patrick.net

* at these prices

There is no pent up demand. There is a shortage of qualified, able buyers at these priced. Period.

Many on this board belong to this group, and any of us may capitulate at any point. ;)

This has so far moved beyond the howmuchamonth payment thinking. People are thinking how much they will lose by buying now.

In prime areas, people still have the will to buy for now. Some buyers were sidelined because of the jumbo loan issue. The new conforming limit will surely enable these buyers.

I would argue that all that will happen with the increasing of limit is a little bit of drop in the interest rate.

There seems to be an improvement of 50 - 100 basis point over the old jumbo. This is not insignificant.

1% is $600/month for a 720K mortgage.

(Alternatively, with the same payment, how much more can they now afford?)

http://www.socketsite.com/archives/2008/03/if_the_pluggedin_readers_are_right_jumboconforming_loan.html

(Since Randy is not back yet I have to be the voice of reason from time to time.)

Many on this board belong to this group, and any of us may capitulate at any point. ;)

Are all the 12 of us going to clear the Bay Area inventory ?

Please dude. The market started falling before the rates started going up. You of all people understand that this is not an interest rate problem, this is a solvency/servicing problem.

BTW, that Paulson guy is pretty proactive, won't you say. He is going to get tougher on mortgage brokers. I am so glad that he is going to save me from all the predatory lenders.

he leveraged all his assets

That has to be the most eloquent wat of saying "hocked" that I've ever heard.

The Original Bankster Says:
re: manufacturing. So we believe govt data when were trying to prove a point (re. SP’s very official looking list)

Here is the source for trade information -

http://www.census.gov/foreign-trade/Press-Release/current_press_release/press.html

It is independently verified US Gov data, so please be warned that it is not as trustworthy as The Original Bankster's data. :-)

@ DinOR

go ahead and use the Voltaire story to impress, but for the love of Homer Simpson, please skip the hogwash on the cretin etymology. I would definitely skip it in the presense of a Cretan - they tend to be rather idiosyncratic and even violent, in a Sicilian kinda way :-)

I should say that my last comment bears the imrimatur of my expertise in the subject matter. As an idiot, I know cretins intimately.

So are people formerly from Crete "ex-cretions?"

Sorry.

They would be Headset if only there was such a thing as "people formerly from X"!

LOL! Bad joke, bad grammer. What's not to like!

We should cut it out though. Our humor is probably in bad taste. Besides maybe there are Cretans working for the all seeing gov. dept. tasked with monitoring blogs for subersive activities...

Treasuries Fall as 10-Year Sale Draws Lowest Demand in 4 Years
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aokOVOAIBy30

Beginning of the popping of Treasury bubble.

Richmond sez:
If I want to buy foreign chocolate, I’ll buy Nestle’. And I do. NOT CHOCOLATE BUYING ADVICE

And if you want to buy American chocolate, buy something good like Scharffen Berger (although they got bought by Hershey, so they will probably f*ck it up too in a few years).

Once you've had good chocolate, man, you won't ever want to eat those sugar-loaded lumps of chocolate-flavored dog-crap that Hershey's peddles to the masses.

Only Scharffen Berger sells undutched cocoa powder, which contains very high amount of antioxidant. I usually stock up on those 2kg bags. Undutched cocoa is far more flavorful than dutched, sweetened powder, and of course much more healthy.

I am actually trying to look for a backup undutched cocoa source, just in case Hershey screws it up.

TOB
your post of 9:27pm is totally nonsensical - either you're drunk or you need to go get some sleep.

Cyprus' problems have nothing to do with linear B and the origins of the greek language and of course none of it has anything at all to do with the origin of the word cretin. I should stress that there is NO propaganda campaign on the etymology of cretin either. I would know.

Agreed completely on Hersheys and ScharfenBerger.

On the issue of GSE conforming loans (the new kind) can any of our resident experts comment on the recently issued standards? What do they mean? Is it a relaxation of standards or just an increaase in the limits which will then be of little consequence?

TOB
you have no idea what you're talking about. There is no issue of "indigenous rights" in Cyprus. There is no confusion on the origin of Cypriots and no connection between that and theories of languages in the region which may have predated Homer's greek. There is no conspiracy to hide the connection of the word cretin to the IQ of Minoan (or was is Roman era) Cretans.

You should look up non sequitur too.

My opinion on the benifit of blogging:

Everyone should try to get your news from sources where they have the budget to do their homework. Hard numbers ARE important.

Blogs are great places for commentary.

The value in this blog is the sample-sized slice of society it provides.

We have a few subject matter experts that are quite helpful for framing an issue, then we have a large slice of good ol average folks who comment within that framework. Kinda like looking at the market, the numbers will take you so far, then the phychology takes you the rest of the way.

On a different topic: how much does federal economic cheerleading bother you? Bush will appear on tv today to say the economy is not in recession. Huh? Isn't that like when the Iraqi generals where giving a live interview saying they were beating the invading Americans and the tank rolled by in the background?

TOB

Look I'm gonna try one more time and that's it: you are trying to find connections between unconnected things. Neither greeks nor turks are semitic. Therefore even if anyone cared how greeks pre-homer wrote noone would be using it as an argument today vis-a-vis the "intercommunal problem". And nobody is. Unless they are a cretin.

in classical teaching, the word cretin derived from Crete, in a much similar way that lesbian derived from Lesbos.

Yes, Lesbian derives from lesbos although it was not used to mean gay until modern times. Cretin does not derive from Crete. Repeating it doesn't make it so. A person from Crete would be a Cretan today and Cretes/Cretekos in Greek. Grab a classical greek dictionary if you are truly interested and look it up.

On a different topic: how much does federal economic cheerleading bother you?

It doesn't really bother me because it seems that the more the Prez says that, the tougher it is for him to go along with any bailout. To the extent that anyone will ask him first of course if he's out there on record that there's no problem, maybe he can be a roadblock.

I guess a "European Bank" refused Bear Sterns counter-party on a transaction earlier this week and the stock is down hard just after the open. Can anyone add to that?

I finally have my counterargument.

1. S&P claims mark-to-market is done or nearly done. Total cost *in their estimate* is $285 billion.
2. Fed, through the TAF, has put out over $300 billion.
a. But, the TAF only accepted MBS at a fraction of face value so total liability to taxpayer is 'co9ntained'.

On the face of it, I have my answer. The Fed has deftly blunted the worst o the over-correction forestalling the margin call and the spiralling of margin of collateral and margin calls. Since banks have only 60 days at the TAF we we likely see more to come from the governemtn to permanently hold this collateral to prevent bank insolvencies, but it certainly seems the FED addressed the correct problem - the solvency crises.

Of course, their are ample opportunities for Doom and Gloom still, but at least we are seeing the counter-argument I was hoping for, even if it was not articulated.

Wow - my little screen here is not editing properly. Sorry for the unreadable goop above.

OO,

Frankly having to parse your words so carefully is why I keep attendance to said events to an absolute minimum. One needn't have eyes on the mayor's office for the most innocent of comments to backfire. Besides, it's exhausting isn't it?

"The Big Picture" had BS collapse as a rumor recently. Bloomberg is all over it calling it a bailout from Feds/JPMorgan. That is all.

Headset,

Thanks for the follow up. Remember, I used to work in a "boiler room" and I've seen a phrase, an anecdote, a snippet go from one end of the room to the other in about 90 seconds.

We can't for the most part control what we hear... but for the love of God verify what you've heard before you repeat it! No matter how juicy or impressive. (I though that much was just common sense?)

Denninger alluded to it yesterday (as it affects PD's) but didn't mention BSC specifically. More referenced to Carlyle.

Duke,

That was pretty much my take on it. Buying time and doing the damage control measures. I understand the Auction Rate failures will continue through the next qtr.

Looks like they are calling the demise of Bear Sterns.

So, Carlyle and Bear Sterns are allowed to die. I wonder who else gets chopped up in the de-leveraging world.

Down 50% ? Wow!

Hey, all you in the know. Is the Bear Stearns bailout one of those "rich helping their rich buddies" thing or could any of us count on this kind of "help"?

In spite of the once venerable Bear Sterns name they now have no more credibility than CountryWide?

Speaking of Countrywide. Is BofA now in serious risk of insolvency?

Good question. AFAIK, not in immediate peril. BofA (we're guessing) was forced into a shotgun wedding w/ CFC to salvage their book. BofA stopped doing subprime in 2001! Again we have no way of knowing but we can only surmise they were chosen b/c they had the least exposure.

Anyone?

Bear Stearns President and Chief Executive Alan Schwartz begged to differ with Wall Street. "There is absolutely no truth to the rumors of liquidity problems," he said, adding that Bear's "balance sheet, liquidity, and capital remain strong."

Wow. Is this kind of blatant lying to your investors not accountable?

Fuzzy,

It's code for: "GET THE F@CK OUT.... NOW!"

Maybe they should change the spelling to Bare Sterns.