Friday, November 30, 2007

Resusitation Required

maybe that isn't your 'cuppa.'
i just cannot understand the recent resusitation of the homebuilders. Sure there is short covering and all. Sure the HBs are massively over concentrated in the investor portfolios. Still who is buying this crap at these prices?

Wednesday, November 28, 2007

For Want Of A Nail

In 1363, to ensure the continued safety of the realm, King Edward III commanded the obligatory practice of archery on Sundays and holidays! The earliest known written version of the rhyme is in John Gower's " Confesio Amantis dated approximately 1390.

Benjamin Franklin included a version of the rhyme in his Poor Richard's Almanack.

For want of a nail the shoe was lost.
For want of a shoe the horse was lost.
For want of a horse the rider was lost.
For want of a rider the battle was lost.
For want of a battle the kingdom was lost.
And all for the want of a horseshoe nail.

For want of a rate freeze the payment was lost.
For want of a payment the profit was lost.
For want of a profit the tranche was lost.
For want of a tranche the rating was lost.
For want of a rating the economy was lost.
And all for the want of a rate freeze.

Not. These people are going to walk because they are upside down. The solution to owning houses you cannot afford is to stop owning not make them no less affordable.

Tuesday, November 27, 2007

Density Density Density Pt. 1.5 Case-Shiller

Here is the C-S price change versus UA density.

2 Los Angeles 6,062 Los Angeles down 7%;
1 New York 5,184 New York down 3.6%;
6 Miami 4,815 Miami, down 10%;
3 San Francisco 4,311 San Francisco down 4.6%;
4 Chicago 3,525 Chicago, down 2.5%;
11 San Diego 3,520 San Diego down 9.6%;
21 Denver 3,228 Denver, down 0.9%;
15 Detroit 3,204 Detroit, down 9.6%:
24 Phoenix 3,193 Phoenix, down 8.8%;
13 Washington 3,055 Washington, down 6.6%;
19 Seattle 2,876 Seattle, up 4.7%.
25 Portland 2,738 Portland, up 2.2%;
7 Boston 2,673 Boston, down 3.2%;
14 Cleveland 2,659 Cleveland, down 4%;
22 Minneapolis 2,453 Minneapolis, down 4.5%;
31 Tampa-St. 2,416 Tampa, down 11.1%;
29 Dallas-Fort 2,346 Dallas, up 0.2%;
33 Atlanta 1,590 Atlanta, up 0.4%;

I'll run a correlation when I get a chance. First glance looks weak. I'll get size and recent growth rates included.

Monday, November 26, 2007

Density Density Density Pt. 1 What Is Density?

"For every complex problem, there is an answer that is clear, simple--and wrong." - HL Menken

No such luck this time. If only there were just wrong and right answers the problems would have ling since been resolved. Density is people in a space. Cut it any finer and planning breaks out and spoils the whole mess.

Today's Plantetizen has an interesting article from the Globe & Mail that shows even whole nations struggle with an identity based upon these arbitrary constructs. Excerpt: Mayors and media pundits insist we're a rapidly citifying nation. Which calls for a radical shift in resources and Canadian identity. But does the proverbial 80/20 split between downtown and down on the farm reflect a new era for a pioneer dominion - or just bad math? Gee, where have we heard the hue and cry that we must do things differently based upon bad science claims? Why is it that it always seems to be pro-urbanists that embrace these tactics? Nevermind for now. We are still laying background. There will be plenty of time to sling the mud after we establish a common language.

The US Census calls places with 1500 persons per square mile urban. The only other choice is rural for everything else. A square mile is pretty big, 640 acres. That's a golf course and 500 houses which would qualify as urban. A square mile is\\can either be a fine or a pretty coarse measure. The smallest cachement is the census block. The next largest is the block group, a logical assemblage of census blocks.
Check out Wendell Cox's decile rankings from the 2000 Census. Hard to imagine Los Angeles as being significantly more compact than Boston eh? That's why the data is more important than the perception. Or is it? Hmmmm.

Density Density Density Pt. 0

Amazingly this is not another tedious anti-density rant. Nope, this is a pro-density post. Density is still a stupid idea but that doesn't mean it lacks aspects that some people desire. Okay, for the most part they want density for other people but still...

First. What is density and what is it not? What are we measuring and at what scale? What about demands on the same physical spaces from non-residential uses? How do architecture and geography and adjacent land uses affect the perception of density? What are the current energy/environment conditions and what portends for the future? How do shared spaces and public spaces fit into the equation?

This is a "Zero Level" post for asking questions and making suggestions. Next up; why density always costs more. Always.
Oh, and just to prove I'm not wholly opposed to crowding people:

Saturday, November 24, 2007

What Not To Do With Your Equity

Something happened to all the MEW (Mortgage Equity Withdrawl). The usual snark is "Hummers and Harleys." There surely was a whole lot of that but there was also a lot of pergraniteel (Pergo flooring, granite countertops and stainless steel appliances). There was also a lot of tuition. College costs have been running more than double inflation for quite a long time. There was also a lot of legitimate home improvement, adding square feet to smaller homes, upgrading mechanicals, insulation, firesafe roofing, etc. Let's not to be too quick to condemn all that MEW as mere consumption. Still, now that it has come to a dead stop there is no way to "short" MIT, ND or USC. There are some companies that qualify. Think Harley-Davidson. A representatitive chart:

Big ticket consumer discretionary products are the leveraged financial products purchased on margin of the housing equity boom. We've already seen what happened to those financial products, selling for dimes and pennies on the dollar. Expect the same for bikes, boats, etc. I'm personally thinking a nice low mileage SV650/850/1000 in the $2000-$3000 range. It won't be long before any number of 20 something construction workers are selling these to pay for the new baby after losing their medical in the slowdown.

UPDATE: More fires in SoCal today. Nothing nearby, houses burning in Malibu. Details as they warrant.

Wednesday, November 21, 2007

It's Only A Flesh Wound

In the bleak days of nineteen-eighty-three, as England languished in the doldrums of a ruinous monetarist policy, the good and loyal men of the Permanent Assurance Company-- a once-proud family firm, recently fallen in hard times-- strained under the yoke of their oppressive new corporate management.
Pushed beyond the bounds of decent and reasonable victimisation, the aged retainers take their destiny in their own hands and-- Mutiny!
And so, the Crimson Permanent Assurance was launched upon the high seas of international finance.
There it lay, the prize they sought, the richest jewel in the crown of the I.M.F.: a financial district swollen with multi-nationals, conglomerates, and fat, bloated merchant banks.
Hidden behind the faceless, towering canyons of glass, the world of high finance sat smug and self-satisfied as their future, in the shape of their past, slipped silently through the streets, returning to wreak a terrible revenge.
Adopting, adapting, and improving traditional business practises, the Permanent Assurance puts into motion an audacious and totally unsuspected takeover bid.
And so, heartened by their initial success, the desperate and reasonably violent men of the Permanent Assurance battled on... until, as the sun set slowly in the west, the outstanding return on their bold business venture became apparent: the once-proud financial giants lay in ruins, their assets stripped, their policies in tatters.
Full speed ahead, Mr. Cohen!
Up, up, up your premium. Up, up, up your premium.
PIRATE: [singing]
Scribble away!
Up, up, up your premium.
PIRATE: [singing]
And balance the books.
Up, up, up your premium.
PIRATE: [singing]
Scribble away!
Up, up, up your premium.
PIRATE: [singing]
But manage the books.
Up, up, up.
PIRATES: [singing]
It's fun to charter an accountant
And sail the wide accountancy,
To find, explore the funds offshore
And skirt the shoals of bankruptcy!
It can be manly in insurance.
We'll up your premium semi-annually.
It's all tax deductible.
We're fairly incorruptible,
We're sailing on the wide accountancy!
PIRATE: [singing]
Sail away!
CHORUS: [singing]
Up, up, up...
And so, they sailed off into the ledgers of history, one by one, the financial capitals of the world crumbling under the might of their business acumen,... or so it would have been... if certain modern theories concerning the shape of the world had not proved to be... disastrously wrong.

Thanksgiving Turkey

Under the you can't make this up heading our friend John the Realtor not to be confused with our friend Jim the Realtor has this bit sweetness and light up on his sort of blog:

This Thanksgiving, I think it’s important to remember that there are some of us who are concerned about our clients, their needs, and not just about getting paid. Some of us are truly here to help you find the right home for your needs and really listen.

Be sure to thank those honest professionals this weekend. (And the best way to thank someone is to send them a referral.)

Got that? The best way to thank a realtor who isn't just in it for the money is to send a little work his way. Jeez, you can't make this stuff up. And since John's self serving post on his sort of blog won't accept your comments there feel free to post them here where he's sure to see them.

Let's Talk Turkey

Tuesday, November 20, 2007

Riverpark? RiverPORK!

Unfreakin' believable. I swear they need to test the Oxnard City Council chamber's water for psychotropics. Talk about drinking the Kool-Aid. This from our local fidshwrap The Star:The Oxnard City Council tonight will consider giving RiverPark developers $12 million for a parking structure and other improvements for an upscale shopping center.
Nevermind the project is obviously deep in financial trouble. Nevermind the economy is on the brink of a recession. Nevermind the transportation infrastructure cannot handle the predicted increase in VPD. Whatinthehell is the Council thinking?

Here is their lame rationale:
As part of the deal, RiverPark will pay the city $9 million for a downtown business assistance program, but it's unclear how that money would be spent.

If that is a little unclear let me put it in plain language: Money laundering with a 25% handling fee.

FRE Insider Information

Freddie Mac for the last 5 days. It isn't chart magic to decode the price action. Freddie visited the confessional and lost $2b in the last quarter and wrote down assets an additional $8b. Dontcha just wish you knew ahead of time that this was coming? Opened down approximately 30% this morning. Couldn't even tell you what 30 puts would have cost you last Wednesday when it is obvious (in retrospect) that the bad news was starting to filter out to some people.

Let's see what related stocks have to say after things settle down. Perhasps a head and shoulder formation?:

Monday, November 19, 2007

Christmas Will Be Red

I've been watching for years. my regret is in not having taken time lapse snapshots. Housing-Watch has been tracking asking prices for those same years.

Most are also at 12 mo lows. Anybody who is still thinking this is "local" needs a new excuse.

Saturday, November 17, 2007

Collusion Implosion or Both?

"If people [homebuilders] stop cutting prices, that's actually good," said David Goldberg, an analyst with UBS Investment Bank. "If everybody does it, it works. If one builder does it, it doesn't."
This gem from a St. Petersburg Times article that goes on to say highly questionable things like: The reductions, builders complain, have sliced into already thin margins. "Thin margins" my Aunt Millie. Here's a free clue for all those professional analysts. People stopped buying houses at these prices. People will start buying these houses at lower prices.

Friday, November 16, 2007

Inflation, Exaustion or Both?

NYTimes reports:
November 16, 2007 - Price Rise at Starbucks Cuts Visits and Shares

Starbucks, the world’s largest chain of coffee shops, lowered its profit and sales forecasts yesterday after reporting its first decline in customer visits.

The shares fell more than 7 percent in after-hours trading.

The forecast revisions suggested that Starbucks was losing customers to McDonald’s and Dunkin’ Donuts, where a cup of coffee may cost $1 less.

“Starbucks is saying what the rest of the U.S. is saying, that the consumer is getting hit,” said James Walsh, who helps invest $1.1 billion at Coldstream Capital Management in Bellevue, Wash. “They’re not immune.”

For some reason I never caught the Starbucks bug. Statistically I should have been target zero for their appeal. If I want a cup of coffee I deliberately bypass the chain on price alone. Does anyone remember Casey's daily rewarding himself to the tune of about $2000/year in latté and bisquiotti? My teens however... that's a different story. They don't seem to understand the marketing or cachet the brand has established. Why should they question $4.50/cup when that's what they've always known? I can admire the company and question the value. Now it turns out that I may not be so different after all. There is hope for the American consumer.

Thursday, November 15, 2007

Dead Again CA-AHSR Edition

In the earlier post on the imploding CA economy I noted that the silver lining was that CA-AHSR (California Almost High Speed Rail) was dead for a generation. It isn't just that there is no money. That hasn't stopped any number of bad ideas in the past. It isn't that the upcoming bond for the first 20% of the first partial route won't pass. It isn't even my spirited and massive influence as to the security issues. it certainly isn't the hundreds of times I've caught them lying about every aspect of the proposal. Logic and truth are poor horses to use in this contest. Far better to use environmentalism and racism as your stalking horse. Apparently the Pacheco Pass route currently recommended goes through wetlands and induces sprawl and doesn't serve the minority population in the East Bay area. Waaaaa.
Here is a SFGate article excerpt:

"If it's defeated, there's no money for either alignment," said Stuart Flashman, an attorney representing several groups that support the Altamont. "Do you want a high-speed rail system, or do you want a pipe dream?"

The rail authority envisions a 700-mile [No. ed.] statewide [No. ed.] high-speed [No. ed.] rail system that would allow travel at speeds in excess of 200 mph [203mph. ed.], whisking travelers from the Transbay Terminal in downtown San Francisco to Union Station in Los Angeles in 2 1/2 hours [No. 2:45 to the Oakland Terminus of the Caltrain connector. ed.]. The proposed system would cost about $40 billion to build [No. The first segment LA to Oakland will cost $43.1b and rising ed.], but the project has no money - or promise of funding - for construction. The bond measure [$10.1b $.6b supposedly for CA-AHSR. ed.] is scheduled to be on the November 2008 ballot, but Gov. Arnold Schwarzenegger, who persuaded legislators to postpone a vote once, wants it pushed back again to 2010 or 2012.

Socialism meets reality once again.

48 Point Type

It must be important when the LATimes uses the big fonts. In this case top fold lead of the Business Section under Real Estate:

Prices of homes at 2005 levels

Well, late to the party is better than never having shown up I guess.

If you bought last October how has that worked out? You paid $480,000 and you've lost $36,000 in a year. You've actually lost a whole lot more because your house isn't the median anymore. The median today is 120 sq ft (~1 bedroom) larger than yours. Okay, the 7% in purchase costs are gone. The $5000 in taxes are out of pocket. All told PITI plus depreciation plus lost opportunity costs and your little adventure in real estate investing has cost you $200 per day. Premium hotel rates but with no room service or maids. Good going there smart investor. You are more than $50,000 behind the dummy who rented.

Juicy data by clicking the headline. Enjoy.

Finger Pointing Time

I've already posted on California's budget crisis. Last summer when the budget was being put together. Last fall when the first revenue shortfalls appeared. Last month when it was obvious that the State House could no longer ignore the problem. Now, finally the first stages of the game are being played. And that first stage? Blame. The way this works; the liberal MSM blames the recalcitrant Republicans for obstructing "solutions." Translation; the Democrat legislature cannot ram through dangerous tax increases. The Democrat legislature blames whomsoever is currently in their target sights. For now that is Da Governator. When Arnold was sworn in in the recall election his first act was to repeal the hated vehicle registration tax.
“There is an ongoing gap between state expenditures and revenues that this governor helped create by slashing vehicle fees and refusing to balance that loss with revenue from another source,” Perata [Senate President Pro Tempore Don Perata, D-Oakland] said in a statement. “That alone accounts for $6 billion of this problem.”
Bullsh¡t. Complete utter bullsh¡t in case you are keeping score.

California has a structural deficit/debt problem. No amount of taxes can close the gap. No amount of spending cuts are possible.

Next step: Schwarzenegger will declare a fiscal emergency under Proposition 58, a very weak balanced-budget measure, forcing the Democratic-controlled Legislature to deal with the budget problem supposedly before acting on other issues. This kills the child healthcare plans and any number of grand projects Sacramento was planning. Strangely it also probably means that a lot of untapped bond authority will finally get spent on real projects. High Speed Rail is now officially dead for a generation at least.

There's 12 million families in California. They spend $116 billion a year. What the heck do we get for our $10,000?

Wednesday, November 14, 2007

FASB 157 Spiked

Shock, surprise. Google the news feeds. They are changing fast.

Here's the deal. The FASB rule 157 required more stringent mark to market valuation of illiquid investments. The kicker? 157 was voluntary. A voluntary regulatory guideline was withdrawn because it would cause market chaos. A bunch of criminals with trillions under management are taking the 5th rather than come clean.

Another WTF? Moment

Margins are evaporating along with home equity, competition is fierce, free services are reducing the value of your efforts. Why then are commissions rising? WTF?
In 1991, the average commission rate was 6.1 percent, ...The rate inched down to 5.4 percent by 2001 and by the end of 2005, it stood at 5.02 percent.

Industry insiders expected further declines with the competition of discount and Web-based brokerages...
But when home sellers found themselves with houses sitting on the market, they became increasingly amenable to paying higher commissions. Real Trends reports the average commission reversed its course and climbed to 5.18 percent in 2006, and it looks like it's going to end 2007 with another rise.


Now don't get me wrong. A true professional can save you money or make a deal where no deal previously existed. A whispered word in the right ear at the right time can make a difference of thousands in your favor. There will always be real estate agents just like there will be travel agents. Still the median home in my area is $560,000. What about a routine transaction justifies $30,000 divvied up amongst the salesmen?

Tuesday, November 13, 2007


My sister wants to buy these houses:The flipper turned flopper owner needs to sell them. He needs $650,000. the houses are not worth $650,000 and therein lies the problem.
Link to the bungalow in back here.
Link to the front house here.

The deal works for my sister as the front house rents out for enough to justify the purchase so they can use the smaller house summers. What then is the problem? Price. You see the flopper bought these properties with a 1031 exchange and then spent a truckload of cash renovating and is now bleeding serious green. 1031 Starker exchanges are great investment vehicles. You can roll over gains form one property to like kind properties tax free. Tax free that is until you cash out. Were the flopper to accept $615,000 he'll end up owing taxes on the $350,000 or so from the previous rollover. That's regular income State and Federal. Ouch. Truth is he cannot afford to sell the houses that are slowly killing him. I guess we'll just have to see if the courthouse steps have the same problems.

Monday, November 12, 2007

Insanity Helps

Look at this chart:

Can anyone tell me where on this graph the company in question filed for bankruptcy protection?

Levitt is up 25% on the day? Why does anyone even pretend this is a market and not a crooked card game.

Groupthink Collective Censorship and Transit Advocacy

I have transgressed the unwritten law. I fought back against denigration and insult and in the process proved my points and embarrassed the transit cabal. Normally no big deal. It isn't too hard to refute the FOAMERS (Forces of anti-mobility), NUTS (New Urbanist Transit Supporters), SmUGLers (Smart Urban Growth Lovers), and TrOGs (Transit Only Groupies).

But enough of my description. Here is the threadand the reason I am bothering you. Two reasons. First Metro Rider was recently recommended here and frequently has interesting topics of transportation concern to the greater LA region. It also provides unique insight into the usually "invitation only" world of anything except autos. Second, I bring this to your kind attention because there is an opportunity for education. You see after the dust up outlined above the author has decided to implement a +/- "voting" system where an 5 people can label someone a troll. Anyone interested in this experiment in collective censorship is encouraged to read the thread in question, make up your own mind and vote + for the people who tried to have a discussion and vote - for those who were just ignoring the facts and seeking out personal confrontation and flames. Thank you for your patience in this matter. If you are uncomfortable with the system you can tell the author in comments here.

Sunday, November 11, 2007

Just Getting Presentable

If We are all going to be out there with a bunch of people swimming naked then it only makes sense to be presentable. Case in point:

Everyone is encouraged to be prepared as the tide goes out.

Eleventh Hour of the Eleventh Day

Origin of Veteran's Day

In 1921, an unknown World War I American Soldier was buried in Arlington National. This site, on a hillside overlooking the Potomac River and the city of Washington, became the focal point of reverence for America's veterans.

Similar ceremonies occurred earlier in England and France, where an unknown soldier was buried in each nation's highest place of honor (in England, Westminster Abbey; in France, the Arc de Triomphe). These memorial gestures all took place on November 11, giving universal recognition to the celebrated ending of World War I fighting at 11:00 a.m., November 11, 1918 (the 11th hour of the 11th day of the 11th month). The day became known as "Armistice Day.”

Armistice Day officially received its name in America in 1926 through a Congressional resolution. It became a national holiday 12 years later by similar Congressional action. If the idealistic hope had been realized that World War I was "the War to end all Wars," November 11 might still be called Armistice Day. But only a few years after the holiday was proclaimed, war broke out in Europe. Sixteen and one-half million Americans took part. Four hundred seven thousand of them died in service, more than 292,000 in battle.
My great-uncle Gene was gassed in WW-I. My family said for years after returning he ate on the floor with his plate in his lap. I still remember his antics from when I was younger. My sisters' husband is currently serving in Afghanistan. Apparently he retained all his "cool points" when he didn't lose lunch on a 40 min Blackhawk ride to the front lines. He got those "cool points" just for being a Colonel and MD and psychiatrist and going to the lines to help our soldiers in the first place.

And so it goes.

Saturday, November 10, 2007

More Licensing is Good

A license is about being qualified to do something. Sure it take thousands more hours in Massachusetts to become a beautician than a Real Estate Agent or Mortgage Broker. That's a different subject. No, I'm talking technical qualification. I don't care what color you are or how many legs you have or even if you are wearing fishnets... Alright, I do care if you are wearing fishnets but again, that is a different story. No, you pass the test, and again I don't care if the written portion is in Mixteca or Pig Latin, just pass it and then pass the oral/driving portion and I say "Welcome to America, you are qualified to drive." What's wrong with that? Of course for my plan to be that simple we need to make a few minor changes.
• First, a DL is not to be used as a form of identification. Is the board certified diploma on the wall a form of identification? Good, we understand this point.
• Second, qualified is not the same as allowed. There's a bunch of other stuff expected before you start using the roads. Are you insured? Is the car registered and insured and in good operating condition? Are you in good health and otherwise unimpaired so as not to be a danger to yourself or others? Do you agree to obey the laws of the road and the land?
Anyone seeing the real issue here? "Drivers License" is the new code phrase for preferential citizen status. Wanting to drive legally here in the US is no big deal. Clearly my proposal for Drivers Licenses as nothing more than Drivers Licenses would satisfy any of the pro-invasionist advocates.

The only way to move forward on this issue is for the other side to admit this isn't really about passing the drivers test and getting certificated. Likewise; We confiscate the cars of suspected solicitors of prostitution. I smell an opportunity for new profit and probably the cheapest form of congestion relief around.

¿Que Pasa?

From the LATimes:
Discord roils L.A. Unified parent panel

Acrimony with racial overtones has plagued the advisory council. The key issue: whether meetings in Spanish should be allowed.

For months, parents on a Los Angeles Unified School District advisory council have disagreed over whether their meetings should be conducted in Spanish or English. Such arguments became so abusive that district officials canceled meetings for two months and brought in dispute-resolution specialists and mental-health counselors.
Friday's chaos had been building since February, when Fonseca, who is bilingual, started to give his chairman's report in Spanish. Some in the audience objected; arguments and recriminations ensued, and school police rushed over amid concerns that a fistfight would break out, witnesses said.


The money quote: "Many parents serving on local school councils don't speak English."

Friday, November 09, 2007

How's Our Canary Doing?

From time to time we revisit Wrightwood, CA. Longtime readers may recall my sweating out the sale of my last non-personal use real estate property there in April 2006. Not only did I get out but I sold to my realtor. The same property is currently for sale again as an agency exclusive. I'll try to track down some info. Back then there were 63 offerings and ~3 months supply. Today there are 170 for sale and DQNews reports only 10 sales in October. 17 months inventory. I think there about 17 real estate agents as well.

Wrightwood is still a great place. Four seasons, small town feel. Good skiing close and at reasonable prices. Downtown, such as it is can be scoped with this LiveCam. Stay a while, enjoy yourself just don't buy a house.

Thursday, November 08, 2007

What Do Dawgs Read Anyway?

The issue came up again a few threads down. This might be a good time to talk about what we read on the web. Follows is a huge ungraded list.



Exurban Nation

Calculated Risk

Jim The Realtor

The Big Picture

The Real Estate Bloggers

Bakersfield Bubble

Bubble Markets Inventory Tracking


Sitting Pretty

Jennifer Marohasy

Cafe Hayek

Bubble Meter

Sacramento Land(ing)

Southern California Real Estate Bubble Crash

Marin Real Estate Bubble

South Bay Beaches Housing Bubble

Boulder Colorado Real Estate Research Blog

Lou Minatti

Seattle Bubble

Sacramento Home Prices

Real Estate Asking Price Summary News, Analysis & Opinion

Sacramento Real Estate Statistics

Keep it Real in Sacramento - BLOG

Mortgage Fraud Blog - Mortgage Fraud News

Look Out Below

Housing Doom

Square Feet: Blowing (real estate) bubbles

HousingTracker: Median Home Prices & Housing Inventory Data

Paper Money - A US Real Estate Bubble Blog

Real Estate comments

Interest Rate Roundup


The Mortgage Lender Implode-O-Meter

California Housing Forecast - California Housing Forecast

Housing Wire - completely free mortgage news

Market Ticker

Watts Up With That?

Doctor Housing Bubble Blog

SMART Agent Homepage

Blown Mortgage - Honest mortgage commentary, market insight, opinion and tips to keep you from getting a bad mortgage

BawldGuy Talking


Illusion of Prosperity

Piggington's Econo-Almanac | Southern California Housing Bubble News and Analysis

The Great Loan Blog

Reggie Middleton's Boom, Bust & Bling Blog

Mortgage Advice and Mortgage Tips | The Truth About — The largest weblink reference source for the mortgage origination and investment community

Economic Disconnect


Inland empire real estate blog

Slow Bubble

Watching America's real estate markets crash in 2006

Flip This

The Boy in the Big Housing Bubble

America's most over-valued real estate markets

There is no housing bubble!

Hawaii Housing Bubble

HOUSING BUBBLE? Much bigger than just a housing bubble!

Out at the peak

Baltimore Metro Area Housing Blog

David Lereah Watch

View from Silicon Valley... What's really happening

Net Gain Real Estate | Maximizing Return on Real Estate Investment

The Phantom Republican

What bubble?

Wayward Engineer


Some is crap. Some is comedic gold like John Lockwood the Sacramento Realtor/Bhudist/Optimist. Some moves too slow to maintain my interest. The list always changes but have fun.

(Un)intended Consequences

"Be careful what you wish for. They wanted to make sure that people kept paying their credit cards, and what they're getting is more foreclosures.''

Bloomberg has the rest of the story.

The new bankruptcy laws are helping drive foreclosures to a record as homeowners default on mortgages and struggle to pay credit card debts that might have been wiped out under the old code
Washington Mutual, Bank of America Corp., JPMorgan Chase & Co. and Citigroup Inc. spent $25 million in 2004 and 2005 lobbying for a legislative agenda that included changes in bankruptcy laws to protect credit card profits, according to the Center for Responsive Politics, a non-partisan Washington group that tracks political donations.

I smell toast burning. Maybe the charcoal parts will make the sh¡t sandwich taste better?

Update, my favorite quote:
Four million subprime borrowers with limited or tainted credit histories will see their mortgage bills increase by an average 40 percent in the next 18 months, according to the National Association of Consumer Advocates in Washington. About 1.45 million of those will end up in foreclosure by the end of 2008, said Mark Zandi, chief economist at Moody's, a research firm and unit of Moody's Corp. in New York.

More like 4 million will end up in other hands. Analysts keep making the mistake of extending past trends into the future. These people cannot afford these houses now and they cannot afford them when they go down 40% in price. They need to get out of my houses and they need to work a lot harder for less money to pay for my investment returns that they promised to me.

What Am I BID?

Sotheby's fired a shot across the bow of all those ostriches with their heads in the sand. You know who I mean; all the idjits claiming the "high end" is immune. Citing poor auction activity the stock opened down 30% this morning. Sotheby's has a local real estate office. Here is a sample page. 3br/3ba for a mere $5.5 million anyone?

Wednesday, November 07, 2007

Vocation Avocation

av·o·ca·tion (#v.7-k"ZshMn) n.
• An activity taken up in addition to one's regular work or profession, usually for enjoyment; a hobby.
• Archaic: A distraction or diversion.
A shy reader asks via email:

Land use/transportation as a hobby? Could you be more specific?

Maybe you can help me with an observation:
Why is the garage the most prominent feature on a house? I mean, it is first thing you see and it occupies such a large portion of the front of the house. My suspicion is that this is the most efficient way to build as much house on a small plot of land (i.e. the ranch style subdivision). Personally, I find it annoying. I don't want to see the garage. I would prefer to have the garage accessed on the side of the house (i.e. corner lot house) or have the garage detached and recessed to the back of the house.

Snout houses... don't get me started. Oh wait... you did get me started. Well then, you asked for it.

First, the short answer: Planners and developers conspire to promote this ugly pattern. Planners initiate the downward spiral by misapplying zoning to promote their urbanist goals and supposedly save money for municipalities. Developers under those restrictions are severely limited in the housing types they can build and still make a profit. The result is snout houses.

Here's how I explain it:
I've noticed one trend that runs right through the
center of every planner driven theory of development
for the last half century. They all seek to
maximize the proportions of public space. Even
traditional suburban residential designs now
typically dedicate three times the area of 50
years ago. No wonder the sense of community is
weakening; we are progressively disenfranchising
any sense of ownership.
Snout houses are the result of planners backing private property behind gates and walls and garages.

Tuesday, November 06, 2007

Kalifornia Uber Alles

Over on CalculatedRisk there was another flare up of California bashing. Look, I admit "we" are totally screwed. We were warned and there just weren't enough right thinking people to make a difference. Now it is time to reap the punishment we so richly deserve. A few personal observations and some budget analysis:
• The State is too damn big to be governable. Not just 36 million people but half of them more than 400 miles away from the Capitol.
• Single party control. For the record, it doesn't matter which party.
• Political impotence. On the national level CA is no longer a battleground state. The Congressional delegation is partisan, incompetent and uncoordinated. It doesn't help that our Federal representation is some 1/4th what some regions enjoy. The Electoral College and 435 seat lower house allocations weren't meant to address 36 million population states.

Okay, budget time. First the analysis of Tom McClintock last June:

In order to produce a genuine balanced budget with a minimum prudent reserve, additional spending reductions of at least $2.893 billion would have to be made, bringing general fund spending to $100.067 billion – or $8.352 billion MORE than we spent as recently as FY 2005-06.

Recent? Not in the least. the Cal-Tax Library has more than a decade's worth of bad fiscal policy archived.

Is it any wonder that Tom McClintock is referred to sometimes as the shadow governor? Here he explains almost a month ago what "Da Governator" just now is discovering is an emergency. Excerpt:
10/12/07 - The Sacramento Bee -- which was the most vitriolic of the newspapers when I warned last summer that the budget was dangerously out of balance and filled with accounting gimmickry, wishful thinking and outright deceptions -- today reported that the budget is now, well, dangerously out of balance. I’m sure they’re shocked-just-shocked.

The Bee reports that based on shortfalls in revenues from the “Big Three” taxes (income, sales and corporate) next year’s deficit is now estimated around $8.6 billion, and this year’s budget could be $2.5 billion below projections.

Here's the money-quote™: The state’s cash position has deteriorated by $9.086 billion over the last 12 months.

Billions seem so dry. Instead think of a billion as $100 per family. Yeah right, as if California spreads tax burdens. Got that? Every family is on the hook for an extra $1000 BEFORE the onset of the fiscal crisis.

Looks like my first guess 07-08 were right. Revenues about $97b against projections of $108b and original planned expenditures of $111b. The next big milestone is Dec 10th when property taxes are due. I predict "shock and awe." Nobody saw this coming.

Yes, California is screwed. Try to say something else as well in the comments.

Monday, November 05, 2007

Huge Transit Ridership Changes

Remember the 90s? You know when transit was the future? The future is here. You'd think a massive 10% y-o-y change in ridership would be headline news right? Not when it is a decline. Here is the Los Angeles data:
Bus Total Calendar Month Boardings 2007 30,582,796 2006 33,860,858

This is headline news. Haven't you heard the headlines? That's because the implosion of the decades long LAMTA policy of transit bias is imploding. These lies cannot survive a recession.

I've been very patient. I've long seen the current transit crisis. All the new projects are in trouble. All the recent projects are not growing as planned. All the old lines are in desperate need of deferred attention.

My only surprise is that not everyone saw this coming or that most did not understand that transits' minor revival was a dead cat bounce.

Hey Buddy, Wanna Buy a Slightly Used Car?

First thought; "Great Used Car Huckster." Second thought; "Can't Speak Spanish." Third thought; "But can identify with the sizable Russian minority." Fourth thought; "Can't close the milk carton never mind a deal."

You get it. What are your thoughts? Also, I admit being sufficiently uninterested. Anyone got a synopsis of the the recent reverse migration? Anything to do with the tens of thousands of damage to a certain vehicle? Or should I say two vehicles since Damion's carcass probably did a job on the underside of some bus somewhere.

P.S. "Real" posts after I take cupcakes to the 3rd grade.

Saturday, November 03, 2007

The Tard Wonder Duo Doesn't Hear You!

D&C seem to be too busy for such things as comments and blogging. All the comments are gone. Sounds like Twinky the Boy Wonder has been doing unspeakable things with the backup thumb drive again. (There's an image that'll stick with you.) So, just like last time, I know you'll just burst if you don't let it out so vent here. Post what they won't let you post at FHB or just tell me that the secret spycam photo seen here is just too much.

Dodge Bob & Weave

That bastion of oldthink MSM the LATimes has the usual agitprop cheerleader article on the latest pack'o'lies being foisted on a desperate metro, state and nation. Anybody got $11b lying around?

Here's the justification for spending all that money: ...the new concept has sparked much debate because of how crucial many officials see the subway to easing the Westside's traffic woes.

A subway to the Westside CANNOT ease traffic congestion. It just isn't possible. The best a subway can hope to accomplish is to hold off an increase in the rate of congestion growth. That only after screwing millions of people for many years with massively increased congestion during construction that will leave behind LESS transportation capacity.

Understand the "Red Line to the Sea" is just LA suffering world class city syndrome. It has no more regional importance than a museum or sports franchise. The lie is in calling it anything more than that.

Friday, November 02, 2007

iPod miPod yourPod

iLou Minatti observes that the retail channel looks to be full of Apple consumer products and don't appear to be selling as well as he thinks they should. Truth is a little more complicated; iPods are "suffering" from two forces. On good, one bad.

First Apple deliberately overlapped products. Too many models too similar and no clear price performance leader. They did this for two reasons; to block out any competitor who might establish a niche and to literally use the market to reveal consumer preference. They knew some models would fail.

Second, Apple is a victim of bad planning. This is an exact repeat of Chrysler's convertible syndrome. When Chrysler reintroduced the convertible to the mass market the reaction was huge. Many times greater than projections. Everybody jumped on board at the same time it was discovered it was years and years of pent up demand. Everybody has an iPod, there's nobody waiting for the end of November to get one that also comes with a free rubber protective case.

Don't worry about Apple, if they need to "cut" prices expect iTunes Music Store credits to be thrown in.

Thursday, November 01, 2007

Merry Xmas (Season)

Yep, that's right. Last night kicked off the "Holiday Season." No, not the time of thanks (although "tanks" works on another level) and celebration and religious contemplation. Squeeze that in during half-time. The real reason for the season; consumer inducement to excess. While getting dragged from store to store collecting future cavities at the Camarillo Premium Outlet Mall the parents were treated to coupons for "early-bird" specials. 20% off any item after all other discounts and things like that. Nothing at Cole Haan shoes or Coach handbags, they were doing just fine it seemed.

So what's this? Anecdote, nothing more. And we all know that the plural of anecdote is not data. The problem is we just cannot rely on the data. Too many people have too much tied up in spinning anything they might be able to share with respect to consumers hitting the wall or more I suspect, like my family which is both fatigued and cautious facing some fairly challenging years of tuition and such. Hopefully the WSJs Holiday Sales Blog will be back to do at least as good a job as last year. bookmark and let's see.

Rob Dawg predicts: Sales up 5.2% y-o-y. Spotty retail performance. Target, Costco, Macy's do well. Walmart does okay but doesn't meet expectations, most particularly same store sales and sales per square foot. Apple scores big attention points but while sales scream gross margins don't increase. Macs and Leopard hyper gains. HP and Sell do okay with deep discounts to noncore products; screens and such. Big products; Wii, auto leases, Transformers, DVDs. Loosers; furniture, home improvement, tools.

Okay, about that 5.2%. There is one extra weekday and the same 10 weekend days this year. Sales include gas remember. I also expect spending to show in the places that report for a slight skew and don't forget inflation, priced jumbo first quality shrimp, beer or wine this year?

I'd like some new tube socks, a roll of 23" R-13 craft batting insulation, and a remote control car the kind with with big soft wheels. I'll still be in line Friday morning at Fry's for whatever Wii package they promote and I'll also renew my vow to boycott BestBuy.