patrick.net

Credit Crisis

You have got to love the way Rick Santelli tells it in the face.

Who is this realtor supplying misinformation? When you provide statistics, a name should be attached to it if you want to have any type of credibility.

If you think the data are not credible you are welcomed to go somewhere else.

Really Donald, do you even really know what kind a place Modesto is?? $600K homes is totaly unjustifed. I see these shills have no math skills at all. Just give me all the money... Donald,you are one sick puppy. One day they will lock you up!

Most well noted residence of Alpine, NJ.... Ah the real world as the MTV generation would like to be...

Damon Dash, hip-hop entrepreneur.[13]
Chingy, rap artist
Patrick Ewing, former center for the New York Knicks.[13]
Fabolous, rap artist.[13]
Andre Harrell, founder of Uptown Records.[13]
Jay-Z, rap artist.[14]
Lil' Kim, rap artist, who rapped about her new hometown in her song Aunt Dot ("Come on Shanice, I'm takin' you to my house in Alpine")[15]
P. Diddy, rap artist.[15]
Chris Rock, comedian, movie star.[13]
Dr. Joseph Dello Russo, LASIK pioneer
Gary Sheffield, baseball player.[13]
Russell Simmons, hip-hop entrepreneur.[14]
Wesley Snipes, actor.[13]
Brian "Baby" Williams of the Cash Money Millionaires
Stevie Wonder, musician.[16]
Barry Weiss, President of Jive Records

BAHAHAHAHAHAH!! Is this it ... your working class folks who make it all happen! Any dog fights coming up this weekend?

> I was wondering how the official statistics can be so wrong compared to numbers from someone on the front lines.

Could it be the normal delay in the data getting into the statistics, from negotiating, pending, closing to making the statistics? In July and August, the lending market deteriorated markedly, as your realtor also noted for negotiations, but many statistics now published have only numbers until June. If that hypothesis is right, we would see the "bad" numbers in November.

> We talked about the large number of “short sales”, where the property is for sale for less than the amount owed to the bank. The problem with those is the need to deal with the banks, which are infuriatingly slow and bureaucratic.

The banks now are probably not staffed right: too many people in lending, too few in the REO department who should have better inside if a short sale is honest or deceptive. Additionally, as a bank I would not hurry to write down the bad debt, which I would have to do after a short sale, - only if the regulators are pressing me.

> In (...) Alpine, the median income is $135,000, while the median home price is just under $1.8 million, according to Forbes. I am sorry, but how can someone making the median income buy a house for the median price? People are doing it everyday…

People did it everyday, because they counted on appreciation to make good in what they lacked in income. Now, on the other hand, appreciation is gone and they (and their lenders) have to face that most houses are too expensive for their income.

Donald denying the crash wont help it. That's soooo 2006.

http://flippersintrouble.blogspot.com/

Sacramento is a similar area to modesto, probably has a LOT more employment though so modesto prices should crash more IMO.

The guy at the FIT blog is VERY kind with his loss calculation, those homes are still not sold and the loss must invariably be much much higher if it ever sells since the price will be lower+closing costs are huge.

Anyway central valley in CA is having a massive crash, no denying that.

Anyway central valley in CA is having a massive crash, no denying that.

I doubt the illegals can get 107% mortgages anymore. Ha Ha.

Donald,

Alpine is a commuter town to NYC that has a lot of extremely affluent retired people with earned incomes of $0 in it. Alpine has always been affluent, and has a lot of older people earning relatively small amounts of money living in expensive houses that they bought in the 1950s. There are also a lot of financial guys who live in Alpine pulling in seven and eight figures, but they are outnumbered by people who have been there for a few years.

Modesto is a farming town. There are a very few very land rich and extremely rich families (i.e. the largest wine producing company on earth), and a lot of lower middle class and agricultural workers. CNNMoney gave Modesto a FAMILY income of under $53,000 last year. That's not per person, that's per family. The real estate market there is simply not able to sustain the prices that were common in 2005/2006.

Salaries have risen a lot in the last 7 years.

A lot of times, the relationship of median salaries to home prices is irrelevant.

Go away for a few days and look what happens.

Who is this fucking troll "Donald" --another pseudonym for TOS/Original Bankster"?-- and why isn't s/he on the ban list?

Sorry for posting this in two threads, but I didn't realize we'd started a new one, and it's too funny not to share :

http://tinyurl.com/yr7w92

20 year old MB crying because he's not making 100k a year anymore!

Hello Kitty,

Haven't you heard? There's going to be a massive and across the board bailout that assures prices won't go down one bit further!

Yeah, uh flippersintrouble guy has got it down. More than just hard data he really helped people see that you don't have to be on television and covered in molding adhesive to be a "flipper". Modesto is toast.

Troll banned, case closed.

Randy and other quality posters driven off by shit-spewing trolls are now welcome to return.

I had a boyfriend from Saddle River. Another affluent commuter town to NYC. Tiny affluent commuter towns aren't really a great comparison to Modesto. I would say that Belvedere would be the Bay Area equivalent to Alpine or Saddle River.

I thought Tenafly was Alpine's sister town. I'm pretty sure you go to Tenafly High School if you live in Alpine.

There's at least one foreclosure coming in Belvedere.

"You have got to love the way Rick Santelli tells it in the face."

Here's one with Rick and some other guy pounding on Cramer. Love it.

http://www.cnbc.com/id/15840232?video=499888906&play=1

Sorry, it's a long clip. Cramer jumps on at the middle.

I bet you also had a sizeable downpayment and little or no other debt, ptiemann.

In a housing market that appreciates at about the rate of inflation, and has for awhile, sticking 20% down should insulate the lender from foreclosure costs. The banks have just been assuming that 20% appreciation would continue, and substituted it for an actual down payment.

I would not be surprised to see down payment requirements hit 25-35%, depending on how severe the price depreciation is in an area. 20% down PLUS expected depreciation. In florida, that'd be huge!

Patrick, I think that’s a bit too conservative. Care to elaborate where you got that from?

Peter, that is not conservative. That is apparently a requirement for jumbo loans nowadays.

Conservative will be a factor of 0 to 1.

So anyone who disagress that prices are going to drastically go down is a "troll?" Nice communist site you have here. Good job listening to both sides of the issue.

ptiemann,

I heard an interesting report on NPR about household incomes having gone up since 2000. Basically they have, but only because more people per household are working more jobs and more hours. The inflation adjusted hourly wage for most people went down, however.

I think that families are now taking the approach toward expenses that I had in college. Need more money for books or want to go someplace nice for spring break? Get another job, add a few shifts waitressing. Having lots of crap jobs was a temporary way of life to get through college. For increasing numbers of people in the US it's now life.

Freedom,

The Patriot Act allows for that. It's ALL AMERICAN now, baby!

Freedom,

I do believe that what I saw people responding to was the suggestion that prices couldn't go down in Modesto, then using the patently false example of the median income/house price in Alpine NJ as the statistic to back up the point of view. I thought it was a ridiculous analogy to make.

Are communists necessarily fascists?

SFWoman,

You mean that's wrong? Is that why my article on the healing powers of crystals keeps getting rejected from Science and other scientific journals?

“The history of all hitherto existing society is the history of class struggles.”

— The Communist Manifesto, Chapter 1

So anyone who disagress that prices are going to drastically go down is a “troll?”

No, but anyone who continues to re-post the same baseless, patently false "data" to steer clientele to one's own failing real estate business is certainly 'fair game' for deletion.

Nice communist site you have here. Good job listening to both sides of the issue.

We have had many contrarian, thinking posters here and will continue to long after you and your kind are history. Oh, and fyi: reserving the right to moderate a privately run paid-for site is called "free enterprise".

Its so rare they ban trolls here. Maybe two that I recall ever.

Trying posting actual facts about crashes on any of 10,000 realtor run blogs and see how fast the comments never show up.

Why do trolls Hate our "Freedom" to ban trolls?

You mean that’s wrong? Is that why my article on the healing powers of crystals keeps getting rejected from Science and other scientific journals?

You write that kind of articles? We need to talk! :)

The Capricorn Age 2008 - 2023 will ensure that only the banks get bailed out.

Donald -
Being a RAP star or B-ball player isnt a real job... If you want to show somehow NJ is full of rich millionairs and isnt prone to downturns go right ahead!!! but guess again NJ has the worst recessions on the East Coast. Plenty before you made that mistake.

Trying posting actual facts about crashes on any of 10,000 realtor run blogs and see how fast the comments never show up.

No kidding. I've had so many posts (polite, profanity-free and data-driven I might add) deleted from Realwhore/perma-bull sites, I gave up months ago.

Found another classic video (1987 crash)-

http://www.youtube.com/watch?v=gad1fjKbY9U

Is it true little Donald has been banned? Gee, I'm going to miss punting around that intellectual nitwit.

BTW, Mr. Freedom, if you care to present reasonable arguments about why housing prices will not fall, and/or why housing prices are NOT overvalued, feel free to do so.

Donald exhibited textbook troll behavior: (1) Present a shoddy, yet "controversial" argument to stir things up (I wouldn't even call his posts arguments, more like insipid taunts), (2) When faced with a rebuttal, change the subject (3) Repeat again as needed.

The problem with Donald goes beyond trolling. He's too dumb to be a good troll. That "Ivy League" edumication didn't do him no good.

Yes the psychology has shifted. There were a few mortgage/real estate crash stories on CNN recently where they enabled comments and the bears and bubblehead comments outnumbered the realtorspeak comments by 9 to 1.

This 'bubble head' meme has long legs.

A person could write a book about the rise of the bubble blogs out of no where and graph the number of bubble blogs to the phases of the RE bubble. Possibly as these blogs die off in number this will indicate when RE will become a wise investment again.

I cant imagine what next category of blog will become wildly popular out of nowhere. Probably we will see A LOT more 'I'm broke/bankrupt/foreclosure/looking for work/career change' blogs. I'm not interested in those except where if they are entertaining which is probably rare.

No kidding. I’ve had so many posts (polite, profanity-free and data-driven I might add) deleted from Realwhore/perma-bull sites, I gave up months ago.

Yeah, I know what you mean. I joined city-data dot com, created a new thread because there wasn't ONE SINGLE THREAD that showed anything negative abount the market even though it is quite obvious that the market is deteriorating right now! I got banned the day I signed up because they didn't like my handle that I was using "LongIslandBubble" and they didn't like the real data I was posting; they deleted most of the images that I put up because they PROVE that they market is crashing; but that's ok, because the thread still lives on and is being invaded by some of my readers.

I'm not gone, just going to take a short break while I monologue on my own blog. I'm in a foul mood, with all this bailout whining and pandering by our unleaders and infotainment media.

I'm just really sick of it all.

I feel like everyone is running around concocting elaborate schemes to "solve the problem", when all that's needed is so simple it's stupid: lower your fucking price.

In case any perspective sellers in Marin are reading, here's a clue: I could maybe afford to get financing to buy your $2.5mm house. I easily could get financing to buy your neighbor's $2.0mm house. But I won't. Because your house ain't worth $2.0mm. Be thankful if it's worth $1.3mm by the end of all this, which is ironically what all you choad hordlers paid in 2004. See, the people left who can afford to buy are strongly correlated with being smart enough with their money to know when to buy and how much to pay. Here's to wishing you pleasant dreams -- of the NOD that's on its way to your mailbox.

Amen Randy.

You've got a nice post over on your blog that fleshes this idea out a bit more.

Honestly though, in a Machievellian way, how can you blame the "Masters of the Universe" on Wall Street for pushing for a bailout, er, handout? If they get their heart's desire, they did a good job looking out for themselves. The group to be angry about are the enablers at the Fed and in the government. They suck. I'm sure Bendover Ben is squirming right now. He knows that a cut in interest rates during the next few meetings will erode what credibility the Fed built back up after Greenspan. But he's been painted into a corner. He appears not to have the cajones that Volcker did to essentially precipitate a recession to help the economy in the long run.

The irony, as you've pointed out, is that no degree of bailout short of de facto nationalizing housing through a MASSIVE bailout is going to be enough to stop this trainwreck. There simply aren't enough GFs left.

In theory if 70% of population are homeowners then they could get all kinds of bailouts passed if they were organized like the AARP. All they seem to have are the NAR/NAHB and the mortgage banking lobbies who want higer prices/eazy credit .

The NAR and friends might be among the most successful lobbies ever looking back at the bubble and all the housing tax perks.....other than Halliburton who have the actual current VP of the US on thier salary(deferred compensation my ass).

Now that the markets appear quasi-stable, if not frankly back on an upswing, it will be interesting to see how the Fed will be able to pull off a rate cut of ANY kind this month in the face of all this benign data. Sure, they can claim "leading indicators" show signs of a downside risk, but who the hell will really believe them? Everyone will know they will just be bailing out Wall Street.

And on the subprime bailout side of things, I will predict that once whatever cockamainie legislations gets passed eventually, a few months after that, we will start seeing MSM stories about how the bailout didn't end up helping anyone at all. This will be just in time for the presidential elections. Once the elections are over and all the empty promises have been made, bailout talk will subside and it will be back to business as usual - bubble up, bubble down. Repeat.

>> A person could write a book about the rise of the bubble blogs out of no where and graph the number of bubble blogs to the phases of the RE bubble.

That "person" sure as hell better not be David Lereah.