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"At the county level, foreclosure resales ranged from 10.6 percent of resales in San Francisco to 68 percent in Solano County. In the Bay Area's other seven counties, October foreclosure resales were as follows: Alameda, 41.1 percent; Contra Costa, 58.9 percent; Marin, 17.2 percent; Napa, 45.6 percent; Santa Clara, 36.4 percent; San Mateo, 21.6 percent; Sonoma, 49.7 percent."
This is juicy.
For a long time many people were hoping for and cheering for a price collapse in housing. But that does not happen without also getting severely unfavorable economic conditions.
Well those conditions came and the worst of it is now upon us. We are only in the beginning of the real pain.
It reminds of the old saying "Be careful what you wish for."
It reminds of the old saying “Be careful what you wish for.â€
It is not like wishing it made it happen. Failing all else, we still have schadenfreude. ;-)
Zephyr Says:
For a long time many people were hoping for and cheering for a price collapse in housing. But that does not happen without also getting severely unfavorable economic conditions.
...
It reminds of the old saying “Be careful what you wish for.â€
Being careful about what we wish for does not change reality. I would bet that the permabulls (remember those?) who used to troll here are probably much worse off if they followed their own real-estate binge advice.
Be that as it may, readers here (and at other sites like Mish's) have been extremely well-served by the information and pointers that helped us prepare for this.
Man, thank God we saved the financial system. I mean, if we hadn't of done that, I'll bet equities would be down 50%, housing down another 10%, unemployment would skyrocket, and there would be economic chaos.
Oh wait.
"Be that as it may, readers here (and at other sites like Mish’s) have been extremely well-served by the information and pointers that helped us prepare for this."
I think that's right to some degree SP. But I remember even just a year ago a bunch of people on this forum saying things along the lines of... "look, so housing goes back down to 1999 levels... what's the big deal?".
Anyhow, I think the general populace has finally realized what patrick.netters knew 2 years ago. But talking to people I know, they have no idea what's coming their way in 6 months.
And even now, predicting hell in 6 months, I can't help but wonder if it might come even sooner.
I absolutely agree that wishing does not change reality. Hope is not a plan!
GSE's just announced suspension of all foreclosures in cases of occupied homes until after the holidays.
But my point about those hoping for a price crash is not that hoping brought it on. Only that those who were hoping for it did not realize how bad it would be for so many people other than property owners and speculators.
. Only that those who were hoping for it did not realize how bad it would be for so many people other than property owners and speculators.
We knew about the Mayan Calendar. We are mentally prepared. ;)
I would like to see things stabilize before the economy is severely impacted. So far the damage to the economy is just started - the damage is small compared to how bad it will likely become. Think in terms of unemployment and inflation in the double digits.
"Be that as it may, readers here (and at other sites like Mish’s) have been extremely well-served by the information and pointers that helped us prepare for this."
The way to prepare for this was to sell your real estate in 2006, and sell your stock in 2007.
"We knew about the Mayan Calendar. We are mentally prepared."
Me too. I plan to party until Dec 21, 2012. If I wake up in the morning on Dec 22, I will go back to work.
FuzzyMath Says:I remember even just a year ago a bunch of people on this forum saying things along the lines of… “look, so housing goes back down to 1999 levels… what’s the big deal?â€.
I am sure I would have said that then, and will also say it now. Housing going "down" to 1999 levels is no big deal - in fact, that is part of the solution.
The way to prepare for this was to sell your real estate in 2006, and sell your stock in 2007.
Hey at least I was right half of the time.
"in fact, that is part of the solution."
Yup. It might be the only part of the solution.
It is however, a big deal.
Look for the PPT today
Looks like the PPT took off work an hour early.
Supposedly the stocks plunged after the Dems balked on the auto bailout. The auto bailout (interesting pun auto bailout, like in automatic) will probrably just be delayed, so we may see a rally then.
Shrinkage at the Fed. Oh, and the bid to cover of the most recent TAF auction was slightly smaller than the one it replaced. I don't know how we live with that thing...
TOB,
C'mon, you can't be serious. Those egomaniac jackasses at Tesla who made a $100k electric car that ran on laptop batteries? Tesla is toast.
TOB, appreciate the sentiment. I often take your word on other topics :-).
Now that crude oil is closing in on $50 a barrel and there seems to be no end in sight for home price declines, look for this to dip further into negative territory next month.
While there is nothing inherently different about a negative vs. positive inflation number, the fact is, at about -1.5% deflation, in the past markets and economies have started to behave very differently than with inflation. Think of it like a guy in a barrel above Niagara Falls. If he goes over the Canadian falls, he probably lives. If he goes over the American falls, he will absolutely die. At about -1.5% deflation, you reach the dividing point where in the past it has almost always meant the barrel is going over the American falls.
Deflation creates a different psychology, and it makes hoarding cash a profitable venture. This greatly reduces the incentive to loan money which hurts business.
Deflation also reduces the incentive to invest or engage in commerce. This leads to job destruction and more deflation...
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# justme Says:
C’mon, you can’t be serious. Those egomaniac jackasses at Tesla who made a $100k electric car that ran on laptop batteries? Tesla is toast.
I know two idiots who have put deposits down on that. Still waiting for the car, and oy vey, these two were worse than RE-permabulls when it came to repeating the happy talk. They seem to have shut up now.
I wonder how badly Citibank/Citigroup really is doing....is Mr. Market correct about them?
How much is Pleasanton going to be affected by 1600 lay-offs at WaMu?
It is going to be unpleasant.
William Black is my new hero.
He is the first I have seen to come out and clearly explain who the perpetrators are in this crisis, and why our government is not prosecuting them.
A MUST see.
(ignore the 2 yahoo douchebags)
justme Says:
Inquiring minds want to know — Larry and Sergey?
LOL, but no.
Two different idiots cow-orkers. One of them is still a little hopeful that Tesla will pull through.
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Perhaps the entire credit crunch could be fixed with very high interest rates. Currently, banks and other institutions have to compete with the suicidally low interest rates of the Fed and the Treasury bailout programs.
Say you're a bank and you know that a new mortgage loan has a 10% risk of default. Then you have to charge at least 10% to compensate for this risk before you can even begin to make a profit. But you can't charge 10%, because you're competing with the Fed's 2% rates, and the Fed is lending without regard to default risk. So you would be committing bank suicide to make loans in a market poisoned by the Fed's rates, knowing such loans will generate a large loss on average.
OK, the bank can get something from the defaulted loans by foreclosing and selling off the houses, but still, the point holds: the Fed is ruining the market for credit. It's kind of like American manufacturers being ruined by cheap Chinese imports, only it's American banks and savers being ruined from within our own country, by the Fed.
The directors of the Bank of England once bragged that a 10% interest rate could "draw gold from the moon". If it's credit we lack, let rates rise, and watch credit problems disappear.
Patrick
#housing