Whistling Past Delinquencies
The market’s recent rally continues to defy negative economic numbers pouring from the data mills in Washington and overseas. Even more striking is that the gains are being led by banks and other financials which have their own toxic soup of indicators.
New fourth-quarter loan statistics from the American Bankers Association released Thursday do not break from the trend. Of the eight types of consumer loans the ABA tracks, only one — mobile-home loans — saw a decrease in delinquencies. Home equity, property improvement, indirect auto, marine, RV and personal loans all showed higher default rates.
ABA also said credit-card default rates rose to 4.52% from 4.2%. The trend isn’t good, but the rate is still close to the four-year average, ABA said.
Everybody is Casey now. Tune in, turn on and drop out.
19 comments:
FIRST!
No snark... too busy. Back to work now. The gubmint needs my tax dollars!
This used to be a hell of good country
Saw a notice of commissioner's sale in today's paper - 2 acres of land in flyover country (figure $3,000 per acre) and a 2007 mobile home. The amount owed on the loan was over $164,000. Who in their right mind buys a mobile home that costs that much? That kind of money will buy a brick house with a 2-car garage and a full basement here. Who in their right mind loans that much on a trailer?
$164,000 covers hookups, fees and permits in parts of this county.
Just saw a house go back to the beneficiary yesterday. What makes this one special is that it is a "beach house." That means a block from the sand.
http://www.zillow.com/homes/map/5212-WHITECAP-ST,-93035_rb/
$609,000.00 declined on the court house steps.
Zillow and general opinion had previously suggested that mid $800s was the market. This one might start serial default in coastal Ventura County.
No takers at 609k? What was the condition of the place? Did the last 'tenant' accidently trip and pull all the piping with him on his way out?
I don't understand how these prices could have gotten so inflated over the years. You can build a decent house in my area for $75-125 / sq. ft., and if you want swank, go to $250-300 / sq. ft. Looking at the aerial photo, there clearly isn't much land coming with the property. Location is certainly worth *something*, but *everybody's* location can't inflate their price.
From the looks of that neighborhood, they might as well just start living in tricked-out cargo containers stacked on top of one another. Google uses them for data centers, so they could probably be converted to kick-ass bedroom apartments. Tie 4 together, and you've got a small house. No foreclosure - just repossess it with a crane and a semi.
As some wag opined yesterday on CR - if you let the owner of an asset decide the mark to market of their own stuff this is the kind of nonsense that ensues
"Zillow and general opinion had previously suggested that mid $800s was the market. This one might start serial default in coastal Ventura County."
That area has some nice attributes and also some downsides. The quality of the houses varies all over the map, from just above shack to some rather nice "architectural" stuff.
Like many other areas, things got bid up far beyond reality, the bad along with the good, in this case exacerbated by the nearby beaches and coastal development restrictions. I'll be watching with interest to see if this sale/fail pulls the prices back toward some semblance of reality. Houses in that area were in the $60K range during the 1970s.
"Houses in that area were in the $60K range during the 1970s."
How would that look adjusted for inflation though?
A handwavy $350k +/-
How about some roasted Detroit coon for dinner?
It seems like every time I drive through Ventura now I see gang-banger wannabes. Like clowns in full costume. It has really gone down hill.
Speaking of clowns in costume, I was in Oxnard this week and there were a couple of them with their shaved heads and white tee shirts wearing matching flannel pajama bottoms.
I moved away from these folks and then this week someone went through our neighborhood and stole everyones mail. The Police said the thieves are trying to get credit card offers with checks in them that they can go use.
Welcome to the favella.
Akira,
Anything you have to soak in vinegar for 24 hours to eat sounds scrumptious.
Houses for sale in that neighborhood look like they haven't been redecorated in the 1960s.
$350k is generous.
Thanks to Beasley's astute dystopian philosophy I hope to find others to feature in Groovy Gangsta Heroes posts on Thursdays.
"Welcome to the favella."
Now, now, remember, diversity is our strength. Just keep repeating it until a nice, comfy glazed-over look comes to your eyes. Diversity is our strength ...
I watch those Jim the Relator videos and I honesty wonder what the &^%$ is in the water out there.
Not only the homes, but all those malls he passes going house to tore up house.
Never heard of a whole state having self destructive tendencies.
And this is now the benchmark for normal that is taking down the rest of our country.
The fact the banks have no problem picking on the stupid is like pissing gasoline on the fire.
After a sharp drop off of credit card offers since last fall, they seem to have started arriving in the mailbox again. Only the variable rate of that Chase Visa is 26.99% plus prime, but not to exceed 29.99%. Trolling for dumbasses I guess. Having exposed themeselves for the scum they are, I cannot even get worked up over their greed. Loan sharks in Brooks Brothers suits.
But I can work up my ire for the FASB board who went along with this charade regarding mark to market that caused this nightmare. Guess the greed overrulled their conscience/intelligence. When you cannot trust the folks writing the rules for auditors, we are all hosed.
Wall Street jumped skyward yesterday figuring somebody would again buy their toxic assets. The true April fools.
I was watching the septic tank man pump our tank out yesterday. I wondered if the brown stinky sh*t inside is still considered steak as that is what it once was and maybe, just maybe that is what it will be in 20 years. So instead of paying 240 bucks for the pump out, should I offer to sell for $8 a lb? Mark to market has to be real, else everyone is just blowing smoke up one another's butts.
The proponent arguments are crap.
1. If the banks say it is worth more, great, audit it. They have had 3 years, there are all kinds of financal folks looking for work but the banks/brokerages havve not lifted a finger to determine the value of the assets. They are managing a fantasy.
2. They talk about what it MIGHT be worth in 20 years. "if wishes were horses, then dreamers would ride" comes to mind.
3. they say in a bad economy, it is not prudent to sell the assets at firesale price. Funny how they have no problem forcing borrowers to do that, or to foreclose in order to find out what the asset is worth so they can go after the borrower.
Hyprocites.
Watch this fool's rally. Wall Street dreams this is all going get better and the investagators will disappear. When the CRE market is exposed, the DOW ride downwards will be faster than last fall. And it looks looks like Corporate debt is ready to get on the the warm up deck as the final coffin nail.
How can our instututions (govt, banks, regulatory groups etc) keep doing the wrong thing and expect things will get better.
We are totally f*cked..
h.
Testify brother!
If only credit card delinquents were something we should worry about. Credit cards are nothing compared to what's coming.
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