patrick.net

bruceb,

I was going to take the cash for the fruit, break it up into billions of subatomic particles and send it over the cable lines to pay for the fruit, but it seemed like soooo much work so I just used the credit card.

Seriously, is there another way to pay for things online than with a credit card?

I also don't understand why Google was worth so much money. It's a really nice search engine, but 99.9% of the times I use the internet it isn't to purchase something, and usually when I do I just pop over to Amazon or Edmund Scientific (great for children's birthday gifts if you are ever stuck). I also don't see the barriers to entry in the search engine field as being all that high. The next young genius with a killer algorithm could steal away their business.

Dare I say, dare I say

BLOG PARTY!!!!!

SFWoman Says:

> I then realized that real estate had become a religion,
> something that people worshipped and had faith, even
> with evidence to the contrary

Throughout history people have had a need to believe in something. Here in the Bay Area there is a huge drop in people who believe in “traditional” religions and a huge increase in people who worship Real Estate and the Environment.

If I announced at a party in SF that I thought the Bible or Book of Mormon was a fairy tale most people would probably agree with me, but if I announced that Real Estate was overvalued and SUVs were not causing irreparable harm to the environment I would be in trouble…

P.S. Did anyone read about the execution style shooting at the Oakland Church this weekend?

Reading between the lines I think we had a “flipper in trouble” The first line of the article said: “A successful businesswoman shot to death outside an East Oakland church had offered her estranged husband three of their jointly-owned six homes to settle a bitter divorce, but he angrily refused and killed her, according to her family and police. “

She was so “successful” in real estate that she still worked as “an administrator for California State Automobile Association”

Sounds to me like we might have found the African American “Casey Serin” who tried to flip her way to riches while in a bad marriage to a conflicted killer who didn’t work much…

99.9% of Google Revenue is advertising.
Advertising dollar that would have gone to newpapers.
That is why newspapers are folding or being sold.

I worked at Yahoo for 18 months.. and hated it.

FYI when advertising dollar dives like it did in 2000
then expect Goog earnings to pop as did Yahoo.
Yahoo laid off 25% of its workforce that year.

Pray to St Jude, the patron saint of hopeless cases.

No panic, yet
March 13: Subprime concerns have investors backing off, but not panicking, Robert Heller, managing director of Chapdelaine Brokerage, tells CNBC's Erin Burnett.

ahahahahahah

I repeat ahahahahah

and no, that's not 2.4 million

ahahahahahahha

What does everyone think about the Alt-A's, will no doc loans be yanked?

Space Age,

I understand about the advertising. But I'm skeptical that the advertisers are getting a good value proposition. Marketing places especially in the bicoastal organizations seem to be dominated by the beautiful people from good universities, their limited perspective blinding them of the big picture.

That's probably why the rise of WalMart caught them off guard.

Sybrib-
Yes, it funny how one goes to Walmart in Mt View and see plenty of Benz and BMWs.

ALT A have been yanked. Its pretty much over.

ALT A have been yanked. Its pretty much over.

Alt-A is a loose definition. So not sure what do you mean when you say it's yanked. But I agree with your sentiment. If income documentation and down payments become mandatory, it is pretty much over.

Is it time to start petitions AGAINST a bailout?

Seriously.

Anybody who votes on the floor to give a thin dime to FBs will not get my vote come the next reelection.

Is it time to start petitions AGAINST a bailout?

LOL!!! :lol:

Like anyone cares.

I dunno... there are more NFBs than FBs around. Renters... 26 million who own their homes outright...

Isn't any Jumbo an "Alt-A"? I would be suprised to find that lenders are no longer giving out jumbo loans of any kind.

Jimbo,
That would CERTAINLY spell doom for the SFBayArea.

it's showtime:

Market hit by US home loan crisis

The US Mortgage Bankers Association reported the proportion of mortgages in the initial stages of foreclosure rose to the highest rate on record, while the chief executive of the largest US home lender said the subprime mortgage industry is now in a 'liquidity crisis.' The subprime sector caters to borrowers with weak credit.

An unexpected drop in retail sales for February added to concerns.

'Just when you thought it was safe to go back to the stock market, a new panic has taken hold. This time it was the report by the Mortgage Bankers Association,' said Phil Flynn, vice president and senior market analyst at Alaron Trading in Chicago.

Shares of financial services companies with exposure to the mortgage market were among the biggest decliners. Citigroup Inc. was the biggest drag on the S&P 500, followed by JPMorgan Chase & Co. and Bank of America Corp., while JPMorgan was the Dow's biggest decliner.

Investors worry that fallout from rising loan defaults in the subprime market could hurt consumer spending as lenders tighten credit amid the housing slowdown. The subprime mortgage market caters to borrowers with weak credit.

In an interview with CNBC television, Countrywide Financial Corp. Chief Executive Angelo Mozilo said the US mortgage sector is entering a "liquidity crisis," but that investors and speculators are overreacting by punishing healthier lenders as well as marginal ones.

"This is now becoming a liquidity crisis," and "it's going to get uglier," Mozilo said in an interview with CNBC television.

I need to be fully awake to make sure I describe it using only publicly available info.

ooh... do they have alien technology too?

I also don’t understand why Google was worth so much money. It’s a really nice search engine, but 99.9% of the times I use the internet it isn’t to purchase something, and usually when I do I just pop over to Amazon or Edmund Scientific

I think that might have been what caused the tech wreck... something about zero revenues, fast burn rates and 500:1 P/E ratios...

I also don’t see the barriers to entry in the search engine field as being all that high. The next young genius with a killer algorithm could steal away their business.

Maybe the next genius who can stop credit card fraud at small stores by using a universal intermediary service! I'm on it now...

CR has posted a chart of prime ARM foreclosures by region.

http://calculatedrisk.blogspot.com/index.html

Is it time to start petitions AGAINST a bailout?

Anybody who votes on the floor to give a thin dime to FBs will not get my vote come the next reelection.

You can start with these guys, they have been fighting government waste for years!

In fact, it looks like they are well aware of it.

SP,

Sometime I would love to have that explained to me! I have never understood it.

I mentioned the subprime meltdown to my husband last night and said I saw the Countrywide guy on TV. My husband said 'Angelo?' I said I thought so. My husband said that he sees him at meetings a couple of times a year, that he's polite and nice, a very straight talker, no b.s. from the guy. If he disagrees with someone he comes right out and says so and what you see is what you get with the guy.

Check this out, here is a real life example of lending standards getting tightened.

i did not know that mid-way through the process, the lender had the right to change what kind of financing they were going to offer!!!!!!!!

this throws a BIG monkey wrench into our ability to buy our house!!!!!!!!!!!

Seems they don't even understand why....typical FB! :lol:

SFWoman,

Oh, I wouldn't doubt your husband's assessment of Angelo. These "big picture" guys can afford to be gracious. They have plenty of little people sweating the small stuff AND a "hit the numbers" sales force that allow them to sell 140 mil. of their own stock. A lot of these guys are "real nice" (when you don't work for them!) :)

Malcom,

I agree, the bubble popped in late 2004 to mid 2005. Absotively... posolutely! True, depending on your definition (and locale) it may have worked out a little differently but outside of a few rare instances everything purchased after that is really on the fence.

So many people were so confident that everything would do well all they focused on was "locking in the BEST possible rate". (Yeah, the guy's a 100K underwater) but check out that great rate of his!

?

Bail-out... + ... billions... = ... BUY!

Here's an idea. I like the idea of a petition, but they are very hard to circulate. Maybe Patrick can help. We can have a contest to design a standard postcard or individual petition form. Maybe they can be posted somewhere online, maybe here, and we can vote on the best one. Then we set it up as a downloaded/printable document. People can then just put their name and address on it, and mail it in to Congress. The address can be preprinted as part of the form, or we can get really creative, and link the correct representative office to that field on the form by having the person enter their zipcode. If that is too much work we just direct them to the easiest place to find the proper address to send it in.

The form would have a simple message like, 'as a citizen of the United States, I wish to petition my representatives to restrain themselves on legislation to use taxpayer money to bail out borrowers who default on their home loans."

Then a place to sign date, a print name and address.

Then we email everyone we know to download the form and mail it in. We have a large enough community here that we could get critical mass pretty easily.

The question is can congress craft a bail-out package in time for the big spring bounce?

I'm buying in anticipation 'cause once they get that baby passed all hell is gonna break loose! FB's flush with freshly minted post bubble bail-out bucks are going to want to trade up creating bidding wars!

The gub'ment will likely use the Zillow "make me move" pricing model and wire the cash directly to FB's account! Man... you guys are such a bunch of suckers! :)

You're ABSOLUTELY right!

With a tax payer funded bail-out shoring up a ridiculously overpriced market we'll only get this one shot! Man, you called this right on the money!

PAR,

You asked a while back about when the Chronicle will post a FB sob story? Well, at least for now here's one from CNN:

http://money.cnn.com/2007/03/14/magazines/fortune/sanon.fortune/index.htm?postversion=2007031410

$1,300...$2,000...there goes your mortgage

When they bought their home in 2004, the Sanons had a feeling they were gettting in over their heads - they were right.

And of course, the Merc has to soothe its readership with this:

http://www.mercurynews.com/ci_5432047

Valley may be insulated from mortgage morass
By Sue McAllister
Mercury News
Article Launched: 03/14/2007 01:39:22 AM PDT

More people nationwide are falling behind on their mortgage payments, especially those with poor credit ratings who bought their homes using subprime loans, and it's reverberating throughout the U.S. economy.
Local economists, however, say the fallout for the Bay Area housing market won't be severe.

Their main argument against a severe effect of the subprime meltdown on the Bay Area is that there are fewer subprimes loans here. Too bad they fail to realize the subprime segment is really just the tip of the iceberg, the canary in the coal mine, or whatever metaphor you choose. Let's see what happens as the Alt-A's and all the rest of the "exotic" loans continue to reset...

I guess the Merc hasn't seen the Map of Misery.

http://biz.yahoo.com/weekend/mortgagepain_3.html

But no worries, "it's different here"...

skibum,

I've never worked in underwriting but I fail to see a great deal of difference between sub and Alt? One discloses the fact that he/she/they have poor credit and the other simply skips over that part of the application.

Local economists, however, say the fallout for the Bay Area housing market won’t be severe.

Hmm...what about those mortgage resets due this year? I'm sure a few local buyers used those. I seem to recall something like 50% of recent SFBay morts were in that category. Does anyone have the actual stats?

Regarding the rise in foreclosures, Santa Clara county isn't immune, if these stats are any indication: http://tinyurl.com/29b9nz

Source: foreclosures.com, which noted: "More than 25,000 homes were in various stages of foreclosure last month, compared to 8,753 in January 2006. The statistics include notices of default, auctions, and homes repossessed by the lender."

The credit bubble is unfolding every day. It is getting more interesting than the housing bubble.

Perhaps 30YR bond is not that bad?

Not investment advice.

lunarpark,
Of course! Based on their past performance, do you really think the Merc is going to play the bear on this one? Just yesterday their "article" about all the subprime fallout in progress was quoting some Fed guy who thinks this all won't turn out as bad as everyone thinks:

http://www.mercurynews.com/realestate/ci_5424134
"Mortgage Morass Called 'Manageable'"

They had the gall to print this in the midst of overwhelmingly bad news all around. Figures.

I was reading one of Patricks articles and someone commented with this:

Good ol Greenspan caused this entire slump. Why doesn't anyone realize that it is Alan Greenspan that screwed 25% of American mortgage and credit card holders. He raised the prime rate 18 times and increased my mortgage and credit card payments accordingly. This increased my own mortgage payment from 740.00 to 1600.00 in a year and a half. Now I am nearing bankruptcy and honestly don't care anymore. I have been just barely holding it together for nearly a year now and because of the realestate slump my house lost 35,000 in value and now i am upside down on the house and cannot refinance into a fixed mortgage. I have been in finance for 20 yrs and have never seen a nightmare like this. An easy solution reduce the prime rate back down to a reasonable level. So those of us who have adjustable mortgages can actually keep our homes and not destroy the market even more with 1000's of foreclosures.

Dominic M. Mac

This FB is in finance for 20 years and goes ahead with an exotic loan? What are they teaching in school these days? What ever happened to common sense?

@Lunarpark-
Great map. Businessweek published that in Sept. '06, so it's hardly a secret to a good reporter. Someone should email that map to Sue McAllister.

It bears noticing that many "prime" spots such as the Bay Area, OC, Santa Barbara, SD have a high incidence of bad morts. So much for the illusion that "wealth" ensures security. Personally, I suspect buyers expose themselves to more risk simply to live in more prestigious areas. When looking at stats, I've noticed more "prime" towns such as Los Gatos, Palo Alto, Sausalito, etc. have higher incidence of foreclosure than more modest neighborhoods. I haven't checked recently, but perhaps it still bears true.

SP,
If you can find that dotcom article, it would be funny to reprint it and substitute "Median Home Price" for "NASDAQ index," "Realtor (tm)" for "Internet Startup," "FB" for "Day Trader" and "Cupertino Schools" for "Web Advertising." I'm sure the article would be fit to be printed right away!

Just saw this on bloomberg http://www.bloomberg.com/apps/news?pid=20601087&sid=a1x64z58hsB4&refer=home

My worst fears are coming true.