From Bloomberg:
U.S. Home Foreclosures Doubled in the Third Quarter
U.S. home foreclosures doubled in the third quarter from a year earlier as subprime borrowers failed to make higher payments on adjustable-rate mortgages, RealtyTrac Inc. said.
There were 635,159 foreclosure filings in the quarter, or one for every 196 households, including default notices, auction notices and bank repossessions. California, Florida and Ohio accounted for 44 percent of the total, and Nevada had the highest foreclosure rate at one for every 61 households. Forty-five of 50 states had increases.
“Given the number of loans due to reset through the middle of 2008, and the continuing weakness in home sales, we would expect foreclosure activity to remain high and even increase over the next year in many markets,” James Saccacio, chief executive officer at Irvine, California-based RealtyTrac, said today in a statement. The company sells U.S. foreclosure information and has a database of more than 1 million properties.
Foreclosures are deepening the U.S. housing recession by pushing more homes onto a market where sales and prices are falling. There’s a 10-month supply of unsold homes, the highest in at least eight years, which may swell as transactions are set to drop to the lowest in at least five years.
The “absurd” number of subprime and adjustable-rate mortgages that are defaulting suggests a greater number than usual of foreclosed properties will eventually go back to banks or be sold at auction, Rick Sharga, executive vice president of marketing at RealtyTrac, said in an interview. Historically, 40 percent of homes are lost.
Foreclosure filings in the third quarter increased 30 percent from the previous three months.
…
Adjustable-rate mortgages to subprime borrowers accounted for 7.3 percent of all home loans and 44 percent of all new foreclosures, the Mortgage Bankers Association in Washington said. The monthly payments on adjustable loans can rise by 50 percent or more, sometimes doubling in size, RealtyTrac’s Sharga said.About 2.91 million subprime borrowers have adjustable-rate mortgages, some 90 percent of which will have reset at higher interest rates by the end of 2008, according to San Francisco- based First American LoanPerformance, the research unit of the biggest U.S. title company.
The third-quarter filings were reported on 446,726 properties, meaning that some properties had multiple filings, Sharga said. “We think 1.5 million households will get at least one filing this year, and we’ll have well over 2 million filings,” he said.
From MarketWatch:
Credit Suisse takes $1.9 billion charge
Credit Suisse reported a 31% drop in third-quarter net profit Thursday after the credit market crisis wiped around 2.2 billion francs ($1.9 billion) off the value of its mortgage book and leveraged loan commitments.
The group said profit fell to 1.3 billion francs from 1.89 billion francs a year earlier. Excluding discontinued operations, profit was down 11%.
…
The division took a charge of 1.1 billion francs on the value of its residential and commercial mortgages and collateralized debt obligation portfolio. And it took a similar charge on the value of unsold loans.
From MarketWatch:
Crude oil breaches $96 a barrel
Crude-oil prices, already at electronic-trading intraday records, breached $96 a barrel Thursday, continuing to rally on news that U.S. inventories dropped more than expected as well as a weakened dollar in the wake of the Federal Reserve’s interest-rate cut.
So Cayne smokes a blunt every now and then.
I would too, if I were presiding over billions of dollars walking out the door.
Fight the power, Jimmy!
Talk about a price cut..
44 Rio Vista, Alpine NJ
NJMLS# 2608210
Listed 3/7/2006
List Price $24,000,000
DOM 367
Expired
Relisted NJMLS# 2718098
Listed 5/3/2007
List Price $19,000,000
DOM 94
Expired
Relisted NJMLS# 2744007
Listed 10/31/2007
List Price $17,000,000
Active
I’m just gonna get the popcorn, sit back, and watch the insanity. Kind of how I watched it when the insanity was on the way down. Although, I found that personally amusing. I think the way down will be more like horrified fascination- literally like watching a wreck.
50% off OLP on Durie in Closter?
NJMLS# 2608996
List Date: 3/10/2006
List Price: $3,295,000
Relisted about 6 times: 2608996, 2610550, 2631723, 2634912, 2721626, 2731498. Finally sold.
NJMLS# 2736271
List Date: 9/6/2007
List Price: $1,999,999
Sold Date: 10/30/2007
Sale Price: $1,650,000
5- That’s meant to be “how I watched it when the insanity was on the way up”. I think this cold has gotten the better of me.
JC smokes,so what even CNBC gave him a pass.Not relevant just cheap shot.
Lookig into etf tracks re ,if goes down you profit.RE goes down 10% fund goes up 20%.Sounds great if we’re right.I guess its time to put money where the mouth is!
Bi the way S R S if you want to check it out.Pun intended!
I think publishing multi-million dollars homes means very little to general population – all it shows that amount of people who can actually afford these houses are very small they in past 4 years thouse mansions were grossly overbuilt.
It won’t matter to me (or to 99% of population) that that house priced at 17 millions and not at 24 millions…
Hell it wont matter to me if they would price it at 5 millions – it is as out of reach at 5 millions as it is at 17 millions.
AL if no money at the top there surely none at the bottom.Almost all levels over built.So it is important even to average buyer.
Citigroup cut to sector underperformer on dividend worries
http://www.marketwatch.com/news/story/citigroup-cut-sector-underperformer-dividend/story.aspx?guid=%7BB8BC14D5%2DBEF0%2D4154%2D9738%2DEEF2213BF7BE%7D
110 Mayhew Drive, South Orange NJ
Purchased: 8/14/2006
Purchase Price $880,000
MLS# 2435890
Sold: 10/31/2007
Sale Price $875,000 (OLP: $995,000)
Net after commission: $831,000
Est. Loss: $50,000
#12,
Weeeeeeeee, $50K loss is nothing. Meanwhile because it’s South Orange the house is only worth $300K
Maybe Chuck Prince sparks up a spliff every now and then, too.
Whoops! 30 BIL light.
That’s gonna leave a mark.
If Jimmy Cayne is the Bob Marley of finance, what does that make Prince?
Foreclosure smoloreclosure…
All you bears can go into hibernation now, the economy grew at 3.9%, oil is at $96+ but gasoline prices keep dropping. Fed keeps dropping rates. Keep wishing for a collapse but things will be just fine.
Booooooyaaaaaaaaaa U.S. economy!!!
Uh frank……nevermind.
(15)-
Frank’s one of Cayne’s rasta monkeys.
“Credit Suisse reported a 31% drop in third-quarter net profit ”
I wonder if this will have an effect on the construction of Xanadu?
Mortgage insurer Radian posts a Q3 loss of $704m.
OT, but anyone that goes to an open house this weekend, I’d be interested to see if any realtors give the old “the fed dropped interest rates again, now’s a great time to buy” Please let me know their response after you tell them there is no correlation between the fed funds rate and a 30 yr fixed and that mortgage rates follow the bond market.
Foreclosure stats
The 10 states with the highest foreclosure rates in the third quarter.
State Per Household
Nevada 1/61
California 1/88
Florida 1/95
Michigan 1/102
Ohio 1/107
Colorado 1/109
Arizona 1/112
Georgia 1/142
Indiana 1/196
Texas 1/205
Actually now is a “GREAT TIME TO BUY AND SELL”
Remember in Real Estate you can’t lose money so the seller is making it and the buyer is making it.
bergenbuyer Says:
November 1st, 2007 at 8:22 am
OT, but anyone that goes to an open house this weekend, I’d be interested to see if any realtors give the old “the fed dropped interest rates again, now’s a great time to buy”
Analyst: “Repossessions are now higher for homeowners than for non-homeorwners. It’s shocking.”
NAR Pending Home Sales due out at 10:00am
10:00 – Pending Home Sales
The National Association of Realtors index of pending home sales tracks sales activity by looking at signed real estate contracts for existing residences. The latest batch of September existing housing sales data showed a big drop in demand which followed the recent plunge in pending home sales index. The August index dropped to 85.5, or 21.5% from a year ago. In July the level was 91.4, down from 102.4 in June
JB [1],
Can’t be. The hustlers told us, in the beginning of Oct, that the crisis was over with the $20B write down.
From MarketWatch:
Income, spending growth slow in September
The third quarter ended on a down beat, with real disposable incomes and consumer spending slowing to the weakest growth since spring, the Commerce Department reported Thursday. In current dollars, incomes rose 0.4%, while spending increased 0.3%, in line with expectations on Wall Street. After adjusting for inflation, after-tax incomes rose 0.2% in September and real spending increased 0.1%. Meanwhile, inflation was steady. in September. The personal consumption expenditure index rose 0.2% on the month. The core rate of inflation – which excludes food and energy prices – also rose 0.2%, as expected. In the past year, the PCE price index has risen 2.4%, while the core PCE index was up 1.8%, the same as the previous month.
“If Jimmy Cayne is the Bob Marley of finance, what does that make Prince?”
Clot [14],
Fred Astaire?
http://www.balloonmanor.com/auction.php
BC,
I thought that was Bob Toll…
Frank [15],
Kudlow’s lap dog.
Speaking of BOOOYAAAA, where is he? I would imagine, taking after Chuck Prince, tap dancing on someone’s grave?
JB [30],
Yes, there are many charlatans that fit that bill.
From Bloomberg:
Radian Posts First Loss as Home Slump Boosts Claims
Radian Group Inc., the third-biggest U.S. mortgage insurer, reported a loss of $703.9 million, the largest yet in an industry roiled by claims from failed home loans.
Radian had a third-quarter loss of $8.78 a share, compared with a year-earlier gain of $112 million, or $1.36 a share, joining larger rivals, MGIC Investment Corp. and PMI Group Inc. in reporting its first quarterly loss as a publicly traded company. Radian, based in Philadelphia, wrote down its $468 million stake in Credit-Based Asset Servicing and Securitization LLC, owned jointly with MGIC, it said today in a statement.
The worst U.S. housing slump in 16 years deepened as homeowners defaulted on 22 percent more mortgages in September than a year earlier, according to Washington, D.C.-based Mortgage Insurance Companies of America. Falling prices make it harder for struggling homeowners to sell or refinance their property and for banks to cover their loans in a foreclosure sale. Mortgage insurers help lenders recoup losses.
“Mortgage insurance credit losses will continue to impact our results for the foreseeable future,” Chief Executive Officer S.A. Ibrahim said in the statement.
Frank,
Thoughts?
Inflation was low because oil prices surged
In GDP math, sometimes one plus one equals zero
Get the quants going, time for some major adjustments. Quarter after quarter after quarter of additional writedowns coming.
“In October alone, rating agencies Moody’s, Standard & Poor’s and Fitch Ratings delivered a heavy drip-feed of downgrades or reviews for downgrade that affected more than $100bn in so-called collateralised debt obligations (CDOs) and the mortgage securities they contain.”
“Many of the downgrades took the CDO securities from investment grade directly to high-yield. In one case, Moody’s cut the Aaa-rated slice of a CDO deal called Vertical CDO 07-1 by 14 ratings notches to B2, and still left it on watch for further downgrades.”
“Domenico Picone, analyst at Dresdner Kleinwort, said: “What is astonishing, and at the same time particularly worrying, is that Moody’s gave a AAA rating to this security only back in April this year.”
http://www.ft.com/cms/s/0/68243c98-87e8-11dc-9464-0000779fd2ac.html?nclick_check=1
From the NY Times:
Real Estate Agent Found Slain in 5th Ave. Home
A woman who helped pioneer the punk music scene, influenced the careers of Madonna and the Ramones and went on to become known as a real estate agent to the stars was found bludgeoned to death Tuesday night in her apartment at 965 Fifth Avenue, the police said yesterday.
OT, but anyone that goes to an open house this weekend, I’d be interested to see if any realtors give the old “the fed dropped interest rates again, now’s a great time to buy”
My keyboardist is a realtor and said something similar over the weekend:
“deals are going to pick up, prices are low and the rates are coming down”
Clot how about Cheech & Chong Up In Smoke ,great movie back then!
#15 Frank Says:
November 1st, 2007 at 7:57 am
Foreclosure smoloreclosure…
All you bears can go into hibernation now, the economy grew at 3.9%, oil is at $96+ but gasoline prices keep dropping. Fed keeps dropping rates. Keep wishing for a collapse but things will be just fine.
Booooooyaaaaaaaaaa U.S. economy!!!
Frank, how many times do i have to explain how oil/gas prices relate??!?!? The price of gas is only indirectly tied to the price of oil. The price of gas is directly based on the amount of supply the refineries have on hand Vs how much demand there is in the market. The issue is compounded in that refineries make something along the lines of 20-30 different blends of gasoline due to state and federal rules differing from market to market. Oil prices can go up, but as long as the refineries are running below capacity then there is not an immediate rise in gas price. This is because the gas you are buying now, was made with oil that the refinery bought months ago when oil cost 80 something $. There is a lead-lag effect between oil and gasoline prices as well as production capacity factors that are strong drivers in the price of gasoline. Please stop making BOOYAH comments about a subject you clearly know nothing about. If you must comment on it start with wikipedia and then move to other more authoritative sources so that we can discuss this inteligently!
Bonus points to anyone who can turn this mess into a parody sung to Hits from the bong by Cypress Hill.
kettle [39],
Stop talking sense.
The safety surcharge (read: tax) on gas is all but done. It’ll be fed to the voting public as the only way to fix our crumbling infrastructure without a property tax increase. No politician is going to say no to it, after all, how can you say no to public safety.
From Bloomberg:
Consumer Spending in U.S. Rose Less Than Forecast
Consumer spending in the U.S. rose less than forecast in September as house prices fell and fuel expenses climbed.
The 0.3 percent increase followed a revised 0.5 percent gain in August that was smaller than previously reported, the Commerce Department said today in Washington. The Federal Reserve’s preferred measure of inflation rose as anticipated.
Homeowners are losing equity as home values fall, depriving many Americans of extra cash to buy cars or take vacations. The slowdown raises the risk that spending will weaken heading into the holidays.
“Consumer spending is going to slow as we get into the fourth quarter,” said Michael Carey, chief economist for North America at Calyon Corp. in New York. “Consumers may be a bit cautious.”
Economists forecast spending would increase 0.4 percent, after an originally reported 0.6 percent gain for August, according to the median of 80 projections in a Bloomberg News survey. Estimates ranged from gains of 0.1 percent to 0.6 percent.
http://www.annaly.com/mikeQ307webv.pdf
ouch and double ouch
# 34 grim,
I know that current core inflation is around 2.8 percent. But really people, who here is buying that core inflation is the an accurate dipiction of overal inflation of the US dollar. M3 is an important tool and was dropped by the FED for a good reason. Its to hard to fudge the M3 numbers and make them look pretty. REAL inflation (M3: the total money supply) is currently above 14%. This is very concerning!
Current M3 Data http://tinyurl.com/zyey9
From # 43
“Consumer spending in the U.S. rose less than forecast in September”
“The Federal Reserve’s preferred measure of inflation rose as anticipated.”
Slumpflation?
#46
“The Federal Reserve’s preferred measure of inflation rose as anticipated.”
This is the same group that is currently bailing out the banks with rate cutes and killing the dollar, oh and apparently its a good idea to inflate a new bubble with dangerously low rates instead or accepting that a recession must eventually follow a bubble(internet). hmmm i dont know if i would place must stock in this groups “preferred method” of anything at the moment
I might also suggest loking at the other charts on this link
Current M3 Data http://tinyurl.com/zyey9
CPI and GDP calculation issued by the GOV are suspect and have a history of being “tweaked” i think that these numbers are probably more realistic and they show that we are headed for trouble
Interesting townhouse in Rockaway Twp.
MLS# 2455235
Listed: 10/21/2007
OLP/LP: $375,000
Purchased: 12/17/2004
Purchase Price: $360,500
Property is down to 2004 price levels and the seller is facing a loss of a few thousand.
Grim: Looks like you have sharpened those SQL skills on MLS data. You are finding lot of cases.
Kettle: You mentioned about new bubble. Where you think the next bubble occuring?
The one place I definitely see bubble is Emergining markets, where the markets have been going crazy. At least in case of India, it seems lot of hedge fund hot money chasing the index.
Emergining markets.
Cool word!
OK, so cut me some slack here, this quick and very dirty…
Cypress Hill – Hits From The Bong Lyrics
Hits from the Fed
Hits from the Fed
Hits from the Fed
Hits from the Fed
Pick it
Pack it
Fire it up, come along
As bernanke takes a hit from the bong
Put the blunt down
Just for a second
Don’t get me wrong
It’s not a new method
Inhale
Exhale
Just got 50 points in the mail
I like a blunt or a big fat rate cut
But my double-barrel leverage
Is gettin’ me stoned
I’m skill it
There’s subprime inside don’t spill it
It smells like shit on the carpet
Still it
Goes down smooth when I get a clean hit
Of the skunky, phunky, CDO $hit
Sing my song
leverage all night long
As I take hits from the bong
Hits from the bong y’all
Hits from the bong
Can i get a….hit?
Hits from the bong
Can i get a….hit?
Hits from the bong
Grim: Looks like you have sharpened those SQL skills on MLS data. You are finding lot of cases.
While it would be great to have that kind of access to the data, unfortunately I don’t. These kinds of scenarios have become commonplace on the MLS.
From MarketWatch:
Citigroup may be forced to cut dividend: analyst
Citigroup in the near-term will be required to raise more than $30 billion by either selling off assets, slashing its dividend, raising capital, or a mixture of all measures, an analyst at CIBC World Markets said.
so what does everyone think of the Bill Gross’ statement that the Fed needs to cut to 1% to stave off the Great Depression Part Deux?
is the risk of not dropping dollars from the sky the greater one?
SG
The one place I definitely see bubble is Emergining markets, where the markets have been going crazy. At least in case of India, it seems lot of hedge fund hot money chasing the index.
My first guess would be emerging markets. All the money floating around out there is looking for a place to go. China has some pretty serious internal issues that have not fully bubble to the surface yet, so that is only a temp stop for the money,. India is big right now, but will start to have similar problem to china. Emerging markets are funny in that they are in some sense only short term. The more money you pump into them the less “emerging” that market becomes and hence more expensive for business (for many business an social reasons). I think that as india follow the “emerging market curve” of starting cheap and then prices going up, india is already half way through the cycle. The next emerging markets are looking like they may be in africa. Look at how much money china is pumping in, and consider that the US has created a new strategic Africa command. The US is in many ways imperialistic, hence we consolidate our military force in an area when we want to control a market. China was to big/strong for the US to bully, but we have been screwing with Africa for decades with no problem….
sorry if that was disjointed. Not an expert, my personal opinion
Skeptic # 55,
do you have a link? i have only heard this second hand.
skeptic [55],
Probably talking his position.
#15 Frank: Are you are so young, so silly. You will learn grasshopper.
(Sorry Doyle, I could not help myself)
Man……C……I bite my tongue……I bite it with all my might……
Clotpoll Says:
November 1st, 2007 at 8:00 am
(15)- Frank’s one of Cayne’s rasta monkeys.
clot: watch it, you are close to pulling a Cosell….
From the AP:
Ahead of the Bell: NY Mortgage Probe
New York State Attorney General Andrew Cuomo is scheduled to unveil what his office called “a major development in his ongoing investigation of the mortgage industry” at 11 a.m. EDT Thursday.
Cuomo is one of several state attorneys general who, along with the Securities and Exchange Commission, is investigating how the industry handled mortgages for people with risky credit, leading up to the collapse of the subprime mortgage market.
The investigations are looking into complaints of unscrupulous lending practices. Numerous mortgage companies, including several based in New York, have lost much of their value, and in some cases declared bankruptcy, as the crisis has unfolded.
The probes also involve queries into what role credit-rating agencies played in the repackaging of subprime loans into various investment vehicles. Some such instruments left major banks and Wall Street firms carrying deeply distressed debt as the value of the underlying loans deteriorated.
kettle,
“When the music’s over, turn out the lights.”
Jim Morrison, The Doors 1967
“An increasingly recessionary looking U.S. economy will likely require 1% real short rates and 3½% Fed Funds in order to stabilize a potential growth contraction in lending not witnessed since the early 1970s or, to be honest, Roosevelt’s depressionary 1930s. We can only hope that Bernanke, Paulson, and their cohorts recognize the danger and that the music keeps playing with the lights still turned on.”
William H. Gross
Managing Director
http://www.pimco.com/LeftNav/Featured+Market+Commentary/IO/2007/IO+November+2007.htm
#15 Frank
Frank makes me laugh, he’s funny…..
Now I will leave work early to go buy a house. Thanks Frank…..
BC
Thanks
Skeptic,
Bill Gross’ comments make sense. consider . SO he wants to avoid a reversion to mean. I agree with him, the only way to avoid a reversion to mean is probably 1% rates. Even then it would only be temporary and the result would very likely be a true collapse of the US dollar and a replay of germany in 1923
http://tinyurl.com/2gwos3
Manufacturing sector slows for 4th straight month, ISM says
http://www.marketwatch.com/news/story/manufacturing-sector-slows-4th-straight/story.aspx?guid=%7BDBC80DFE%2DCF9D%2D48DF%2D8C5F%2D3CEED76098BA%7D&dist=hplatest
The ISM index fell to 50.9% from 52% in September. Economists expected a dip to 51.5%. Readings over 50% indicate most firms were growing. The index has been above 50% for nine straight months, but has declined for four straight months. The new orders index fell to 52.5% from 53.4% in September. The production index dropped to 49.6% in October from 54.6% in September. The prices paid index rose to 63% from 59%.
Could be a Black Thursday as the media is beginning to embrace the likelihood of a recession. Perhaps Ben should have cut the rate by a half a point ;)
Bill Gross is a grandstander…..enough of it please…..he’s moving to the plate for the last at-bat of his career, and he is swinging for the fences……you have to bear (no pun intended) that in mind when you read his stuff…..
Chrysler cutting 12,000 jobs…. but no worries, it’s always a good time to buy.
What happend to Pending Home Sales?
Perhaps Ben should have cut the rate by a half a point ;)
Of course, one reason for the fall today is oil prices. Had the Fed cut 50 basis points yesterday, we’d probably be looking at $100 oil today. Catch-22.
Aren’t pending home sales scheduled for the 13th?
“What happend to Pending Home Sales?”
There weren’t any!
Ba dump bump, chhhhhhh!
74
lol
Don’t worry, real estate never goes down. And besides, your salary will go up in a few years and you can always refinance. Hurry, bring your checkbook as this charmer won’t last!!!
Very OT
But some of you might find this interesting ( a human immortal), oh, and a new species has sprung from the combination of a human being and a virus. Its really very Sci-fi like, although it has been very useful in research for decades.
http://tinyurl.com/2aln89
now back to heckling Bi….
RentingNJ [72],
All of the pros said that cutting the FED lending rate would smash the dollar and result in a deeper hole to climb out of. All of the bulls on this board said, “Don’t fight the FED!”
Less than two months later, the economy is heading into recession, the dollar is dropping rapidly and the market is reacting negatively to the 2nd rate cut. I hope the bulls know what they are doing.
I’ve been mostly shorting or out of the market since August.
Looks like Hillary is gonna be presiding over an economy that closely mirrored that of Jimmy Carter. The only thing left is for Iran to take some hostages.
NAR revised their schedule for a combined release on Nov. 13, Housing Forecast/ Pending Home Sales Index during a news conference at NAR convention, 3 PM EST
“Bill Gross is a grandstander”
Chi,
And how does that make him any different than the other rubes?
BI:
Looks like homebuilders are going to breach their 52 week lows. I guess your 3rd homebuilder recovery just stalled like the previous two. Is oil dropping? Is gold rising?
this is just another example of deterioration seeping into prime lenders. although flagstar briefly did tap into the alt-a and supprime arena.
Flagstar Fundings, Earnings Deteriorate
$6.6 billion 3rd quarter originations:
Quarterly business worsened at Flagstar Bancorp Inc. — which saw profits plummet.
Third quarter residential production was $6.6 billion, falling from $7.2 billion during the second quarter, the Troy, Mich.-based company announced Tuesday. Originations were, however, better than $4.6 billion a year earlier.
Fundings were handled from 151 loan origination centers, the press release said. The company employed 852 loan officers and account executives, while total employee count company wide was 2,939 at the end of the third quarter.
The mortgage servicing portfolio was reported at $26.7 billion as of Sept. 30, jumping from $21.5 billion three months earlier. The company held $5.0 billion in mortgages held for investment at quarter’s end.
Delinquency of at least 90 days on all loans ended the latest period at 1.81 percent — jumping from 1.30 percent at the end of the second quarter, the report indicated.
Flagstar’s earnings fell to a loss of $32.1 million from a second quarter profit of $15.1 million, primarily reflecting “a decrease in gain on loan sales, an increase in the provision for losses, and a decrease in gains on sales of mortgage servicing rights,” the statement said.
thanks Rich.
Sorry about more OT,
But w/ regard to iran…. Do you realize that while we claim that iran is trying to build nukes and danging the war drum to bomb them ( the UN inspectors say they arent) we are quietly helping eqypt build a nuclear weapon..?.?.
NJMLS Bergen County Sold & Under Contract (Pending Sales) Data for September and October
September
Year Sold U/C
1995 721 689
1996 705 690
1997 841 770
1998 886 755
1999 842 598
2000 803 770
2001 732 587
2002 828 774
2003 1039 908
2004 952 885
2005 946 832
2006 679 695
2007 581 504
October
Year Sold U/C
1995 720 706
1996 792 832
1997 826 786
1998 845 830
1999 799 616
2000 785 828
2001 897 749
2002 793 850
2003 976 923
2004 887 935
2005 830 797
2006 725 763
2007 535 576
Ouch
We(USA) are up to our eyeballs in debt. Isn’t the only way to reverse that is to have a credit contraction?
Aaron,
The alternative (and not one that I advocate) would be massive inflation. Essentially we print money to repay our debts.
“Essentially we print money to repay our debts.”
Sound like an unbelievably regressive tax to me. Can we offer some high income tax cuts to go along with it to make it even more regressive please?
RE:#22
OT, but anyone that goes to an open house this weekend, I’d be interested to see if any realtors give the old “the fed dropped interest rates again, now’s a great time to buy”
Just bid on a house earlier this week,Bergen County 14% below asking, seller came down 3%. Both listing agent and my agent said yesterday,”You know, the rates have come down, so there we expect other buyers to bid on this house. You should consider moving up in your price”
My response, “Last time the Feds cut the rates, mortgage rates went UP” Clearly these folks live in another world. LA LA LAND
Is there anyway that I can cut the buyers agent out of the mix and get access to the MLS for a fee? I am so tired with agents who are not working for me!
For those interested in mortgage fraud:
The dollar volume of active mortgage fraud cases tracked last month was $0.3 billion, compared to $0.5 billion the prior month and $0.8 billion in October 2006.
State Rankings and Index Level:
October
2006
1.Florida 110
2.California & South Carolina (each)100
3.Indiana and New Jersey (each) 70
National: 790
$ amount: $780,699,652
September
2007
1.Ohio 170
2.Minnesota 130
3.Florida 110
4.Georgia & California (each) 80
National: 740
$ amount: $489,830,000
October
2007
1.New York 110
2.Missouri 100
3.Illinois 90
4.Georgia 80
5.Florida & Minnesota (each)60
National: 810
$ amount: $336,294,100
*A minimum of $100,000 was used for all cases tracked, including when no amount was available. The national total index is an aggregate of all state data.
In one case tracked, Wachovia Bank accuses Ameriquest Mortgage of selling it $129 million in loans with fraud.
Markets likely to see the biggest fraud increases are California, Florida and Nevada.
#89 NJ BUyer: Give it a week or so,and they will be calling you back, then you can bid 20% under asking.
Sound like an unbelievably regressive tax to me. Can we offer some high income tax cuts to go along with it to make it even more regressive please?
While I clearly don’t advocate this approach, I actually don’t think it’s really regressive. In fact, I think on balance its progressive.
Look at it this way; inflation punishes people holding money by devaluing their holdings and rewards people who are in debt by reducing the burden of that debt. The lender gets screwed while the borrower gets off the hook.
The have-nots are the ones who are in debt, while the haves are the beneficiaries of this debt (they own bonds or stocks in credit providers etc.).
There are two caveats:
1) incomes must go up with inflation to actually realized the burden reducing effect of inflation
2) I say this is progressive on balance, because there are “poor” people who manage to save money & “rich” people who are up to their eyeballs in debt.
Grim I think Insane in the membrain fits this mess better:
——————————–
Who you tryin’ to get greedy with ese? Don’t you know I’m a grubber?
To all the Greedy Grubbers on the land
Boy your Stupid just Flip that shack
Now your in welfare land
No more money
Feel done when I come in slam
Damn
I still owe uncle sam
Don’t make me drop my price
No bidding wars like 2005
EEEN!
The lights are blinking
I’m thinking
It’s all over when I drop my prices
Oh, I thought I could make money,
Cause of the big double digit increase – o
Bro’, I got ta maintain
`Cause a greedy grubber like me is goin’ insane
Greedy Grubber in the membrane
Greedy Grubber in the brain!
Greedy Grubber in the membrane
Greedy Grubber in the brain!
Greedy Grubber in the membrane
Plenty insane
Home sellers Got no brain!
Greedy Grubber in the membrane
Insane in the brain!
Do my shoddy work undercover
Now it’s time for the sucka
Unsuspecting homebuyer
To watch my pockets get fatter
Greedy Grubber on a diet
Don’t try it
I’ll overprice my flip like we not in a buyers market
My shit’s fat like a Greedy Grubber slammin’ that ass
Leavin’ you outpriced in the grass
You know
I don’t take a lowball
Lightly
Punks just jealous `cause they can’t flip like me
So flip that shack: wicked, wild
Happy face Grubber never seen me smile
Flip that Capecod
I’ll explain
A Greedy Grubber like me is goin’ insane
Greedy Grubber in the membrane
Greedy Grubber in the brain!
Greedy Grubber in the membrane
Greedy Grubber in the brain!
Greedy Grubber in the membrane
Prices insane
Home Sellers got no brain!
Greedy Grubber in the membrane
Greedy Grubber in the brain!
Insane in the brain
In the brain
It’s because I’m greedy
Insane in the brain
In the brain
It’s because I’m greedy
Insane in the brain
In the brain
Insane
It’s because I’m Greedy
Insane in the brain
Like the guy on tv
Flip the house
I’ll sell dat house and break ya off something soon
I got to get my props
Cops
Come and try to forclose my flops
These pigs wanna blow my house down
Head underground
To the next town
They get mad
When they come to raid my pad
And its been abandoned Sad
Yes I’m the greddy grubber
Of this ship if I get
Wit’ the ultraviolet dream
Hide from the red light beam
Now do you believe in the unseen
Look, but don’t make your eyes strain
A greedy grubber like me is goin’ insane
Greedy Grubber in the membrane
Greedy Grubber in the brain!
Greedy Grubber in the membrane
I’m Insane in the brain!
Insane in the membrane
Plenty insane
Home sellers Got no brain!
Greedy Grubber in the membrane
I’m Insane in the brain!
Insane in the brain
It’s because I’m Greedy Grubber
Insane in the brain
It’s because Greedy Grubber
Greedy Grubber in the brain
It’s because I’m Greedy Grubber
Greedy Grubber in the brain
It’s because I’m Greedy Grubber
“…I think I’m going crazy…”
From Reuters:
GMAC posts $1.6 bln third-quarter loss
GMAC, the finance company once controlled by General Motors Corp, on Thursday reported a $1.6 billion third-quarter loss, hurt by mortgage losses at its home lending unit amid difficulties in the housing and credit markets.
“Fed keeps dropping rates.”
BOOOYAAA Frank [15],
How do you decipher the recent action in XLF and BKX? Troubling, at least to me. Especially on the back of a rate cut.
#95 BC Bob: Frank has absolutely no idea what you are talking about.
mike (38)-
A classic. Shoulda made AFI’s Top 100 list.
NY ATTORNEY GENERAL SUES FIRST AMERICAN AND ITS SUBSIDIARY FOR CONSPIRING WITH WASHINGTON MUTUAL TO INFLATE REAL ESTATE APPRAISALS
http://www.oag.state.ny.us/press/2007/nov/nov1a_07.html
vodka (52)-
Mad skillz, yo.
RentingNJ [92],
To refute your argument, what about the lower income earner who has no debt (me). My drop in value of my worth from excess $ printing is a much larger percentage of my total worth than that of the higher income earner. Sure we can both purchase less, but the rich guy can still buy a Porche, while I end up on a moped instead of in a Hundai.
Why must the middle class always bail out the lower class, while the upper class continues to benefit from regressive tax breaks?
Let me guess. Cause they earned it!
#98 – Wow!
“but the rich guy can still buy a Porche, while I end up on a moped instead of in a Hundai.”
stu [100],
There will be a ton, who think they are rich, looking to hitch a ride on your moped. Many don’t have a clue it’s coming.
Homer, Insane in the Brain-
Exxxxxcellent
#59 3B, I knew you couldn’t hold out forever!
#105 Doyle: I know,I slipped, I will refrain from using that expression for the next month.
For the techies out there:
I need to set up an online store, pretty simple and basic. There are plenty of hosting sites out there that offer turnkey with shopping cart, credit card acceptance and the like at a reasonably low monthly cost. It is a high cost, one off item that would be sold so I would anticipate traffic to be fairly low and I don’t want high end graphics, just simple pictures. Therefore bandwidth is not a big issue.
My problem is I am running Mac, like it, and don’t want to change. A lot of these sites seem focused on Windows. Anyone know anything about running a site from a Mac platform.
Also – I would like to have the site to look semi decent. How much would it cost to have someone do basic design and set up for me? And where would I look for it?
If anyone can help I can be reached at lisoosh at gmail dot com.
Thanks.
Cuomo is hitting all of the right middle class targets as AG. First shady student loan operations now shady mortgage lenders.
I rarely post here but I’m an avid reader. I thought people would like to see what the ugliest most overpriced (at $7.9 million) and expensive house on the Jersey Shore looks like. For background, the house is located on Ocean Avenue in Monmouth Beach and at best has a partial view of the ocean from some of the higher floors. Note that the property is located on half an acre and the lot is essentially all house. To get an idea what this house looks like up close, think of one of those Staten Island two family homes built in the 1970s. I think the house could be overpriced by about $6 million.
http://www.tiny.cc/VVc2P
Merrill Lynch pov: exerpt from Roubini’s site
as David Rosenberg, the chief US economist for Merrill Lynch put it in his most recent report:
“We think a miracle is needed to avoid recession. With domestic demand growth struggling to stay above a 1% run-rate, if we manage to avoid a recession with another huge down-leg in homebuilding activity and home prices, we think it will be a miracle.”
r, #109
Yeah, but this house would be $23mil in CA!
#109
further proof that money doesn’t buy taste
lisoosh
Its not really about if its a mac or if its windows, its more about the browser. If your using there templates make sure they allow for your browser. So if you run Safari on your mac see if they allow for Safari. When creating a website with a web hosts templates its going to be done through the browser.
Check to see the FAQ’s
BC Bob Says:
November 1st, 2007 at 10:25 am
“Bill Gross is a grandstander” Chi, And how does that make him any different than the other rubes?
Bost: LOD equivalent of Yoda
Appraisals just got a little bit tighter this afternoon..
Chi,
I have no idea who Yoda is? However, sounds like a great name for a hedge fund.
From the link above..
Attorney General Andrew M. Cuomo today announced that he is suing one of the nation’s largest real estate appraisal management companies and its parent corporation for colluding with the largest savings and loan in the country to inflate the appraisal values of homes.
In a scheme detailed in numerous e-mails, eAppraiseIT (“EA”), a subsidiary of First American Corporation (NYSE: FAF), caved to pressure from Washington Mutual (“WaMu”) (NYSE: WM) to use a list of preferred “Proven Appraisers” who provided inflated appraisals on homes. The e-mails also show that executives at EA knew their behavior was illegal, but intentionally broke the law to secure future business with WaMu.
“The independence of the appraiser is essential to maintaining the integrity of the mortgage industry. First American and eAppraiseIT violated that independence when Washington Mutual strong-armed them into a system designed to rip off homeowners and investors alike,” said Attorney General Cuomo. “The blatant actions of First American and eAppraiseIT have contributed to the growing foreclosure crisis and turmoil in the housing market. By allowing Washington Mutual to hand-pick appraisers who inflated values, First American helped set the current mortgage crisis in motion.”
As First American acknowledged in its 2006 annual report, appraisal fraud can damage the entire housing market, including consumers and investors alike. Consumers are harmed because they are misled as to the value of their homes, increasing the risk of foreclosure and hindering their ability to make sound economic decisions. Investors are hurt by such fraud because it skews the value and risk of loans that are sold in financial markets.
In April 2006, EA began providing appraisal services for WaMu, which became EA’s biggest client. Within weeks, WaMu began complaining to EA that its appraisals were not high enough. WaMu pressured EA to employ exclusively a new panel of appraisers that WaMu hand-selected as “Proven Appraisers.” This set of appraisers was chosen by WaMu specifically because they inflated property appraisals. WaMu profited from these higher appraisals because they could close more home loans, at greater values. Over the course of their relationship, between April 2006 and October 2007, EA provided approximately 262,000 appraisals for WaMu.
From Reuters:
NY AG sues First American unit in mortgage probe
New York Attorney General Andrew Cuomo said on Thursday that he has sued First American Corp (FAF.N: Quote, Profile, Research) and one of its units for allegedly colluding with Washington Mutual Inc (WM.N: Quote, Profile, Research) to inflate the appraisal values of homes, helping trigger the mortgage market meltdown.
The lawsuit, filed in New York Supreme Court, contends that First America and its real estate appraisal subsidiary eAppraiseIT violated appraiser independence laws.
Wamu is down 6%. Good for them!
Just saw the first headline using the word “conspiracy”. Ouch…
For all the bears out here, if the Global GDP is worth 20-30 trillion $ and subprime and housing is worth only 500billion, how will the global economy fall to its knees? Its just a small percent. Whats wrong with this argument?
kettle and homer
You made my day with those Cypress Hill lyrics. They are too funny.
Nice Article:
Now That Housing Has Soured, Renters Are Glad They Didn’t Buy
http://finance.yahoo.com/real-estate/article/103796/Now-That-Housing-Has-Soured,-Renters-Are-Glad-They-Didn't-Buy;_ylt=AgR8QixL3.WOQQ3y6Q858J67YWsA
Let’s see Zack [121].
The world economy is based on mass consumerism. Although the subprime debt is probably less than 5% of the global GDP, the problem may be:
1)larger than just subprime (wait till credit card debt kicks in)
2)lots of people own homes (unfortunately, very few buy yachts and Bentleys which make up a large part of that global GDP number)
3)lots of Bentley owners are indirectly invested in these subprime loans (many unknowingly – can you say hedge fund?)
4) if people stop buying because they feel they are housepoor, then that global GDP number is gonna get a lot smaller.
5) did anyone mention unemployment?
zack,
Let’s say we try hard and ignore Alt-A. When a home backed by subprime loan goes down in value so does the house next door which is backed by prime mortgage. Wealth effect? Consumer confidence?
$500B is only in the US. As an example, in some Indian villages, small time farmers have given up on farming because their 10 acres is now worth millions of US $. Now add GB, China, Spain, Russia to the mix.
Today is a day to buy, buy and buy, with inflation thru the roof and dollar falling, where do you park your money in Treasuries? Stocks and real-estate. Booooooyaaaaaaa
Appraisals just got a little bit tighter this afternoon
Kind of off topic, but at what point will short sales be included in the comps for appraisal purposes?
I see no valid reason to exclude short sales, especially as they move from relatively unique events to a major player in the RE market.
As a lender, wouldn’t you want short sales considered in the appraisal? After all, if the purpose of the appraisal is to understand the value of the underlying collateral in the even of default (rather than a pesky inconvenience standing between you and your origination fee) a short sale would probably be most representative of what you could expect to recover. After all, as a lender, you will probably be looking at a short sale if your borrower defaults.
Imagine someon’e pulse rate while on Rte 80 in rush hour in a moped….. imagine being the center of attention and road rage for doing 40 mph, even in the right lane. And cycling to get moving during stop and go….. should be fun.
#127 – Good point. As short sales become more prevalent, it will be hard for the lender o ignore these in the comps.
109# wait till the next hurricane floods monmouth beach and they wont be able to insure that mc barn….
“Today is a day to buy, buy and buy,”
Frank [126],
What do you suggest buying?
#127…I always wondered why they were not included in the first place, but with a “*”.
Renting [127],
Amen.
#126 I love Frank, yesterday his main source of information was People Magazine, today he is offering investment advice.
Its getting desperate out there!!
RentinginNJ Says:
Kind of off topic, but at what point will short sales be included in the comps for appraisal purposes?
I don’t think appraisers will have any choice but to take these into consideration. Until now, lower priced sales in an area was usually due to a non-arm’s length transactions (family member to family member). Or, the lower priced property had something really wrong with it. The appraiser would usually make the comment that that particular property was not used due to those facts.
In the case of a short sale, it is an accurate representation of the sales activity in a given area (assuming decent condition) and an appraiser would be wrong to not include it in determining value of your place. In short sales, the seller is getting as much as he can for it in the market even if it is less than what is owed.
Nice map:
http://consumerist.com/assets/resources/2007/11/foreclosureheatmap.php
#131 BCBob Ramen?
with inflation thru the roof and dollar falling, where do you park your money in Treasuries? Stocks and real-estate.
There are a few problems with this…
First, unlike U.S. stocks which can be purchased cheaply by international investors on a weak dollar (giving a boost to the market), real estate is local (except maybe for NYC ) and must therefore be supported by local incomes.
While inflation is a big problem, so far it hasn’t manifested itself in income levels. Current income levels do not support home prices.
Even if inflation finally does manifest itself in income levels, homes are still overvalued and real home values will fall (nominal values will either fall or remain stagnant) until prices reestablish their historic relationship with income levels.
#138 Even if inflation finally does manifest itself in income levels it is going to take quite some time before that happens.
I would also add, even with high inflation, layoffs which will be coming will will keep a lid on those increases in income.
You incease in income will be that you have kept your job.
what company makes ‘Friskies Buffet’?
#126 Frank
Yes, very strong argument with some great advice, thanks Frank
Sell, Sell, Sell.
He really is funny….
#127
very good point. i think short sales should absolutely be considered. if you think about it, its the perfect example of why banks are left holding the bag. it was the lender who appraised and agreed to lend on an inflated value that potentially got the borrower in trouble and not able to pay. granted, there a million and one reasons why people foreclose and or go short, but consider this example i recently came across.
4bd 3bath in Little Silver (Short Sale)
Home Purchased on 12/05 for $349,000
Home Refinanced (same lender) on 12/06 for 520,000
that is a 33% increase in 12 months.
well guess what, borrower could not pay and the bank is stuck. the bank listed the home for 600k, then 550, now 499 and i’m told there is an offer on the house some where in the neighborhood of 490. this asset would be purchased on the secondary market for 260,000 so if the bank sold it at 490, good for them. but i’ll believe it when I see it closed. (I was going to offer 390).
so yes, the home next door should be valued less than it was 6 months ago.
[142],
Do you know the address of that LS property?
with inflation thru the roof and dollar falling, where do you park your money in Treasuries? Stocks and real-estate.
Swiss francs??? Euro’s??? Yen???, commodities….
Frank, what people like you and Bi seem to be missing is history. To have a successful over view of the market so that you can try and manage exposure and increase wealth, you need to have a good understanding of the history of economics around te world. lIke every other aspect of human nature from war to politics to economics, history repeats itself. you cannot understand the past the present/future without understanding the past. If you look at economic histories for the last couple of hundred years the im,lications of some of the current trends makes much more sense; may i suggest some reading?
The Great Wave Price Revolutions and the Rhythm of History
by:David Hackett Fischer
http://tinyurl.com/28hmpv
maybe Frank and BI should start an investment club?
dont tell unrealtor but …
http://money.cnn.com/2007/10/30/real_estate/commissions_rise/index.htm?postversion=2007103113
During the housing boom, home sellers were in the driver’s seat with real estate agents courting them – often at bargain commission rates. But now that the bubble has burst, the tables have turned.
In 1991, the average commission rate was 6.1 percent, according Steve Murray, of Real Trends, which tracks the brokerage industry. The rate inched down to 5.4 percent by 2001 and by the end of 2005, it stood at 5.02 percent.
Industry insiders expected further declines with the competition of discount and Web-based brokerages. In early 2006, the chairman of Re/Max, Dave Linder, told Real Trends that he expected a drop into the 4 percent range within five years.
But when home sellers found themselves with houses sitting on the market, they became increasingly amenable to paying higher commissions. Real Trends reports the average commission reversed its course and climbed to 5.18 percent in 2006, and it looks like it’s going to end 2007 with another rise.
I hate to keep repeating myself, but is anyone e;se here concerned about the possible near term move from petro-dollars to petro-euros/other currency. This would launch inflation through the roof
bewm #136,
Anybody else notice the relatively mild foreclosures in San Francisco and San Mateo counties? These are the priciest home markets in the country and (using conventional but wrong metrics) the least affordable.
Shouldn’t foreclosures be highest in those place?
Nope. The reason is assets matter as much as income in places where the people buying homes are very smart and very rich.
Its just winners and losers and don’t get caught on the wrong side of that line – Bruce Springsteen
Around here that line $200k per year and rising.
correct …the only winners are those making 200+ and renting.
OT, but where do you put your $ in this inflationary environment? With inflation at like 6% (not even thinking about the ~14% they don’t report) I’m losing money every day even though I’m earning over 5%.
Stock mkt is gonna drop, RE is dropping, other currencies are inflationary as well, what about gold, has it already peaked?
#150 njbear: Except for the people that are making 200k that are now being laid off laid.
Even NYC suffers from recessions, something newbies to this area are going to find out,
today’s market sent a loud and clear messsge to ben and company: don’t be fooled by 3.% GDP number – half of them were contributed by your buddy gwb; don’t be fooled by slightly hiher than your targeted inflation rate – that was entirely driven by oil maniac; don’t be fooled by njrereport bloggers – those re bubble colt is doomed be defeat by almight fed. you guys are moving to right direction to target rate within (2.72%, 3.14%) but you need to move faster than yesterday’s pace.
end of daily market analysis. thank you.
#148 Ah, No. It just takes those areas longer to fall, but they to do fall.
#153 I promised Doyle, I cannot.
3b Says:
November 1st, 2007 at 1:48 pm
#150 njbear: Except for the people that are making 200k that are now being laid off laid.
Even NYC suffers from recessions, something
newbies to this area are going to find out,
3b: We have a client who is consulting at a bank and is watching, em masse, people being kick-out the door. What shocks him beyond the obvious is just how indiscriminate it is. If you are in the wrong job and that area gets nuked, you are screwed, no matter how value-added you are……
154,
Home prices in places like New York and San Francsico do fall, but they always bounce back. Across the entire home price cycle, prices in New York and San Francisco rise faster than inflation.
The same can’t be said for Cleveland, Detroit, and Pittsburgh. Price declines are permanent when a city lacks a critical mass of rich and smart people.
From the WSJ Real Estate Journal:
Now That Housing Has Soured, Renters Are Glad They Didn’t Buy
Homer -Thanks. Sure these are stupid questions to a tech, but I have enough new skills to learn with this business set-up to not want to have to become a website designer too.
the only winners are those making 200+
So I guess that means 90% of jerzians are not winners? If being a winner means Communting 4 hours to and from work everyday and working 12-15 hour days you can keep your 200k. Money does not make you a winner…
Being a good person, not being a wall street sell out makes you a winner.
I work until 330 and I am home by 3:45 and I would not change it for anything. I may not make 200k or even 100k but I have a life besides work
Lisoosh
I am always glad to help and share my knowledge with people.
by accident, my view in 153# is echoed by …
Stock Investors Fear End to Rate Cuts
http://biz.yahoo.com/ap/071101/wall_street.html
Increasing US Vacant Housing
Chart:
http://tinyurl.com/25etl2
200K is so 2007, you need to tell your boss due to gold, oil, rising taxes and commutation costs and a weak USD that you need 250K to break even and he can tack on 5% to that for your raises.
Actually, anyone who bought a house pre 2002 and refinanced without taking cash out is most likely ahead of renters by a lot. Lots of people pay under 2k a month to the bank for their total payment (mtg, ins, tax etc.) which is way less than a decent house rental. Rents rise 3-5 percent each year but my mortgage does not.
Houses are still sky high historicall, got a call from a realor today on a new exclusive lising that owner has “priced right” for a quick sale within a week. Guy wants 950K and he paid 389K in 1998. So the guy thinks a house can rise $5,200 hundred a month every month for nine years can still be priced at a bargin price. Shows the right neighborhood people are still buying. We are only 4% down in last 52 weeks and that is like calling Google at 4% less than 700 a bargain.
median rents:
http://tinyurl.com/25tcm3
median asking price:
http://tinyurl.com/2774wl
http://www.bloomberg.com/apps/news?pid=20601109&sid=apYzXCKprHpk&refer=home
Bear kicks some GS butt tonight
no worries, entry level pay just went up
http://education.yahoo.net/degrees/articles/featured_preparing_for_entry_level_jobs.html
2 more charts people might find interesting, built from US census data
median rents :http://tinyurl.com/25tcm3
median asking price: http://tinyurl.com/2774wl
#164 I ahve a 3 bed/2bath house in good town. $1650 a month, and have been there for almsot 3 years, no increase in rent.
My neighbor “owns” property taxes have risen 3k in the same time frame.
“maybe Frank and BI should start an investment club?”
Beardstown Men anyone?
gabby hyman, lol
#157 They alwasy “bounc” back, makes it sound like it happens quickly.
And the last itme around in both San Fran and NYC, they did not bounce back, but rather a long slow slog.
“Its just winners and losers and don’t get caught on the wrong side of that line”
Bruce Springsteen
Pre [149],
Love it.
“Poor man wanna be rich,rich man wanna be king,and a king ain’t satisfied,till he rules everything”
#164 And for what it is worth, I know quite a few people in my good town who purchased pre-2002, and bewteen the additions,a nd the kitchen redos, and expensive cars, their monthly nut is far more than 2k a month.
And if you live in the PRNJ, then your property taxes have gone up every year, by that same 3 to 5% that you quote.
Talking of new cars, I’ve seen just 1 new 2008 Honda Accord in the one month since launch. Is that an indicator of how bad things might get in auto land? No home eqity to tap into perhaps?
#156 Chgo: Not surprised, I have seen this all happen before, Wall St cuts are ruthless.
Sure the big boys get it (O/Neal), but so do many others.
You are in Fixed Income, but on the muni side, so you think you are Ok, no, lets cut there too.
Those CMO/CDO guys screwed up, yeah they have to go, but while we are at it lets get rid of all the receptionists too, and the administrators and all the tech guys that do not make money for the firm etc.
I had a friend of mine back in the mid-90’s who left to got to DLJ.
1 week after joining the firm , DLJ closed the Department, ONE WEEK!!
“Lots of people pay under 2k a month to the bank for their total payment (mtg, ins, tax etc.) Rents rise 3-5 percent each year but my mortgage does not.”
John,
How about those that paid bubble prices in NNJ from 2004-2007. Say they put down less than 20%. What is their payment? Calculate at their adjustment rate, not their fantasy rate.
True, your mortgage does not go up 3-5%. How have your taxes fared? In addition to this, why don’t you include upkeep/maintenance cost. This seems to be a missing ingredient when discussing the true cost of ownership.
Homer Says:
November 1st, 2007 at 2:00 pm
If being a winner means Communting 4 hours to and from work everyday and working 12-15 hour days you can keep your 200k. Money does not make you a winner… Being a good person, not being a wall street sell out makes you a winner.
I work until 330 and I am home by 3:45 and I would not change it for anything. I may not make 200k or even 100k but I have a life besides work
Mr. Simpson: whatever helps you sleep at night is good with me…..
[175] BC Bob,
Add to the fact that AMT ruins your property tax/mortgage interest deduction and you pretty much described my case. The only thing I have going for me is that I bought a 2-family (rental income) in a private estate sale (great price) with a 10 house walk to a station on the Midtown Direct in Montclair (great location). My wife and I have been saving like mad and will purchase another home as we approach housing market bottom hopefully in a year or two. Currently my property tax goes up about $1,000 per year. At least our combined raises increase at least 5 times as much.
#175 BC Bob tax increase in my town have been goinup 6 to 8% a year for the last 4 years.
On top of that we went through a reassessment at the height of the market.(05)
I know people whose taxes have increased 40% and more over the last 4 years!!
John what were you saying about those 3 to 5% rent increases?
177#, stu, my understanding is AMT affects property tax but not mortage interest deduction – at least it is the case for primary residence. that is why ex high incomers buy in towns such as alpine where you pay premium in property but less tax.
stu [177],
Sounds like you have a gem. Now get them to pay you rent in euros.
got a call from a realor today on a new exclusive lising that owner has “priced right” for a quick sale within a week. Guy wants 950K and he paid 389K in 1998. …. Shows the right neighborhood people are still buying
Doesn’t show anything. He hasn’t sold it yet. He is free to ask whatever he wants. It would be interesting to keep track and see how he actually does.
for Kettle1, from the WSJ:
“Nowhere in the Middle East are the strains more acute than in the U.A.E., the Middle East’s second-largest Arab economy, where investors are betting heavily on a “depegging” of the local dirham as domestic inflation pressures increase.
“Speculators are definitely bidding on a depegging and that’s why they’re increasing their dirham deposits,” Henry Azzam, Middle East Chief Executive Officer at Deutsche Bank told Zawya Dow Jones Newswires in an interview.
Attracting that money are chances of a quick profit once the peg snaps. ¶ Deposits held in the emirates’ banks have exceeded 1 trillion U.A.E. dirhams ($272 billion) for the first time, more than is currently deposited in the region’s largest economy Saudi Arabia, latest central bank figures show.
“The probability of depegging has increased,” says Kamran Butt, Dubai-based chief economist at Credit Suisse Group. “The market consensus is for the U.A.E. to depeg.””
Is there any way to find out the contract price of a home prior to transaction close?
True cost of ownership:
How about accounting for the astronomical rise in utility bills? Aren’t you coming out ahead if rent increases are 2-3% a year, while utilities increase double digits?
That’s assuming utilities are included in monthly rent.
Holy sell the car to a Russian in the backroom, bi-man!
Somebody around here bought a car from a Russian dude in the backroom of a MickeyDee’s in Philly, right?
I just sold my old car to one semi-intelligible Mikhail working in the back room/office of a car wash place because the quarter machine wouldn’t work.
I tell the guy I need quarters so I can wash the car for the first time in two years and sell it. He pops the hood and offers a few grand.
I’m thinking I’ll get a certified check or money order, etc. when I return in a few days.
He starts pulling cash out of the air. Title? Have it. I walk home. Bi, tell me. Please. What is with the cash economy? Is it an Ebay thing?
chicagofinance Says:
November 1st, 2007 at 2:34 pm
Homer Says:
November 1st, 2007 at 2:00 pm
If being a winner means Communting 4 hours to and from work everyday and working 12-15 hour days you can keep your 200k. Money does not make you a winner… Being a good person, not being a wall street sell out makes you a winner.
I work until 330 and I am home by 3:45 and I would not change it for anything. I may not make 200k or even 100k but I have a life besides work
Mr. Simpson: whatever helps you sleep at night is good with me…..
Chicago: exactly. I love how anyone that does well financially is a Wall Street sell-out, works 15 hour days, and commutes 4 hours a day while ignoring their family… Are you f’ing kidding me?
Homer: do you know anyone who does well financially that is not chained to their desk 12-15 hours a day? And where are they commuting from for 4 hours everyday?
#177 stu: and I bet you are smart enough to realize that if you have a good tennant, you are probably not going to turn around and slap them them with a big increase.
#143
170 Pinckeny Rd. It’s a great Tudor and hope it falls out of contract because I still really want it.
Homer #160,
You seem a little bitter to me; but hey if being on the soap box makes you feel better, rant on.
“Being a good person, not being a wall street sell out makes you a winner.”
Sorry if its been posted already, but some really excellent commentary on housing from Minyanville:
http://www.minyanville.com/articles/FOMC-mortgage-dollar-gold0oil/index/a/14705/from/yahoo
3B
How can your landlord’s property taxes keep increasing at the rates you claim they are yet your rent stays the same?
Something doesnt add up.
$41 billion here, $41 billion there, sooner or later this starts to add up:
http://news.yahoo.com/s/ap/20071101/ap_on_bi_ge/fed_markets
3b [188] says: #177 stu: and I bet you are smart enough to realize that if you have a good tennant, you are probably not going to turn around and slap them them with a big increase.
Well I do have a great tenant and their 2 year lease is up September of 2008. We have been giving them below market rent in exchange for labor at $50/hr (4 hours per month). This has enabled them to stay and has resulted in me getting a finished basement, new back door, a finished attic and some other nice improvements. Plus I declare less income and they don’t have to pay as much out of pocket. Unfortunately, the improvements that they have made to their unit is pricing them out of it and we are running out of projects. By the way, the barter agreement is in the lease. They always pay on time, but the rampant property tax increases (revaled in late 2005) have forced me to price them out. They essentially rent half the house. If my property taxes go up $1,000 every year, then to break even, I would have to raise their rent $500 every year. Now we know that is not going to work. We are fighting our reval in court (it is so grossly wrong), and hope to catch a break there. I am planning on raising the rent $400 over two years though. I am not a charity case ;)
#184
rent increase 2-3% ?? It is not the case anymore. It is true for the first renew. From 2nd will be 9~10%. We pay utility anyway.
#193
It is goooood, isn’t it? $ is just like water, pumping/infusing into the market.
The country will not be short of toilet paper.
Now if all of us multi-family owners got together and price fixed our rental increases, we could really screw the renters ;)
Great rent deals are available from small-time landlords. I rented 8 or 9 places while in college and for first couple years out, and I always went with these guys rather than go into a larger complex.
But this masks the fact that apartment rents have been rising rapidly for years.
A 10% yield on a 4 unit building goes negative when one unit is vacant, so landlords are happy to trade below market rent for an occupied apartment.
For a more accurate picture of what is really happening, check out the apartment REITs operating results. They’ve been raising rents aggressively during past few years, especially in coastal cities.
The DOW is up around 8% for the year in nominal prices. Since in my view inflation is probably close to 10%,(I paid $9.50 for a gallon of milk in a manhattan grocery store today) in real prices the dow is down 2% for the year and ladies we are poised for a correction here, get your money out of dollar denominated US securities and treasuries.
just my two cents.
A 10% yield on a 4 unit building goes negative when one unit is vacant, so landlords are happy to trade below market rent for an occupied apartment.
very very true!!!
#198: Which does not change the fact that property taxes have been rising dramatically fro years.
It is a lot easier to shop around for cheaper rentals, as opposed to being trapped in ahouse that you may not be abel to sell,while the property taxes spiral higher.
hehehehe #193,
Do you have the total amount since Sept?
Nedi
#194 $400 over 2 years, very reasonable, And even $500 dollars a year, or about $41 a month is still better then the 600 to 880 average yearly increase in property taxes in my town.
Women are getting more education. In 1960, there were 1.6 men graduating from four-year colleges for every woman, according to Mr. Katz and his Harvard colleague, Claudia Goldin. By 1980, there were as many women as men graduating. Today, there are about 1.35 women graduates for every man.
#192
The landlord has owned the property for almost 25 years, the house is paid long ago paid for.
In 2 years he is retiring and will be selling it along with his own residence.
At which time he will be moving to Fla for the Winter months, and living in a small condo in Suffolk Co, during the rest of the year.
He is more concerned with who lives there as opposed to maximizing hsi profit; form my perspective it is a sweet deal.
3b,
Sounds like you have a great deal; but it appears that your situation is the exception and not the rule that increased property taxes = rent increases.
$9.50 for a gallon of milk? Is it flavored with gold?
HA – I have the original 1955 furnance, bathroom and front steps in my house and I grieve my taxes to keep them low. Plus I fix the little things myself. When I rented the landlord was renting it for $800 a month below market as it was rent stablized and I had to fix little things myself anyhow or deal with a million phone calls and letters to get anyone to come. My property taxes have gone up $1,800 since 1999, big deal. I am smart enough to know that the land value is what drove up housing prices in the last few years not the house value. When we sold our parents house in 2004 we sold it for $50,000!!! I get that figure from we sold it for $550,000 and a plot the same size nearby went for $500,000. Idiots were flipping houses in 2002 to 2004 and thinking it was their pretty paint jobs that made them the money but in fact if you pos cape you paid 300K in 2003 rose in value 20% you could of flipped for 360K without even touching it. Now people are catching on.
The same dopes took out home equity and blew out their houses as “an investment”.
BC Bob Says:
November 1st, 2007 at 2:28 pm
“Lots of people pay under 2k a month to the bank for their total payment (mtg, ins, tax etc.) Rents rise 3-5 percent each year but my mortgage does not.”
John,
How about those that paid bubble prices in NNJ from 2004-2007. Say they put down less than 20%. What is their payment? Calculate at their adjustment rate, not their fantasy rate.
True, your mortgage does not go up 3-5%. How have your taxes fared? In addition to this, why don’t you include upkeep/maintenance cost. This seems to be a missing ingredient when discussing the true cost of ownership.
#206 I do have great deal. I think the point we were trying to make is that mtg payments not going up (assuming fixed), is not necessarily an advantage over renting, as property taxes are going up by an equal amount or more every year.
Plus if you have a 2 or 3 year lease you are protectd for that period as opposed to prop taxes which increase every year.
yes, rents have been going up, but rents are more closely correlated to wages than buying since you cannot borrow to pay rent. so rents cannot rise faster than wages (as they have been for the last couple of years) for very long.
Personally, I am not too concerned about rents increasing in the near future
Is it me or does it not feel like August 19th all over again.
3b
I hear you, but isnt it advantageous to to have a fixed rate mtg while the dollar is inflating away as we speak;
Are we now seeing the word collapse and housing in the same sentence?
The action comes one day after Fed Chairman Ben Bernanke and all but one of his central bank colleagues voted to slice a key interest rate for the second time in six weeks to protect the economy from the ill effects of collapse in the housing market
Ramsey
SLD 99 PINE ST $585,000 9/16/2005
SLD 99 PINE ST $545,000 10/31/2007
Westwood
SLD 77 ASH ST $450,000 11/12/2004
SLD 77 ASH ST $420,000 10/31/2007 (w/updated kitchen)
Attorney General Andrew M. Cuomo today announced that he is suing one of the nation’s largest real estate appraisal management companies and its parent corporation for colluding with the largest savings and loan in the country to inflate the appraisal values of homes.
But… didn’t Suzanne research it?
I have never worked on Wall street. Does 12 hr days include commute or is it 12 hours of real work + commute?
Lets say its a tech job.
Ambac Financial Group Inc. fell $7.14, or 19 percent, to $29.69, the steepest decline in the S&P 500. Ambac’s bonds were downgraded to “deteriorating” from “stable” by Gimme Credit Publications Inc. because of the world’s second-largest bond insurer’s risk from collateralized debt obligations. Ambac’s stock price fell as much as 25 percent.
Dow Plunges More Than 350 Points-
Wall Street plunged Thursday, pulling the Dow Jones industrial average more than 350 points, as investors found themselves confronted by two uncomfortable prospects: an end to interest rate cuts and a slowing economy.
Gosh – once again, the bubble bloggers were right. This board should be very proud as it is so rare that so few can frequently be so right.
#212 ADA I am much more concerned with the underlying value of the asset, then with the financing mechanism, although fixed is always best, IMO.
More than that I am concerend with the out of control property tax increases because that will affect the underlying value of the asset (house)
Renting 4br 2.5 bath home real nice neighborhood for 1100 a month,with no sec deposit.Ok I live in Vernon but good schools & no crime to speak of.It will take a hell of a decline for me to buy, #,s just to good renting.I will admit commuting is hell to nyc but most northern nj areas liveable.Many people have empty homes, can not sell, lowball just like buying in this market you can get a great deal.Juet be carful not to get foreclosed out moving is a bitch.
Lets say its a tech job
Tech is the best, you guys if you make under 100K base get time and a half and still get the cash and stock bonus. Double dipping if you ask me. If you work late you get time and a half and then come bonus time you get paid a big bonus cause you worked late. SWEET.
Love it!
WaMu suspends ties with First American unit after lawsuit
Washington Mutual said on Thursday that it suspended its relationship with eAppraiseIT after the unit of First American Corp. was sued by New York Attorney General Andrew Cuomo. The suit accuses First American of allegedly “colluding” with Washington Mutual to inflate the appraisal value of homes. WaMu said it has cut ties to eAppraiseIT until it can investigate the situation. “We have absolutely no incentive to have appraisers inflate home values,” the mortgage lender said in a statement. “Inflated appraisals are contrary to our interests. We use third-party appraisal companies to make sure that appraisals are objective and accurate.”
From Reuters:
AIG shares fall again on subprime exposure fears
American International Group Inc (AIG.N: Quote, Profile , Research) shares fell on Thursday as fears of a third-quarter loss from its subprime loan exposure once again ran through the market.
In late afternoon trading, AIG’s stock was down 5.6 percent to $59.57 a share on the New York Stock Exchange. By contrast, the Standard & Poor’s Insurance Index <.GSPINSC> was off 2.6 percent.
“There’s a rumor that AIG will report significant subprime losses in its third-quarter earnings,” said Rob Haines, an analyst with CreditSights. AIG will report its earnings Nov. 7, after the regular market close.
likely fed is going to cut discount rate again in an emergency meeting before thanksgiving.
BI:
After the results of yesterdays cuts, it appears that they are woefully ineffective. Just wait until those arms reset and credit card defaults begin. Hoowah!
“We have absolutely no incentive to have appraisers inflate home values,” the mortgage lender said in a statement. “Inflated appraisals are contrary to our interests. We use third-party appraisal companies to make sure that appraisals are objective and accurate.”
LMAO!!! Yeah right!! But… but… we had no idea!
“When all you have is a hammer, everything looks like a nail.”
“likely fed is going to cut discount rate again in an emergency meeting before thanksgiving.”
bi, you’re panicked. Hang on, there young fella. Everything is going to be O.K. for now. Go on out and get yourself a nice steak dinner tonight.
We’re still good for now.
Disclaimer: I have not sold equities within the past few months, nor have I traded in commodities. However, I have reallocated, and sold one clunker of a car for half it’s book.
oops. its.
#221
Not quite. I used to work at Bear in IT and they definitely gave you a nice bonus at the end of the year. Then a few years ago they started backing out your “overtime” from your bonus check. Never happened to me as I moved into a different position but it happened to a good chunk of my buddies. They were all told that this would not happen and so they were working late, working on weekends like mad dogs. Then at the end of the year they get a bonus check for 1/2 of what they expected and were told this was due to the $40K that was deducted from the check before it was cut. Total BS.
The answer the prior question, 10 hours a day is the absolute minimum and a 12 hour day is very regular. 12 hours at work at your desk, not counting commute. 7-7 or 8-8 is pretty normal I think. Come September you better be there 12 hours a day if you want that six figure bonus, that is for sure.
bi Says:
November 1st, 2007 at 4:15 pm
likely fed is going to cut discount rate again in an emergency meeting before thanksgiving
===
so goes gas at $4 too.
Housing is in death spiral now and into next year.
sellers are running acared especially the ones that have to sell. Comp breakers..take off 5% off of each comp downdraft. kind of like 3 years ago $50,000 price increases with each sale now take $50,000 off each comp sale.
It’s a death spiral to the bottom. And noone knows how far it is going to fall.
Thanks Mike & John.
84 kettle
stop making sense.
“We use third-party appraisal companies to make sure that appraisals are objective and accurate.”
And thank g*d those third party folk don’t realize that they’ll get hired again and again if we get the number we want and the door will hit them in the a$$ on the way out if we don’t.
228# pat, why do i need be panick?
consitent with all my posting here, i am bearish on everything: stock, oil, gold, foreign currency, emerging market espcially. 4% CD is much better than 20% correction from emerging market and commodity maniacs.
225#, they are not effective since they cut too little. they need to move it the range between 2.72% and 3.14%, which is derived from my black box model.
Anybody know how to get into Swiss sovereign funds.Running for non usd place to weather the storms, money markets US are not the place to be as I will not keep with inflation.
“likely fed is going to cut discount rate again in an emergency meeting before thanksgiving.”
bi,
Do yourself a favor. Buy a few birds. The cost to feed the damd bird is going thru the roof, not top mention transportation costs. I’m buying a ton, keeping them in my bunker freezer. They’ll be on E-Bay next year. Take that to the fed meeting.
#236 Real Estate?
239# acctually i am with you guys when i look at recent market action on citigroup and etc: something must be wrong with these financial companies. now everyone blames subprime but i suspect some other stuff is going on. watch out!
now everyone blames subprime but i suspect some other stuff is going on
What does you black box say?
#238 I am in the MERKX fund, not saying it is right or wrong, mostly holds Euro, Swiss Francs and gld. You may want to look at the ETF’s. They have cheaper expenses. Not sure if there is a Swiss one but there are for Euro, Yen etc
OT, but interesting to note with our talk of the falling dollar.
My company hosted colleagues from around the globe this past week (at my offices in NYC). One of the highlights of their trip was a visit to the Apple store. The new Ipod nano w/ video is $149 here. The Euro is worth about 1.4 dollars. In addition, the nano w/ video costs about $250 in Europe.
They were in hog heaven, buying 2-3 at a time!
Hey. Hey.
Isn’t tomorrow the scheduled day for the money market alternatives discussion? I just checked my Outlook calendar reminders and it says NJREREPORT WEEKEND OPEN DISCUSSION MM RATES TOMORROW.
Whatever happened to sports and cars?
“Isn’t tomorrow the scheduled day for the money market alternatives discussion?”
A discussion about 6% IRR investments is a discussion that I’ll avoid.
cars? a bit of good news for american car makers:
http://money.cnn.com/2007/11/01/news/companies/autosales/index.htm?postversion=2007110115
“but i suspect some other stuff is going on.”
bi [241],
Beware of your suspicions.
Cars?
http://en.wikipedia.org/wiki/The_Cars_(band)
Hey BI:
Put some cash into SRS.
bi,
Were you surprised by yesterday’s inventory #’s. Serious question, not sarcastic.
225……defaults? Yeah, this is going to change banking as we know it…greed is going to bury these guys…..and probably spark new legislation….maximum interest on cards….default rates….protect the banks from themselves…morons.
Oh darn it! 5:35 again…..*the exodus* (joking)
253#, this f* inventory number was just a slightly higher but all maniac oil men are just too greedy – much greedy than 2005 condo flippers.
? Will mortgage insurers refuse to back defaulted mortgages if they find that the loans were made using collusive appraisals?
Pat Says:
November 1st, 2007 at 4:23 pm
oops. its.
I saw that…..we run a tight ship here!
Watch out!
>>
Ramones ex-manager, stars’ realtor murdered, police say
http://www.cnn.com/2007/SHOWBIZ/11/01/stein.obit/index.html
Stein, 62, was one of New York’s top real estate brokers and was known for her list of celebrity clientele, which included Madonna, Sting, Michael Douglas and Angelina Jolie.
gary Says: November 1st, 2007 at 5:22 pm
Cars? http://en.wikipedia.org/wiki/The_Cars_(band)
Give me an Elliott Easton guitar solo any day of the week. Watch the 45 seconds from 2:15-3:00 and skip the rest.
http://www.youtube.com/watch?v=LmxjuE08drc
#257 Theo Says:
Will mortgage insurers refuse to back defaulted mortgages if they find that the loans were made using collusive appraisals?
Good question. Mortgage insurance companies actually place mortgage underwriters in many of the larger mortgage companies. How it works is that if a loan comes in that needs MI, then the loan is given to that underwriter. The MI company then gets the MI rather than having another competitor get it. I was such an underwriter from 2003 to 2005 at Chase mortgage but working for GE Mortgage insurance co. In that case, I assume the MI company would have little recourse as the MI underwriter reviewed the appraisal prior to approving the loan. If something was going on that could not be detected by reviewing the appraisal though, they might then have a course of action.
Tight ship? I’ve been slacking off ever since I stopped working until 9 pm and Sundays. ;)
Plus, perimenopause is most definitely a silent, but deadly grammar killer. Grammarstasis is one completely undetected and untreated symptom.
On the plus side, I find that as I plead insanity and memory loss after more and more incidents, the hubby is finally stepping in and covering me. It’s a miracle. I should’ve pleaded hormones in my 30’s.
He’s paying bills, grocery shopping and calling me to remind me of things.
Hehehe. > very evil laugh.
Pat Says:
November 1st, 2007 at 6:16 pm
Hehehe. > very evil laugh.
P: on NJREReport it us the “half-moaning” yell….
http://www.youtube.com/watch?v=oibk9Zk1_yI
http://www.youtube.com/watch?v=GIesChXHqg8
grim…unmoderate
http://simplythebest.net/sounds/WAV/sound_effects_WAV/sound_effect_WAV_files/evil_laugh.wav
http://www.dkhp.com/sounds/57%20Evil%20Laugh.mp3
can i trouble someone for information on a property in secaucus, which can be found in njmls service. that listing is 2725002. thank you.
OT- Wal-Mart going green & lean
Visited a store today that dimmed it’s interior lights so low one could hardly see.
HEHEHE,Thanks I will check that out.
Oman’s Mohammed bin Hamad al-Rumhy said he didn’t know of one oil-producing country that isn’t at maximum output.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aADuZMV8xgBo&refer=home
For all the bears out there, here’s some food to survive the winter….
Personal Income and Spending Up in September
http://www.nytimes.com/2007/11/01/business/01cnd-econ.html?_r=1&oref=slogin
i wonder how fed feels about today’s sell-off after the rate cut? i hope that they feel pretty bad with the cut.
#271 Yo Frankie, so were foreclosures and revolving credit debt.
Were you out there charging in September?
On Fast Money, Doug Kass said C is having meetings over the weekend and Prince will be gone by Monday.
He was one of the people making a call on O’Neal last week.
271,
How much was PCE inflation in September?
Bi: Regarding oil
The “oil men” are not being greedy in the same manner that the flippers were. The current rise in oil is primarily based on fundamentals. Most major oil fields have reach peak production capacity (i.e. they cannot pump out any more brl/day then they already are). this dos not mean that the oil is running out( a different and very controversial topic)but it means that supply cannot meet demand. If the full potential production of iraq could be brought online you might see a reduction to the $80’s and that would only be temporary. Basicly oil is going no were but up simply nn the basis that the population of china and india are now demanding huge amounts of oil on top of the US and Europe’s usual demand.
Citigroup: ouch
Assets $2,354,740 trillion
Liabilities $2,227,311 trillion
http://yahoo.brand.edgar-online.com/fetchFilingFrameset.aspx?dcn=0001104659-07-074791&Type=HTML
I think that there will be more rate cuts by the FED. i dont know if they will in january or afterward, but my gut feeling is that they are not done, they will sucome to pressure by the street and others. They are not willing to take the heat like vockler did in the late 70’s and early 80’s and not cut or to increase rates
277,
Those assets may not be correctly valued.
#279 kettle: I see it the exact opposite way. I think Bernanke knows that if he does not face this challenge now, the consequences will be dire.
The current situation has IMO the potential to be far worse than the 70’s.
We were a different country then, and stonger in many ways than today.
3b
The current situation has IMO the potential to be far worse than the 70’s.
i agree with this, but i do not have much faith in bernanke, i hope he surprises me, but i fear that the political forces (i.e the public and political outcry when the market contracts from raised rates, which needs to happen) at play here are beyond him
bear[275]
From Crudelow’s post.
“But overall inflation, as measured by the P.C.E. deflator, is up 2.4 percent for the year, above the Fed’s so-called comfort zone of 1 percent to 2 percent.”
Frank [271],
Dead man walking?
#281 KETTLE I hope so too>
3b/kettle,
Worse than the late 70’s. We are just entering the hyper-inflation stage. The line has been drawn in the sand. Inflate or depress. Wake me up when a Paul Volcker clone is running the show. BB is a great man. However, can we rush him to the hospital and remove the side of his brain that is obsessed with 1929. At the same time, implant a set??
#273,
Charging or not but still spending big time, that’s it matters.
chicagofinance Says:
November 1st, 2007 at 8:17 pm
On Fast Money, Doug Kass said C is having meetings over the weekend and Prince will be gone by Monday.
_____________
It’s gotten so bad, I find myself hoping for massive devastation- if only to finally get CP out out out! Fortunately and unfortunately, I may get my wish.
Give me another writedown! Extra Subprime exposure! LBOs piling up in the backroom! Dance dance dance!
The “oil men” are not being greedy in the same manner that the flippers were.”
k4ettle [277],
Yes.
The market is in backwardation. Producers are working 24 hours a day to get their inventory to the market. Why hold product? Front month is more expensive than back month. Producers are not holding out for 20% more, they are ready to move product. In addition to this, OPEC knows exactly what they are doing. They cringe with the dollar. Most of their payables are in euros, yet they get paid in dollars.
It’s actually amusing listening to the experts. At $50, $20 is built in for geopolitical reasons, at $70, $20 is built in for the same, at $90, $20 is built in for the same…. It’s freaking comical. Where is geopolitical risk going? How about OPEC is up in arms with the dollar peg and has no choice, at least they believe this? Not to forget, current demand is running close to 2M barrels over supply.
How about we get hit with an extremely cold winter or there is a major disruption.
Bottom line, if you try to fade a market in backwardation, you are whistling dixie. You may be right. Not many have, picking a top. You better hope that the stars are alinged. Why not go with the trend and buy puts for protection?
Disclaimer: This is not addressed to you, not even an opinion, just an observation.
BC Bob,
I am confused, maybe it just late…
Are you agreeing with me? i am interested in your comment, but i do not understand your point here
The market is in backwardation. Producers are working 24 hours a day to get their inventory to the market. Why hold product? Front month is more expensive than back month. Producers are not holding out for 20% more, they are ready to move product. In addition to this, OPEC knows exactly what they are doing. They cringe with the dollar. Most of their payables are in euros, yet they get paid in dollars.
The real danger and one that will happen in the near to intermediate furute is that opec will drop the petro-dollar. instead of requiring that buyers pay for oil in US dollars, they will most likely switch to requiring that buyers pay for oil in Euros (some have proposes a basket currency trade). if this happens the several Trillion dollars floating around the world oil markets will be dumped for Euros i.e petro euros. when this happens, if the dollar is at all weak the US currency is going to be wiped out ( maybe not doomsday, but a frickin train wreck for sure)
BC
please note that you may be diving into futures markets a little over my head
286….are you kidding…the overhead to live in North Jersey….means you spend — like it or not — ok, so I gotta keep my local joints in business….$$$$ today….and life does go on…..Dry aged Beef tonight….sushi for lunch…DAMN THE TORPEDOES!!
I was just looking at the NJMLS. 40% homes sold in the last few days where ARMs. I cant belive that people are so stupid. Even with all the bad media they would still use ARMs.
#278- oops. I meant Citibank.
ketttle [289],
Yes, in total agreement.
I was discussing both the physical [spot/cash] market and the futures [back months].
Whether justified or not, producers have no incentive to hold inventory, they are rushing product to the market. Front month, Nov., is higher than back months; Dec, Jan, etc.. In normal markets there is a upward sloping curve;
Dec would be higher than Nov and Jan would be higher than Dec.. The cost to store, carry inventory, ins., etc., would determine this.
However, in tight markets, front month will rule supreme. You are spot[no pun] on, they are pumping faster than flippers were selling. The world is sucking up approx 2M barrels a day more than is being produced. Until, this market goes contango [front month lower than back month] maybe Jan?, anybody trying to short has a better shot at AC.
Again, just an observation.
“On Fast Money, Doug Kass”
Chi,
I told my wife not to put my shorts away for the winter. After listening to him, I better run to the tailors and get them hemmed.
Bost: WTF with the financial stocks?…..I mean this damn well SOUNDS like capitulation…..no one will touch them and the only thing coming out of their mouths is a $hit sandwich. Can these puppies actually go lower? Except GS, which is a Level 3 sack of garbage.
Kettle,
One other thought. The futures are schizophrenic. $3 down, $4 up. Is this consolidating, for a move higher, or simply topping out? Now, I’m speaking like an ANAL-yst, covering all bases.
chi,
I think more is to come. Capit? Maybe when we get a huge down day[gap down] with monster volume. The again, don’t underestimate the fed. How about a surprise gift for X-Mas?
Then again.
BCBob, thanks for the few posts above….a lot of food for thought.
When a devaluing dollar is competing with other countries for oil (something that has not happened before), it’s hard to see oil collapsing unless China and India come in for a hard landing. Their torrid pace of economic expansion is bound to cool sometime, but I’d be less surprised if their markets, especially China, didn’t correct substantially. Some valuations are getting a bit ridiculous.
Jase Rion,
Tis late, but if you’re about:
ACT 18 FAIRVIEW AVE $699,999 6/19/2007
PCH 18 FAIRVIEW AVE $644,900 7/20/2007
PCH 18 FAIRVIEW AVE $574,999 9/25/2007
Also availablt for reant as of 10/26 for $2,000
From the tax records:
Deed $310,000 1/14/2003
Deed $0 9/19/2006
Mortgage $78,675 10/11/2006
Taxes $5,125.71
I for one, am off tomorrow, time for one more Ramos Fizz… gnite.
thank you, rich in nnj.
http://data.bls.gov/PDQ/servlet/SurveyOutputServlet?data_tool=latest_numbers&series_id=CES0500000032&output_view=net_1mth
Change in Real Earnings = 0
#286 Frank: A fool and his money (or credit), well you know the rest.