patrick.net

Patrick, HARM, et al.:

One of these days you should start a thread on anecdotes of crazy debt-to-income DTI levels. I have a couple of odd stories for you. It would be interesting to see who knows the story of the highest DTI ratio.

Randy H,

Happy New Year to you as well! Can we still read your blog by going to Capitalism 2.0?

StuckInBA Says:

RE cycles are so much slower. Anyone who wanted to sell had all the time in the world to do it. To me this was nothing but slow. It has taken almost FOREVER for borrowers, lenders, policy makers and everyone involved to come to their senses. And they are still trying hard to avoid coming to their senses.

I think malcom said it well. We all knew what was coming but a lot of folks looked other way. How else can we explain big financial institutions holding the bag.

@Randy H,

Good to hear from you, and thanks for the update from up there. I'm not really surprised - I've come to the conclusion that to even want to be a Realtor, you not only need to possess utter obliviousness to surrounding economic realities but more importantly an eternally optimistic outlook. These guys are never going to sell homes as curmudgeons and wet blankets.

It's like they're the grasshoppers and we're the ants, only in the end, the government bails out the grasshoppers and steals from the ants' winter stores.

wow CFC @ 6.60

Survival for Those in Foreclosure

http://www.theseuncertaintimes.blogspot.com/

Wow sa, that's amazing. That's about as low as Accredited Home Lenders got when I was shorting them. I wonder if they will survive.

I still do get a laugh out of imagining realtors accepting skibum as one of their professional peers.

Hi DinOR, that is interesting about Palm Springs. Personally I could never live there, I like to visit it every now and then but I guess there are enough people who want to be there that it has stickier prices. That is a tough place to get a reasonably priced hotel room during any kind of event.

beignet,

That article sounded like a "how to" book for predatory borrowers about gaming the system for a few months, all justified by FBs claiming victim status from an evil lender.

There is a similar article in the Patrick Housing Crash News "Dumping Your House?" California Rosenthal Fair Debt Collection Practices Act which protects consumers from creditor harassment when they are represented by an attorney. If a lender contacts you after you tell them you are represented by an attorney, that you refuse to pay, and not to call you ever again, then they must stop or they are liable for statutory damages of up to $1,000 per act.

Gives it the feel of the Ambulance Chaser ads you see on TV.

Great to hear from you, Randy! Kudos for trying to break through the Gold Wall of Propaganda. The ignorance of basic economics and real estate routinely demonstrated by so-called "experts" could fill the Library of Congress, with enough left over for the Grand Canyon.

I recall trying the same on a few Realtor blogs and having my posts deleted almost immediately. No profanity, no vulgarity, not even a snide "told ya so" tone --just facts, logic and sources. And yes, the public *still* trusts used house salesmen as though they were impartial experts and fiduciaries operating in their best interests. Some are slowly learning otherwise. The rest will never learn and get sheared again on the next up-cycle.

That’s about as low as Accredited Home Lenders got when I was shorting them. I wonder if they will survive.

But Orange Man said during last results that they will be profitable in the coming quarter. You mean you don't trust him ?

Orange man eventually might be fitted for an orange jumpsuit, what with all the "re-created" letters never actually sent to borrowers and all. He'll be in (BK) court well before that day, though, given their recent stock performance.

Are we gonna see 11K for DOW?

baignet - good site. We'll see a lot more like that.

When there are millions broke and homeless, it's going to be pretty hard to pretend it hardly happens to anyone.......

sa -- the Dow is at about 8000 for those dealing in Euros.

[OT]
(very) Long time lurker here. Decided to pop in and wish everyone a Happy New Year but had some trouble getting a login so gave up. Had to try again today though, because Randy H has resurfaced. I have appreciated the information all of you have provided here and have benefited mightily by not buying. However, I always had a special appreciation for a select few of the posters here, Randy being one of them. When he vanished, I felt a gigantic void. Call it not a mancrush as it isn't; maybe a SavedFrombeingFB_Crush? Anyway, Happy 2008 to all and Randy, I hope you pop back in from time to time with your analysis. Good luck with the blog relaunch!

"re-created"

Is that anything like... forged? Funny thing was their legal dept. supposedly sent the letter to an address the borrower wouldn't have been living in yet at the time!

CFC is coming dangerously close to becoming a non-marginal security. What happens then...?

ex-sunnyvale-renter Says:
January 8th, 2008 at 12:22 pm
"sa — the Dow is at about 8000 for those dealing in Euros."

Interesting point, so with the weakening dollar, the DOW figure is actually masking an even weaker market. The solution, lower rates some more, and crank up the printing presses.

Not to confuse anyone so I'll add the footnote, basically the 12,600 today isn't the same 12,600 it was 6 months ago.

>> Are we gonna see 11K for DOW?

I am rooting for it. Very happy to see DOW and dollar decline so far ...

Countrywide Stock Plummets
Countrywide Shares Tumble, Lender Denies Bankruptcy Rumors

LOS ANGELES (AP) -- Shares of Countrywide Financial Corp., the nation's largest mortgage lender, plunged Tuesday after the company denied rumors that it was planning to file for bankruptcy protection.

The stock fell $2.13, or more than 28 percent, to $5.51 in afternoon trading after sinking to a 52-week low of $5.05.

In a prepared statement earlier in the day, the company said there was "no substance to the rumor that Countrywide is planning to file for bankruptcy, and we are not aware of any basis for the rumor that any of the major rating agencies are contemplating negative action relative to the company."

RE: CFC, funny thing is, they are still advertising great rates on CD's to Countrywide Bank, easily 100bp, up to 200bp better than most competitors. D'ya think they're in dire need of cash???

Airlines... any day of the week.

Retailers? Occasionally.

Mfrs? It's not unheard of,

But a Mortgage Lender?! C'mon people, when was the last a ML had to declare BK? Anyone?

Maybe Buffet will buy CFC now !

I sold my CFC put long time ago, but I am still happy - the sooner they disappear from this planet the better.

“re-created”
Is that anything like… forged?

LOL ! There is no end to the surprises. Isn't there a point when people realize not to do stupid things anymore ? I mean enough already. CFC deserves the financial version of the Darwin award.

I guess BAC got a "sweet deal" when they invested in CFC at 18$ thinking there is no way to "loose" !

(HARM : Check out http://tinyurl.com/2n342y Nice surprise, if you haven't seen it yet)

A very good confirmation of bear market today. I hope everyone's puts and shorts worked out beautifully so far. Let's ride the market down and make our money (that is not tied up in RE) work hard.

Randy, welcome back. Good to know that you have decided to hold out till 2010. You mentioned considering renting two adjacent condo units before, is that what you plan to do? Are you up in Marin or have you relocated down to Peninsula?

OO :

This one is for you.

http://tinyurl.com/2agbq2

Stuck,

thanks. That's why I have always said one has to short individual stocks that are already weak in a weak sector, and stay away from shorting indices.

PPT has limited resources, they cannot and will not buy up BBBY, CC, or companies in industries without the closest ties to White House. Don't short Goldman, don't short BOA, but there are plenty of other choices that you can short to your heart's content and never worry about PPT ruining your day. You think PPT will care to save WSM? I don't care if the indices are heading up, I just care that the individual stocks that I short are hitting new low.

Do your homework. There are lots of loser companies in loser industries waiting to hit new low as the American housing ATM runs dry. Pay particular attention to retailers without much overseas presence.

Then the travel companies. Will PPT care if CCL hits new low? Will PPT care if CALC goes bankrupt?

The only problem of shorting these losers is the availability of share for borrowing. That is more of a worry than PPT.

China just launched its first ever gold futures market today in Shanghai.

minimum contract size: 1000g
max fluctuations allowed: 5% +/- of the previous day closing
min margin deposit 7%
no delivery

"financial version of the Darwin award"

Oh definitely. When I say ML's going belly-up being a rare occurrence (I mean other than the 212 already noted on Implode-a-meter!)

Let's see, you have NO inventory, almost all of your staff is 1099 "commission only" and you shuffle your paper to a GSE before the close of business that day? To me, that's like a bookie having to declare BK?!

OO, good call on today being a bear market confirmation. I have it on word from an astute source that a bull-bear indicator crossed paths today (stochastic and mac-something???). The last time this happened was in 2003 when it signaled a bull market, previous to that was in 2000 that signaled a bear market. Today's crossing signals we are entering a bear market. I was told that if I'm going to trade, to do so only on the short side.

So I was at home depot and lowes a few times in the last week. Its a total graveyard. There is only 1 line open and about as many customers as employees. And they are mostly VERY helpful. I was like - is this the same store? In 01-05 the place was a madhouse night or day rain or shine.

Now i get home to see CFC at 5 and Etrade at 2! I have accounts at Etrade and have a cd and 401k there. Am I screwed? will they 'steal' my money in event of BK? im 50k over fdic limit with them... I also have a cd w/cfc (under fdic limit) so i guess im safe there....

really instead of having CDs with these guys i should have shorted them with those funds-too late now....

One thing about bear markets to keep in mind. There are often violent rallies. For many many reasons. Be willing to cover your shorts.

* NOT INVESTMENT ADVICE

Lowes is always more pleasant than Home Depot but I've noticed the same thing. I have to say, I got a hell of a deal on a refrigerator at Lowes. Then I did 6 months same as cash to get an extra 10% off. Free delivery too. I ended up with a nice Whirlpool 21CF with icemaker in the 500s.

I almost feel dirty admitting this but JC Penny is all of a sudden a great place to shop for men's stuff. Man, you get them on the right day and it is a discount on top of a discount. These are real savings not that 70% off bullshit with the preprinted tag. I don't know how they do it but then you look and see that they actually have a line at the register vs Sears, Nordstrom, or Macys where you just see a bored person trying to look busy with crickets chirping in the background.

I have accounts at Etrade and have a cd and 401k there. Am I screwed? will they ’steal’ my money in event of BK? im 50k over fdic limit with them

Why did you go over FDIC limit at all ? Not trying to put you down, but there are enough banks to spread out your cash - ING, Citi Esavings, HSBC, EmmigrantDirect and so many banks give decent rates on cash.

If I were you, I would definitely bring all my accounts below FDIC limit.

Remember than when Netbank went down last year, people over 100K limit did NOT get the full amount back. IIRC, it was something like 50c on $. So that will hurt.

I don't think stocks held at Etrade are at risk. But that's not an expert opinion, just knowledge that I have gathered from various web-sites. But even the stock portfolios can be moved to a different broker. It can take more than 2 weeks to transfer, and cost some fee, so make sure you are comfortable with those things.

FWIW, I have moved all my cash out of Etrade. Even for money markets, I have moved to Treasury Only MM funds.

* NOT AN ADVICE

Well I was under fdic at etrade, then I trasferred old 401k to them recently from old job....now over... Its confusing what is covered by FDIC as I have a mixture of CD's,stocks,mm 'sweep' account, treasuries with them.

Certainly I will move everything out of etr tomorrow - they just borrowed 2.5b and are again out of cash and also the market cap is only 1b today?(thats what i read) anyone paying attention has to pull everything out of them asap IMO, i love that company too - ez to use via internet.

its a sad day. I wonder if both lowes AND hd will survive the multi year housing recession we are now in? Anyone remember Builders Emporium, House2Home?

HelloKitty,

bite the bullet and take your money out from etrade, you only lose a bit of penalty fee if you pull out your CDs. Beware though, there are already different tales of how difficult it is to ACAT etrade accounts to other brokerages, I have a friend who started doing it at the first sign of distress and the ACAT process took almost a month due to difficulty on etrade side, understandably, because they will do everything possible to slow you down. Try to fill out the forms in their office, so if there are problems, you can catch it right away instead of going back and forth with their customer service on phone.

For your CD, you can just pull it right away and transfer to another bank (recommend BOA, too big to fail). Your 401K is insured by SPIC and the limit is $500K. Your CD is covered by FDIC for up to $100K.

@OO,
thanks for the advice, i will move everything - cd first.

I read they have some insane amount of money in 2nd mortgages which are impozzible to sell aparently and they need cash.... interesting situation.