patrick.net

I think Al Gore will run in 2012.

He is a smart man. Only half smart arsses will run for 2008. If you want to be the next Roosevelt, why would you place yourself in a seat that is set up for failure? My biggest hope is all this mess will blow up right in Bush's face when he is still in the white house, unfortunately it is quite impractical for things to unravel that fast.

Sriram, (BTW, I have a good friend named Sriram... but he's a Ganapaty, so I know it's not you.)

What it means is that those loans will have to be held on the books. Local banks/CUs/etc that engaged in sensible lending would still be able to make these kinds of loans as their balance sheets will not be imploding with foreclosures.

The question is... how many banks are going to be in that condition?

If investors continue to refuse to buy these loans, the rates will go up and up until you CAN sell these loans on to WS, which will have an impact. If loans for 417 are at 6.5, and loans above that are at 9-12%, there will be a big push down on all the middle-to-lower-upper areas. Areas where a large percentage of houses are bought by ACTUALLY wealthy as opposed to people who have to borrow money will not really drop. Woodside proper, maybe Atherton... Anybody who leveraged to get IN there is screwed if they can't make payments, but most of those houses were probably bought for mostly cash, and don't go on the market all that often.

The rest of the Alt-A Bay Area could be in SERIOUS trouble. One of the reasons sub-prime collapsed first is those buyers typically have very little reserves. Alt-Aers that bet and overleveraged will usually have more reserves to deplete before they are foreclosed and punted. They will hold out for 'break even' as long as they can, but without loans, no dice. And cash only buyers are NOT going to shell out 1.2 million to buy a house in Cupertino. (unless they're retarded and rich, like Forrest Gump.)

He’s actually moderated the anti-gay angle for the campaign, but he’s still firmly anti-abortion to the point of being anti-morning after pill.

There is nothing wrong with being pro-life. Although I believe the Federal government has no business in this issue, I think that abortion is wrong. It is vile to consider it as a "woman's choice." However, the option should remain open because the society will be worse off if abortion is illegal.

Alt-Aers that bet and overleveraged will usually have more reserves to deplete before they are foreclosed and punted.

Alt-Aers are just subprime people with slightly higher income.

Remember, the middle class is simply the lower class but with assets to lose.

sfbubble, I have a good friend named SFBubble... but he's a Seller, so I know it's not you :)

Sorry, couldn't resist making that lame joke. Thanks for the explanation, that makes sense.

I really hope something like this triggers panic and real downward pressure in the peninsula and south bay.

Peter P :
I don't mind him being anti-abortion, I mind the fact that he shows every indication of supporting legislation banning it should it hit his desk. His waffle on it is that he wouldn't support putting women to death who had an abortion. However, he mostly manages to fall behind the "Keep the federals out of it" shield on most of the issues that I really dislike his stance on.

Let's not get sidetracked on abortion or other standard fare divisive pseudo-issues. Arguing about shit like that is *exactly* what the election engineers thrive upon.

Let's stick to making it crystal clear what responsible, thinking, tax paying American citizens and legal, tax paying residents have to say about this issue.

So far, I've found very little to disagree with in every comment on this thread. That is powerful given I know that many of us have very different "ideological" perspectives. But the common ground we all share is that irresponsible, corrupt and outright stupid treatment of the US housing market has left the most responsible US Taxpayers at least a little poorer, and quite a lot pissed off.

But the common ground we all share is that irresponsible, corrupt and outright stupid treatment of the US housing market has left the most responsible US Taxpayers at least a little poorer, and quite a lot pissed off.

Rest assured that the solution to this problem will make us even more pissed off.

Singling out Obama among all the populist, "I'm for the middle class" platitude-filled democrats is probably unfair to Obama. He's no better and no worse in ideology. Like everyone else, he panders to interest groups, and frankly he is more disappointing than say, Hilary, who you knew was going to turn out just as she has.

It's a sad day when the French leader (Sarkozy) sounds more reasonable and free-market oriented than almost any viable US presidential candidate.

Dang Peter, that makes me upper-low class ….. down from lower-mid class ….. crud!

My point is that there is no differences between the two. :)

It’s a sad day when the French leader (Sarkozy) sounds more reasonable and free-market oriented than almost any viable US presidential candidate.

Sarko is my Hero. He is not just any French leader.

I wanted to donate to Ron Paul too but I can't because I am not a citizen.
But that makes me think... maybe I only want to be a U.S. citizen if Paul or someone like him gets to lead this nation.

You know that Sarko is not excessively free-market minded, nor is he anywhere near as meritocracy-friendly as us Anglo-Economy types would wish to believe.

For one, Sarko is trying to bully the ECB into putting monetary control under political guidance. For another he's very protectionist. All in all Merkel is more free market compatible, even with the annoying German corporate governance system.

I’m gaining more repspect for old HeliBen day by day.

Same here.

Me three. But I am reserving the praise because the show has just began. Ben is going to face much stronger demands for rate cut as time goes on. Past one year where he kept the rates unchanged will be nothing compared to what's going to come at him in future.

Has anyone seen the Bank of America ARM Reset Chart. It makes the Credit Suisse ARM chart look like a walk in the park. Resets peak in March '08, just in time for the primaries. The REO Speedwagon ("Keep the Fire Burning") should be going full tilt around the time of the Presidential election. I imagine they will just mount the election placards above the For Sale-Foreclosure signs dotting everyones lawns. I will vote for the first candidate who brings up the CAR ARM affordability index/scam.

You know that Sarko is not excessively free-market minded, nor is he anywhere near as meritocracy-friendly as us Anglo-Economy types would wish to believe.

I know. But there is only so far right the French can go. And that will still be way left of what is possible here.

I wanted to donate to Ron Paul too but I can’t because I am not a citizen.

IIRC, a permanent resident can donate too.

See "Confirm Your Eligibility" on

https://www.ronpaul2008.com/donate/

On the topic of politicians from other countries. When I look at India's finance leadership, they look more capitalistic to me and I find it extremely ironic. Because India was a socialistic country for the longest time and only recently have taken some anti-protectionist, open currency and free market measures.

The so called "dream team" consists of a prime minister who is an economist and has been a good Reserve Bank Governor and a finance minister who for a change knows a thing or two about finance, among others - a capable current governor for Reserve Bank and another good guy as a planning commissioner.

The mortgage rates in India have gone up significantly as Reserve Bank has increased their rates. This has killed RE speculation and put a damper on stock market gains. But the policy makers are far more concerned with fighting inflation, managing growth and economic health. My impression is they don't care about some specuvestors loosing their shirt.

The RBI may reduce rates now to prevent Indian Rupee from gaining too much. Exports are a major support for economy. But bail-out of specuvestors would be the last reason on their mind. Govt bail out is not uncommon in India, so I find their current stance a pleasant surprise. Especially when I contrast that with current US politicians.

I thought I'd share some of this lovely anonymous email I got a couple hours ago:

[Consider the entire thing one big [sic]]

Mr. "Randy H", or should I say Randolph. Now that I know who you are I'm gonna to tell you that you are a hippocrit. the only reason you don't wanna buy and call home owners disgusting names is cause your mad you can't buy their houses cheap. Your nothing but a hippocrit. That's right you made money buying a house and then selling it but now you wanna make more money buying so cheap and putting the owners out on the streets. I've been helping honest people buy their dream home in Mill Valley for almost 5 years and still never to come across such an asshole like you!!!!!!!! If you and your pathatic internet friends get your way only assholes like you all will own the beutiful houses in mill Valley. We hope that good men like Barak Obama or Hillary will put taxes on you to teach you all a lesson for wishing to hurt so many people. These people are my clients and what you write makes me mad and sick and I really hope the worst for you like you lose your job because of this.

I hope your happy. "Linda the Licensed Realtor"

Probably found me while searching for Obama stuff. Two messages I'd send:

* Barack, Intelligent bunch of supporters you have there. Bravo.

* "Linda". Might I suggest you learn to first spell "Barack Obama" before voting for him?

* “Linda”. Might I suggest you learn to first spell “Barack Obama” before voting for him?

Yeah. What if she votes for Osama instead?

Peter P Says:
Which button looks better?
http://www.buttonsonline.com/2008/paul.html

The more I read/hear/see what Ron Paul has to say, the more I like the idea of RP for prez... but why do over 50% of his mugshots make him look like Stanley Laurel?

SP

I don't think we are "hippocrits." What does that mean anyway? Hippo critics?

but why do over 50% of his mugshots make him look like Stanley Laurel?

He needs a better photographer. He needs one who used to do realtor mugshots.

Peter P.,

Realtor mugshots are always from the Realtor's peak looks year. Ron Paul needed the photographer about 35 years ago.

"One point for Mr. Obama: APR is not the same as EAR. You might want to get get someone on staff who actually knows something about markets, finance and economics before you go making a fool of yourself in the Financial Times."

Not sure I understand this comment, at least in the context of Obama's comments in the FT. His statement concerning APR is correct, relating to mortgages, as an apples to apples comparison for rates/fees being charged by the broker.

Randy,

Linda needs a job selling houses because nobody will hire her as an editor.

Randy, do you think your newest pen-friend also frequents Second Life? :)

Bap33 said:
Soooo , if the libs want to save all these stupid FB’s,

Silly rabbit, they only talk about saving the FB's. They don't really give a sh*t one way or another, because once they are in power, their policies will result in the creation of another new class of losers that they can appeal to in the next election circus.

SP

Randy H,

Thanks for the chuckle care of your Realtor (TM) fan:

What is a "hippocrit"? Is it related to a hippogriff (Potter fans)? Is it a critical hippopotamus?

If you and your pathatic internet friends get your way only assholes like you all will own the beutiful houses in mill Valley.

Yes, we are all truly "pathatic," and we all want "beutiful" houses.

We hope that good men like Barak Obama or Hillary will put taxes on you to teach you all a lesson for wishing to hurt so many people.

Why the royal "We"? Or is she the spokeswoman for all dumbass Realtors (TM) in Mill Valley? Also, I didn't realize Hillary was a he. News to me, although I'm not that surprised. :)

skibum,

You're a doctor, I'm surprised you didn't notice Hillary's a man. Or maybe she's a woman now, whatever polls better.

Hey, at least she spelled "lose" correctly.

Randy, you have interesting Haterz. ;)

Re: debates about abortion for Randy :

The point I was trying to make is that a person who is against most of RPs social policies is still willing to not only vote for, but donate money to his campaign because he's basically the only guy with sane ideas about fiscal policy in the race.

There is NO candidate for me. Socially liberal (that doesn't mean I love SS) and fiscally conservative (see? That means I don't love SS! Stupid government bankrupting me for lazy old people!) The fact that democrats and republicans are all basically fiscally irresponsible right now is the problem. They just can't agree on what to waste our money on is all.

Bottom Line ...

I can not and will not vote for Democraps in 2008 ...

They just can’t agree on what to waste our money on is all.

Well said.

We needed a non-politico money man to fix money troubles

I agree. Bill Gates for president!!!

Speaking of Gates I am a bit upset that he is no longer the richest man in the world. I doubt he cares though.

Hopefully, Gates can retake the throne very soon. :(

I got a strange letter from the Federal Shadow Minister for Housing in an election year after a housing summit stating that the Labor (opposition) policy will be:

1) keep 'interest rates' low
2) put $1.1 bn into social housing and affordable housing solutions, by building rentals pegged at 20% below 'market rates', whatever they are

How the govt intends to 'keep interest rates low' when they are pegged by an arms-length reserve bank responding to national and international economic conditions is beyond me.

Unless they take control of pegging interest rates for housing loans and re-regulate the industry heavily -- fine with me.

My solution: nationalise housing, peg the price of everything at half what it is now, tie it to CPI, and shoot anyone who complains. Any complaints? Didn't think so...

@Kjac22

Not sure I understand this comment, at least in the context of Obama’s comments in the FT. His statement concerning APR is correct, relating to mortgages, as an apples to apples comparison for rates/fees being charged by the broker.

If I'm too harsh on you, please excuse me.

Barack is categorically wrong in his statement. I'll demonstrate why:

He said these were subprime borrowers facing impending crisis of losing their homes. That means they have variable rate, teaser, interest-option/interest-only and/or negatively amortizing loans. None of these folks have either (a) large equity positions or (b) fixed rate standard amortizing loans. If they had (a) or (b) then they wouldn't need Barack's proposed government nanny-bailout.

As such is the case, we calculate the *effective* rate as:

EAR=((1+APR/n)^n)-1

Similar to how a credit card is calculate. In fact, as HARM and all the good folk here have proven ad nauseum here over the past 2.5 years, a huge portion of these folks actually have explicit revolving credit lines atop their dubious, negatively amortizing adjustable rate primary mortgages. For them, the EAR is explicitly the above formula added to a modified version of the formula yet again, which subtracts from the principal payment the amount forced into future reamortization because of the burden of the equity line.

If I wasn't trying to be diplomatic I could have said about Mr. Obama, instead: he is naive, cynical, or ignorant. A "Home Score system" like he proposes is practically impossible without almost total government regulation of all aspects of the real estate value chain. Since he apparently is unconcerned about the behavior of the powerful Realtor(tm) lobby -- after all they do contribute heavily -- all his "Home Score system" would result in is a transference of even more power to the entirely unregulated, often entirely unethical real estate industry. At least the banks are honest actors trying to maximize their profits. Realtors are not honest actors in that they have a systematic conflict of interest in their agency structure.

If Barack really cares to protect home buyers "reaching for the American dream" then why doesn't he simply insist upon imposing fiduciary responsibility upon Realtors? Who the hell do you think talked all these people into taking on suicide loans at the ground level? It wasn't the big, evil guys with monocles and cigars in the back room of the banks. It was the woman in the leased Lexus.

Owning a home represents a big part of the American dream and all Americans — no matter what their income level — should have the power to reach for that dream.

To dissect Obama's statements some more, possibly ad nauseum, why does no one question his (and many others')assumptions that *all* Americans should be able to reach the "dream" of homeownership? So, someone on welfare should be able to own a home? Someone with a minimum wage job should be able to take out a NINJA loan and "buy" a home? Oh, wait, that's what's already been happening for the last 5 years!

EBGuy Says:
Has anyone seen the Bank of America ARM Reset Chart.

The most interesting thing is the peak of Jumbo-ARM resets in April 09. That seems to be a "Bay Area Easter Special".

SP