patrick.net

Leading Indicators Forecast Housing Crash

A key gauge of future economic activity fell unexpectedly for the fourth time this year amid signs of a slowing housing market, according to a report released by a private research group Thursday.

The so-called U.S. index of Leading Indicators declined 0.1 percent in July to 138.1 after inching up 0.1 percent a month earlier, according to the New York-based Conference Board. Wall Street economists in a Reuters survey were expecting the index to advance by a modest 0.1 percent.

"The economy is cooling but it isn't likely to stall out," said the firm's labor economist Ken Goldstein. "The cooling off in the housing market has been more pronounced, however, and is one factor in the softer domestic pace of economic activity.

"Meanwhile, the coincident index - a measure of current economic activity -rose 0.2 percent last month, building on a 0.2 percent gain a month earlier. So far this year, this index has logged monthly gains.

The leading index measures a basket of economic indicators ranging from unemployment benefit claims to building permits and is intended to forecast economic trends up to six months ahead.

According to the Conference Board, half of the ten indicators that make up the leading index increased in July, but it was mainly a decline in building permits and a steady number of weekly claims for jobless benefits that drove down the index.

SQT,

I closed that thread and deleted his messages. One way to handle limiting Trolls is to edit your original post after it's gone quiet and unclick the "Allow Comments" box.

A good indicator is to wait until after weekend readers have had their chance to comment. Often DS and Bap33 will be some of the last to comment ;)

Glen,

Your commentary on deficiency judgments is interesting. While CA law allows deficiency judgments in certain circumstances, I expect that the terms of the loan contract must provide for a deficiency judgment in order for the lender to pursue such recourse. Most states do allow for deficiency judgments, and my loans on properties outside CA have all included a provision explicitly stating that the lender has this right. None of the loans on my CA properties have ever had any such reference. Therefore I assume that the lender has no such right under the contract terms of these loans. This is an academic point for me, as my LTVs are mostly under 25% of value now. However, I wonder if lenders are placing the needed contractual wording in their loan documents to allow them to seek a deficiency judgment, and whether it is even worth the bother for them (prolonged process of foreclosure if a deficiency is enabled). It seems that for most borrowers there are no other assets of consequence to pursue – so the legal right to seek a deficiency judgment would be a moot point, and the lenders would be better served to just take the write-off and move on.

What do you see? Is this evolving?

This week's Barron's has an article titled "The No-Money-Down Disaster" that pretty much parallels what people have been predicting on this blog for years.

I cannot find an online copy, not being a subscriber, or I would excerpt portions. If anyone has a subscription, they should review it here. I think you would all be pleased.

It is in the "Other Voices" section, so doesn't count as an endorsement by a major financial publisher, but the fear is there, or they wouldn't run it.

Barron's website is down for now, I will post some excerpts when it is back up.

New thread: I may buy a condo, finally

If, like Japan, we fail to act, the coming decade could be very bleak indeed.

Prop 1300: Save Homeownership Act
To sustain the American Dream and save the children, the State of California will guarantee that those who buy homes will be able to sell them at a minimum of the original purchase price. Funding for this act will come from converting most public schools to fireworks factories, and to charge all new residents to this state a naturalization fee of 25% of their net worth.

When I was a teenager, I thought tire spikes on all the roads crossing the state line might help slow the population influx. The Population of CA has almost doubled since then.

It would really be a shame to close out this thread with fewer than

100 posts.