patrick.net

China's debt is just like Japan's debt, or American debt, it is all issued in local currency, so these government crooks can just print as much as possible. Of course nobody has our power to issue debt to foreigners in OUR currency.

Two more days to Friday, I am always very excited on Friday lately waiting to see which banks bite the dust. Kinda disappointed that Wamu has not folded yet.

Btw, Gordon Chang is not a very credible commentator on China, he has a personal agenda and is quite biased in his assessment.

I may share his hatred, but not his bias. There is no use just wishing ill will on China, it has never proven to work. Objectively assessing its strength and weakness will be more profitable. What will bring down China is not its debt, or lack of democracy, or whatnot, but rampant inflation accompanied by food crisis. If we are lucky, we will see it before 2010. Henry C. K. Liu is a far more credible and insightful commentator than Gordon Chang.

OT

Some really major price reduction on land from foothills of S. San Jose to Morgan Hill. For the sellers that want to "meet the market", the reduction range is about 20-30% compared to a year ago, almost half off from 05 top. Further away, Gilroy has crashed (but you still won't be interested). All those Gilroy serviced flat lots advertised for $350K-400K an acre need to come down at least 2/3 to make sense, if Gilroy can make it through the surging crime rate in the recessionary cycle though.

The fortress land is still asking for a wishful price tag, but there are signs of softening.

Study: Illegal residents decline
USA TODAY

The number of illegal immigrants in the USA has fallen sharply as state and federal officials intensify a crackdown on undocumented migrants and jobs grow scarce in the faltering economy, according to a report Wednesday by a group that advocates reduced immigration.

Using Census data, the Center for Immigration Studies (CIS) estimates that the illegal immigrant population dropped by 10% to 11.2 million from August 2007 through May.

"Illegal immigrants are responding to changing conditions and leaving the country in significant numbers," says Steven Camarota, director of research at CIS.

His study found that the number of legal immigrants rose from 26.6 million to 27.6 million over the same period.

"It doesn't seem like America is more unpleasant for immigrants," he says. "It seems more unpleasant for illegal immigrants."

Mortgage professionals flooding temp agencies

The pop of the housing bubble has hit few groups harder than those from the mortgage industry.

Many who were making six-figures at the height of the housing boom are now taking whatever they can to pay the bills.

"They're now grateful to receive a sales position with a base salary of $40,000 a year with a commission plan," said Sherri Mitchell, president and CEO of All About People staffing agency in Phoenix.

"You have a lot of small companies that have really just disappeared, but nobody knew they existed in the first place," said Jay Butler, director of the realty studies group at ASU.

Mortgage companies that concentrated on subprime and no-documentation loans began closing their doors as early as late 2006, and with the housing market still near its bottom, mortgage players continue to feel the pressure.

Check out this video by Jim "the Realtor" Klinge, on his website, Bubbleinfo.com
or here:

http://tinyurl.com/6kmsxe

Nice truck Jim!

Steveoh,

Nice! But what was his point in making it? Certainly not to sell the house.

That truck could be classic if were to be restored.

Headset,

I guess this realtor is known for his videos and pithy comments on his blog about his own industry. He has managed to attract a following and prabably produced that for them.

I see the California is trying to get its budget in order by cutting the pay of 200,000 state workers.

http://www.cbsnews.com/stories/2008/07/28/politics/uwire/main4301396.shtml

This can't go over well. People do act funny when you involve their money. How many people will lose their sympathy for these state workers if they discover their taxes will have to go up inorder to meet these obligations?

CA Gov. Arnold Schwarzenegger

"Today I am exercising my executive authority to avoid a full-blown crisis and keep our state moving forward. This is not an action I take lightly, but we do not have a budget, and as governor, I have a responsibility to make sure our state has enough money to pay its bills."

Cutting the pay of about 200,000 state workers to the federal minium wage of $6.55 an hour would save California as much as $1.2 billion a month, the governor's office said. Such workers would get regular pay plus back pay once a new budget is approved.

http://tinyurl.com/6l3wsw

...workers would get regular pay plus back pay ...as much as $1.2 billion (per as many months as it takes to get a budget?)... once a new budget is approved!

I guess the bright side is the forced savings for the employees affected, right? I wonder if they could offset the temporary shortfall by changing their W-4.

I wanna say that they did this very same thing back in '89, '90 maybe. I remember all of my cash customers that were state employees coming in and using credit cards and bitchin' like all get out. Does that ring a bell with anyone?

Is this reasoanble price? I know that Homestead High is crappy school. I have seen students and the crowd does not look good.

==================
777 HOLLENBECK AV #6F, Sunnyvale 94087 (Sunnyvale)
$699,950 Beds: 3 bed(s) Baths: 2 1/2 bath(s)

Btfl 3/2.5 End unit in the prime SU location, minutes to Cumberland shcool(API 901/stores/park/freeway. Remodeled Kitchen w/ new recess lights/granite counter/sink etc. Newly remodeled bathrms w/granite counter/vanity/toilet/floor/light fixtures/mirror etc. A/C for summer comfort, separate family rm upstairs, dp windows, two spacious patios, extra storage space in attic,New berber carpet upstairs.

Schools/Districts
Elem: Cumberland Elementary/ Sunnyvale Elementary
Middle: Sunnyvale Middle
High: Homestead High/ Fremont Union High
===============

Is this reasoanble price? I know that Homestead High is crappy school. I have seen students and the crowd does not look good.

Homestead High has decent test scores (if you belive in them), Fremont high is a lot worse, test scores or not.

"Los Banos is San Jose East now-a-days. Not a place to raise kids, but retirement might be better. The mexican gangs are thick now. It’s all thugs and drugs. 9 of 10 babies born last year was to unwed teen hispanics. Source: Wifes aunt works in the hospital baby area, and her cousin works for welfare office in Los Banos."

Hmmm... that looks familiar:

Bab33: "90% of all babies born is Merced County in the past 5 years were born to unwed-teen-hispanics, all (100%) were paid by welfare and are on welfare"

http://patrick.net/phpBB3/viewtopic.php?f=2&t=8398&p=40887&hilit=unwed+teen#p40887

Then your source was:

"@marksf, I tried to find the article on-line. It was a local story, not an AP thing. The date of the story was (I'm pretty sure) March 31, 2008. Merced Sun-Star."

And you conceeded:
"fair enough .... yep, without the article I'm without any support."

http://patrick.net/phpBB3/viewtopic.php?f=2&t=8398&st=0&sk=t&sd=a&hilit=unwed+teen&start=199

You sure you're not just making this new '9/10 babies born to unwed teen hispanics' allegation?

The reason I ask if you're making this up is two fold:

1) In one place you claim your source is the "Merced Sun-Star" and then a few months later, you claim your source is "Wifes aunt works in the hospital baby area, and her cousin works for welfare office in Los Banos". The fact you claimed a newspaper source earlier, makes me highly suspicious of your later claim.

2) 9/10 babies born to unwed teen Hispanics is an over the top allegation. I can certainly see that figure in a clinic that serves mostly unwed teen Hispanics, but for a whole city or county, that number is preposterous.

"well, no, I aint making it up. Why would I do that?"

Because you've got it out for illegal immigrants? I've got no beef with people bringing up legitimate issues regarding illegal immigration. But I do take issue if people make things up, because that would be slander against a whole group.

100%, 97%, 95% financing is alive and well in other parts of the country. There are apparently plenty of investors willing to stump up for the backing of these mortgages. This is confirmation of my belief that the CA market won't truly capitulate until rational lending becomes mainstream again throughout the market, not just in CA.

FWIW, Wednesday's TSLF auction ($50 billion) had a bid to ask of .56, which was only slightly higher than the one 4 weeks earlier (.52). Whatever conditions caused the spike one week earlier seemed to have abated.

In an article which should be near and dear to Patrick's heart....

Forbes has the top 10 "overpriced" zip codes in the US based upon a measure of purchase price vs. rental value.

http://finance.yahoo.com/real-estate/article/105488/America's-Most-Overpriced-ZIP-Codes?mod=weekend

Fortress wannabe Willow Glen comes in at spot #10.

So, which banks failed today?

EBGuy,

H3 seems boring, non-borrowed reserve just went red another 4B or so.

It is more fun counting failed banks on a Friday afternoon.

OTOH, California is hitting "bottom" according to this article as rents are theoretically in line with prices in many instances, which is antithetical to Patrick's #1 home page argument:

http://news.yahoo.com/s/nm/20080801/us_nm/california_housing_dc

Happy Bank Failure Day!

I mean Friday (same thing)

http://www.fdic.gov/bank/individual/failed/firstprioritybank.html

http://promo.realestate.yahoo.com/americas-most-overpriced-zip-codes.html

Ten spots where buyers pay a huge premium to own relative to how much it would cost to rent.

In San Jose, Calif., home to Silicon Valley and some of the highest home values in the country, a bumper sticker reads, "Dear God, one more bubble before I die."

I used to be a fan of Ben Stein's, but I saw him on Larry King a couple of days ago. He with great authority was telling everyone what happened with housing and basically gave a summary of what we've talked about here for years. I think it is fitting to remind everyone what he was saying just 6 months ago.

http://www.youtube.com/watch?v=-x01rhPtMLQ

Ben Stein is joke ... I always give him lowest possible rating in Yahoo.

Quick Q: any Patrick.net regulars live in Oregon (aside from DinOR)?

Really? I always thought Ben Stein was generally respected as having a brilliant economic mind. If I ever doubted myself on the housing downturn it was because of his opinions.
Again though, it still astounds me that the same experts who misjudged all of this still have their jobs, and still get the phone calls when the media wants an 'expert' opinion.
During that same show they had experts talking about the tax ramifications of the debt forgiveness if you just walk away. Obviously these experts weren't reading Patrick.net when the Mortgage Debt Relief Act was passed. We had a pretty long discussion here, but the experts who are still misinforming the nation missed that one.

http://www.irs.gov/newsroom/article/0,,id=174034,00.html

Whoever suggested I watch Glengarry GlenRoss, thanks. It is a very good movie and I recommend it.

Bay Area rents are going to go up if the following excerpt from the Modesto Bee is true:

'At least one industry analyst suspects the valley's foreclosed families are headed back to the Bay Area, especially those who had been commuters.

"We believe that there is going to be a tremendous shift back to urban areas, led by those who bought homes in the outlying areas who lose their homes to foreclosure. They will choose to rent near work to save money," wrote John Burns, a national real estate consultant in his July building market analysis.'

Another "fire sale" in the Berkeley Hills. Looks like the original financing in 2005 (sale price $1.2million) was an 80/10/10-- so $120K in downpayment down the drain. The first and second liens were owned by the same party. Now hitting the market at $914900.

A Sunnyvale family, who didn't want their names used, sent their children to Hoover Elementary in Palo Alto by producing a grant deed for a Palo Alto home occupied by the children's grandparents. Although the mother's name was on the deed, her children weren't actually eligible because attendance is determined by where the child lives, not where a parent owns property. But Palo Alto officials never checked, said the mother, who wanted her children to attend a "good" school and later moved into the district.

Last year, a Cupertino Union employee living in San Jose, outside the district, discovered that one of her neighbors was a student who attended her school.

In a recent week, Cupertino's tip line fielded three calls. The district annually may discover four or five students at each school with falsified addresses, Carmichael said.

"People care because they feel like they're paying an inflated price to live in Cupertino, and they look at someone who doesn't pay that price and feel that the other families are burdening the system," said Cupertino Assistant Superintendent Linda Denman.

OMG, you guys were right. I'm reading somewhere else that the tax credit to buy a foreclosure actually has to be paid back. What a complicated hassle.

“We believe that there is going to be a tremendous shift back to urban areas, led by those who bought homes in the outlying areas who lose their homes to foreclosure. They will choose to rent near work to save money,” wrote John Burns, a national real estate consultant in his July building market analysis.’

While I'm sure there will be some shifting, the outerlying areas are now becoming truly affordable (that's what those 50% declines will do for you). For reference, a monthly ACE pass from Stockton to San Jose goes for $282.50; this is equivalent to servicing a $27,500 mortgage at 7% (30 year fixed). I will leave the rest of the math up to the reader (including calculating the "psychic cost" of commuting that far each day...)