Housing Bubble, credit bubble, public planning, land use, zoning and transportation in the exurban environment. Specific criticism of smart growth, neotradtional, forms based, new urbanism and other top down planner schemes to increase urban extent and density. Ventura County, California specific examples.
Friday, January 11, 2008
New Inventory A'Comin
How many Countrywide employees can afford their houses in the Thousand Oaks area? [Only the orange man raises his hand.]
Can't believe BofA is buying them - talk about throwing good money after bad. Not that I mind, I used to bank with BofA long, long ago and was VERY unhappy with them. Would love to see them suffer.
There are three reasons I can see for BOA moving here.
1. The Feds are covering their asses so it is a no lose deal.
2. They are covering their asses from the 2 billion earlier purchase. We don't want to see any embarressment from their earlier deal gone south.
3. Buddies protecting each other. If CFC went bankrupt, the orange man would end up in an orange suit. This way they can claim there is no need for an investigation. and Mozillo will pay back his friends with some of the additional 100,000,000 he is getting out of this deal
If CFC failed, it would be an unmitigated disaster for the market. This was equivalent in essence to the LTCM bailout; the participants realized that they were facing either a short-term loss or a market meltdown, and chose to take the loss.
BofA's main mistake was that it took the CFC burden all on itself. A couple more weeks and the Fed could have rounded up all the major banks, showed them CFC's finances, and given them the LTCM speech: "either you guys bail these idiots out or we all go down."
The regulators fingerprints are all over this deal. In that respect BAC did a smart thing. They took one for the team and when the really nasty stuff starts flying they have a favor to call in.
Interesting capital phase change IMO- all that liquidity crashing out of solution into an varible assortment of gems and dreck...oh well, at least such solids can be filtered and the rest decanted.
When i first started this blog oh so many years ago I called it "house arrest."
The CFC refugees will be of all varieties. I imagine a third will sell with a comfortable profit. Another third will technically sell for a profit but in truth it will turn out they already extracted that profit. The last third is screwed. They bought in 2004-07 and/or re-fied up to peak price leverage levels. A very few of those will be saved by BAC relocation assistance. We are talking several thousand houses total.
I think you're assuming that someone's going to buy those houses . . . what jobs will people work if they want to move to the area, crossing guard at the elementary school?
Somebody's pain, somebody's gain. Once that lot has cleared out and the traffic on the 101, 118 quietens down a bit, I look forward to coming back - a second home in th Conejo Valley ? nahhh - its damn silly when I only expect to use it 3 months of the year - but one can dream.
13 comments:
Perhaps Ventura County can be declared a Federal Disaster? What would top it off is a real good freeze around March.
Can't believe BofA is buying them - talk about throwing good money after bad. Not that I mind, I used to bank with BofA long, long ago and was VERY unhappy with them. Would love to see them suffer.
There are three reasons I can see for BOA moving here.
1. The Feds are covering their asses so it is a no lose deal.
2. They are covering their asses from the 2 billion earlier purchase. We don't want to see any embarressment from their earlier deal gone south.
3. Buddies protecting each other. If CFC went bankrupt, the orange man would end up in an orange suit. This way they can claim there is no need for an investigation. and Mozillo will pay back his friends with some of the additional 100,000,000 he is getting out of this deal
"the orange man would end up in an orange suit."
Classic. Well-played.
LoL, the talking heads on CNBC just said exactly the same things in the same order. It sounded like they were reading off the blog. ;-)
If CFC failed, it would be an unmitigated disaster for the market. This was equivalent in essence to the LTCM bailout; the participants realized that they were facing either a short-term loss or a market meltdown, and chose to take the loss.
BofA's main mistake was that it took the CFC burden all on itself. A couple more weeks and the Fed could have rounded up all the major banks, showed them CFC's finances, and given them the LTCM speech: "either you guys bail these idiots out or we all go down."
The regulators fingerprints are all over this deal. In that respect BAC did a smart thing. They took one for the team and when the really nasty stuff starts flying they have a favor to call in.
Hillary is busy in LV getting out the illegal immigrant vote.
http://www.lvrj.com/news/13702902.html
The money quote... "We treat these problems as if one is guacamole and one is chips, when ... they both go together," she said.
Did they teach that at Yale? Where did she go to school?
Another question is can they afford to move?
Interesting capital phase change IMO- all that liquidity crashing out of solution into an varible assortment of gems and dreck...oh well, at least such solids can be filtered and the rest decanted.
What's another name for "house-poor"?
All I can say is the housed are hosed.
When i first started this blog oh so many years ago I called it "house arrest."
The CFC refugees will be of all varieties. I imagine a third will sell with a comfortable profit. Another third will technically sell for a profit but in truth it will turn out they already extracted that profit. The last third is screwed. They bought in 2004-07 and/or re-fied up to peak price leverage levels. A very few of those will be saved by BAC relocation assistance. We are talking several thousand houses total.
I think you're assuming that someone's going to buy those houses . . . what jobs will people work if they want to move to the area, crossing guard at the elementary school?
Somebody's pain, somebody's gain. Once that lot has cleared out and the traffic on the 101, 118 quietens down a bit, I look forward to coming back - a second home in th Conejo Valley ? nahhh - its damn silly when I only expect to use it 3 months of the year - but one can dream.
-K
"House Arrest" -that's good, was that before "Arrested Development?"
The Germans have the concept built into their word for real estate: Immobilien
Also love how they use the same word for guilt and debt: Schuld
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