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post #1 of 43 (permalink) Old 02-25-2008, 06:10 PM Thread Starter
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Economic QOTD

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Don't buy it. For months now the debate has been over whether America will have a hard landing or soft landing, the answer hinging on how big 2007's housing disaster turns out to be. Well, there won't be any housing disaster. We won't have a landing at all, soft or hard. Right now the U.S. and global economies are both accelerating.

You can see right through the housing crash story by looking at the prices of housing stocks. The market knows what the economic worrywarts do not, which is that the housing sector is already making a comeback. In the last six months housing stocks are up 24%, well ahead of the overall market. If housing were destined to fall apart in 2007 these stocks wouldn't be so strong now

Did you know that housing sales are up in the last few months, not down, and that inventories are lower than six months ago? We're accelerating, not landing. This is true not just in housing but also pretty much across the board.
- Kenneth L. Fisher
Forbes, 02.26.07

He wants you to buy Pulte, Toll, Beazer.

I have much respect for Mr. Fisher and his father but I'm not buying it just yet. One of those three is a client of my so I hope he is correct.

My 401K is now a 400K (was 301K)
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post #2 of 43 (permalink) Old 02-25-2008, 06:16 PM
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One of these days, I'll have a clue what you are talking about in this sub-forum.
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post #3 of 43 (permalink) Old 02-25-2008, 06:20 PM
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post #4 of 43 (permalink) Old 02-25-2008, 07:03 PM
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Quote:
Originally Posted by exlude
One of these days, I'll have a clue what you are talking about in this sub-forum.
Fisher is going against the common wisdom by saying that the economic sky is not falling, and that the economy is actually improving, and not to "buy into" what you read in the news.
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post #5 of 43 (permalink) Old 02-25-2008, 07:17 PM
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Quote:
Originally Posted by 01WhiteCobra
- Kenneth L. Fisher
Forbes, 02.26.07

He wants you to buy Pulte, Toll, Beazer.

I have much respect for Mr. Fisher and his father but I'm not buying it just yet. One of those three is a client of my so I hope he is correct.
Feb. 2007, sheesh. I guess he was wrong.
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post #6 of 43 (permalink) Old 02-25-2008, 07:59 PM
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The agent I use to for real estate here in FW says we are doing just fine, especially with houses over 150K, and that is where I am.

This correction basically got all the people out of home loans that should have never been there in the first place. The shacks that sprung up all over the outskirts of FW with 3000sf for 160K, where alot of sub-prme loans went, have all gone to investors and are being turned to rental properties.

I hope to snatch one up in the next year or so and make me some money off of the trend. The people who are smart are making money during this time, just look at Eric, he isn't panicking, he is acting like the old guy in the wheelchair in "It's a Wonderful Life".

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post #7 of 43 (permalink) Old 02-25-2008, 08:11 PM
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Originally Posted by 90 Notch
just look at Eric, he is the old guy in the wheelchair in "It's a Wonderful Life".
fixed
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post #8 of 43 (permalink) Old 02-25-2008, 08:39 PM
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I've said all along, most of the housing "crash" is inside peoples' heads here in Texas. Our market is not, nor ever has been inflated. I have folks all around me who came from California, Washington, and the northeast who have paid cash for their homes in the last year. I'm talking $275k and up...way up. Is housing doing great? Nope, but it's not near as bad as the doomsayers in the paper say it is.

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post #9 of 43 (permalink) Old 02-25-2008, 08:43 PM
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Quote:
Mon Feb 25, 5:50 PM ET
WASHINGTON - Sales of existing homes fell for the sixth straight month in January, dropping to the slowest sales pace on record. Median home prices were also down and many analysts predicted further price declines in the months ahead given high levels of unsold homes.

The National Association of Realtors said Monday that sales of single-family homes and condominiums dropped by 0.4 percent last month to a seasonally adjusted annual rate of 4.89 million units. That was the slowest sales pace, going back to 1999, and was seen as evidence that the steepest slump in housing in a quarter-century has yet to hit bottom.

The median price of a home sold in January slid to $201,100, a drop of 4.6 percent from a year ago. Particularly alarming, analysts said, was the fact that the inventory of unsold homes jumped to a 10.3 months' supply, meaning it would take that long to sell the 4.19 million homes on the market at the January sales pace.

That was up from 9.7 months in December and just below a two-decade high of 10.5 months hit in October. During the peak of the housing boom in 2005, the supply of homes relative to sales stood at 4.5 months.
http://news.yahoo.com/s/ap/20080225/...77gWwf4MWyBhIF
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post #10 of 43 (permalink) Old 02-25-2008, 08:45 PM Thread Starter
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Quote:
Originally Posted by 90 Notch
The agent I use to for real estate here in FW says we are doing just fine, especially with houses over 150K, and that is where I am.

This correction basically got all the people out of home loans that should have never been there in the first place. The shacks that sprung up all over the outskirts of FW with 3000sf for 160K, where alot of sub-prme loans went, have all gone to investors and are being turned to rental properties.

I hope to snatch one up in the next year or so and make me some money off of the trend. The people who are smart are making money during this time, just look at Eric, he isn't panicking, he is acting like the old guy in the wheelchair in "It's a Wonderful Life".
LOL on the wheel chair.

Like I said I have much, much respect for Ken Fisher. If I had more money I'd put it into his private management fund.

His book, The Only Three Questions That Count: Investing by Knowing What Other's Don't Know is awesome. Unfortunately I don't think he had answers to those three questions with that quote.

His dad's book, Common stocks and Uncommon Profits and Other Writings is awesome as well.

Mikeb, look again at the date. If you would have purchased his recommendations on the recommendation date, you'd be down about 40% on Pulte (your 10K investment would be worth about 6k.)

Will the homebuyers be ok? Yea, eventually, I'm sure they will. If you are investing for retirement and are young (I'm old and almost in a wheel chair according to this board!) you'll be ok.

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post #11 of 43 (permalink) Old 02-25-2008, 08:48 PM Thread Starter
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Quote:
Originally Posted by Vertnut
I've said all along, most of the housing "crash" is inside peoples' heads here in Texas. Our market is not, nor ever has been inflated. I have folks all around me who came from California, Washington, and the northeast who have paid cash for their homes in the last year. I'm talking $275k and up...way up. Is housing doing great? Nope, but it's not near as bad as the doomsayers in the paper say it is.
Certainly you won't be at the extremes of the coastal areas (Stockton California is seriously hurting with 2 of 3 homes being sold under distress.) But, I did see a house the other day on the market for 475 that went for 315 on a short sale.

You obviously know the area real estate better than me, Vertnut, but on average the home prices are down 4-5% year to year according to the Dallas Fed. No one wants even a 4-5% decrease in their home value.

I love it. I know it will come back and in the mean time... let me go tell the tax collector, FU, my home value is less than y'all are putting it on the tax rolls for.

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post #13 of 43 (permalink) Old 02-25-2008, 08:55 PM Thread Starter
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Originally Posted by TexasDevilDog
According to that map I better shuddup and be glad CCAD decreased be 2-3% this past year.

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post #14 of 43 (permalink) Old 02-25-2008, 08:59 PM
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The market is down, for sure. The homes in the $120k-$180k range are everywhere. A friend of mine is with "History maker Homes", and said that 35% of their sales were to "sub-prime" buyers...35%! I'm like...you're fuckin' kidding me! Nope. Couple that with the fact that they will (would?) start a house with a $500 deposit, and you can easily see why there is a large surplus of these homes on the ground. He said many people that had been previously approved, got rejected when the mortgage companies panicked. A lot of them had put down their $500, and slabs had been poured with walls going up.

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post #15 of 43 (permalink) Old 02-25-2008, 09:02 PM
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Thnks for the map, TDD! I'm exclusively in Ellis County, which shows a 1% decline in sales price. I'll agree to that...it's hardly the 4-5% we're hearing about in the press.

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post #16 of 43 (permalink) Old 02-25-2008, 09:04 PM
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Quote:
Originally Posted by 01WhiteCobra
Mikeb, look again at the date. If you would have purchased his recommendations on the recommendation date, you'd be down about 40% on Pulte (your 10K investment would be worth about 6k.)

Will the homebuyers be ok? Yea, eventually, I'm sure they will. If you are investing for retirement and are young (I'm old and almost in a wheel chair according to this board!) you'll be ok.
I've been told time and time again that this is just a minor downturn and that the economy is fundamentally in great shape. I've never believed it. I think we've got a few months of recession ahead of us.
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post #17 of 43 (permalink) Old 02-25-2008, 09:10 PM Thread Starter
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Quote:
Originally Posted by mikeb
I've been told time and time again that this is just a minor downturn and that the economy is fundamentally in great shape. I've never believed it. I think we've got a few months of recession ahead of us.
If we aren't there already. The top 4 investment banks have all finally made the call that we are in recession.

Which typically means its almost time to start buying again.

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post #18 of 43 (permalink) Old 02-25-2008, 09:21 PM
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Did someone say recession?

The US Economy will go into Recession during 2008 contracts on Intrade closed down 0.1 today, to end at 65.
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post #19 of 43 (permalink) Old 02-25-2008, 09:25 PM Thread Starter
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The new buyers of a rundown graystone on the South Side showed up Jan. 9 to look at the house they won at a foreclosure auction. They took the plywood off the front door and went inside to make sure the utilities had been shut off. Then they called the police.

Sitting upright in the corner of a bedroom off the kitchen was a human skeleton in a red tracksuit. Next to him lay a dead dog. Neighbors told police the corpse was almost certainly Randy Johnson, a middle-age man who lived alone in the North Kenwood house.

The cause of Johnson's death has not yet been determined, but it is just one of the mysteries about 4578 S. Oakenwald Ave. Somehow, Johnson's house was transferred three times to new owners without anyone noticing he was inside. It's a story involving forged deeds, a corrupt title company and a South Side family that has been under investigation for mortgage fraud."
http://www.chicagotribune.com/busine...,7543625.story


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post #20 of 43 (permalink) Old 02-25-2008, 09:25 PM
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Quote:
Originally Posted by kangol
Did someone say recession?

The US Economy will go into Recession during 2008 contracts on Intrade closed down 0.1 today, to end at 65.
65.0 means the market predicts there is a 65.0% chance that this event happens.
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post #21 of 43 (permalink) Old 02-25-2008, 09:26 PM
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Americans rob their retirement like never before

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February 24, 2008 -- EONOMIC security is a hot topic on the campaign trail this year. But while the candidates posture and promise, we're witnessing a quiet run on the nest eggs of millions of Americans.

It's a run that will make any retirement fix even more painful and expensive than it already is. Rather unfortunately, it is also likely to cast dispersion on the private market solutions to the Social Security mess.

The problem is that debt-strapped Americans are starting to tap into their 401(k) retirement plans as never before. Several of the biggest administrators of the popular retirement plans report double digit increases in so-called hardship withdrawals in recent months.

At industry leader Fidelity Investments, withdrawals from 401(k)s surged 17 percent surge in December - the biggest jump on record, and a surge the company calls "dramatic."
http://www.nypost.com/seven/02242008...t_ac_99008.htm
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post #22 of 43 (permalink) Old 02-25-2008, 09:27 PM
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Quote:
Originally Posted by TexasDevilDog
65.0 means the market predicts there is a 65.0% chance that this event happens.
Now that's a bold statement.

BTW - you forgot:

If you think it is more likely than this you should BUY
If you think it is less likely you should SELL
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post #23 of 43 (permalink) Old 02-25-2008, 09:31 PM
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Quote:
Originally Posted by TexasDevilDog
I wonder how many of the folks dipping into their IRA's, are doing so to avoid foreclosures?

Speaking of which...did everyone hear Hillary call for the 6 month moratorium on foreclosures during the debate? The bitch is crazy! What happens after six months?

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post #24 of 43 (permalink) Old 02-25-2008, 09:49 PM Thread Starter
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Originally Posted by kangol
Now that's a bold statement.

BTW - you forgot:

If you think it is more likely than this you should BUY
If you think it is less likely you should SELL
Ain't time to try and catch the falling knife. Wait until the hedggies pick the knife up off the floor then buy.

Be a trend following moron. You won't catch the bottom you won't sell at the top but there is a shitload of gravy in the middle.

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post #25 of 43 (permalink) Old 02-27-2008, 05:24 AM
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Bair also noted that the agency is planning to beef up its staff -- including temporarily hiring up to 25 retired FDIC employees who worked in the agency's more than 200-person division that handles failed banks -- to handle an anticipated increase in bank failures. She declined to predict the extent of bank failures this year.
http://biz.yahoo.com/ap/080226/banks...unge.html?.v=2
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post #26 of 43 (permalink) Old 02-27-2008, 06:17 AM
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How about the front page of the Business section in today's DMN? They can't determine if housing prices are up or down...and they have the "data".

Folks need to take Texas out of the mix on most of this negative bullshit.

*Secede!

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post #27 of 43 (permalink) Old 02-27-2008, 07:35 PM
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The dollar fell to a fresh record low against the euro on Wednesday as Ben Bernanke signalled that the Federal Reserve is likely to cut interest rates again next month.
...
However, Mr Bernanke said rate cuts to date had only had limited effect in easing overall financial conditions, in particular in the housing market.

“It has been very difficult to lower long-term mortgage rates through Fed action,” he said, adding “what we have done has been mostly just to offset the tightening of credit” that would otherwise have taken place.
NEWS FLASH to Ben Bernanke: The FED can not control long term rates.

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post #28 of 43 (permalink) Old 02-28-2008, 09:07 AM Thread Starter
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Quote:
Originally Posted by Vertnut
How about the front page of the Business section in today's DMN? They can't determine if housing prices are up or down...and they have the "data".

Folks need to take Texas out of the mix on most of this negative bullshit.

*Secede!
Well, as you probably know already, the "cheaper" market in D/FW is flat to down but the over 300K (maybe the line is 400K) is still doing well.

Although when I was at Truluck's off McKinney a couple of weeks back there was a table of "bidness dudes" talking about how their friend was walked out of a brokerage firm with about 30 others that day.

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post #29 of 43 (permalink) Old 02-28-2008, 07:02 PM
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"Economic growth was very weak in the fourth quarter—were it not for the addition of trade, the economy would have contracted in the fourth quarter,” John Ryding, chief US economist at Bear Stearns, said.
http://www.ft.com/cms/s/0/fe872cc2-e...0779fd2ac.html
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post #30 of 43 (permalink) Old 02-29-2008, 04:34 PM
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Qotd

Quote:
``The party is over,'' Buffett said in his annual letter to shareholders. ``It is a certainty that insurance industry profit margins, including ours, will fall significantly in 2008. Prices are down.''
http://www.bloomberg.com/apps/news?p...8Lk&refer=home
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post #31 of 43 (permalink) Old 02-29-2008, 04:40 PM
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Fun day on the market! Hope everyone has their hard hat on... the sky is falling.
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post #32 of 43 (permalink) Old 02-29-2008, 04:44 PM
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Quote:
Originally Posted by 01WhiteCobra
Ain't time to try and catch the falling knife. Wait until the hedggies pick the knife up off the floor then buy.

Be a trend following moron. You won't catch the bottom you won't sell at the top but there is a shitload of gravy in the middle.
Ain't that the truth.

But, I was just finishing TDD's direct quote from http://www.intrade.com/

God damn that site takes forever to load.
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post #33 of 43 (permalink) Old 02-29-2008, 04:50 PM Thread Starter
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Then in January he learned about a new company in San Diego called You Walk Away that does just what its name says. For $995, it helps people walk away from their homes, ceding them to the banks in foreclosure...

You Walk Away is a small sign of broad changes in the way many Americans look at housing. In an era in which new types of loans allowed many home buyers to move in with little or no down payment, and to cash out any equity by refinancing, the meaning of homeownership and foreclosure have changed, economists and housing experts say...

Though many states give banks recourse to sue borrowers for their losses, Mr. Case said, in practice it’s not often done “It’s tough to do recourse,” he said. “It’s costly, and the amount of people’s nonhousing wealth tends to be pretty slim...”

The company assured him that in California he was not liable for his debt, and provided sessions with a lawyer and an accountant, as well as enrollment with a credit repair agency. He stopped paying his mortgage and used the money to pay down other debts.

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post #34 of 43 (permalink) Old 02-29-2008, 05:03 PM
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Originally Posted by 01WhiteCobra
.
That is why public policy should be changed to not allow banks to make >90% YTV loans. That stuff going on is not in the public's best interst.
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post #35 of 43 (permalink) Old 03-01-2008, 02:57 PM
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http://www.nytimes.com/2008/03/01/bu...rssnyt&emc=rss
Quote:
Mortgage foreclosure notices are going out so fast that in some states the number of new foreclosure proceedings each month is greater than the number of homes sold that month.
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post #36 of 43 (permalink) Old 03-02-2008, 05:39 PM
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Listening to Bob Brinker this weekend. It was mentioned that Hedge Funds last week were having to sell assets for margin calls. If the market falls more I guess this could cause even more margin calls and more selling.

I see a possible dangerous spirl.
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post #37 of 43 (permalink) Old 03-04-2008, 02:56 PM Thread Starter
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There is a very important phenomena that is occurring that has only been covered in an only "glancing" manner.
Beyond the concept of "jingle mail" -- which suggests that folks who can pay their mortgages may just choose to walk away given the dramatic loss of equity due to housing's collapse -- consider the following:
As a developer, I had stepped to the sidelines and rented beginning in 2005, because I was sure that housing was unsustainable and was bound to collapse; it took 2 more years for it occur.

Nonetheless, as I have followed several of the homes that my wife and I were interested in a few years back, they are all on the market now. What is shocking, that in each and every case, I have been told by brokers and banks that the owners, have ceased paying their mortgages in some cases for nearly 2 years and have continued to occupy these homes.
Now, these are homes in excess of $2,000,000 in the very best neighborhoods in South Florida. Brokers have added that these buyers further complicated things by putting huge home equity lines on top of their mortgages and now have no possibility of selling their homes for amounts needed to cover their accumulated debt.

This may not seem like news, but understand what this means: There is currently an 8-10 month wait to get a court date to have a foreclosure filing heard in Dade and Broward counties. The bankers have non-performing loans on their books to the best heeled borrowers in multi-million dollar amounts with no immediate means for recovery; with a non-secured second mortgage in place, there is no possibility for a "short sale" that will satisfy all of the borrower's debt. They are reluctant to take a haircut knowing that they have the home equity debt still around their neck and are likely to frustrate any near-term sale.

There is no clean way to sell the home that would guarantee "clean title" hence a foreclosure is the only means to separate the property from the dead-beat speculator/squattor.
Banks do not want to spend the $50,000 required to take a home through a foreclosure and clear the title -- only to put the house back on the market for a deeper loss afterwards. Most likely, they have not revealed these owner occupied defaults to their shareholders, thanks to the sheer numbers of non-performing loans on their balance sheets, and the daunting task of foreclosing on all of them.
This is the ultimate seizure and full stop of the market whereby everyone is standing in a stalemate. As one broker said to me, "these bums sitting in $3,000,000 homes overlooking the water are likely to be left alone by the banks for 2 years before the banks even get serious about foreclosure."

So here is the difference between "walking away," these folks are doing anything but walking away, they are sitting on lounge chairs sipping martinis living cost free! (not to mention that they have ceased paying property taxes and insurance)
I can only imagine what this market will look like in the coming years . . ."
.

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post #38 of 43 (permalink) Old 03-04-2008, 03:04 PM
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Quote:
Originally Posted by 01WhiteCobra
.
I hope that the law changes because of these deadbeats and they get charged criminally for knowingly occupying a residence they are not paying for.

I know it probably won't happen, but it sure needs to in these extreme cases IMO.

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Robert A. Heinlein

I have to agree with a quote from former Treasury Secretary William E. Simon: "Bad politicians are sent to Washington by good people who don't vote."
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post #39 of 43 (permalink) Old 03-05-2008, 07:00 PM
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March 5 (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke will ``destroy the U.S. dollar'' by cutting interest rates, investor Marc Faber said.

Bernanke's reduction in the target rate for overnight loans between banks to 3 percent has spurred a rout in U.S. stocks and gains in oil and gold prices, said Faber, the Gloom, Boom & Doom report publisher who told investors to buy gold at the start of its six-year rally.

The U.S. is now in a ``de-leveraging'' phase where banks make fewer loans, stunting economic growth, Faber said. He estimated that a U.S. recession began two or three months ago.

``In the U.S., they pursue essentially economic policies that target consumption, which in my opinion is misguided,'' Faber said in an interview with Bloomberg Television from Chicago. ``They should pursue economic policies that stimulate capital investment and capital formation.''
http://www.bloomberg.com/apps/news?p...owo&refer=home
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post #40 of 43 (permalink) Old 03-05-2008, 07:04 PM Thread Starter
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I'm going with Dr. Faber being long the dollar at the moment.

My 401K is now a 400K (was 301K)
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post #41 of 43 (permalink) Old 03-06-2008, 07:53 PM
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``I've been in this market for 30 years, I'm one of the senior citizens of the bond market, and I have never, ever seen such a confluence of negative events,'' said Marilyn Cohen, who manages $215 million in fixed income investments as president of Envision Capital Management in Los Angeles. ``Clearly the Fed has been rendered impotent on doing anything to end this credit crisis.''
http://www.bloomberg.com/apps/news?p...efer=worldwide
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post #42 of 43 (permalink) Old 03-10-2008, 05:51 AM
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The hedge-fund industry is reeling from its worst crisis in a decade as banks are now demanding more money pledged to support outstanding loans even when the investment is backed by the full faith and credit of the United States.

Since Feb. 15, at least six hedge funds, totaling more than $5.4 billion, have been forced to liquidate or sell holdings because their lenders -- staggered by almost $190 billion of asset writedowns and credit losses caused by the collapse of the subprime-mortgage market -- raised borrowing rates by as much as 10-fold with new claims for extra collateral.
http://www.bloomberg.com/apps/news?p...efer=worldwide

I could be wrong but I expect the FED to not wait for next week and to cut this week 75 basis points. Everything I read is that the liquidity of the credit markets are drying up again and they need a shot of more money. Just like an addict, the money market needs its fix.
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post #43 of 43 (permalink) Old 03-13-2008, 06:46 AM
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A total of 223,651 homes across the nation received at least one notice from lenders last month related to overdue payments, up 59.8 percent from 139,922 a year earlier, according to Irvine, Calif.-based RealtyTrac Inc.
http://biz.yahoo.com/ap/080313/foreclosure_rates.html
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