Sep
30
2008
Case Shiller July 2008 Results
By Charles TurnerReally briefly, Case Shiller for July came out today. Portland’s index is 174.21, down from June’s 175.03.
This second graph shows the same index since Jan. of 2006.
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Totally agree, New Homes. -6.6 YOY is awesome! I really hope we can keep it up!
Wow your market certainly looks great. I think the north west and mid atlantic are the only two markets still doing relatively well. Keep it up!
Regarding Case-Shiller, this found its way into my inbox this morning:
MacroMarkets announces Initial Public Offering Plan for Home Price Securities
In part:
Investors interested in benefiting from a housing recovery reflected as a rise in the index value and/or gaining access to this important asset class without the costs associated with buying a home can invest in Major Metro Housing Up (NYSE ticker: UMM). The underlying value of UMM will increase as home prices rise as measured by the
S&P/Case-Shiller index.
Investors seeking to manage existing exposure to housing, or those who are concerned about further home price declines reflected as a decline in the index value, can choose to invest in Major Metro Housing Down (NYSE ticker: DMM). The underlying value of DMM will increase as home prices fall as measured by the S&P/Case-Shiller index.
Heh… don’t expect that $700Billion debacle to lead to “happy days are here again” in mortgage-land.
No Loanz, no sales. No sales…
Well, it’s been a while. Just dropped by for old times sake. It seems that things are worse than even any of us pessimists expected. Today we’ve got Bernanke saying that if this boondoggle doesn’t pass there won’t be an economy on Monday. Well, now, that’s just scare tactics. Hey, what ever happened to Bernanke saying “It’s contained to subprime”? Ah, those were the good old days.
The thing is, I’m sure you could find willing lenders if you’ve got 20% to put down and a 780+ FICO and less than 36% backend DTI. But how many people fall into that category now?
Whatever happens, we need to do the right thing by our principles and that means: NO BAILOUT FOR WALL ST!
When people start talking about their principles I get nervous. This bailout is for Main Street.
There is no endowment in man or woman that is not
tallied in you,
There is no virtue, no beauty, in man or woman, but
as good is in you,
No pluck, no endurance in others, but as good is
in you,
No pleasure waiting for others, but an equal pleasure
waits for you.
From Whitman, “Leaves of Grass”
mr. thrifty: the spin is that it’s for Main St. But it’s very clearly for Paulson’s buddies on Wall St.
I read a comment on another forum a couple of days ago that sums it up quite well:
The Titanic hit the ice burg a while back (probably about the time Bear Stearns was going under). All this bailout does is allow Paulson’s wealthy Wall St. buddies to get to the lifeboats first.
BTW: take a look at what Mort Zuckerman had to say about this bailout on Charlie Rose a couple of days back:
http://calculatedrisk.blogspot.com/2008/10/zuckerman-on-charlie-rose.html
Oh, it’s quaint that you have such a high regard for Mr. Paulson, there “mr. thrifty”, but you must remember that Paulson doesn’t work for Main St. He works for Goldman Sachs & his Wall St. buddies.
And now I must bid you adieu. I’m off to the bunker.
This bailout is going to allow our credit markets to function again, and allow price discovery for mortgage backed paper. Sorry, but this needs to happen. Ummm…. I never mentioned Paulson, but lets see, who laid the ground work that allowed Goldman to be last man standing in the investment banking world? Ya, why listen to that guy!
The upcoming year is going to be some painful, so ugly, it’s no surprise some of you refuse to believe it. It’s too frightening.
We’re headed for very tough times.
Maybe Sarah Palin will save us?
That’s a riot Mr. Thrifty. You are being sarcastic right? I mean, I don’t know too many “true believers” in this plan. In fact, I think you’re the first one I’ve run into (assuming you were being serious). Are you perhaps a mortgage broker or somesuch? Drink koolaid much?
never mentioned Paulson, but lets see, who laid the ground work that allowed Goldman to be last man standing in the investment banking world? Ya, why listen to that guy!
Ummmm… It’s pretty clear that Paulson was at Golden Sacks during the creation of this mess and I do suspect he was well aware of what was going on. Apparently you like having the fox guard the hen house. Of course, old Hank was saying everything was just fine and contained until just a few months ago, so what does that say for his foresight? Hell, I’d rather have Naysayer in charge, at least he saw this debacle coming over a year ago.
Hey, the stock market was up 200 pts prior to the bailout passing and now it’s down over 100pts. I thought the bailout meant pink ponies for all?!
I’m not a true believer, I’m just saying its part of what needs to happen, if injecting cutsie sarcasm into everything you say is pathological for you then I guess you’d have to distort everything I say so it will fit the mold you need.
Mr Thrifty,
You sound like everyone I’ve heard that has been in favor of this plan. Parroting back the lines fed to them. There are mechanisms in place that allow for banks to get capital from the government without them hoisting all their bad debt onto the taxpayer.
Please refer to the Discount Window. (2% loan)
Mr. Thrifty, have you seen the credit markets today?
http://www.bankrate.com/brm/ratewatch/other-indices.asp
LIBOR and the TED spread are still sky high.
This is the single largest bailout in human history and nothing is unlocking.
I want to know what color the sky is on your planet.
Mr Thrifty,
I think you don’t understand. The money is already headed off shore. Wall Street’s bills to the foreign investment companies have already started to be paid off. We won’t see a dime of any of it! The Federal Reserve is almost insolvent!
We’re all buggered! Yay!!
Cutsie sarcasm aside, it’s the only reaction I think people can muster to opinions that, from their perspective, belie belief.
Mr Thrifty, Main Street won’t see a dime of that ‘bailout.’ As for real estate, it’s still extremely overpriced. If your market gets halved from peak to trough, count yourself as lucky.
This won’t be 1929; it will be worse. Excessive debt at all levels of society – personal, corporate, government – need to be worked off prior to any meaningful recovery.
You might want to take a look at some charts to see how long it took for the stock market to recover from 1929. More than 20 years. Check on real estate; you’ll find similar results.
You’re selling an asset that is declining in value. Anyone who buys a house today is catching a falling knife and they deserve what’s coming to them.
Nice to have you back TiP.
I’ve been mum on the subject because frankly, I don’t know. I’m surprised about how many do.
I don’t know if lending will ease. I don’t know if it should. I don’t know where the bottom of the real estate market is. I don’t know how long it will take to get there if we are not there. I don’t know that the bailout was the best idea. I don’t know what the alternative would have been.
I do know that these are pretty scary economic times and that some people will have the worlds seriously rocked. I don’t know how others take pleasure in that but is is clear some do.
I do know that I will never again rent a car from Budget (had to slide that in somewhere as I think they are crooks).
I don’t know that I can see Sarah Palin as our President and I don’t know that either presidential candidate has presented a feasible economic plan. I don’t know if any governmental economic plan is feasible. I used to think that government should be run more like a business, now I don’t know.
“I do know that these are pretty scary economic times and that some people will have the worlds seriously rocked. I don’t know how others take pleasure in that but is is clear some do.”
The bottom 50% have their world rocked for the past ten years. Economic justice is fun for the victims. Sucks to be you tho.
If this bailout hadn’t gone through we’d be looking at Dow 8700 by the end of next week, maybe much worse. Some banks hold illiquid mortgage assets, some hold bad loans and some simply need capital. Others have just been hurt by the crisis of confidence. The availablity of the discount window has not and will not resolve those issues. Banks and their counterparties need confidence that they are on solid ground and can lend their surplus capital to each other and to the public. If Paulson can relieve them of most of those toxic assets it will help. Just to make it crystal clear I’ll say it verbatim: Its not a panacea. But as long as that paper is clogging the system is gonna be hard to move forward.
I understand that people want any recovery deal congress passes to have a punitive nature to it, but the sad truth is that whatever punishment Wall Streets minions have coming has already been inflicted. The investment banking business model is finished and Goldman and JP Morgan will now go forward with charters that will force them to use far less leverage. But you only have to get rich once. Withholding this bailout dough would make them less rich.
Why would you want government run like an entity with a 90+% chance of failure? That’s what happens to most businesses.
That’s what brought us here: Market Cultism. Believing that “The Market” can do magic, can provide for our needs and with a profit to boot! The belief that we can “harness greed” and direct it to do great things.
What can you say about a culture whose dominant ideology not only exploits but nurtures and encourages the worst instincts in humans?
Joe6pac was right. We were taunted while some were riding high. Ridiculed as we warned about the excesses. Why take away the pleasure of payback? Seems this culture would revere a negative emotion like revenge.
It sucks to be me. And you. Enjoy the lyrics from Avenue Q: http://www.theatre-musical.com/avenueq/libretto.html
Why would you want government run like an entity with a 90+% chance of failure? That’s what happens to most businesses.
What percentage of governments fail? Do you considers the US governement to be a sucessful model of governement or is it failing (albeit with an ability to print its own money)?
“Do you considers the US governement to be a sucessful model of governement”
The answer is…*drum roll*…NO.
I am speculating here but I think what Naysayer might be saying is that government programs tend not to be the most efficient, well run programs, aka businesses. If they are money losers they pull money from another program or run a deficit. Perfect example, defense spending.
Government programs tend to lack adequate oversight. Look at the years of Medicare abuses and the billions in fraud discovered in that program. How much do you think Uncle Sam will recover. And then there is the IRS…if they would just enforce current laws and went after those who manage to avoid paying their fair share of taxes we might be in a different position but instead the IRS budget gets slashed?!?!
Now, Charles, what would happen if Prudential or your remodeling business or your or my family finances were run inefficiently and frequently made poor financial decisions? I would guess our consequences would be more detrimental.
So if the government fails to use OUR $800 billion efficiently what will happen?
And now California wants $7 billion!?!?!
Time will tell what this will bring.
Well I haven’t seen anyone posting plans to emmigrate to Canada or Mexico, so I guess you’ve all come to the same conclusion I have: Living under our current model of government is the best deal out there. Trust me if you can’t make it here, you have no chance of survival anywhere else.
New Zealand, actually. Wouldn’t it be nice to live in a country that didn’t spend over 60% of it’s budget on military spending?
I do have a few friends with spouses with dual citizenship making plans to move to Canada. Many countries make it quite difficult to relocate, though. Many want big bucks in the savings and youth on your side, ie, don’t come here to retire, you gotta work a couple of decades to earn your keep. And then it depends on your profession, too. New Zealand being one of the them with stringent rules.
It is very difficult to find decent work in France and Italy without temp visas which are difficult to obtain. I have had friends work under the table in seasonal jobs but nothing stable.
Yes, we do have a great country but for how much longer? We are technically bankrupt and our debt continues to spiral.
“Yes, we do have a great country but for how much longer?”
Thats pathetic. Are you really surprised other countries don’t want broke lazy Americans who can’t cut it here? What are you gonna put on your application? Excessive freedom and unlimited opportunity made it impossible for me to make a good living and be happy? Need to cut and run because things got choppy for while? If your not interested in participating in the worlds greatest democracy why would they believe your gonna go over there and put your back into it? Frankly I’m amazed that you seem genuinely surprised that any country would want you to contribute to its economy for a substantial period of time before reaping the benefits of its retirement programs. Do you expect to be handed everything? And I’m a pretty liberal guy saying this, but I did grow up in a housing project in South Boston.
France is riddled with social and economic problems. Paris is ringed by countless slums filled with impoverished immigrants. Do you think your going to move over there and be coddled by some permissive nanny state while you watch all your problems melt away?
Did I say I was surprised? I actually agree with their stringent migration rules. I was just pointing that out to say that it’s not as easy as some make it out to be.
You don’t know me, Mr. Thrifty, so don’t pretend you do!
Well I haven’t seen anyone posting plans to emmigrate to Canada or Mexico, so I guess you’ve all come to the same conclusion I have: Living under our current model of government is the best deal out there
Oh, believe me Mr. Thrifty, I’m looking into what it takes to move to New Zealand. Fortunately I have an engineering grad degree and that appears to be on their “in demand” list. Maybe bearlee is looking to move there too – problem is, they don’t have a lot of room over there so we can’t ALL go there. (Hey, Charles, maybe you should be a Real Estate Agent in New Zealand, I’m hearing a lot of people express interest in moving there – should be good for land values there). Canada would be OK too, if it’s Vancouver, though houses there are quite pricey too.
No, I don’t think we’ve got the “best deal out there” by any means. As someone aptly put it on reddit a while back: “In places like Europe and Canada at least they get healthcare for their taxes, in America all we get is dead Arabs.” And I might add, bailouts for those on Wall St. who made very bad bets.
Mr. “Thrifty” I think you’ll find that life in America is going to get to be rather miserable over the next few years as we move from the pretend economy we’ve had for the last several years to reality.
Need to cut and run because things got choppy for while?
Mr. “Thrifty” (I’ll bet I’m thriftier than you are – I’ve been driving the same car for 22 years), it’s not just a matter of things getting “choppy” it’s a matter of not wanting to live in a corporate welfare state. Yes, we’ve had corporate welfare for a while now, but the bailout passed on Friday was over the top. I don’t want to contribute to the rich who can’t “make it on their own”. Nor do I want to put up with those who whine about the possibility of not being able to get a loan to buy an SUV with spinning rimz. This has become a nation of whiners who live beyond their means and cannot delay gratification. I’d rather take up with a more responsible lot.
Now, Charles, what would happen if Prudential or your remodeling business or your or my family finances were run inefficiently and frequently made poor financial decisions? I would guess our consequences would be more detrimental.
That’s a rhetorical question isn’t it?
I was born in England and have family there so that’s probably where I’d book my one-way flight to if it came to that.
Oh, I know you, your all the same.
Ok, so now we know. The answer to the economic crisis: run away to New Zealand! I
If you really think things are better there check out this quote from a recent article in press.co.nz describing how attempts to stem NZ’s economic woes are fairing: “A young working couple with one child told her that instead of their budget being $100 short, it was now $88. “Instead of being really awful, they are now just awful.”"
Sounds like uptopia to me.
Maybe that couple will trade places with bearlee and tip.
link for the full piece is here:
http://www.stuff.co.nz/thepress/4715420a6530.html
Mr Thrifty,
How do you define success? Is it a million in the 401K? Owning a home, cough cough, I mean a big mortgage? Well, I have neither but I don’t consider myself a failure. It maybe hard for some to understand but success is not always monetary. The spouse and I have been eye-ing New Zealand for nearly ten years, even before Bush took us on this wild ride. At first it was my ties to family that kept me here, now I sometimes think it’s my family pushing me, hehehe, though a lot of it has to do with a sense of adventure.
Unless you have lived somewhere else and know me well, Mr. Thrifty, you are no authority on what country is best suited for my needs.
As for your link, ever wonder what those in other countries think about the good ol’ USA when they hear about our ‘news’, our death rates, our crimes rates, our suicide rates, our gun violence, our wars….
New Zealand has the 4th highest suicide rate in the world.
LOL, where did you get your data? Try WHO/World Health Organization.
But seriously, have you ever thought what the US looks like in the eyes of others through the media and not just US based media? If we are so wonderful why isn’t everyone flocking to get here?
So take your link with a grain of salt. Until you actually live there you really don’t know what it’s like. Maybe we won’t like it? Maybe we’ll love it. But to turn a blind eye to what’s currently going on in this country is dangerous. I do hope our politicians wake up before the people revolt which is not likely since too many are too worried about their own livelihoods. Kind of reminds me of the Holy Crusades, with unrest growing in the homeland the Pope sends the people on a ‘recruit some Catholics’ crusade across the continent. Can’t really over throw your own government when you are too busy murdering and pillaging other countries.
What are you a petulant teen ager? Grow up. Thats just childish gibberish. Conversation over.
to mr. thrifty- your entire argument is so tired and worn, now conversation over.
I am an American who has spent 10 years overseas and will spend more. I have a life that I can pick up overseas at my choosing- and people who are looking/thinking of picking up and going for a sea change somewhere else show at least one trait- they haven’t given up and in.
When you make a decision to go overseas, you are expanding your opportunities and world view- however, what you take from any trip depends on the person- any sourpuss can take a great experience and turn it into garbage.