patrick.net

Is this a sell signal on gold ?

That looks almost exactly like the scenario presented by some "expert" Glenn Beck had on his show a few years back. Very entertaining stuff. Ah, I love Glenn Beck.

John Mauldin just wrote a piece on Hyperinflation today. Not much entertainment value, with worth the read, especially the last few paragraphs. His book "Endgame" is on my reading list now.

http://www.businessinsider.com/and-here-comes-inflation-2011-3

Its Mish, dangnabit!
Now we’re back into Winter and prices are doing exactly the same thing and the usual suspects are claiming exactly the same thing.
On another thread you stated it's normal to be down 5-10%. The the CS SF Bay Area Index was down (summer peak to December) ~2.5% in 1992 and 1993. These sure as heck ain't typical times.

I'm not sure why anyone listens to Mish. His investment performance since March 2009 has been god awful. His fund has lost 20% since the market bottom in March 09. I'm not sure how you accomplish that given the fact that every stock and commodity has rallied more than 100%. Hell even the bonds that took a 50% haircut in 2009 are up 100%. That's 2 straight years of losses while all markets have done nothing but go up.

Here's Mish calling for a bottom in 2011

http://globaleconomicanalysis.blogspot.com/2009/07/housing-update-how-far-to-bottom.html?ref=patrick.net

More lies. Not biting.

Mich is like other True believers married to his cause. Going down with the ship only makes him more shrill.

Is there any hidden data being held back by the banks that is causing this reduction or can we trust this data?

I wouldn't get out the party hats yet. Fewer foreclosure filings doesn't mean people aren't defaulting. It could mean the banks just aren't acting on the defaults.

Yep... hard to argue... and the bigger question when will people stop reading the headlines and start reading the body of the articles.

"That was the biggest year-over-year decline the company has ever recorded.

"We believe some of the servicers have slowed foreclosures as they wait to see how the settlement talks play out," said RealtyTrac spokesman Rick Sharga, who expects a huge spike in filings over the next few months.

Yet the months of foreclosure inventory keep rising....

My play on Japan was working fantastic until the earthquake. Basically, it was the Marc Faber position. The bond market in Japan will collapse under monetization/desperation to prop up the export market and there will be an outflow into equities. That was well underway and paying off. With the collapse in the Nikkei occurring right now, I think the probability of a bond market collapse has increased because they will need to fund even more public projects. Furthermore, I think the Tsunami's damage to the coastline will devastate the import market that Japan relies so heavily on. They will be forced to monetize, bonds will go down, equities, will go up for the simple reason that they are safer than the bonds. They certainly won't go up based on strength of the economy. I'm jumping in today or tomorrow.

So why are so many of the REO's sitting unsold? I guess banks have to clean up those first before they start filing more...until then happy squating to those deadbeats.

The properties they already have are not selling due to low demand. this is what I see through my business. we have had a few properties over a year now from FDIC through NRT.

Katy Perry says

The properties they already have are not selling due to low demand.

In other words, prices are too high.

gameisrigged says

I wouldn’t get out the party hats yet. Fewer foreclosure filings doesn’t mean people aren’t defaulting. It could mean the banks just aren’t acting on the defaults.

second that.

It’s obvious to almost everyone that SOME AREAS have bottomed. That’s not rocket science. Detroit? Parts of Florida, Arizona, Vegas - most of us are in agreement here.
jt, Just want to make sure we are all on the same page here. The February numbers from Clear Capital show a Detroit and Las Vegas still in free fall. Florida is showing traction in some markets, while others are slower to respond. Arizona may be showing signs of a seasonal uptick in the next month or two. Ohio is actually the state showing the best gains.

Foreclosures have actually increased over the last 6 months, not decreased:

http://www.doctorhousingbubble.com/bad-bank-model-bofa-7-charts-us-housing-market-option-arms-win-worst-performing-loan-7-million-distressed-loans/

"Judicial foreclosure states recorded the most severe drops in foreclosures," said Sharga.
Nothing like some procedural issues to help with extend and pretend.

it's actually the low end areas that haven't bottomed yet because there's too much inventory.

The market that I live in is pretty healthy. With most decent houses selling in less than 30 days that's not a recipe for further price declines.

I just noticed that 1128 Victory Lane appears to have been foreclosed for under $200k in December 2010. I'm not suggesting new lows, but it does seem like deals can still be had at the courthouse steps. Will be interesting to see if flipper margins are still there. Can anybody comment on the nineties downturn: do market dynamics at the bottom allow for both flippers and longer term (rental) investors? Or do flippers need to be driven out by low margins before we can turn the corner?

EBGuy says

I just noticed that 1128 Victory Lane appears to have been foreclosed for under $200k in December 2010. I’m not suggesting new lows, but it does seem like deals can still be had at the courthouse steps. Will be interesting to see if flipper margins are still there. Can anybody comment on the nineties downturn: do market dynamics at the bottom allow for both flippers and longer term (rental) investors? Or do flippers need to be driven out by low margins before we can turn the corner?

The investor dynamic in the mid 90's was different than the current investor dynamic.

In the mid 90's, the purchase model for an investor was positive cash flow only. No consideration was given to the idea of future price appreciation.

Currently there are several subsets of investors:

-The classic positive cash flow investor. I tend to think someone like the poster "robertarias". This I believe is the smallest investor subset at the moment.
-The guy trying to beat the stock market. This guy is bright enough to know that the stock market is in a huge bubble. But he is also dumb enough that he made future plans based on a certain return and now can't get that return in anything without risk. So he buys a property to rent out. Unfortunately this guy nearly always has a mindset of "ZOMG so cheap". If I rent it out at a 6% return, ZOMG I'm doing better than a CD.
-Conglomerates. I honestly don't know much about these. I'd imagine very very ripe for fraud.
-Foreign investors. These guys seem to be going bonkers for property in really depressed markets like Vegas and Phoenix. There are seminars in Australia, China, Japan, Canada, touting the RE in depressed areas of the US. Kinda like the Armando Montelongo things. Future price appreciation is almost always a huge component of the seminar.

Anyway, bottom line is that in the depressed areas, the classic positive cash flow investor is gonna do fine(provided government handouts/section 8 continues in current form). But the guys counting on future appreciation?.....what happens 4 years down the road if the stock market booms. And all these guys have their money tied up...after years of property taxes, paying to fix up the mess their tennants made...etc? Continued oversupply as they look to cut losses and bail.

You go look at any decent house in the san fernando valley and you will realize that most "good" homes all have multiple offers at this point. If you're FHA, slim chance of getting in because 20%down and cash rules. That's just the fact. Nobody is overpaying, or going over asking price, but buyers are there and are buying. Many people have realized that it is actually time to buy. Not in a panic way like "this month or never" but we have arrived at the point where you gotta step up if you want to buy and can afford it. If you cannot afford it then that's not enough reason for the market having to crash further - you just can't afford it and should spent less time on the forum predicting world apocalypse but work harder, save more money until you can afford a house that works for you.

We just found out that our new neighbors of the house we bought are tenants - slightly smaller house than the we bought and they pay $2800/month in rent...more then we pay to own - NO BRAINER.

Disclaimer: I don't know how houses in the 300k range are doing...I am talking San Fernando Valley, south of the Blvd or close to it, Encino, Tarzana, Woodland Hills, Sherman Oaks house prices range 480k-750k

SubOink says

Disclaimer: I don’t know how houses in the 300k range are doing

I do,. they are tanking and IMO so will the 500K-750K homes by 20 percent in less than 2 years. is renting really that bad of an idea? or is the greed keeping people awake at night. the Ego loves a deal I guess?

a fool and his money will soon be parted but at least the Va jay jay is happy! ;-)

Katy Perry says

SubOink says

Disclaimer: I don’t know how houses in the 300k range are doing

I do,. they are tanking and IMO so will the 500K-750K homes by 20 percent in less than 2 years. is renting really that bad of an idea? or is the greed keeping people awake at night. the Ego loves a deal I guess?
a fool and his money will soon be parted but at least the Va jay jay is happy!

You seem confident in your prediction. So prices will fall EXACTLY 20%. Ok. Uh huh. Are you SURE they won't fall 18%, or 17.4%? Or maybe just 10%? Do you have a crystal ball?

If you are so confident that prices will fall 20% - then put your money where your mouth is and short the appropriate stocks that would reflect such a drop. You can probably short the entire index because if prices were to fall 20%, then none of us will have a job anymore and things will be so bad that you will not buy a house even then. Be careful what you wish for. YOU won't make out any better in this than anybody else if such a scenario was to happen because that money you are putting in the bank right now will be WORTHLESS. At least I have a house, an asset with actual value because you have to live somewhere.

You beat me to it.

Gottfried is also famous for his "tasteless" jokes about 9/11 within days of that event. I personally think people are way too sensitive, but I can't blame Aflac for firing him.

SubOink says

You don’t need to prove anything was wrong because you obviously can’t.

No, that's only obvious to ducks and pigs like you. I already proved him wrong numerous times before, and, he never really answered most of my posts directly. Usually, he either weasels out of every situation or comes up with some BS data which is either out-of-date or just plain wrong. Here is another link where I proved him wrong, and he hasn't had the balls to answer me, either:

http://patrick.net/?p=528285#comment-723695

dodgerfanjohn says

Currently there are several subsets of investors:

You forgot the neutral cash flow investor like me. Let the tenants pay off the mortgage in 15 years then take all the rent minus upkeep. Take the depreciation allowance against my current high tax rate. I don't care if the house goes up or down since I won't be selling it. I just want future cash flow after retirement when I will be in a whole lot lower tax bracket.

dunnross says

No, that’s only obvious to ducks and pigs like you.

So now I am a pig. I guess it takes one to know one. Or maybe you are just an angry renter. I get it. I used to be an angry renter myself. Frustrated with the world. Looking at negative news with delight and ignoring any slight sign of positive news because it didn't fit into my angry renter world. Then it crashed, then I could afford it, then I bought. You should do the same.

dunnross says

Yes, but he cherry-picked the dates

He picked the peak price in CS and the most recent CS data available. That's the worst case scenario using CS numbers...

klarek, you have to admit you fit the angry renter stereotype to a T.

1) pissed off at homeowners...check
2) pissed off at anyone who has strategically defaulted...check
3) generally seem frustrated with the world...check
4) look at negative news with delight...check
5) ignoring any slight sign of positive news because it doesn't fit with your angry renter world view...check
6) try to convince others not to buy with the hope that it will help prices come down...check.

I'm not sure what other elements there are to an angry renter, but I'd bet you possess them too.

ch_tah says

klarek, you have to admit you fit the angry renter stereotype to a T.
1) pissed off at homeowners…check

2) pissed off at anyone who has strategically defaulted…check

3) generally seem frustrated with the world…check

4) look at negative news with delight…check

5) ignoring any slight sign of positive news because it doesn’t fit with your angry renter world view…check

6) try to convince others not to buy with the hope that it will help prices come down…check.
I’m not sure what other elements there are to an angry renter, but I’d bet you possess them too.

ch_tah says

klarek, you have to admit you fit the angry renter stereotype to a T.
1) pissed off at homeowners…check

2) pissed off at anyone who has strategically defaulted…check

3) generally seem frustrated with the world…check

4) look at negative news with delight…check

5) ignoring any slight sign of positive news because it doesn’t fit with your angry renter world view…check

6) try to convince others not to buy with the hope that it will help prices come down…check.
I’m not sure what other elements there are to an angry renter, but I’d bet you possess them too.

Same argument could be made for all you angry used-house-owner out there, as well:

1. pissed off at renters for not having their equity disappear overnight...check
2. pissed off at prudent savers for not buying and bidding up the price of their prized possessions...check
3. pissed off at fence-sitters for not jumping off their fences and propping up their open-bust of a housing market...check
4. look at even the tiniest spec of good news, no matter how ephemeral it is with their tongs hanging out...check.
5. try to convince others to buy no matter how ridiculously overpriced and not supported by any fundamentals.

Good old realtors pumping the news up the market to keep the balloon party going.

The way that article is written it is very biased toward a conclusion which is not necessarily supported by the data. But the word choices are very biased. I live in CA, still a bubble here and with budget problems this state has I'm expecting a lot more prices falling since government can't get their budgets balanced without increasing taxes.

Since when is RealtyTrac a 100% accurate source? They buy their data from other parties which is not guaranteed to be accurate representation.

After donating to red cross to help Japanese we are now thinking of investing into Japanese companies too.

We might invest into TM. Anyone has any specific recommendations on other companies out there? I think investing into companies that will handle buildings would be a wise choice at this point. TheOakMan any symbols you would recommend?

ch_tah says

klarek, you have to admit you fit the angry renter stereotype to a T.

Fitting the stereotype of the euphoric, status-upgraded debt-owner. You're no different than the fools who bought in 2005, patting themselves on their backs while speaking condescendingly to "bitter renters".

1) pissed off at homeowners…check

Nope.

2) pissed off at anyone who has strategically defaulted…check

I think they're deadbeats, but I'm not pissed at them until taxpayers have to foot the bill for their greed.

3) generally seem frustrated with the world…check

Wrong. Generalized statement is generalized. And dumb.

4) look at negative news with delight…check

A correcting bubble isn't negative, it's positive. Only delusional fools leaping into a bull trap would call that negative.

5) ignoring any slight sign of positive news because it doesn’t fit with your angry renter world view…check

I'm pretty patient. Positive news is fine if it's not the result of market manipulation. When retards fall for it and somebody points it out, the only rational way to ingest this is for said retards to assume that the realist hates good news.

6) try to convince others not to buy with the hope that it will help prices come down…check.

a) convince people not to buy an overpriced house to preserve future wealth
b) by convincing ten people to not buy now, I have forced prices downward

If you believe b) over a), then you're a certified fucking idiot.

I’m not sure what other elements there are to an angry renter, but I’d bet you possess them too.

I'll help you out: 7) not mathematically retarded

You can deny it all you want now, but your previous posts suggest otherwise. Actually, re-reading your post, you don't really deny the points except for #1.

ch_tah says

You can deny it all you want now, but your previous posts suggest otherwise. Actually, re-reading your post, you don’t really deny the points except for #1.

I figured a more thoughtful retort addressing each point would better explain how you're wrong than just a bland denial, but I have a tendency in life to overestimate an audience's intelligence. I should have known better and dumbed it down, considering you're using the tired "bitter renter" cliche. People like you lack any self-awareness.

klarek says

ch_tah says

You can deny it all you want now, but your previous posts suggest otherwise. Actually, re-reading your post, you don’t really deny the points except for #1.

I figured a more thoughtful retort addressing each point would better explain how you’re wrong than just a bland denial, but I have a tendency in life to overestimate an audience’s intelligence. I should have known better and dumbed it down, considering you’re using the tired “bitter renter” cliche. People like you lack any self-awareness.

You addressed each point, but didn't deny any except for #1. #2 taxpayers do foot the bill, so you are angry. #3 you just say is dumb, but it's probably true. #4 you spin it to be positive, but if you are rooting for our economy to go down, I would call that looking at negative news with delight. #5 you write off any positive news as manipulated, so you essentially ignore it all. #6 whenever someone asks about buying you say buying now would be stupid in hopes of convincing them not to buy.

In any event, no one said "bitter" renter. I said "angry" renter. If you had a nickel for every F-bomb you threw on this site, you'd be able to buy a very nice house right now, even at these "elevated" prices. As I said before, you fit the description of an angry renter well. Careful about getting angry about being called an angry renter, you might find yourself in a perpetual loop.

ch_tah says

You addressed each point, but didn’t deny any except for #1.

Your accusations about being frustrated with the world and with reality were ridiculous. Of course I deny them. Addressing them was an explanation WHY they were silly, not at all an admission that there's bitterness involved.

ch_tah says

#2 taxpayers do foot the bill, so you are angry.

Not necessarily. A lot of these loans to the banks were paid back, their lost capital will diminish their profits for years to come. I'm rather indifferent about this.

ch_tah says

#3 you just say is dumb, but it’s probably true

It was a really dumb remark, lacking context or a citation. I'm just living life like everybody else. The world treats me just fine.

ch_tah says

#4 you spin it to be positive, but if you are rooting for our economy to go down, I would call that looking at negative news with delight.

I want unemployment to decrease. I want real GDP amongst the middle class to rise. I want our country to not drown in debt. Rooting for undue increases in a bubbled real estate market is at best an obstacle to these goals and at worst an impediment. You just have an extremely simplistic view of what you believe "the economy" is, and where you expect it's measure of strength to be shown (in your supposed equity).

I believe houses for the most part are overpriced. You on the other hand made a snap decision to buy based on the so-sophisticated "I've waited too long" analysis, and are thus tying your expectations to a thoughtless purchase. Therefore based on my view, your decision, and your yardstick for economic improvement, you're pissed that housing prices are resuming their downward trajectory, which I told you they would. I don't take any delight in what was inevitable.

ch_tah says

#6 whenever someone asks about buying you say buying now would be stupid in hopes of convincing them not to buy.

I don't think I have said it like that, at least not since 2008. I say it's risky, that the market is a bull-trap, that prices have not bottomed at a fundamentally-supported level on their own, so there's no reason to believe they'll increase on their own. You dismiss these points, for whatever reason. Beyond the frustration of you not getting it, my only point would be to adequately warn somebody who has had sunshine blown up their ass by a realtor or other market cheerleader. I'd rather people not get screwed. Your implication that I'm trying to make prices fall is absolutely ridiculous and pathetic.

ch_tah says

If you had a nickel for every F-bomb you threw on this site, you’d be able to buy a very nice house right now, even at these “elevated” prices.

A nickel for every f-bomb, an f-bomb for every extremely asinine remark coming from folks such as yourself. I actually don't swear that often on these boards, once or twice here or there, but apparently it offends you. My bad.

ch_tah says

As I said before, you fit the description of an angry renter well. Careful about getting angry about being called an angry renter, you might find yourself in a perpetual loop.

Do you think that if I just bought without hesitation or thought I'll be swept away to the blissful world of equity, unicorns, and rainbows? Is that how it works?