patrick.net

3:13PM -what PeterPee said.

However, the credit co's HAVE to have figured out I'm utterly insolvent by now, a few accounts have gone to collections, and yet I'm still getting offers of credit. Sure, I tried calling on one, and it got as far as the part where I said I don't have a cellular phone because I "don't believe in them", and went nowhere, but I keep getting all these offers.

I interpret this as sheer desperation. They are desperate to get money moving, any way they can. I'm spending/consuming 1/10th of what I was, no kidding. Not everyone will cut down this far, but they'll cut down all they can.

Fake "credit crunch" = 6.5% FRM for people with so-so credit, and media "victims" like the Oropezas and Daniel Sadek being unable to serially cash-out refi their various "investment" properties in perpetuity.

Real "credit crunch" = SIBA's only-lend-to 800+ FICOs with 30% down only + full-doc + only-lend-to career bankers/doctors/lawyers/producers/politicians + giving DNA/blood samples at close + first-born as collateral + short seller being forced to eat any squirrels found on property + buyer gets free "recreational" access to short seller's wife + Joshua tree lodged firmly in short seller's (now broke) ass as he is escorted off the property by local sheriff.

Or better yet, a 15yr FRM.

Or, even better-er: cash.

Really real credit crunch = no financing at all

See new thread graphic for a well balanced, bear-ific meal.

HARM, where can I find this brand of cereal?

I want the free helicopter for Christmas!

A: Any participating Un-Safeway or State'er-income Brothers.

Huh? I do not know of a single person buying with 30yr FRM.

I did when I bought my place in San Jose in 1981. Re-fi'ed to another 30yr FRM but paid it off in 2004. PAID IT OFF. Now there's a concept that needs to be revived.

Cash is nothing more than another word for a fixed-rate zero-percent mortgage. :)

I did when I bought my place in San Jose in 1981.

But you are not *buying* right now. ;)

I thought paying a house off is like stuffing money into a mattress... :roll:

Paying your house off??? Very "unsophisticated"!

http://media3.washingtonpost.com/wp-dyn/content/photo/2005/11/28/PH2005112801636.jpg

YSP = Yield Spread Premium

Uh, that's not a picture of me, up there. GC, what is that guy good for?

I never took money out via HEW to buy toys. So when I sold that place in May 2006 (check and you will see I sold at "the peak" :) ) I was able to buy a nice new place in Boise and have about ONE MILLION DOLLARS left over. If I can't live on the return on that amount I should be taken out and shot.

Not all boomers lived an extravagant lifestyle. I'm a millionaire but shop for grocery bargains and change the oil in my vehicles.

Not all boomers lived an extravagant lifestyle.

Congratulations, DennisN! As a Patrick.net regular and prudent investor-saver of the Boomer generation, you qualify for Un-Boomer (tm) status. You join the august ranks of likeable and popular Un-Boomers such as DinOR, FAB, OO, LILLL, and many, many more!

If I can’t live on the return on that amount I should be taken out and shot.

Watch out for inflation though.

Well yes inflation bothers me. I think the FED should bump up the fed-funds rate to around 8-9% to "flush out" the speculators/unworthy types. Why doesn't the FED realize these guys are screwed already and that it would be better in the long run to "finish them off" ASAP?

Bullfighters know that the "moment of truth" comes when the bullfighter thrusts his sword into the bull's heart. Why shouldn't the government do the same to FB's?

I think the FED should...

But how should we react if they don't?

But how should we react if they don’t?

That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government...

DennisN, I was talking about investments...

Don Harrold: Master of Men

http://www.youtube.com/watch?v=xMTyBCjVWJM

Not a plug for this guy. Just like what he had to say on this one.

The place, Teh place, from which I type, was paid for on a liar loan,. 3X payments and paid off.

now the area is larning, yes, larning, that prices have to be predicated on min. wage.

Teh pity, yes Teh pity, is that it's not good for growing crawdads on, however, I have much hope for sparrows, which are a delicacy in Europe and crawdads abound locally.

People will look back upon the 1930s as a time of leisure and mint juleps..........

If you are waiting for the DQ report for Santa Clara, you may want to chew on this in the meanwhile.

http://rereport.com/scc/

Every single indicator is negative. Except the median of course !

- Inventory is reaching all time high since 1999 spring, and it's still winter.
- Days of inventory going to moon
- The first chart of price v/s sales - note the red line, going to the bottom on the bay
- And people on an average paying less than asking price !

Is this Bay Area ?

the number of homeless people and beggars in Santa Clara is a wake-up call.

To properly sense the situation you need to become homeless or nearly so yourself.

Become so, then report back. It's only a matter of time.

HARM Says:
December 18th, 2007 at 5:11 pm
" you qualify for Un-Boomer â„¢ status. You join the august ranks of likeable and popular Un-Boomers such as DinOR, FAB, OO, LILLL, and many, many more!"

It should go without saying but all of the boomer jabs that I make are directed to the stereotypical grotesque boomers and not to fellow readers here. I do however encourage un-boomers here to pass on what they pick up from the different generations in the hope that they may influence their peers to behave in a manner that is not as repulsive as their normal actions, and also not an embarrassment to the United States when they travel overseas.

Since boomers were the counter culture maybe enlighted boomers should be called counter-boomers.

What law gives the Fed the authority to regulate the finer points of mortgage lending and contracts?

What law gives the Fed the authority to regulate the finer points of mortgage lending and contracts?

What law prohibits the Fed from regulating the finer points of mortgage lending and contracts?

Huh?

dunno about Fed, but Paulson is definitely working in his WS pals' favor. Which means, not a chance in hell for tightening credit, how else are WS bankers going to make easy millions if credit is tight?

Did you guys see the following chart? Shocking
http://www.financialsense.com/fsu/editorials/kirby/2007/1213.html

The Fed does not have to tighten credit. Free Market *always* tightens credit itself in the contraction phrase of an asset bubble.

Maybe it depends on where you live. Out here the realtors® and mortgage brokers are hurting. They made us jump through every hoop in the book to buy. But we have 800 credit and no credit card debt and did 30yr fixed so all-in-all it was very smooth.

But I hear the brokers are absolutely starving. The guy who sold us our house (nice guy-- I wouldn't wish anything bad on him) is going through a divorce and is going to hand his house back to the bank. He can't afford the house and the divorce because the market is so bad no money is coming in.

Our mortgage broker basically reiterated it for us when she told us that no loans are going through right now that aren't spotless. In fact, the loan package we went with won't be offered any more by the end of the year since the banks are getting really edgy. I've seen tons of houses in my neighborhood fall through escrow in the last few months. In fact, it's more unusual if a sale sticks.

I do think that the Sac metro area is ahead of the BA in terms of where we are in the crash. Our declines have been markedly faster and steeper so I think we seeing the crunch first.

Peter P Says:
Or better yet, a 15yr FRM.

Or a 0% fixed rate - with 100% downpayment...

I disagree somewhat with the original post about the credit-pullback not being seen at the retail level - I used to get two unsolicited letters every day in the mail, offering to refi my mortgage. Now, not so much - maybe two a week.

It isn't quite reached the point where mortgages are not available, but there is still plenty of time left before we reach the bottom here. It will happen.

Peter P,
So true. The MARKET is tightening credit. The Fed lowering rates is silly and inflationary. I am still wondering what capitulation signal will come that will cause Ben to raise rates. Maybe we should have a vote.

Bill will raise rates when:

a) Oil goes to $200 per barrel
b) Social Security is required to give a COL increase of 10%
c) The monthly cost of military action in Afghanistan and Iraq goes to $10billion
d) Medicare is projected to become insolvent in 2010

Duke Says:
I am still wondering what capitulation signal will come that will cause Ben to raise rates.

That depends on what his real motive is. If really fighting inflation is the true motive, the Fed would have done this already well in advance of the signals you mentioned. Since that is not the case, let us assume price inflation is not the issue.

My guess is that liquidity is the concern, and we have a very long way to go before rate increases. Several layers of derivative markets have become stuck, and the players who made bets in those markets are unable to move or even close out their positions without becoming insolvent and triggering a chain reaction of cascading collapse in their counterparties.

The central banks are trying to resuscitate these markets through desperate liquidity measures. Raising interest rates is simply not an option now, until the patient shows some signs of recovery.

IMHO, it could be misleading to look at prices (housing, oil, gold, etc.) as a signal that the fed will raise rates. They just don't seem to care about shite like that. After all, the price of a McMansion in the Fortress is a mere rounding error compared to what is at stake in derivatives.

News from Sacramento... looks like there were some job cuts at Intel's Folsom location. I didn't see an announcement, but it seems to be related to the sale of Intel's optical platform division to Emcore a few days ago. I don't have specific numbers for the affected headcount, but this can't be good for Sacramento area housing...

Punchbowl!

While there is no "Min. posts required" to keep one's membership here at Patrick.net current... what the hell have you been doing that's been more interesting than this!

Do tell, oh and good to see you!

Malcom,

"Counter-Boomer" is absolutely accurate. Just assigning a name to my affliction puts me on a path to recovery. I'm calling the RV dealer as we speak!

Perma-Rentor and Vernon Smith are GODS!

Thanks so much for that link! I need a printable copy I can forward to... everyone with a mailbox!

"at the end of the capital-gains rainbow"

Almost poetic isn't it!

Can someone, please... that is still in contact w/ astrid forward that to her in thoughtful and caring fashion? It was my crude and frustrated treatment of a long ignored topic that turned her off but perhaps someone w/ Prof. Smith's credentials will convince her I wasn't just taking a position to p!ss her off?

TIA

I like that term, Un-Boomer. There are Boomers who are actually not like the people talked about in Ted Rall's book, Revenge Of The Latchkey Kids.

There *are* a huge number of boomers who seem to have taken on as their life's work to act just like the stereotype though!