patrick.net

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...