patrick.net

By UFO, do you mean Unleveraged Financial Openess?

I have a buddy in El Mirage. I'll give him a call and see what's up. He lives in that very neighborhood on DinOr's link. He said it was bad, but I had no idea.

sfbubblebuyer Says:
November 7th, 2007 at 5:09 pm
"Peter P,
Start off by being a hack sci-fi writer."

Aren't they on strike?

The horror show of the MEW mess has some coverage in the NYT:

http://www.nytimes.com/2007/11/08/business/08borrow.html?pagewanted=1&_r=1&hp&adxnnlx=1194499379-3dZS2rVE2YZe/n2Ylc/RAg

Nothing much new to us, but they have a nifty chart tracking MEW state by state. It's ugly.

EBGuy Says:

> Do you think there are a lot of “old school” TICs out
> there sharing a mortgage? I would imagine most
> people these days have the new fangled “fractionalized
> TIC loans”.

About 90% of the TICs in San Francisco are sharing a mortgage (and praying that they will be one of the few lucky ones allowed to go condo each year).

If the value of a TIC drops and one of the investors walks away the others have to either take over his payments while they sell his unit at a loss or all walk away ruining all their credit.

Even with the new individual TIC loans you mar still be on the hook for maintenance and taxes if your fellow TICs don’t pay…

GallopingCheetah Says:

> Was in Vancouver this weekend, chasing skirts.
> Canadian girls are fitter (though not as pretty).

Fitter and not as pretty as… Seattle girls?

Almost anyone is fitter than Portland girls who seem to on average weigh about the same as a typically NCAA linebacker (who are on average about a foot taller)…

'fit' means 'pretty' in UK ;)

A 'board-certified psychiatrist' should already be making good money, as they are a qualifed doctor already. Psychiatry is a specia1isation following from completing a medical degree.

Speaking about having more stuff than people, the Treasury here just 'discovered' they suddenly have a $109 billion surplus, derived in large part from mining revenues to the govt, to do with iron ore and China mostly, I suspect. This estimate is up from the previous mere $17 bn surplus supposed to be in the coffers. This is about $5,000 for every citizen in the country, or $10,000 for every taxpayer. Unemployment is also low, causing less strain on the govt budget.

The first thing both parties did was offer tax cuts to the tune of $30 bn+ over the next couple of years due to an impending election.

However, the predictable flow-on effects of such a handout are a major spending spree followed by the Reserve pushing interest rates up even higher, so your tax cut would quickly be absorbed if you were a mortgagor.

"Almost anyone is fitter than Portland girls"

Amen to that brother. Yet I'm not sure the "linebacker" analogy holds? I've went up against a few of these guys on the field and trust me they're all muscle. After years of working downtown I'd say they're more... lumpy? In any event PDX is the only place I know where girls get on meth and actually GAIN weight!

Art auctions are falling short. What is going on? People can’t afford 30 Million for a piece of... never mind.

Big Ben
http://www.msnbc.msn.com/id/21688234/

To me, Schumer kinda stole this article. I am not sure if this is bad or incomplete reporting or if Schumer is an idiot. In an article in which the general rule of monetary policy was stated as "lower rates when in recession" and "raise rates if there is inflation", Schumer is quoted as saying, "I think a recession is likely."

Um, yikes. I hope this does not mean that the chairmen of the joint economic committee is advocating for more rate cuts. I mean sheesh, the dollar is already tanking. Can you imagine the effect of more rate cuts? The simple truth is that we have seen this before. We are *in* a reincarnation of Carter's stagflation and the remedy is the same. We are just going to have to raise rates, possibly (and probably) ridiculously so. World economic output will go down (Global recession) and the best we here can hope for is to minimize our losses as there is just no way to 'short the world.' In fact, watching the gyrations of the hedging models would be hilarious if I could only divorce myself from the reality that a lot of people are losing a ton of money.
Where to park money? Health. Swiss franc. Companies that will get governemnt contracts when massive US infrastrucutre spending is announced. Ah, the good old FDR days.
By the way, war spending is off the table as we simply do not have the military size needed to go into Iran. So the cynics who say "war your way out of recession" will have to wait a few years at the very least.

LOL yeah "fit" means well, physically fit, in the UK.

American girls are judged like prize hogs, by the lb.

Big'n'lumpy is how I like my oatmeal but unfortunately it's a good way to describe Pacific Northwest Amurrikun gurls.

By the way, stay away from real-estate for a while. Until the regulation dust settles and some very probable tax code changes are made there is just no way to correctly price this asset class. Or rather, be sure to price in something like (2-3 years from now):

1. 35% price reduction (given fewer buyers with 20% down, 35% gross pay, new appraisal methods, and credit wirthiness mandated by new FICO model.
2. 10% for 30 year fixed loans and 2 points
3. Maximum mortgage interest rate deduction limited to something like $250k
4. Modification of 500K capital gains deduction

I would say that the NAR and the Financials lobbies are going to be pretty impotent for a while as this mess will be laid at their feet.

Ben to market :

"Please don't ask for any more rate cuts. Please, please, please. I know you don't like inflation. But not liking it doesn't mean it won't come. No, no, please don't get me wrong. I love you. Really. And I will give you a rate cut if you really really want. But please think if you really need it. And please don't cry, I will be always there for you. I will do whatever it takes to make you happy".

"by the lb."

(Don't get me wrong, there's plenty of guys up here that could stand to lose a few lbs. too)

All I ever hear about is how everyone's into kayaking etc. but evidently that must come right after they finish their next micro-brew? At least I'm honest about it. I'm a.... pool hall guy.

"and some very probable tax code changes"

Really? How 'bout that!

Congress overrides Bush's attempt of fiscal responsibility:

http://www.reuters.com/article/bondsNews/idUSN0823679120071108

Duke (1,2,3,4, above),
I think it will take at least those numbers to beat the systemic malfeasance into submission. I think that people will eventually have to meet those standards, or something close to them, in order to bring credibility back to that market. I am still in awe of how things got so far out of control.
Bald greed, ain't it a humdinger.

"systemic malfeasance"

Ouch!

I'd heard they have already changed the FICO model? No more "piggy backin'" on accts! Hey, it's a step. Since I don't see much of anyone w/ 5% (let alone 25%) down we can safely dismiss that one. On #4 I've never said we should totally do away with the exemption altogether so I'd be open to moving it out to 8-10 years if it means bringing sanity back?

Ooops, sorry. No offense intended.
That's just my oldfartishness coming out. There was a time when those numbers, although high, were the norm. Yes, it was painful for the buyer, but the market seemed to be more stable.
Yeah, we had booms and busts, but the magnitude seemed much more managable. Then again, I guess it's all in it's own context. What we griped about then, that seemed catastrophic, is chump change now.

New thread: Bloomberg to WaMu: “Be careful what you wish for”

Richmond,

None taken. Did any of us ever imagine a time when actually having a down payment for a home would've been a requirement? The fact that we let people w/ "decent" FICO's "pre-raid" their equity and then turn around and buy w/ zip down can't have been a positive.

I just realised that if you scale the Oz govt surplus to the American population, you would have an AUD$1.5 trillion surplus now... and we may as well call dollar parity for all intents and purposes...