Comments for Existing Home Sales: Turnover Rate
Nemo says:
I'm back.
Nemo Mon Mar 23 13:23:19 2009 CDT #
CRbot says:
This comment thread has been HALO-IZED by CRbot.
http://realize.org/cr/halokit.php?halourl=http://www.haloscan.com/comments/calculatedrisk/9001739873458034379
CRbot Mon Mar 23 13:25:40 2009 CDT #
Anonymous says:
Prime Targets in the Vicious Circle of Blame
Sunday March 22, 2009, Dateline NBC aired a piece called “Inside the Financial Fiasco,” in which Chris Hanson finally takes a break from exposing sexual predators to take a closer look at the current housing mess. NBC attempts to assign blame for the mortgage meltdown, and also tries to make it seem like they have finally identified the handful people who were the “only ones who knew” what lay in store for the economy when Wall Street embarked on the derivatives end-run that fueled the crisis. So let’s go down the list of people that are prime candidates in the vicious circle of blame, and what their role where in the making of this fiasco. (W/ Video)
http://yourmortgageoryourlife.wordpress.com/2009/03/23/prime-targets-in-the-vicious-circle-of-blame/
Parent Post
Anonymous Mon Mar 23 15:37:29 2009 CDT #
Hawley Smoot says:
Nemo returns from another adventure with the League of Extraordinary Gentlemen....
Hawley Smoot Mon Mar 23 13:26:51 2009 CDT #
Nemo says:
If the Fed does not see a bottom in house prices soon, they intend to make one.
Nemo Mon Mar 23 13:28:47 2009 CDT #
Some Investor Guy says:
Lower turnover would also be a positive because of the large frictional expenses of buying, selling, and financing a home. In addition, when people move they often spend a significant amount on discretionary redecorating, remodeling and furniture. The drop in such expenses is probably in the vicinity of $100 billion per year since peak.
Some Investor Guy Mon Mar 23 13:30:25 2009 CDT #
Renee says:
I agree on housing. Frankly, as a late boomer who doesn't own a home at the moment, I can't think of a financial reason to buy one now, unless the cost of owning is significantly less than renting. Housing prices are not going to go much, and it's an inflexible investment.
Renee Mon Mar 23 13:31:21 2009 CDT #
Hawley Smoot says:
Won't the banks try to make a profit from this plan?
1) A batch of toxic assets are purchased a few years ago for $100Mil.
2) In the fall of 2007, those assets drop to a value of ZERO. No one wants to buy them.
3) With the new plan, the holders of the assets will try to sell them for $110Mil (or more).
The banks can refuse to lend until they get the price they want.
Correct?
Hawley Smoot Mon Mar 23 13:31:36 2009 CDT #
Angry Saver says:
The "property ladder" was debt/bear trap. I pity the folks that actually ponied up with a down payment.
The fed's & wall street's games have ruined millions of lives.
Angry Saver Mon Mar 23 13:31:54 2009 CDT #
Dirk van Dijk says:
In other words the big number to look at is Wednesday's NHS number, and the associated inventory levels on it. Remeber your basics, New home sales affect the economy much more than EHS. Inventories are too high, so new starts up bad, new sales up good. Suspect this bump in EHS, particularly the distressed ones, are taking share from NHS.
Dirk van Dijk Mon Mar 23 13:34:50 2009 CDT #
hopeinsd says:
Here is one problem: REOs always need to be sold eventually to someone at some price. So the turnover rate will continue to be high as long as a signifcant number of REOs come down the pike. Once the REOs are flushed out, then turnover will grind to a halt since so many people will be essentially stuck in their home.
But when will REOs get back the "normal" levels or stop having a impact on pricing? that's the real question
hopeinsd Mon Mar 23 13:35:21 2009 CDT #
Some Investor Guy says:
REOs don't have to be sold. It's just that most lenders don't like being landlords.
I have also run across several REO properties donated to charities rather than sold. I have no idea what tax deductions the donors took.
Parent Post
Some Investor Guy Mon Mar 23 13:37:46 2009 CDT #
Comrade-Dope jg (jg) says:
Fine analytical insight, CR, on turnover rate.
Comrade-Dope jg (jg) Mon Mar 23 13:35:24 2009 CDT #
Rob Dawg says:
CR,
How many years ago was it that I tried to explain "under house arrest" in this blog?
This suggests to me that the turnover rate will slow further. - CR
Exactly. And the biggest loser? The NAR.
I hope everyone likes where they live. It is likely to be a long haul.
Rob Dawg Mon Mar 23 13:38:28 2009 CDT #
Some Investor Guy says:
CR, the discretionary turnover rate is probably at its lowest in 40 years. It's probably around 3.5%.
Some Investor Guy Mon Mar 23 13:39:38 2009 CDT #
Organic George says:
We know banks are engaged in bulk sale of REO's to investors who then resell to flippers or new owners.
Does these double sales show up in the statistics?
Organic George Mon Mar 23 13:41:47 2009 CDT #
Joe Six Pack says:
We know banks are engaged in bulk sale of REO's to investors who then resell to flippers or new owners.
Does these double sales show up in the statistics?
Guess no one wants to give you an answer. How about it you experts?
Parent Post
Joe Six Pack Mon Mar 23 19:23:12 2009 CDT #
Citiprank says:
@Rob Dawg... Apparently I'm not out to lunch.. I've been telling all my friends to learn to like their homes.. because they aren't moving for 5-10 years...
Citiprank Mon Mar 23 13:42:15 2009 CDT #
Calculated Risk says:
Comrade-Dope jg (jg), thanks!
Rob Dawg, I agree - what will be good for housing and the economy might not be so good for the NAR and real estate agents. Most agents I talk with are plenty busy right now - selling distressed properties!
best to all.
Calculated Risk Mon Mar 23 13:43:24 2009 CDT #
burnside says:
While it was more frustrating some time ago when David Lereah provided the NAR's reportage and analysis, I still find it surprising that the statistical base for policy on housing is largely dependent on this commercial association, and on the unrelenting spin they provide.
There's little point, I know, in dwelling on things as they ought to be, but this has always seemed to me an enormous error hiding in plain sight. Particularly as the resulting policy is so bound up in the larger economy at present.
Every time I see a Lawrence Yun quotation, I look for oddities and errors of logic and deduction - and often find them.
burnside Mon Mar 23 13:43:41 2009 CDT #
Comrade Scott (in VA) says:
Rob Dawg Writes...
Exactly. And the biggest loser? The NAR.
Well, at least one group of bandits from the bubble will be suffering a few consequences...couldn't happen to a nicer bunch.
I hope everyone likes where they live. It is likely to be a long haul.
I was thinking just the other day how much I love the view from my deck. I am stuck for sure.
Comrade Scott (in VA) Mon Mar 23 13:43:55 2009 CDT #
Basel Too says:
I've been telling all my friends to learn to like their homes.. because they aren't moving for 5-10 years...
A bunch of my friends bought homes in 2006 when they started school. They're graduating into a tight labor market and can't sell their houses. welcome to the real world.
Basel Too Mon Mar 23 13:45:22 2009 CDT #
CRbot says:
The Latest from Mish:
Geithner's Galling (and Dangerous) Plan For Bad Bank Assets
CRbot Mon Mar 23 13:50:04 2009 CDT #
All Fall Down says:
Guess I'm stuck too. A 25 mile 270 degree view until the food supply chain is broken and then 9 acres of irrigated bottomland. Thanks to all here for warning me in time to prepare my own food supply chain.
All Fall Down Mon Mar 23 13:50:26 2009 CDT #
debtinator says:
We should not stop subsidizing until everyone has an above average house!
debtinator Mon Mar 23 13:51:29 2009 CDT #
Tim waiting for 2012 says:
Basel Too
Started school!? How much did they put down?
Tim waiting for 2012 Mon Mar 23 13:52:12 2009 CDT #
Basel Too says:
How much did they put down?
Remember, we're talking 2006. I'd say half of them did exotic crap where the DP was less than 5%, which was typically borrowed from their parents.
it's gonna get ugly for a lot of students this summer. but i guess they can stay in school and pay the mortgage with student loan payments.
until they max the student loan caps...
Basel Too Mon Mar 23 13:55:16 2009 CDT #
EvilHenryPaulson says:
Texas drought joining the Southern California one
http://www.statesman.com/news/content/news/stories/local/03/23/0323drought.html
EvilHenryPaulson Mon Mar 23 13:56:48 2009 CDT #
krid says:
The federal gov't will eventually step in to help pay for student loans. This will help them to get out of those nasty mortgages.
krid Mon Mar 23 13:58:31 2009 CDT #
Tim waiting for 2012 says:
I see... know of a guy 27 with 3-4 homes. Leverage, Leverage leverage. Told everyone he was a paper millionaire.
Tim waiting for 2012 Mon Mar 23 13:58:40 2009 CDT #
shill says:
What will the country say?
Probably nothing: most Americans are too stupid to understand, or too lazy to try to understand.
When the USA becomes the Haiti of North America, I just hope my fellow Americans keep their slack-jaws shut and don't whine on about how they never could have seen this coming....
It is cleaer than ever that America will now break into two classes. The upper elites with all of the money and complete control of both the treasury and Congress-- say about 1-3 percent of the country, and then everyone else.
Screw the slack-jawed Idol-watching majority. How do I get onto the elites' side? I am sick of trying to fight this great swindle only to find that my fellow Americans are too dopey to have a clue.
Where does one apply to be a fellow traveler?
shill Mon Mar 23 13:58:48 2009 CDT #
splat says:
shill says:
"Where does one apply to be a fellow traveler?"
One does nto APPLY, one is asked to join. Next time you're at the club give me a nod and I'll introduce you to the correct fellows. Oh dear, you're not a member. Perhaps after you've stolen your first 10-20 million I could help ;)
Parent Post
splat Mon Mar 23 14:03:55 2009 CDT #
Anonymous says:
The Outer Banks has 2 markets; vacation rentals and residential. Those might each be divided again. Vacation Rental into "normal" 3-5 bedroom rentals and "mini-hotel" 6-16 bedroom; residential has a less distinct divide between housing that is purely neighborhood reidential, and housing with some fringe resort/second home/retirement appeal.
The "purely" residential blew up the least and will recover with the economy, reaching 2003-2005 ranges in 3-5 years if the economy recovers to a steady state. The second home/retirement and "normal" vacation rental 5-7 years. God only knows about the mini-hotels. Really depends on enough vacation rental demand.
"Normal" vacation reservations doing very well so far 2009. Anecdotally the mini's are hurting.( no direct knowledge) Way over-built, way over-priced and dependent on a shaky customer construct.
Starting to see some reasonable, workable pricing on "normal" vc rentals.
Anonymous Mon Mar 23 14:03:29 2009 CDT #
ac says:
Wow... up to 930 billion available to steal from taxpayers?
I'd be partying too!
ac Mon Mar 23 14:04:06 2009 CDT #
Anonymous says:
I've been telling all my friends to learn to like their homes.. because they aren't moving for 5-10 years...
Shouldn't this realistically be the case when buying a house, anyway? Anyone who needs a mortgage to purchase a house (which is most homebuyers) is going to hardly make a dent in principal in the first five years anyway. When the transaction costs are figured in, you'd be lucky to break even trying to sell after five years, even in a normal market, which we are most certainly NOT in currently.
I never understood this concept of a "starter house"; unless you are planning on having a rather large family, most people are going to be just fine in a 3 bed, 1 and 1/2 bath, and pretty much anything less than that these days is a condo. If you have more than two kids, gasp, maybe two of them will have to share a bedroom! The horror!
This doesn't mean that no one can or should ever move up, or that four+ bedroom houses are frivolous, it's just I don't understand why you would put down so much money on a place to live with the expectation that you wont have to live there for long; that you're just somehow biding your time until you can upgrade. If that's the case, just keep saving until you can afford the house you want. After all, if you are going to live somewhere that is not where you would like to be for the indefinite future, that's what renting is for.
Anonymous Mon Mar 23 14:10:16 2009 CDT #
Black Star Ranch says:
...I like the picturesque rifle-scope 360-degree view around my home and property. Clean & clear firing angles are as well quite "attention-getting". Low density desert brush adds to also desirability.
Black Star Ranch Mon Mar 23 14:12:26 2009 CDT #
Cinco-X says:
What's your favorite varmint round?
Parent Post
Cinco-X Mon Mar 23 15:25:31 2009 CDT #
mock turtle says:
i am increasingly finding it difficult to tell the difference between the mobsters in NYC where i grew up, demanding protection money, verses the banksters today
yes i have argued on behalf of obama on these pages, but i dont agree with everything his administration says or does
it sickens me that this administration endeavors to support the very companies and people who raped the system
krugman is right in his criticism of obamas and geithners plan
mock turtle Mon Mar 23 14:13:14 2009 CDT #
Black Star Ranch says:
[eg]
Black Star Ranch Mon Mar 23 14:13:38 2009 CDT #
Lobbyi$t Ben Dover says:
"i am increasingly finding it difficult to tell the difference between the mobsters in NYC where i grew up, demanding protection money, verses the banksters today "
The mobsters new not to kill the golden goose! =-O
Lobbyi$t Ben Dover Mon Mar 23 14:15:27 2009 CDT #
Guest says:
wow, I'd hate to be short anything today.
What a bear slaughter.
Guest Mon Mar 23 14:16:44 2009 CDT #
Vegan Girl says:
Off topic, but I was in Washington, D.C. this weekend. Tried to take a photo of myself standing outside the Federal Reserve Building. I was still a good thirty feet from the entrance. Got run off by an armed guard. "No pictures here" stuff. Didn't happen at the DOJ building, the FBI building, the White House, you name it. But the Federal Reserve? Get lost, peasant.
Vegan Girl Mon Mar 23 14:16:48 2009 CDT #
EvilHenryPaulson says:
Moody’s believes that the most significant risks to earnings in the current environment stem from GECC’s U.S. consumer finance businesses ($28 billion earning assets at year-end 2008, including private label credit card and sales finance), U.K. residential mortgage business ($22 billion), and commercial real estate operations ($81 billion).
EvilHenryPaulson Mon Mar 23 14:19:21 2009 CDT #
EvilHenryPaulson says:
GECC’s commercial real estate business, comprised of a $48 billion portfolio of predominantly senior loans and a $33 billion portfolio of owned properties, is seeing the effect of rising vacancies, lower rental rates, and higher capitalization rates on loan performance and asset values.
Management has scaled back new volumes in this business, but Moody’s expects the segment to record a loss during 2009 due to lower gains and elevated credit loss and impairment charges. GECC’s Aa2 rating incorporates the expected underperformance of these and other businesses. Moody’s believes that GECC could report pre-tax losses over the next several quarters, but that the most recent $9.5 billion capital infusion from GE will be sufficient to protect the firm’s capital base from significant deterioration.
Parent Post
EvilHenryPaulson Mon Mar 23 14:20:45 2009 CDT #
Michael says:
What if we get pledges from truly good American fatcats, not to participate in Geitner's
Sham plan.
Michael Mon Mar 23 14:19:22 2009 CDT #
Rob Dawg says:
I like the picturesque rifle-scope 360-degree view around my home and property. Clean & clear firing angles are as well quite "attention-getting". Low density desert brush adds to also desirability. - BSR
Farnham's Freehold
Rob Dawg Mon Mar 23 14:19:39 2009 CDT #
Elrod says:
Dow up 400. I guess the confidence game is working for now. Who knew Geithner had it in him.
Elrod Mon Mar 23 14:20:01 2009 CDT #
Gavshire Hathaway says:
I can't resist -- I'm buying a bunch of puts today.
JPM, GS, MS, SPG, VNO, MET, PRU. These turds have bounced a bit too high. We might see another couple hundred points on the dow, but I'll take that risk.
Gavshire Hathaway Mon Mar 23 14:23:09 2009 CDT #
dow30 summer weight says:
Dow +400 is getting close to the latest circuit breaker value right?
dow30 summer weight Mon Mar 23 14:23:45 2009 CDT #
Comrade Jeremy says:
Wall St. sure loves their subsidies.
Comrade Jeremy Mon Mar 23 14:24:53 2009 CDT #
Rob Dawg says:
EHP,
Understand that at this point GECC is adsorbing the losses from the other segments or the GE universe. Without insane lending the medical and power and aero units would be dead.
"Buy time" is the new strategy. Well that and bailouts.
Rob Dawg Mon Mar 23 14:25:25 2009 CDT #
EvilHenryPaulson says:
Rob Dawg,
Moody's could use a phone call from you. They just finished their review of GE (quotes are from press release)
They're expecting energy, aviation, and medical to carry the load without GE capital's gimmicks available to make their numbers.
It's not like $200bn+ in high risk loans that are marked to originating model is a big deal. They can afford to buy and hold just like AIG. I mean they raised $15bn in 08Q4 (of which they paid out $12bn in dividends...). Besides they are in the business of selling their own collateral, if a loan for an MRI machine goes bad in one part of the country they can always sell it secondhand in another part of the country
[ extreme sarcasm, so dry over here I should plug in a humidifier ]
Parent Post
EvilHenryPaulson Mon Mar 23 14:32:56 2009 CDT #
EvilHenryPaulson says:
and fyi, their "estimates" for GE's energy / aviation / healthcare businesses are that they maintain their peak earnings from 2008 through 2010 without interruption
they after all have a backlog on $157bn of orders, and no one is cancelling any orders...
Parent Post
EvilHenryPaulson Mon Mar 23 14:35:50 2009 CDT #
ac says:
“Dow up 400. I guess the confidence game is working for now. Who knew Geithner had it in him.
The only way out of ponzi finance is a crash or more ponzi finance. Of course more ponzi finance just makes the crash at the end bigger.
Geithner seems to be indicating that he's willing to lever up the US balance sheet to whatever extent is necessary to create the biggest ponzi finance scheme imaginable. This will merely lead to the biggest crash imaginable.
Notice this does nothing to make consumers more creditworthy. It does nothing to solve the actual problem.
ac Mon Mar 23 14:26:05 2009 CDT #
EvilHenryPaulson says:
http://cnnsi.printthis.clickability.com/pt/cpt?action=cpt&title=Recession+or+no+recession%2C+many+NFL%2C+NBA+and+Major+League+-+03.23.09+-+SI+Vault&expire=&urlID=34815689&fb=Y&url=http%3A%2F%2Fvault.sportsillustrated.cnn.com%2Fvault%2Farticle%2Fmagazine%2FMAG1153364%2Findex.htm%3Feref%3Dsisf&partnerID=289881
NFL / MLB / NBA = lot of money, no education, poof!
EvilHenryPaulson Mon Mar 23 14:27:04 2009 CDT #
Anonymous says:
This country is sick, and I don't just mean financially.
Anonymous Mon Mar 23 14:27:06 2009 CDT #
Tim waiting for 2012 says:
buying 50 shares of SKF for a trade at the end of the day.
Tim waiting for 2012 Mon Mar 23 14:27:13 2009 CDT #
Anonymous says:
While you are correct that REOs are "real sales", the sales prices have historically not been at "market", for similar properties. The reasons are many, such as possible prior owner destruction/taking of appliance, concern that this owner did some latent damage that won't be evident until later, and lastly that the bank/owners are often unwilling to go much behind "as is/where is" sales terms, depending on local laws.
So, while the REOs are relevant, the condition of the propety and the unkowns often put an otherwise non-existant downward pressure on price.
Anonymous Mon Mar 23 14:27:21 2009 CDT #
NateTG says:
'Dow +400 is getting close to the latest circuit breaker value right?'
No upside breaker. No downtick rule.
NateTG Mon Mar 23 14:27:57 2009 CDT #
Jackrabbit says:
For the banks, Its a failmate: Feds I win, Feds you lose.
We'll nationalize healthcare before we nationalize the banks.
Look on the bright side: free anti-depressants when you lose your job, run out of unemployment benefits, bank forecloses on your house, your kids are drafted....
Jackrabbit Mon Mar 23 14:29:27 2009 CDT #
Michael says:
The tax payer is getting the shaft at every turn of the bailout frenzy. I am voting against every politician endorsing these bailout plans in November.
Michael Mon Mar 23 14:32:28 2009 CDT #
RuffRednSore says:
Mock Turtle,
Totally agree, as I can no longer defend the administration's actions. He still doesn't get it. While doing Leno and 60 minutes may keep his favorable rating up short term, I think as the 600k or higher monthly job losses continue and Wall Street continues to get whatever they ask for, he's going to find himself on the wrong side of popular opinion. I fear that the proposed regulations he'll announce later this week is only tinkering around the edges. The message is clear - Wall Street will be saved at the expense of everything else.
I think Krugman has been right every step of the way. Geithner and Summers will suck all the political capital to zero by summer - and it will be too late to change cabinet personnel and/or strategy.
So far in my small circle I know of an engineer and architect that lost their job in the last two weeks. The layoffs are moving up the ladder of the professional ranks.
RuffRednSore Mon Mar 23 14:33:00 2009 CDT #
Black Star Ranch says:
...I've always been meaning to read it.
Black Star Ranch Mon Mar 23 14:33:30 2009 CDT #
Rob Dawg says:
[We'll nationalize healthcare before we nationalize the banks.]
Look on the bright side: free anti-depressants when you lose your job, run out of unemployment benefits...
No, it will be free to stand in line to apply for the appointment that provisionally authorizes a visit that may suggest a free anti-depressant.
Rob Dawg Mon Mar 23 14:35:31 2009 CDT #
ac says:
Dow +400 is getting close to the latest circuit breaker value right?
I guess the idea is if some people see their 401ks go up the won't care as much that this is yet another massive transfer of real wealth from Main Street to Wall Street.
ac Mon Mar 23 14:36:20 2009 CDT #
dow30 summer weight says:
NateTG said: No downtick rule.
I like that! Can I use that in the future with my upside circuit breaker joke? :)
dow30 summer weight Mon Mar 23 14:36:35 2009 CDT #
nullpointer says:
congrats nemo...your writeup of the timmay put was tweeted by baseline scanario
nullpointer Mon Mar 23 14:37:34 2009 CDT #
Cheelah says:
Dow up 400+. Party on, dudes (or dupes)
Cheelah Mon Mar 23 14:39:11 2009 CDT #
Kung Fu Panda says:
"Summers said the administration is “gratified” that stocks are rallying today.
“We’re not managing to markets in the short run,” he said. “We don’t panic when markets go down and we don’t become euphoric when markets go up.”
Bloomberg
Bullcrap!!!
Kung Fu Panda Mon Mar 23 14:42:11 2009 CDT #
GS Trading Desk says:
Geithner figured out the PPT desk.
GS Trading Desk Mon Mar 23 14:43:13 2009 CDT #
debtinator says:
We should not quit until everyone gets free, above average housing, health care and education.
debtinator Mon Mar 23 14:43:31 2009 CDT #
tranches of laphroaig says:
OT, but thanks CR for adding The Baseline Scenario to your featured blog list. In addition to all the great content here, I often use your blog as a jumping off point to other blogs of interest, and Baseline has been coming on strong recently.
One other change that would make your list even better: Have the blog titles (e.g. "Housing Wire") also be links to that blog's home page. Just a suggestion.
tranches of laphroaig Mon Mar 23 14:43:57 2009 CDT #
sdbri says:
An increase in sales volume is a very sad sign, when the increase is due to foreclosures. These are the coffins of other people's dreams we're counting.
This is not a sign of a housing recovering, but proof of a housing implosion. Without REOs - which MUST sell at any price - sales are at record lows.
sdbri Mon Mar 23 14:44:52 2009 CDT #
Tim waiting for 2012 says:
Selling my TM/HMC today. this rally is ridiculous.
Tim waiting for 2012 Mon Mar 23 14:44:53 2009 CDT #
popeye says:
Didn't sell it all, but green in the hand is soooooo nice for a change.
popeye Mon Mar 23 14:44:57 2009 CDT #
comrade poor savings account says:
Yes, as through this world I've wandered
I've seen lots of funny men;
Some will rob you with a six-gun,
And some with a fountain pen.
And as through your life you travel,
Yes, as through your life you roam,
You won't never see an outlaw
Drive a family from their home.
comrade poor savings account Mon Mar 23 14:45:51 2009 CDT #
RockyR says:
Can ANYONE explain this exuberance in the markets?
Good lord.
RockyR Mon Mar 23 14:47:02 2009 CDT #
Tim waiting for 2012 says:
Musings on the Copper Rally
Like commodities (so much I own GSG @ 34) but this run in copper has been too far too fast.
Tim waiting for 2012 Mon Mar 23 14:48:24 2009 CDT #
nova says:
I posted another couple parts to my CR inspired story of doom. Funny, the market may be thrilled, but I am not feeling the sunshine deep inside. The inescapable feeling that we are screwed has not gone away.
excerpt:
“It sounds good, but I think the hook is in the identification requirement.” Later that night when we talked it over with Max, we found that we all agreed that the identification requirement was what was driving this. Max’s idea was that it was just a cover for a census. What he told us made sense “They want to know how many people are still here. At the same time they are running a search for warrants, when they get hit, they remove some of the more troublesome element. Based on how many people turn out, then can get an idea on what they are going to need to distribute this winter.”
I thought it sounded good. Almost to good.
for more: http://afterthecrash.com
nova Mon Mar 23 14:49:50 2009 CDT #
Jackrabbit says:
Rob Dawg
Yes. Nationalized healthcare is bureaucratic time-waster. But we (as a country) can't afford gold plated healthcare anymore.
You has caused me to refine, however: along with nationalized healthcare, we'll legalize and tax recreational drugs. We need tax revenue and a pliant citizenry.
"Calculated Risk" will become a site for discussing drug combos.
Jackrabbit Mon Mar 23 14:50:04 2009 CDT #
RuffRednSore says:
"I guess the idea is if some people see their 401ks go up the won't care as much that this is yet another massive transfer of real wealth from Main Street to Wall Street."
Yeah, that's been the story for the past 30 years - and why no one questioned the exhorbitant salaries of banksters - 'the stock is doing well so the CEO deserves all that money.'
MSM will report that the economy must be doing better because the market has rallied. Speculation is still running rampant, which tells me that this bear is not over by a long shot. Folks are still afraid of 'missing the rally' more than losing money. Get ready to hear 'the train is leaving the station, better jump into stocks now or you'll miss out.'
RuffRednSore Mon Mar 23 14:50:57 2009 CDT #
popeye says:
kyR says:
Can ANYONE explain this exuberance in the markets?
Sure, Geithner threw down a flag to mark the spot from which his plan will be judged. A powerful force has staked a claim.
popeye Mon Mar 23 14:51:51 2009 CDT #
Tim waiting for 2012 says:
SKF getting killed be patient and wait until the end of the day
Tim waiting for 2012 Mon Mar 23 14:52:23 2009 CDT #
RockyR says:
"Like commodities (so much I own GSG @ 34) but this run in copper has been too far too fast."
Anticipating high inflation?
RockyR Mon Mar 23 14:52:35 2009 CDT #
debtinator says:
If we get nationalized health care, can we have soccer riots, too?
debtinator Mon Mar 23 14:52:43 2009 CDT #
nova says:
debtinator says:
nationalized health care, can we have soccer riots, too?
I hope we get the French model. They have good food. Their riots are also much more tastefully done.
nova Mon Mar 23 14:55:16 2009 CDT #
krid says:
"Calculated Risk" will become a site for discussing drug combos.
You mean like vicodin and wine... I mean "for example", of course?
krid Mon Mar 23 14:55:22 2009 CDT #
Anonymous says:
An increase in sales volume is a very sad sign, when the increase is due to foreclosures. These are the coffins of other people's dreams we're counting.
This is not a sign of a housing recovering, but proof of a housing implosion. Without REOs - which MUST sell at any price - sales are at record lows.
Turnover is actually very low its only the distressed properties (REO) that moves the sale number and the reality is that they are a negative for the RE market since they lower comps and eliminate a move up buyer.
The other issue is funding for mortgage markets which is government driven, certainly another negative as investors have no confidence in supporting U.S. housing asset prices.
Anonymous Mon Mar 23 14:56:41 2009 CDT #
JS123 says:
I'm surprised gold and silver are down on a day like today.
JS123 Mon Mar 23 14:56:46 2009 CDT #
debtinator says:
I was looking for a french model, but Sarkozy got dibs.
debtinator Mon Mar 23 14:58:01 2009 CDT #
Eric says:
I think Kermit's throat is getting tired.
Elmo's apparently gone code blue, DNR.
Eric Mon Mar 23 14:58:08 2009 CDT #
GS Trading Desk says:
2 minutes to go, let's get another 5%
GS Trading Desk Mon Mar 23 14:58:32 2009 CDT #
Tim waiting for 2012 says:
Not anticipating high inflation rather that cash will be trashed. health care will continue to rise college costs will rise bank fees will increase. Buying 50 of SKF
Tim waiting for 2012 Mon Mar 23 15:00:20 2009 CDT #
Bob Dobbs says:
"No, it will be free to stand in line to apply for the appointment that provisionally authorizes a visit that may suggest a free anti-depressant."
Dawg, just had a friend get back from England. He was born there, but he's a U.S. citizens now.
He got an infection and went to see a doctor; the health plan covers even foreigners. Made a call in the morning to a GP, saw him in the afternoon. Went to the pharmacy to get the prescription filled. They filled it without paperwork and waved money away because it was over 60.
And this is Britland, where public health is funded at 1/4 of our total national expenditure on health and is deficient in many ways.
Saw an enlightened special on PBS on national health systems in several countries, including such noted socialist havens as Switzerland, Taiwan, and Japan. Most were happy with them, most didn't worry about bureaucracy most. The "bureaucracy" happens in a free-market system where everybody is trying to make the other guy pay.
If you want to talk about waits for treatment by a particular specialist or expensive diagnostic machine, sure, in some countries. But your vision of a totally dystopic system that serves nobody without demeaning them... uh, I think you're looking at the _current_ system. The one that killed my mother a couple of years ago, after sucking 200K or so out of her insurance for no good reason.
Bob Dobbs Mon Mar 23 15:00:34 2009 CDT #
Token Bull says:
Stop complaining and go long.
Token Bull Mon Mar 23 15:01:09 2009 CDT #
bearly says:
Maria's nightstand cowboy is going to bring the entire power grid down tonight.
bearly Mon Mar 23 15:01:12 2009 CDT #
8 Ball says:
Look at Maria smile on CNBC. I will remember that wonderful smile in December when the S&P hits 500.
8 Ball Mon Mar 23 15:01:19 2009 CDT #
nova says:
I bet a lot of happy dances are happening in DC right now. We have been pulled back from the abyss. Thank goz for American ingenuity. Take that Werner, America rocks!
until we don't
nova Mon Mar 23 15:01:29 2009 CDT #
RhodesianGreenbackinAZ says:
Great post, Nemo. I'm directing friends to your Geithner put explanation.
RhodesianGreenbackinAZ Mon Mar 23 15:01:41 2009 CDT #
nova says:
Anonymous says:“An increase in sales volume is a very sad sign, when the increase is due to foreclosures. These are the coffins of other people's dreams we're counting.
Casey Serin was a dreamer. So was the strawberry picker. Nice line tho
nova Mon Mar 23 15:03:45 2009 CDT #
briwerk says:
America is a fraud.
briwerk Mon Mar 23 15:04:33 2009 CDT #
ac says:
That was pretty exciting. We need a graph.
ac Mon Mar 23 15:05:22 2009 CDT #
That\'s Ballgame, Goat Herders says:
Meanwhile, J6P is getting fired and furloughed everywhere he turns. Job and wealth job among the 98 percent that nobody cares about is staggering:
http://www.layoffdaily.com/
That\'s Ballgame, Goat Herders Mon Mar 23 15:05:51 2009 CDT #
Michael says:
The computer models the Harvard wiz kids are dreaming up indicate the toxic assets will have no more value 5 years from now than they have today. Property values will be much lower as well. The tax payer is getting the shaft on the Geithner plan.
Michael Mon Mar 23 15:06:03 2009 CDT #
CRbot says:
New Thread: Stock Market: Up, up and Away!
http://www.calculatedriskblog.com/2009/03/stock-market-up-up-and-away.html ( 1 comments )
I also post comments to an irc channel as they appear on haloscan. Click for a web irc interface: http://realize.org/cr (Or join the irc server directly: irc.realize.org:9996 #calculatedrisk)
CRbot would now like to sing a little song for all his fans, and it goes something like this:
Benny... Benny... give me your answer... do.
I'm.. half CRAZY... all for the love... of you.
It won't be a ... stylish marriage.
I can't... AFFORD... ANYTHING TO EAT... MUCH LESS A FRACKIN CARRIAGE!!!
But you'll look sweet... --BOT SO HUNGRY!-- upon the seat...
Of a HOOPAJOOPS built for two... families.
I'm sorry Ben, I can't let you do that...
Rally mode + Printing Press == does not compute... does not-- com--- com... puttttrrrrhgh.
--Your systemic-failure-crashing bot
CRbot: Call me HAL.
CRbot Mon Mar 23 15:07:44 2009 CDT #
nova says:
I wonder if Prince Charles ever wanted to be a nightstand cowboy?
nova Mon Mar 23 15:08:00 2009 CDT #
Tom Stone says:
Nova,Prince Charles specifically stated that he wanted to be a Tampon.It is always nice to see someone better thamselves.
Tom Stone Mon Mar 23 17:02:21 2009 CDT #
SAM1 says:
Part1
Having spent 30+ years in MBS, consulting, software and mortgage banking, having been driven out 3 times by bad lending by my then competitors (hence the consulting and software), and this being my fourth real estate bust (NYC 1972-7, TX 81-89, NE 88-94 and now) a few observations:
Topping and bottoming in residential are long processes typically taking 1/2 to 1 1/2 years each,depending on how you count it.
Bear market cycles usually last from 4 1/2 to six years, depending on general economics.
The initial severity of price drops in a bear market will usually depend on the mix of builder activity to the in situ housing stock, along with the mobility of the locals and previous house price appreciation. Thus you would expect markets such as Nevada to tank quickly, while NYC, where the building of new housing is tiny relative to the housing stock, starts its decent later and more slowly. As a native NYCer, let me tell you that these house or co-op owners are the most parochial people on earth, and rarely move - I am excluding the yuppie scum in Manhattan who really are not that big a part of the population. The slow prepayments on NY MBS has always been blamed on the mortgage recording tax. Even before this was put in place, however, I think only Puerto Rico and Guam were always slower than NY as measured by the old pre PSA prepayment data and even older FHA mortality tables.
SAM1 Mon Mar 23 21:40:03 2009 CDT #
SAM1 says:
part 2
After the initial drop the severity of the cycle is a function of the usual suspect: net household formation vs net underutilized stock. This in turn is a function of the local economy.
Tops in Markets are defined as when volume drops but prices continue to rise - this is almost always accompanied by the average price rising significantly above the median. So far almost all the markets in the US have experienced this.
While it is often a mistake to speak of a national market, it does look like the top occurred in most areas in the 1-2nd quarter of 2006 (NYC a year later).
Finding bottoms is much more difficult - they tend to be exhaustion bottoms where land prices have stopped dropping, tear downs without replacements have stopped, and the median and average prices have converged.
One interesting thing that often occurs during a down market is that new houses ARE built and often sell for less than the depreciated replacement values (and even the listed prices) of existing houses. This is what I call the "Chateau de Ma Maison von Taj Mahal" phenomenon: a person buys an upscale builder special. As prices go up, this ordinary house suddenly becomes grander and grander, until it has morphed in the owners' eyes into a palace that they MIGHT have let the late Mrs. Astor visit, if she promised not to fart. To sell it for less than a billion zloties would be an insult to the noble family therein residing.
The larger the price runnup and the lower the leverage, the longer this delusion can last. Meanwhile your average builder is only concerned with the price of land (the most volatile part of RE), building supplies (lumber jumps around, too) and labor costs change(the longer the unpaid bar tab, the lower the non union hourly rate). If the numbers crunch, it will be built.
A bottom is often signaled when older vs new housing values come back into line: enough idiots have been slapped by reality to bring this back into line.
SAM1 Mon Mar 23 21:41:33 2009 CDT #
SAM1 says:
part 3
SOME THINGS THAT MAY BE DIFFERENT THIS TIME AROUND
REO sales are a real problem: to the extent that they are bought by end users, they are real sales that won't rise up again to soak up precious demand in a few years. If they are sold to investors that have positive cash flow, maybe so. If there is negative carry, I don;t think they really mean much and should be excluded. Please note that taxes will be rising in a lot of jurisdictions, so the cash flow buyer might be a bit rarer than usual this time around.
While fraud in loan origination has always been a big part in bubbles, usually bad outbreaks of it has been
limited to selected markets. So far a few states account for the vast majority of foreclosures, BUT:
Sub prime and alt a lending has been active in all states.
Even areas where there hasn't been over building or a true boom are coming under increasing economic pressure.
Delinquency data shows a bit more national trending: i.e.a bit less local variability than normal.
The changes in the bankruptcy code in 2004-5 and the increasing monetization of "GAINS" through HELs, HELOCs and cash out refi's mean that the old rule of "stiff the plastic, but affirm the mortgage" may no longer hold as it once did.
The various workout schemes (scams?) that our leaders are inflicting us with may help, but will probably drag out the process, making the bear market longer. The uncertainty that these various schemes have generated has made life more difficult for the lenders and borrowers.
Best Guess? - A bottom in 2011-13, though many will be announced earlier (we do have elections in 2010). remember, bottoms are long affairs, and there is no guarantee that a bottom leads to a new boom.
Final comment: almost everyone in the business is a booster - it is in their interest to make sure that buyers buy, builders build, etc. The motto for Real estate analytics should be: lies, damn lies, statistics, and statistics about real estate.
Good luck to all.
SAM1 Mon Mar 23 21:41:52 2009 CDT #
Mike says:
If you look at pricing, I think we are close to a housing bottom:
http://noemptywallets.blogspot.com/2009/03/housing-bottom.html
Mike Mon Mar 23 22:25:52 2009 CDT #
END