If you know the market you win! The Multiple Listing Service or MLS is a database that allows a real estate broker to share information about a property for sale across the internet allowing brokers representing potential buyers to find homes. The purpose of theMLS to is enable a more efficient marketplace to occur between brokers by distributing information.
Feel Free to look through that entire MLS database through the link above. You can also sign up for free Email Notifications about properties you might be interested in, as soon as it hits the market. Create specific search parameters and every few days, you will receive an email with listings just for you. This allows you access to new homes as they hit the market, watch for reductions and learning about properties as soon as they are updated in the National Database. It works! Have fun and happy shopping.
2011-04-29 – SFgate.com
Nicolas Cage, the Oscar-winning star of “Leaving Las Vegas,” bought a seven-bedroom home with a panoramic view of the city’s casino-lined Strip in 2006 for $8.5 million. By January 2010, it was in foreclosure.
The next owner, who property records show paid $4.2 million, has put the house on the market for $7.9 million – an “unrealistic” price, according to Zar Zanganeh, the broker handling the listing.
“It’s sad,” Zanganeh said, his high-heeled boots clacking on the marble floor as he gave a tour of the 14,000-square-foot mansion featuring a six-person steam shower and a closet the size of a small apartment. “There’s a lot of inventory, a lot of homes like this waiting for an owner.”
A growing number of high-end homes are selling at a loss or facing repossession by lenders in Las Vegas, which already has the highest rate of foreclosure filings among large U.S. cities. The wave of defaults that began with subprime borrowers and the unemployed has spread to upscale homeowners who see no point of staying even if they can afford to.
As if the fact that the world economy has once again taken a turn for the worse (rising inflation in China, sinking everything in Europe, endless QE in the US) wasn’t enough, that pesky problem of robosigning and fraudclosure just refuses to go away. And even though the major banks are doing their best to remove any reference of this problem, which will eventually be the final nail in the coffin sealing the first truly global great depression, from the mainstream media, here is a sampling of some of the choicest admissions by robosigners, which will continue to serve as the basis for thousands of lawsuits (both RICO and otherwise) to come. While we know that BofA’s Reps & Warrantees reserve is woefully underfunded (with everyone and their grandmother now seeking to putback RMBS to BofA, anything less than ‘infinity’ is underfunded), we hope Bank of America has set up a sufficiently large legal expenses reserve. It will need it.
1. ‘Just Sign The Documents
Video deposition of alleged robosigner Crystal Moore of Nationwide Title Clearing. Deposition taken by attorney Christopher Forrest of The Forrest Law Firm in Pinellas County, Florida, Nov. 4, 2010
2. A Vice President At More Than 20 Companies
Part 2: Video deposition of alleged robosigner Bryan Bly taken by attorney Christopher Forrest in Pinellas County, FL on Nov. 4, 2010.
3. “Just Look For My Name, And Then Sign”
“Do you have any understanding as to what that term means, ‘for good and valuable consideration’?”
“I don’t usually read the docs when I sign.”
“So it’s not part of your job to review the document. Your job is just to sign it.”
“Just look for my name, and then sign.”
4. No Experience Necessary
“What did you study [in the one year of college]?”
“Nothin’. It was just the basic.”
“Do you have any other additional training or education in banking or finance?”
5. Signing 5,000 Documents Per Day At Less Than A Minute Each
“Can you tell me on any given day how many assignments or other documents you sign?”
“Are you looking for a ballpark average?”
“Ballpark. I certainly don’t expect you to remember exactly.”
“I’d say 5,000.”
“Would that be an average day for you?”
“That would be average.”
“Would it be fair to say that during your tenure at NTC you’ve probably signed an excess of 50 or 60 thousand documents?”
“Could be higher than that?”
“With signing so many on any given day, can you estimate for me the amount of time you spend on any given document?”
“Less than a minute.”
“When you’re presented with a document to sign or notarize, do you take any steps to verify any of the information contained in the document?”
“Not in the body.”
“When you say ‘not in the body’ are there any other steps that you take?”
“I’m just looking to make sure it’s been fully signed.”
“Would it be accurate to say that you are presented with a stack of documents to sign, and your practice is to look at the document, see if it’s been signed, affix your signature to it and then move on to the next document?”
6. A Disturbing Lack Of Experience
“When you say ‘financial’ are you referring to matters relating to banking?”
“No. We don’t do mortgages in my country. … I don’t have any idea about mortgages when I started here.”
7. A Strange Definition Of A Mortgage
“Did you take any steps to verify any of the information contained in this assignment before you signed it?”
“Do you ever take any steps to verify any of the information in the documents you sign at NTC?”
“What is your understanding of what exactly is a mortgage?”
“When somebody goes to buy a house, they take a loan. And then the mortgage is their paying the banks bank.”
“Can you tell me what your understanding is of the term ‘promissory note’?”
“That’s just the note. Like it says the interest rate and stuff like that on it.”
8. Management May Have Electronically Signed Documents For One Employee
“Do you play any role in the creation of the documents to which your signature is electronically affixed?”
“Do you have any idea what documents or how many documents your signature has been electronically affixed to?”
“Do you ever review those electronic documents after your signature has been affixed?”
“So would it be accurate to say that entire process takes place outside of your presence and knowledge?”
“That would be fair.”
“You play no role in the determination as to whether or not you should be signing the document physically, or whether your electronic signature should be inserted?”
“Who makes that decision?”
“That would be someone in management.”
“So someone else in management is making a decision as to whether or not to use your signature to affix it electronically to a document?”
“And you have no role in that process?”
9. Signing More Than 50,000 Documents
“Have you signed assignments or other documents as vice president of any other companies?”
“What companies have you signed as vice president?”
“I don’t know.”
“You can’t recall any?”
“Can you estimate for me the number of different companies that you’ve signed assignments as vice president?”
“I don’t know.”
“Can you estimate for me how many assignments or other documents in total during your tenure at NTC you signed as an officer or a vice president of a company?”
“I don’t know.”
“Is it more than 10?”
“More than 500?”
“More than 5,000?”
“More than 20,000?”
“More than 50,000?”
“And out of those 50,000, the only company that you can recall signing as a vice president or an officer is City Residential Lending?”
The Federal Reserve’s quantitative easing programs, QE for short, is not inflationary, said Chairman Bernanke to Jacksonville University students on November 5th, 2 days after Bernanke and company launched QE II. These asset purchase programs, he said, are not inflating the money supply.
Not so says THE CONTRARIAN TAKE to those same students. Says THE CONTRARIAN TAKE to Chairman Bernanke, it may be time for Money Mechanics 101, for it appears you do not understand the money creation process. If you did we don’t think you would have said this:
What the purchases do… is… if you think of the Fed’s balance sheet, when we buy securities, on the asset side of the balance sheet, we get the Treasury securities, or in the previous episode, mortgage-backed securities. On the liability side of the balance sheet, to balance that, we create reserves in the banking system. Now, what these reserves are is essentially deposits that commercial banks hold with the Fed, so sometimes you hear the Fed is printing money, that’s not really happening, the amount of cash in circulation is not changing. What’s happening is that banks are holding more and more reserves with the Fed…
Growing criticism of U.S. Federal Reserve policy is fueling global tensions as leaders of the world’s largest economies prepare to meet in South Korea Wednesday.
Last week the Fed announced it would pump another $600 billion into the U.S. economy through the purchase of long-term Treasuries, a move known as quantitative easing, or “QE2,” since it is the second round of such purchases.
The move sparked fears that it could reignite inflation pressures, cause a new global asset bubble or spark a so-called “currency war” in which nations devalue their own currencies to keep their own exports competitive.
President Obama will hear those complaints later this week when he arrives at the G-20 meeting in South Korea, a summit of heads of state of the world’s leading economies.
The harshest criticism came Friday from German Finance Minister Wolfgang Schäuble, who told reporters at a conference that, “With all due respect, U.S. policy is clueless.”
“It’s not that the Americans haven’t pumped enough liquidity into the market,” he said. “Now to say let’s pump more into the market is not going to solve their problems.”
Financial upheaval has been matched by political upheaval, and we can only hope that Congressman Ron Paul and his son, Senator in waiting Rand Paul, can build momentum to finally cut out the cancer that is destroying America – by ending the Fed for good.
For Bank of America, Countrywide Financial is turning into a fixer-upper home that keeps needing one more budget-busting repair.
In January 2008, then-chief executive Ken Lewis called the Charlotte bank’s $4billion deal to buy the troubled lender a “compelling value.” But nearly three years later, the mortgage unit created by the acquisition is a major headache for Lewis’ successor, Brian Moynihan, and the bank’s shareholders.
More Evidence That Eurobank Stress Tests Are a Garbage-In, Garbage-Out Exercise
2010-07-03 — nakedcapitalism.com
“The stress tests conducted on 19 large American banks by the US Treasury in 2009 were an amazingly effective exercise in salesmanship and sleight of hand. Banking industry experts, including Bill Black, Chris Whalen, and Josh Rosner, dismissed the process as mere theatrics: too little staffing and not enough “stress” in the economic forecasts and loss assumptions (particularly on second mortgage). My pet peeve was that the banks ran the tests on their trading books using their own risk models, the very ones that had performed so well in preparing them for them in the runup to the crisis.”
On The New York Fed’s Editorial Influence Over The WSJ
2010-07-05 — zerohedge.com
“Yet going through some of the recently made public e-mails produced on behalf of Stephen Friedman, we had a few questions as to the full independence of the WSJ when it comes to “editorial” suggestions from the Federal Reserve Board Of New York. As the below email from Fed EVP of the Communications Group, ala media liaison, Calvin Mitchell to the WSJ’s Kate Kelly demonstrates, and as the final product confirms, the Fed was quite instrumental in what quotes, tangents, implications, and story lines the WSJ was allowed and not allowed to use and pursue in framing the problem of not only Friedman’s conflict of interest, but that of the FRBNY board of directors itself.”
Investors Snap Up High-Quality Multifamily Properties as Rents, Occupancy Improve
2010-07-01 — costar.com
“Competition Fierce for Choice Assets But Deals Aren’t As Prolific in the First Half of Year as Some Analysts Expected”
Fed Made Taxpayers Junk-Bond Buyers Without Congress Knowing
2010-07-01 — bloomberg.com
“By using its balance sheet to protect an investment bank against failure, the Fed took on the most credit risk in its 96- year history and increased the chance that Americans would be on the hook for billions of dollars as the central bank began insuring Wall Street firms against collapse. The Fed’s secrecy spurred legislation that will require government audits of the Fed bailouts and force the central bank to reveal recipients of emergency credit.”
Banks Face $5 Trillion Rollover by 2012
2010-06-30 — nakedcapitalism.com
“This Sydney Morning Herald story (hat tip reader Gordon) highlights a Bank of England report that not only points out the magnitude of the financing needs of major banks over the next few years, a daunting $5 trillion, but also indicates that US and European bank refinancings are falling short of their rollover calendar. This suggests that we may witness a combination of balance sheet shrinkage and more covert and overt funding support.”
Bloodbath tomorrow in the stock market?
The correction, soon to be crash, is here: the market had a bigger relative open to close move today than it did on May 6. We closed at the day’s lows on massive volume, despite definitive central bank intervention, regardless whether it was the SNB, the ECB, or the Fed. The central planners have lost control of the market, and all thanks to the inevitable collapse of hyper capitalist Keynesianism coming out of the formerly most communist country in the world. A day of ironies. And it’s not over. Futures are already down another 4 handles. The correction is coming, and it will be a bloodbath. The Fed can not push rates lower. It will print. It is inevitable. It is our destiny.
Update: Futures now 7 handles lower. 46 point move in ES: that is almost a 5% move in the S&P for now.
2010-05-14 Mish’s Global Economic Blog
Record 40 Million, 1 in 8 on Food Stamps
from Mish’s Global Economic Trend Analysis by email@example.com (Michael Shedlock)
Hello recovery, where art thou? Month after month, the number of food stamp recipients hits news records.
Please consider Food-stamp tally nears 40 million, sets record.
Nearly 40 million Americans received food stamps — the latest in an ever-higher string of record enrollment that dates from December 2008 and the U.S. recession, according to a government update.
Enrollment has set a record each month since reaching 31.78 million in December 2008. USDA estimates enrollment will average 40.5 million people this fiscal year, which ends Sept 30, at a cost of up to $59 billion. For fiscal 2011, average enrollment is forecast for 43.3 million people.
Snap, Crackle, Pop
It’s no longer supposed to be called “food stamp” program but rather SNAP, Supplemental Nutrition Assistance Program.
No matter what you call it, another 260,000 are on it than last month. However, data is way lagging. A quick check of my calendar says it’s May. The SNAP data reported Friday, May 7 is from February.
Excuse me for asking, but how hard is it to count the number of people in a program getting free benefits? Is it really so difficult that it takes months to count?
Here is an interesting tidbit from the article, “Research suggests that one in three eligible people are not receiving benefits.”
My quick math suggests approximately 53 million people could be receiving SNAPs but only 40 million are.
Note: 53 million was arrived at by taking 1/3 of 40 million and adding it 40 million. Another possible intrepretation, perhaps more likely, is 40 million is 2/3 of 60 million.
The Fed “Owns Credit-Default Swaps … On Debt Owed by California and Nevada. So the Fed Would Profit If One of Those States Defaulted on its Debt.”
What about this one folks…….. “The Fed also owns credit-default swaps — basically, insurance policies that pay off if a borrower defaults on a loan. It holds swaps on the debt of Florida schools, and on debt owed by California and Nevada. So the Fed would profit if one of those states defaulted on its debt.”
As Europe is bailed out to the tune of nearly $1 trillion dollars, Congressman Ron Paul warns that the constant monetization of debt, allied with taxpayer-funded bailouts, will inevitably lead to runaway inflation and the collapse of paper currencies.
Under the terms of the Federal Reserve’s credit swap deal with the EU – in addition to an additional IMF bailout of which U.S. taxpayers will be picking up 20 per cent ($57 billion dollars) of the tab, Paul pointed out that not just taxpayers but “anybody that buys anything” will be funding the European bailout because of the attendant inflationary consequences.
“The prices are going up already, producer prices are going up, the cost of living will go up so everyone in American will suffer and eventually the whole world will suffer because we cannot carry the whole world with our dollar,” Paul told Fox Business, adding that eventually people will lose confidence in the dollar.
The Congressman agreed with the host that the bailouts would lead to the crash of paper currencies, noting that last week’s stock market turmoil was accompanied by gold acting as a currency rather than just reacting to the value of the dollar.
2010-04-29 Daniel Amerman.com
Have the Federal Reserve’s unprecedented market and banking interventions fundamentally weakened America’s banks? In this article, we will illustrate how the Federal Reserve has been hollowing out the US banking system. We will show how the Fed has been creating a banking industry shell that looks strong on the surface, but is increasingly empty beneath that facade, with less and less economic strength, and an ever greater reliance on the Federal Reserve’s monetary creation ability.
Using a single loan as an example, we will explore in step by step detail how almost 10 percent of US bank assets have been hollowed out, with former investments in the economy being replaced by excess reserve balances at the Federal Reserve. On paper, these balances are the highest quality assets which a bank can own, yet in economic reality, they represent an investment in nothing at all.
Few articles explained the dangerous process of creating an almost entirely artificial mortgage market in 2009, and almost none have explored how participating in this process has transformed US banks in 2010. When you finish, you may find yourself looking at the new US banking system in a very different way, as well as understanding the powerful economic and personal investment implications.
BEIJING — China is expected to impose a moratorium on share issues by real estate companies in mainland markets as part of a broader campaign to rein in rising property prices, state media said Wednesday, potentially blocking $16.1 billion in capital-raising.
The move could delay plans by 45 Chinese companies to raise about 110 billion renminbi, China Daily said, citing unidentified people close to the China Securities Regulatory Commission.
A commission official told Reuters a formal suspension was not in place but confirmed that before approving any share issues in mainland markets, the regulator and the Land Resources Ministry were examining whether property companies had illegally manipulated land prices. The official asked not to be identified because he was not authorized to speak to the media.
Willem Buiter Issues His Most Dire Prediction Yet: Sees “Unprecedented” Fiscal Crises, US Debt Inflation And Fed Monetization
Doomsday scenarios from the establishment periphery always come fast and furious, especially in our day and age when bankrupt sovereigns are the norm, not the exception. And the “faster and furiouser” these come, the more steadfast the core is in refuting that the reality is much, much worse than portrayed on the mainstream media. Which is why we were very surprised when we read Willem Buiter’s latest Global Economic View (recall that he works for Citi now). In it the strategist for the firm that defines the core of the establishment could not be more bearish. In fact, at first we thought that David Rosenberg had ghost written this. Once the apocryphal truthsayers such as Buiter become mainstream within the mainstream, it is only a matter of time before the marginal opinion shifts to match that of those who have been prognosticating doom all along (for all the right reasons). In the below piece, Buiter presents a game theory type analysis, which concludes that the US and other sovereigns will soon be forced into fiscal austerity. Among his critical observations (we recommend a careful read of the entire 68 pages), are that the US is highly polarized, and that the Fed, which is “the least independent of leading central banks” would be willing to implement “inflationary monetisation of public debt and deficits than other central banks.” The next step of course would be hyperinflation. And Buiter sees America as the one country the most likely to follow this route. Most troublingly, Buiter predicts that a massive crisis is the only thing that can break the political gridlock in the US in order to fix the broken US fiscal situation. Must read.
2010-04-29 Jesse Cafe’ Blog
The strategy of the Bernanke Federal Reserve and of the Obama Administration’s economic team is fairly clear: prevent the bank failures of the 1930’s by propping up the biggest banks with huge infusions of publicly subsidized capital, and hope that they start lending again as the economy recovers. It is a variation of the ‘trickle down’ theory of economics adjusted by the perceived Fed policy errors of the first Great Depression, with little from the New Deal programs.
Bernanke is famously a student of the first Great Depression, even as General Joffre, the architect of the Ligne Maginot, was a student of the first World War. And Larry Summers is remarkably similar to Marshal Pétain. Tim, on the other hand, seems to be a student of very little, not even apparently of the tax code which he administers, except perhaps the art of being a manservant, a valet to the powerful.
Failure number one of course is that the banks that they chose to support are not responsible commercial banks engaged primarily in lending to small business and localized activity. Those banks are the local and regional banks that are failing in record numbers. The banks they chose to save are those who have heavily contributed to the campaign coffers and job prospects of Washington politicians. Goldman Sachs, for example, is a glorified hedge fund dedicated to speculation and enormous amounts of leverage. One only has to look at the source of their profits to understand what it is that they do with their capital and energy. And it is largely from ‘trading.’
Statement of Congressman Ron Paul – United States House of Representatives – on Motion to Instruct Conferees on HR 2194, Comprehensive Iran Sanctions, Accountability and Divestment Act – April 22, 2010
Mr. Speaker I rise in opposition to this motion to instruct House conferees on HR 2194, the Comprehensive Iran Sanctions, Accountability and Divestment Act, and I rise in strong opposition again to the underlying bill and to its Senate version as well. I object to this entire push for war on Iran, however it is disguised. Listening to the debate on the Floor on this motion and the underlying bill it feels as if we are back in 2002 all over again: the same falsehoods and distortions used to push the United States into a disastrous and unnecessary one trillion dollar war on Iraq are being trotted out again to lead us to what will likely be an even more disastrous and costly war on Iran. The parallels are astonishing.
We hear war advocates today on the Floor scare-mongering about reports that in one year Iran will have missiles that can hit the United States. Where have we heard this bombast before? Anyone remember the claims that Iraqi drones were going to fly over the United States and attack us? These “drones” ended up being pure propaganda – the UN chief weapons inspector concluded in 2004 that there was no evidence that Saddam Hussein had ever developed unpiloted drones for use on enemy targets. Of course by then the propagandists had gotten their war so the truth did not matter much.
We hear war advocates on the floor today arguing that we cannot afford to sit around and wait for Iran to detonate a nuclear weapon. Where have we heard this before? Anyone remember then-Secretary of State Condoleeza Rice’s oft-repeated quip about Iraq: that we cannot wait for the smoking gun to appear as a mushroom cloud.
2010-04-21 – Ritzhold.com
” We have known for decades that these are frauds. We have known for a decade how to stop them. All of the major regulatory agencies were complicit in that statement, in destroying it. We have a self-fulfilling policy of regulatory failure because of the leadership in this era.
We have the Fed, the Federal Reserve Bank of New York, finding that this is three card monty. Well what would you do, as a regulator, if you knew that one of the largest enterprises in the world, when the nation is on the brink of economic collapse, is engaged in fraud, three card monty? Would you continue business as usual?
That’s what was done. Oh they met a lot — they say “we only had a nuclear stick.” Sounds like a pretty good stick to use, if you’re on the brink of collapse of the system. But that’s not what the Fed has to do. The Fed is a central bank. Central banks for centuries have gotten rid of the heads of financial institutions. The Bank of England does it with a luncheon. The board of directors are invited. They don’t say “no.” They are sat down.
Instead, every day that Lehman remained under its leadership, the exposure of the American people to loss grew by hundreds of millions of dollars on average. Auroroa was pumping out up to 300 billion dollars a month in liars’ loans. Losses on those are running roughly 50% to 85 cents on the dollar. It is critical not to do business as usual, to change.”
2010-04-19 – Calculated Risk Blog
” Moody’s reported this morning that the Moody’s/REAL All Property Type Aggregate Index declined 2.6% in February. This is a repeat sales measure of commercial real estate prices.
Below is a comparison of the Moodys/REAL Commercial Property Price Index (CPPI) and the Case-Shiller composite 20 index.
Notes: Beware of the “Real” in the title – this index is not inflation adjusted. Moody’s CRE price index is a repeat sales index like Case-Shiller – but there are far fewer commercial sales – and that can impact prices.
CRE prices only go back to December 2000.
The Case-Shiller Composite 20 residential index is in blue (with Dec 2000 set to 1.0 to line up the indexes).
Commercial real estate values are now down 25.8% over the last year, and down 41.8% from the peak in August 2007.
Wow. What a crazy read.
“….There was so much money to be made bilking these dizzy Southerners that banks like JP Morgan spent millions paying middlemen who bribed — yes, that’s right, bribed, criminally bribed — the county commissioners and their buddies just to keep their business. Hell, the money was so good, JP Morgan at one point even paid Goldman Sachs $3 million just to back the fuck off, so they could have the rubes of Jefferson County to fleece all for themselves…..”
Our Country is currently doing 50,287 loans a month per article above. These include all types of home loans, purchases, refinances, construction loans, HELOC’s, etc. This does not mean 50,287 homes have been sold or taken off of the market.
Our same Country is losing 290,631 homes a month to foreclosure. These numbers do not include the hidden inventory nor does it include all the mortgages that will adjust in 2010, 2011, 2012 causing the foreclosure number to go up and removing even more potential buyers. I always go back to the fact we were at an all time high of homeownership in our country’s history before the bust. Where do we plan to find more buyers? We have lost close to 5 million buyers because they lost their homes to foreclosure. Minimum lending requirements require you to be 3 years removed from a foreclosure discharge date before they will be able to buy again.
A LOT OF INVENTORY WITH VERY FEW BUYERS!
SUPPLY AND DEMAND. IT’S A VERY SIMPLE NUMBERS GAME.
HOME PRICES WILL CONTINUE TO FALL WAY BELOW WHERE THEY CURRENTLY ARE FOR THE SIMPLE FACT THERE ARE NO BUYERS TO REMOVE THE SUPPLY.
2010-04-08 – businessinsider.com
“In this morning’s Breakfast With Dave note, David Rosenberg of Gluskin-Sheff hits on a theme we discussed the other day, about the impact of Obama’s “Extend & Pretend” mortgage policy. As originally argued by Paul Jackson at HousingWire, it’s the fact that millions of families are essentially living mortgage-free which explains the seeming disconnect between sagging housing and rebounding consumer spending.”
2010-04-08 – irvinehousingblog.com
“Lenders are trying to figure out how their massive Ponzi Scheme collapsed. They are relearning lending again because everything they thought they knew was wrong. When you get down to the heart of the matter, borrowers are carrying too much debt which is killing them financially and emotionally”
I attended a local Building Industry Association conference on Friday 26 March 2010. The west coast manager of real estate owned, Senior Vice President Ken Gaitan, stated that Bank of America, which currently forecloses on 7,500 homes a month nationally, will increase that number to 45,000 homes per month by December of 2010.
I apologize to everyone about the lack of updates. Work has been…. well…. work. It seems transactions take 3 – 4x as long and nearly 9 of 10 are either Short Sales or Bank Owned real estate. It seems that the banks are controlling the market, the interest rates and now, most of the real estate for sale. We have tax credits expiring, we have the FED’s backing out of buying Mortgage Backed Securities, we have hundreds of billions $$$ in loans left to adjust and we have an ENORMOUS pool of Commercial Rela Estate scheduled for default in the next 4 years. Things are about to get really interesting, so I’ll get back on my horse and keep you all up-to-date.
Happy Navigating, Jason Pickle
Nov. 27 (Bloomberg) — The worldwide decline in equities spurred by Dubai’s efforts to reschedule its debt is a sign that government spending alone won’t be enough to protect financial markets, according to Arnab Das of Roubini Global Economics.
Shares slumped from Shanghai to Brazil and European shares fell the most in seven months yesterday after Dubai World, the government investment company burdened by $59 billion of liabilities, sought to delay repayment on much of its debt. Governments have spent, lent or guaranteed $11.6 trillion and central banks held interest rates near zero percent to end the first global recession since World War II.
“We’re bound to see a rise in risk aversion,” Das, who is based in London, said in an interview. “The Dubai situation signifies that although the major central banks around the world have stabilized the financial system, they can’t make all the excesses simply disappear. We still have to work out those balance sheet stresses. The recovery is proceeding, but significant challenges still lie ahead.”
Barry Ritholtz, CEO of Fusion IQ… notes the existing home sales number was juiced by sales of cheap condos and various government programs. Meanwhile, the Case-Shiller results were below expectations.
The 10 major cities in the Standard & Poor’s/Case-Shiller home price index have risen 5% from their April low, but the index is still predicting a massive 45% fall from today’s values.
The index is still showing a current loss of 30% from the high in June 2006. Based upon a trend generated from the actual prices of 1987 to 1997, and generated forward in a linear projection, the index will fall a total of 62% before it reaches the trend norm.
2009-11-16 — heraldtribune.com
“The FBI recently added short sale flipping, dubbed “flopping” by some mortgage fraud experts, to its list of recognized real estate fraud.”
2009-11-16 — reuters.com
“Investors who reaped robust gains in U.S. mortgage-backed securities by piggy-backing on the Federal Reserve’s $1.25 trillion buying program are bracing for the end to the central bank’s support — and positioning themselves for a new round of profits as prices cheapen.”
” At least another decade will pass before housing prices return to peak 2006 levels, according to an analyst at Moody’s Economy.com.”
While Regions may be an extreme example of inflated loan values, it’s not unique. Bank of America Corp. said its loans as of June 30 were worth $64.4 billion less than its balance sheet said. The difference represented 58 percent of the company’s Tier 1 common equity, a measure of capital used by regulators that excludes preferred stock and many intangible assets, such as goodwill accumulated through acquisitions of other companies.Wells Fargo & Co. said the fair value of its loans was $34.3 billion less than their book value as of June 30. The bank’s Tier 1 common equity, by comparison, was $47.1 billion.
2009-08-11 — blownmortgage.com
“Two reports out say if you’re thinking of buying, wait. The prices are going to continue to drop. The reason they offer are the same: Continuing increases in the number of homes worth less than their current mortgages.”
2009-08-11 — minyanville.com
“My vacation back to the US surprised and confounded many of my old friends: they know I moved back to park my wealth in dollars. Incredulously they asked how I could possibly not believe the US government, along with their crony partner the Federal Reserve, will not devalue the dollar to “settle” our debt with foreign lenders. A normal default (since we all know there is no way to possibly pay this debt back, nor is their enough capital in the world to buy our newly needed “financings”) isn’t palatable, they say, so the only direction for the dollar is down. I agree, but only in the long run. “
2009-08-10 — lewrockwell.com
2009-08-10 — blownmortgage.com
” Over 3 million people are 60 days behind in their mortgage payments with little hope of finding a quick solution. This has caused many borrowers look for somewhat imaginative measures to save their home, one of these has been declaring bankruptcy to avoid a mortgage foreclosure. Does this work? Is it legal?”
“Readers may recall that during the heat of bailout battle, the Federal Reserve got into the fancy finance business, relying on the sort of deal structuring sometimes used to try to turn toxic odd pork scraps into barely-digestible sausage, the procedure used for pigs so dead that merely putting lipstick on them just won’t do.
The items in question are Maiden Lane, the vehicle used to backstop JP Morgan’s purchase Bear Stearns, and two sons of Maiden Lane created for dodgy AIG exposures. The bank was permitted to move some particularly fragrant collateral from Bear over to the Fed for a loan of $30 billion. The arrangement got reworked on the fly, and in the end, the Fed loan was reduced to roughly $29 billion as JP Morgan agreed to assume $1.15 billion of risk. The assets were placed in a holding company to be managed by BlackRock.”
It’s about time that people start asking the tough questions.
THIS IS NOT A MISPRINT.
“U.S. taxpayers may be on the hook for as much as $23.7 trillion to bolster the economy and bail out financial companies, said Neil Barofsky, special inspector general for the Treasury’s Troubled Asset Relief Program.
The Treasury’s $700 billion bank-investment program represents a fraction of all federal support to resuscitate the U.S. financial system, including $6.8 trillion in aid offered by the Federal Reserve, Barofsky said in a report released today.
“TARP has evolved into a program of unprecedented scope, scale and complexity,” Barofsky said in testimony prepared for a hearing tomorrow before the House Committee on Oversight and Government Reform.
Treasury spokesman Andrew Williams said the U.S. has spent less than $2 trillion so far and that Barofsky’s estimates are flawed because they don’t take into account assets that back those programs or fees charged to recoup some costs shouldered by taxpayers.
“These estimates of potential exposures do not provide a useful framework for evaluating the potential cost of these programs,” Williams said. “This estimate includes programs at their hypothetical maximum size, and it was never likely that the programs would be maxed out at the same time.”
“Often, the troubled home owner assumes the loss will be eaten by the lender. But Bank of America and Chase have quietly added language in their short-sale agreements that require the borrower to sign a promissory note for the shortfall.”
“Home prices will be lower in two years compared to Q109 for much of the country’s metropolitan statistical areas, (MSAs) according to an economic trends report released by PMI Mortgage Insurance Co.”
“Reporting from Washington — Just as the nation’s housing market has begun showing signs of stabilizing, another wave of foreclosures is poised to strike, possibly as early as this summer, inflicting new punishment on families, communities and the still-troubled national economy.
Amid rising unemployment and falling home prices, mortgage defaults have surged to record levels this year. Until recently, many banks have put off launching foreclosure action on the troubled properties, in part because they had signed up for the Obama administration’s home-stability plan, which required them to consider the alternative of modifying loans to make it easier for borrowers to make payments….”
“Declines of more than 20 percent in regional banks and homebuilders and the failure of transportation companies to erase their annual loss may be signs the rally in the Standard & Poor’s 500 Index is about to fizzle.”
“Mad props once again to Zerohedge who shone the bright light on Freddie’s latest screed. I’m not going to take from their discussion of The Fed buying up paper at what will (almost certainly) lead to ruinous losses – you can find that there. Rather, I am going to look at some of the internals from the document published that they didn’t focus on.”
2009-06-10 Dr Housing Bubble.com
If you want further proof how horrific these products are, take a look at how many of the Alt-A and pay Option ARM products originated with a second lien. That is, low down or nothing down fantasy buyers. In California, there are currently floating around 186,917 Alt-A mortgages with a second lien on them. You can rest assured that 90 to 99 percent of these loans will implode in the upcoming months. This is where your piggy back loans and 80-10-10 crap came about. I remember when zero down was a crazy way to suck in unknowing investors to thousand dollar seminars but it actually became a mainstream way to buy a home.
Before you even wonder how safe these loans are 41.6 percent of California Alt-A mortgage holders already have one late in the last 12 months! Keep in mind that most of this junk hasn’t even hit recast points and nearly half are already late with one payment:
May 6, 2009
Presented by Mike “Mish” Shedlock.
Mike “Mish” Shedlock is author of one of the most read economics blogs on the Internet: Mish’s Global Economic Trend Analysis http://globaleconomicanalysis.blogspot.com.
Mish gave an @Google talk, sharing his perspective on the state of the global economy (housing, the stock market, commodities, etc.) He also provides his interesting story about how he started blogging, and the impact that it has had on his life personally and professionally.
In January, Time.com ranked his site the #1 based on a rounded set of criteria http://www.time.com/time/business/article/0,8599,1873144-3,00.html. From the article:
“Although Mish is not an economist by training, he adroitly gets into the thick of economic data. Mish uses observations made by those in major media, so-called experts and government officials and serves up analysis based on his impression of their relevance and validity. The author is not afraid to attack conventional wisdom.”
2009-06-07 Mish’s Global Economic Blog
Please consider unemployment forecasts. The Fed forecast unemployment at 8.4% in 2009 and the “adverse forecast” was at 10.3% in 2010.
Hello Ben, in case you did not notice, Jobs Contract 17th Straight Month; Unemployment Rate Soars to 9.4% and Bankruptcy Filings Reach 6,000 A Day.
2009-05-31 Mish’s Global Economic Blog
Yale University economist Robert Shiller has often dazzled audiences with a chart showing home prices from 1890 to present. Someone even used Mr. Shiller’s chart to make a YouTube video that puts its viewer on a roller-coaster ride over peaks and valleys in home pricing. It’s a bumpy ride.
Now another economist, Thomas Lawler, says Prof. Shiller’s chart is “bogus.” Mr. Lawler says Mr. Shiller cobbled together data that are inconsistent and sometimes unreliable. Mr. Shiller defends his work and accuses Mr. Lawler of making “wild allegations.”
3 Fascinating articles. Woooooaah Nelly, it seems as things were not as rosy as we thought for the last month.
Mortgage Delinquencies, Foreclosures, Rates Increase
“Mortgage delinquencies and foreclosures rose to records in the first quarter and home-loan rates jumped to the highest since March this week as the government’s effort to fix the housing slump lost momentum.”
Mortgage Marekt Seizes Up
Mish’s Global Economic Blog: http://globaleconomicanalysis.blogsp…-locks-up.html
“With respect to yesterday’s episode in the mortgage market — yes, it is as bad as you can imagine. Yesterday, the mortgage market was so volatile that banks and mortgage bankers across the nation issued multiple midday price changes for the worse, leading many to ultimately shut down the ability to lock loans around 1pm PST. This is not uncommon over the past five months, but not that common either. Lenders that maintained the ability to lock loans had rates UP as much as 75bps in a single day.”
THE CURTAINS ARE ON FIRE!!!
“To put this in a bit more simple form, this means that while the banks are claiming to be increasing loss provisions, loans are going bad faster than their provisioning is increasing – which means they’re reporting “profits” that are false, as provisions for bad loans hit earnings. So we can take some more off those “reported earnings”, as much as another $6-10 billion dollars.”
” Searching for the housing bottom, with Barry Ritholtz, FusionIQ CEO and the Fast Money traders.”
www.Claytonhomes.com – Take a look what the “new mobile homes” look like. WOW!
They are also moving forward on the concept of a “green manufactured home”, see the link below.
http://www.treehugger.com/files/2009/01/clayton-ihome-design.php – When Warren Buffet bought Clayton Homes in 2003 I was still working in the prefab biz; Punching well above my weight, I sent him an email about the business case for a mobile home manufacturer doing well designed green housing. I don’t know if he got it; I never got an answer.
I feel this might revolutionize homes as we know it.
“JP Morgan Chase & Co., Citigroup, Wells Fargo & Co., Goldman Sachs Group, GMAC LLC, SunTrust Banks, Inc., and Fifth Third Bancorp — are at risk of failure and may have to cut back lending dramatically to stay alive.”
The homeless include a startling number of first-time homeless, she says. We asked them what industries they were involved in. The majority were talking about construction, the housing industry, real estate. There was a direct correlation to the housing market crash.
Unless this capital is forthcoming, a clutch of countries will prove unable to roll over their debts at a bearable cost. Those that cannot print money to tide them through, either because they no longer have a national currency (Ireland, Club Med), or because they borrowed abroad (East Europe), run the biggest risk of default.
Traders already whisper that some governments are buying their own debt through proxies at bond auctions to keep up illusions – not to be confused with transparent buying by central banks under quantitative easing. This cannot continue for long.
2009-04-23 Mish’s Global Economic blog
The Commercial Real Estate Time Bomb has gone off but it has been lost in the euphoria of economic cheerleading and bottom calls based on dubious (at best) earnings reports from banks. Here are a few headline items from the past week or so to consider.
Malls shedding stores at record pace
CNN Money is reporting Malls shedding stores at record pace
Strip malls, neighborhood centers and regional malls are losing stores at the fastest pace in at least a decade, as a spending slump forces retailers to trim down to stay afloat, according to a real estate industry report.
In just the first quarter of 2009, retail tenants at these centers have vacated 8.7 million square feet of commercial space, according to the latest report from New York-based real estate research firm Reis.
That number exceeds the 8.6 million square feet of retail space that was vacated in all of 2008.
Reis’ report shows that store vacancy rates at malls rose 9.5% in the first quarter, outpacing the 8.9% vacancy rate registered in all of 2008, and marking the largest single-quarter jump in vacancies since Reis began publishing quarterly figures in 1999.
In 2006 and early 2007, the official housing statistics were still showing that house prices were holding up. But that was largely because so many sellers were refusing to sell. The auctions, made up mostly of foreclosed homes, showed the truth: house values were starting to plummet in many places.
So a few weeks ago, I decided to go to an auction at a hotel ballroom in Washington — and to study the results of several others elsewhere — with an eye to figuring out whether prices may now be close to bottoming out.
That’s clearly a huge economic question. Last week, JPMorgan’s chief financial officer told Eric Dash of The New York Times that JPMorgan, and presumably other banks, would be under pressure “until home prices stabilize and unemployment peaks.”
It seems we are off to the races with the gov’t being the primary shareholder of bank interests. Good Lord, what’s next?
Is That Recovery We See?
By John Mauldin
- Is That Recovery We See?
- Those Wild and Crazy Analysts
- The Shadow Inventory of Homes
- Commercial Real Estate Starts a Long, Slow Slide
- P/E Ratios Go Negative!
- The Effect of Earnings Surprises
- Corporate Earnings and Recovery in Recessions
- The Implosion in Social Security
The market, we keep hearing and reading, is telling us that there is recovery around the corner. And pundits point to data that seems to suggest the worst is behind us. The leading economic indicators, while still down significantly, seem to be in the process of bottoming. There is a large amount of stimulus in the pipeline. Mark-to-market has been modified. Housing seems to be finding a bottom, if you look at the rise in sales from January. And so on.”
2009-04-09 ZeroHedge Blog
The bottom line is that there is a massive wave of actual foreclosures that will hit beginning in April that can’t be stopped without a national moratorium — this wave is so big I would not put it past them trying it.
CA foreclosure background – in mid-2008 the foreclosure wave was artificially held back as a result of the CA law SB1137 enacted in Sept 2008. This also kept NOD’s and NTS’s at much lower levels than the actual defaults that were occurring. Other bubble states and several banks/servicers also went on random moratoria and the foreclosure wave was held back for the past six months. But just like so many other intervention and moratoria in the past, the problem just comes out the other side even more violent than if they would have done nothing. Adding insult to injury, the GSE’s announced this week that they were coming off moratorium, which could increase foreclosures by 20-25% alone.
Bill Moyers Journal
Sharing the Blame for the Economic Crisis?…
William K. Black, former senior bank regulator
2009-03-26 – blogspot.com
These are just a few simple realities under which we currently exist. To deny the existence of one or more of these truths does not make it go away. And as time goes by, the effects of these truths becomes magnified and the gravity of our situation becomes more clear. The worst is yet to come. Please prepare wisely
50 truths: The simple, underlying fundamentals of a dying system. The Top 10:
- Unemployment is increasing
- Federal tax revenues are decreasing
- Consumer spending is decreasing
- The risk of catastrophic Deflation is increasing
- The risk of catastrophic Hyperinflation is increasing
- The U.S. debt is increasing
- The U.S. deficit is increasing
- The risk that the U.S. government will eventually find itself unable to service its debt is increasing
- Homelessness is increasing
- Poverty is increasing
See all of them at the link below…
So, we are on the blue continuum. It appears that it almost matches the 30’s Depressionary numbers. I feel we will see another deep, dark drop shortly. The current upswing has very little bering on the condition of the full economy.
Full Size Chart here: http://dshort.com/charts/bears/four-bears-large.gif
Excellent explanation of what happened between 2001 and today. I caught a glimpse of CNBC’s documentary on the financial crisis called “House of Cards” just now and I highly recommend anyone who’s interested on how we got ourselves into such trouble to watch it.
From what I’ve seen, it at least explains:
- How it was a credit crisis to a stock market crisis to a economic crisis.
- What a CDO is and Alan Greenspan’s take on it.
- What some people have done to warn it and how others knew things were going to be bad.
The show, House of Cards, is going to be on CNBC and premiers tonight (2/12/2009) at 8:00pm ET and 12:00am ET.
Or you can view this entire special online here:
2009-02-19 — crisisofcredit.com
I’ve been talking with investors about this very thing for the past year. Unfortunately, I think this one is inevitable. Banks have been pulling their warehouse lines for the past year and increasingly, local banks, are beginning to lend only to their customers. Seems as if it’s back to sitting at the bankers desk or using our new subprime lender, FHA.
2009-02-14 – CNNMONEY.com
NEW YORK (CNNMoney.com) — Some big banks have cut back on doing business with mortgage brokers – and if the trend continues, many mortgage brokers could close down.
That may be bad news for consumers because fewer brokers could lead to a less competitive marketplace and more expensive home loans resulting from consumers not being able to easily comparison-shop rates.
2009-02-18 – WSJ.com
Homeowner Affordability and Stability Plan
The deep contraction in the economy and in the housing market has created devastating consequences for homeowners and communities throughout the country.
· Millions of responsible families who make their monthly payments and fulfill their obligations have seen their property values fall, and are now unable to refinance at lower mortgage rates.
· Millions of workers have lost their jobs or had their hours cut back, are now struggling to stay current on their mortgage payments – with nearly 6 million households facing possible foreclosure.
· Neighborhoods are struggling, as each foreclosed home reduces nearby property values by as much as 9 percent.
1. Refinancing for Up to 4 to 5 Million Responsible Homeowners to Make Their Mortgages More Affortdable
2. A $75 Billion Homeowner Stability Initiative to Reach Up to 3 to 4 Million At-Risk Homeowners
3. Supporting Low Mortgage Rages by Strengthening Confidence in Fannie Mae and Freddie Mac.
The Homeowner Affordability and Stability Plan is part of the President’s broad, comprehensive strategy to get the economy back on track. The plan will help up to 7 to 9 million families restructure or refinance their mortgages to avoid foreclosure. In doing so, the plan not only helps responsible homeowners on the verge of defaulting, but prevents neighborhoods and communities from being pulled over the edge too, as defaults and foreclosures contribute to falling home values, failing local businesses, and lost jobs. The key components of the Homeowner Affordability and Stability Plan are:
2009-02-17 – Ritzhold.com
“Beyond the $700 billion bailout known as TARP, which has been used to prop up banks and car companies, the government has created an array of other programs to provide support to the struggling financial system. Through Feb. 10, the government has made commitments of nearly $8.8 trillion and spent $2 trillion. Here is an overview, organized by the role the government has assumed in each case.”
2008-17-08 – NYTimes.com
“President Obama has not ruled out a second stimulus package, his press secretary, Robert Gibbs, said on Tuesday, just before Mr. Obama signed his $787 billion recovery package into law with a statement that it would “set our economy on a firmer foundation.”
2009-01-24 — cnn.com
“Banks are moving slowly to list repossessed homes for sale, which could mean that housing inventory is even more bloated than current statistics indicate.”
2009-01-23 — calculatedriskblog.com
The government’s attempt to spend (read borrow) our way out of this situation may lead to a total collapse of the dollar.
The Fed meeting minutes released today sure paint a picture of a Federal Reserve with very little regard for how to unwind these measures or what the long term consequences could be. I think a collapse in dollar assets is a very real concern after years of being considered nearly lunatic fringe talk.
Willem Buiter wrote a great piece on this.
We’ve been saying this for a long time… and for the record, Ill pull up a previous post from a few months ago with a very troubling graph showing the true impact of these new Alt-A and Pay Option ARMS.
From my April 24 post:
Recently, I have researched the impact and adjustment period of different types of adjustable loans. It seems by the end of 2008, most of the subprime adjustable loans will have adjusted at least on some level. Many in the media are speaking of the lending crisis ending at the end of this year. My data says differently. Beginning in Q1 of 2009 and continuing through Q4 of 2011, we will see an influx of new adjustables, ALT-A and Pay Option ARMS. This is just the beginning of the Tidal Wave as most of these loans are already in a negative equity state. See this Adjustment schedule for yourself. Month 1 is January 2007.
2008-12-11 – Bloomberg.com
“U.S. foreclosure filings climbed 28 percent in November from a year earlier and a brewing “storm” of new defaults and job losses may force 1 million homeowners from their properties next year, RealtyTrac Inc. said”
A total of 259,085 properties got a default notice, were warned of a pending auction or were foreclosed on last month, the seller of default data said in a report today. That’s the fewest since June. Filings fell 7 percent from October as state laws and lender programs designed to delay the foreclosure process allowed delinquent borrowers to stay in their homes.
“We’re going to see a pretty significant storm next year,” Rick Sharga, executive vice president of marketing for Irvine, California-based RealtyTrac, said in an interview. “There are two or three clouds that suggest a pretty heavy downpour.”
Rising unemployment, expiring foreclosure moratoriums and state efforts that “run out of steam” will push monthly filings toward the record of more than 303,000 set in August, Sharga said. The number of homes that revert to lenders, the last stage of foreclosure and known as “real estate owned” orREO properties, will increase to 1 million from as many as 880,000 this year, he said. …
Mishes Global Economic Trends Blog –
The state of New Jersey is insolvent. Bankrupt might be a better word. New Jersey is $60 billion in the hole on pension funding and the Governor is planning on skipping payments in a “pension payment holiday” until 2012 so as to not increase property taxes. To top it off, the ongoing plan assumptions are 8.25%. Sorry NJ, that simply is not going to happen. ….
Inquiring minds are now reading that Goldman Draws Ire for Advising Default Swaps Against New Jersey.
Goldman Sachs Group Inc., one of the top five U.S. municipal bond underwriters, is angering politicians and public-finance officials in New Jersey, Wisconsin, California and Florida by recommending that investors purchase credit-default swaps to bet against 11 states’ debt.
Bets against public debt, once unheard of on bonds considered safe enough for retirees, have soared as the National Conference of State Legislatures projects recession-fueled budget crises will cause $97 billion of shortfalls nationwide over the next 18 to 24 months.
2008-12-10 — ml-implode.com
“This story was originally released a couple of weeks ago but somehow did not make it to the blog. It goes hand in hand with the Moody’s downgrade of many Bank of America Jumbo Prime deals citing a 13% delinquency rate. This represents a total meltdown in the sector happening right now that nobody is reporting.”
This is a difficult one to wrap my head around. But the idea that they are trying to create a different class of debt is very troubling. The resulting confusion can’t be good for investors who were fooled by GSE AAA ratings based on “implicit” guarantees.
Move Presents Challenges: ‘Very Close Cousins to Existing Treasury Bills’
By JON HILSENRATH and DAMIAN PALETTA – Wall Street Journal
The Federal Reserve is considering issuing its own debt for the first time, a move that would give the central bank additional flexibility as it tries to stabilize rocky financial markets.
Government debt issuance is largely the province of the Treasury Department, and the Fed already can print as much money as it wants. But as the credit crisis drags on and the economy suffers from recession, Fed officials are looking broadly for new financial tools.
Fed officials have approached Congress about the concept, which could include issuing bills or some other form of debt, according to people familiar with the matter.
It isn’t known whether these preliminary discussions will result in a formal proposal or Fed action. One hurdle: The Federal Reserve Act doesn’t explicitly permit the Fed to issue notes beyond currency.
2008-12-08 — doctorhousingbubble.com
“It is important to note that home building during the Great Depression dropped by 80% between the years 1929 and 1932. It is also the case that many families owned farms which clearly isn’t a factor in today’s market. But we can use current measures and try to determine how deep our current decline is in relation to the past. Keep in mind that when you read 1929 – 1932 you may get a psychological feeling that this was a short timeframe. Remember that in late 1929 we saw the peak of the stock market and the bottom wasn’t reached until the middle of 1932 and it lingered near the lows for a very long time. If we follow a similar timeline with our market peak in October of 2007, then we can expect a bottom in the summer of 2010.