgage lender that is cutting 1,000 jobs and may post its first loss in more than eight years, was downgraded to “junk” status on Wednesday by Moody’s Investors Service.
http://www.reuters.com/article/marketsNews/idUKN1930843420070919?rpc=44
“Saudi Arabia has refused to cut interest rates in lockstep with the US Federal Reserve for the first time, signalling that the oil-rich Gulf kingdom is preparing to break the dollar currency peg in a move that risks setting off a stampede out of the dollar across the Middle East.”
Thanks a million for that info, looks like Bernanke just lost his bet BIGTIME!
It also looks like I better not wait until the U$D index hits 78, because the next drop might by 5-10 all in one drop…
Aaron #18 –
“Do any of you here seriously think that borrowers have learned their lesson and won’t use poison loans if they are available? What about lying about unverified income?
What possible constructive use is there to blaming borrowers?”
i think the constructive use is to try and prevent it from happening again.
i also don’t think they bear all the blame, but regulators can only try and save people from fraudsters and predators – i hope that there is some better oversight as a result of all this – however, at the end of the day it is unrealistic to think that the govt. can save people from their own stupidity. it just can’t happen in a free society.
“Well, I’m not the only one liquid person in CDs, Money-Market et al. that is preparing to pull out of the U$D -:
Kali,
Many already have.
“Many already have.”
Well, I pulled-out 50% in 2003 as I stated previously, I’m talking about pulling 100% out minus living costs, which I’m sure some prudent investors (including hedge-fund/investment banking con-men) already have.
I guess I never thought it would actually get this *BAD*, but alas even a blindman could see this coming back when the Greedspan FED dropped rates SOOooo insanely low back in 2001-2002.
Talk about selling out your country…
Kali and BC Bob
Instead of keeping cash in a money market fund or u.s. treasury fund, where can a person invest their cash and keep it liquid?
“Instead of keeping cash in a money market fund or u.s. treasury fund, where can a person invest their cash and keep it liquid?”
From the research I have done staying liquid over the next couple of years will be *VERY* dangerous.
I’d suggest physical Gold, Silver and Swiss Gov’t. Bonds.
Perhaps someone else has some ideas, because it’s getting to be *THAT* time…
Re Moody’s and other professional predictors, including Hughes and Seneca, they never offer an causal explanation for their predictions. Just so much wasted ink.
BTW when I said “staying liquid over the next couple of years will be *VERY* dangerous.”, I meant to “Stay Liquid” in US Dollars (U$D).
I think having assets tied-up in home ownership will be even worse, unless you bought at or below the historical “mean” price, which is 1999-2001 prices depending on the area ;-)
Then again, I would look at owning any home a possible liability in the future, as property tax collection will become a major problem with out-of-control gov’t spending as tax revenue dries up in other areas.
looks like even the scientific world has something to say about housing
Subprime problems signal trouble ahead, research shows
From the fed statement;
“Readings on core inflation have improved modestly this year. However, the Committee judges that some inflation risks remain, and it will continue to monitor inflation developments carefully.”
[Edit]Well, productivity growth is slowing and unti labor costs are rising? What else are they monitoring? The NFL point spreads?
http://charts3.barchart.com/chart.asp?vol=Y&jav=adv&grid=Y&divd=Y&org=stk&sym=CIX7&data=H&code=BSTK&evnt=adv
They’re monitoring how fast everyone is creating currency.
As long as the FED prints funny-money at equal or less than the other Central Banks, it’s not inflationary in the FED’s view.
Example:
In 2007 the FED is inflating the monetary supply at about 12-14%.
In comparison, Russia is inflating at almost 50% and China roughly 45%.
They must have some really great graphs in regards to their reasoning, it’d be great if they shared them so we could all get a laugh…
We are definately heading into a Global Recession/Depression, but it probably won’t really hit until the end of 2008, though one could say we’re already well into it.
Personally I think the panic was caused by financial experts figuring out the *Party is Over* and that they’d better tighten things up so they can cash out ASAP…
The dollar-o-meter has hit an all time high, today, on this blog. Are these late comers or vets? I tend to get a little antsy when the trade gets a little too crowded. HMMNN?
“In 2007 the FED is inflating the monetary supply at about 12-14%.”
[54],
…..and by a wave of the wand decided to stop reporting M3. It’s a travesty what these bozos are creating. How many times do we need to raise the debt ceiling? On top of this Paulson has the b#lls to tell China that we will improve the current account defecit by increasing our savings. Like Billy Joel telling a LI cop that his Mercedes is stuck between 2 trees because he decided to pull over and rest.
Print and spend will ultimately cause more problems down the road. Bring back Paul Volcker.
BCBob, should we call it the anti-dollar o’meter?
Talk about the trade getting a bit crowded, did you read this NYT article from last weekend “Japanese Housewives Sweat in Secret as Markets Reel”
http://tinyurl.com/yraese
Thank you, Mr. Ben. YOu saved the country.
Bloggers, Rate is historically low and sellers are motivated. Don’t miss the perfect time to buy.
not so honest,
read post #42
Big mistake by the Fed.
Drove through Newark today.
Saw so many for sale signs all over the place. Nobody is ever going to buy all the inventory in that town. Whom is the idiot building so much???
SAS
“Bloggers, Rate is historically low and sellers are motivated. Don’t miss the perfect time to buy.”
HAHAHAHA…is this guy pullin’ our legs or is he a David Lereah clone?
The way things are going sellers won’t be motivated until 2009 when they’ve seen the dollar devalued by half and RE prices dropped by the same…
There’s a flipper trying to unload his misery, er, property.
He decided to have an ‘auction’ (not to be confused with an auction).
Full list price in the MLS: $1.2 million.
Minimum bid for the pretend auction: $1.2 million.
Not a typo — the “auction” minimum “bid” is the current full list price. What a clown.
The property:
MLS 2420223
http://homes.realtor.com/prop/1084046559
It’s a modular shoebox — arrived on a truck, assembled in hours — that looks like a $200K rowhouse from Staten Island.
Ballgame over! Yankees win!!
Theeeeeeee……….Yankees……………WIN!
Question for the realtors: Is there any reason a realtor would only list a property on realtor.com and not NJMLS.com? Isn’t the whole idea of getting a property sold therefore being on the NJMLS.com site?
NJMLS is only one of many multiple listing (MLS) systems across New Jersey. In this area we also have GSMLS (Garden State MLS), and the Middlesex MLS. Head towards the shore and the Monmouth/Ocean MLS becomes the system of choice. These are all different systems, owned by different people.
There is no single MLS system, however, in many cases Realtor.com makes listings from all these systems available to consumers.
jb
JCSidelines Says:
September 19th, 2007 at 7:22 pm
Re Moody’s and other professional predictors, including Hughes and Seneca, they never offer an causal explanation for their predictions.
JC,
I’m not sure how you could make that statement without access to the full report (not just the media reporting). Do you have access to the full report? If so, I’d love to read it. Will you share?
I do agree with your point, however. The media is usually light on reporting the methodology. Those guys tend to jump right to the money shot.
It’s OK if you don’t share, after all, it does cost $4,000 a quarter to subscribe to the Housing Market Monitor. Not cheap by any means, but you do get what you pay for.
For those who haven’t had the pleasure of reading one, here is the sample they offer:
http://www.economy.com/store/download_sample_getfile.asp?f=SFHousingMonitor.pdf&id=143
I don’t think anyone would feel that Moody’s hasn’t provided adequate rationale for their forecast.
jb
Would people back off with all of the USD cratering discussions?
#1 you are discussing something that is highly speculative, volatile, and whimsical
#2 despite obvious current conditions that would predict USD weakness, it is not abundantly clear that loading up on foreign currency exposure in lieu of maintaining USD positions is a road to riches
#3 bottom line, if you are not familiar with this realm….do not even for a second consider screwing around with money you cannot afford to lose
CF:
It appears to be the old herd (or is it heard) mentality at work.
WSJ
Emerging Markets And Oil Bubble Up Will the Fed Rate Cut Turn Overseas Gambits Into Tech-Craze Repeat?
By JUSTIN LAHART and JOANNA SLATER
September 20, 2007
Now that the fallout from the downturn of the housing-loan market has prompted the Federal Reserve to cut interest rates, the race is on to find the next bubble.
Emerging markets are a popular answer.
FYI – it is not a negative article…it is discussing opportunity
Chifi, I don’t think anyone expects the USD to crater overnight or soon.
There are individuals (I’d guess quite a few on this blog too) who are in and out of this country frequently – whether working, visiting or on business, and have assets and liabilities in different currencies.
There is nothing fundamentally wrong with people positioning portfolios to exploit a (debatable) trend and discuss it. We’re fortunate enough to be in a country where different financial instruments exist to partake in this if one wishes.
I will say that direct exposure to a weak dollar trade is akin to using a chain saw to slice cheese. Used inappropriately, expect a swift amputation to net worth.
t c m
it’s pretty simple, don’t allow people to finance with less than 20% equity, whether a deposit, refi, or heloc.
Trust me, if this was law we would never again see a housing bubble.
I think this study is exaggerated to certain extent. It may be true for some regions like Florida, Arizona and Nevada but I highly doubt it’s credibility for Edison NJ.Yes prices are lower and it’s definately a buyers market at this time but could anyone show me properties that have significant price drops in North Edison?
“Ben’s Helicopters Riding High”
http://tinyurl.com/ysp5dm
sas
Re JB Post #67
A fair point you raise about the nature of financial reporting (or any reporting, for that matter) rather than the research. However, I took a seminar a few years back re how social scientists should talk to reporters about their research, and the take away was that you insist on starting the conversation with methodology first,and only then move to results. It forces beat writers to wrestle with their better angels… editors, perhaps another story…but I’ve found the way you explain really makes a difference. The reportage for Robert Shiller has been meatier, in part, I would guess, because of the way he addresses the press.
ad (43)-
The only way a property can be on Realtor.com is to be listed on some MLS. Realtor.com will not accept exclusive listings. That property is probably on another MLS.
BC (57)-
So, what’s the bull argument for the USD?
That we’re not inflating at the same pace as dictatorships and Third World rug bazaars?
Talk about damnation with faint praise.
And, BC (57)-
Is the likelihood of Saudi Arabia’s removal of the dollar peg (which seems inevitable) the first step toward the Petroeuro?
InspectorFox Says:
September 20th, 2007 at 1:22 am
I think this study is exaggerated to certain extent. It may be true for some regions like Florida, Arizona and Nevada but I highly doubt it’s credibility for Edison NJ.Yes prices are lower and it’s definately a buyers market at this time but could anyone show me properties that have significant price drops in North Edison?
Please DEFINE sinificant, and define it based on asking prices and 2005 sales prices as well.
Unfortunatelly we do not know current sales prices yet – we will know them in 6 month or such.
So most of us can compare only asking prices.
Clot [78],
No bull argument from me. I’m digging faster than ever. I was only making mention of the dollar chatter on this blog. I’ve been saying for 2 years that it, dollar, will be a much bigger problem than RE. I was just wondering where these other bashers [not you] were at that time.
if you are a BUYER offer 20-30% les of listed price ,,,and sellers will JUMP at the offer. I tried it in Edison and Jackson and Upper Montlair.