Bye-bye Skippy. Let gas prices continue to rise!

[Kevin Mc]

A couple of things took place. Bill Clinton signed a republican bill that allowed for oil commodities to be traded in 2000, which made the market more responsive to speculation. Also, our country got an oil profits driven administration over the past 8 years.

No conspiracy theories here Jim. The CFMA has little affect on what is happening today in the oil futures market. Oil commodities have been traded since the invention of futures trading. Our (the US) biggest problem is the CFTC (Futures Trade Commission) is massively inept and lives by the rule that markets correct themselves (they typically do). Oil is the new gold. Unlike many other commodities we can't run our lives without it. Same is true worldwide. When there is little else profitable to invest in, folks go for the "hot" item of the month. Right now it is oil. If you check the volume traded on commodity markets worldwide you will see it has skyrocketed in the past 6 months. If I was an investor I would be buying oil futures as it looks like a no-brainer. If we shut out our speculators we will still be dealing with the high prices due to other markets. Hold tight, it will come around at some point. Of course the price will never really go down more than 50 cents a gallon even if there is a surplus. That is simple business. Now back to Skippy, like high gas prices, I believe he/she is here to stay.

 

[Jay Faustini]

I see the reason behind the recent quick spike of prices to be based on speculation in the oil futures market. I knew that the margin requirement was low but I didn't know is was only 4%. A significant raising of the margin requirement would drastically reduce the speculation (I know there is a bill pending in Congress about this, but I really doubt that the lobbyists will let it pass).

 

[Hamlet]

Skippy doesn't drive comps, so how is high gas prices going to run them out of business?

 

[TC]

Lousy appraisers aren't going away anytime soon. Count on it.

TC

 

[moh malekpour]

Anyone who thinks the higher gas price is going to eliminate Skippy is dreaming.
We have 498 AG, 561 AL, 838 AR and 501 AT licensed appraisers in Orange County, CA. The market is dead but in a dead market, there are still few pre-REO, REO and Refi appraisals but whom do you think is getting them? The Skippy, because all of these assignment are issued by AMC. The AMC has at least 200 appraisers from 2399 appraisers in this county on their approved appraisers list but only one appraiser gets them all, the one who charges them less. According to the Skippy who joined the AMC a month ago because he was broke and desperate for work, he was told upfront and bluntly that regardless of experience, education, competent, and quality of work; the appraisal fee and turn time are the main condition for getting an assignment. They told him that current fee for drive by was $115 and for interior $175. The Skippy offered them $110 for drive by of any property type such as foreclosure, purchase, complex properties, over $2 million properties and $170 for interior of any kind of property.
In this dead market, the Skippy is getting 2-3 assignments a day. He has no E&O insurance and didn’t require having one and he has no assets of any kind.

 

[Mztk1]

No conspiracy theories here Jim. The CFMA has little affect on what is happening today in the oil futures market. Oil commodities have been traded since the invention of futures trading.

I use short hand, but what I am saying is by and large correct. Here's an excerpt from a Business Week artical:

More Regulation Needed?
Several changes over the past decade have relaxed the agency's oversight of commodities markets. The Commodity Futures Modernization Act of 2000 (CFMA) allowed energy commodities for the first time to be traded on deregulated "exempt commercial markets," meaning exchanges exempt from CFTC or any other U.S. government oversight. This law was a departure from the Commodity Exchange Act of 1936, which had confined commodities trading to CFTC-regulated exchanges.

In addition due to the Shad-Johnson Accord of 1982 there was a prohibition on single-stock futures and narrow-based indices up until the 2000 act was passed.

I believe the act contained the infamous "Enron Loophole". I'm sure you can look up The Commodity Futures Modernization Act of 2000 on Wikipedia.

The desire for money does not need a conspiracy. There may be no direct conspiracy for appraisers to hit numbers, yet the Skippies do it by the boat load. Traders will say the CFTA does not affect the price of oil (they want the money train to keep rolling), but most economists are saying it has. In fact Soros (who considers himself an economist and philosopher first and foremost) and the CEO of Shelll said the price of oil per barrell if not for the change in trading would likely be between 40 and $60 a barrel today.

What is a conspiracy? There are several definitions and I certainly do not want to imply anything illegal is going on. But by the fifth definition of conspiracy, plans to increase profit flow between two or more persons are by definition a conspiracy.

5. any concurrence in action; combination in bringing about a given result.

Technically, when the LO calls and asks for you to hit $210,000 and the house is worth $200,000 but you can "find" the extra $10,000 so you increase the value, you just participated in a conspiracy. So though a lot of us like to pooh-pooh the word, the fact is they exist in a common day way, every day.

 

[Jozsef Poor]

It's only a matter of time before we creep above $5 a gallon... and if the economist are correct, $7 might be possible by the end of summer. Although it hurts all of us, the AMC's are going to have bend. The skippy's can't afford to do the work for their current fees when the gas prices don't cover the bottom dollar when an appraisal is completed. Come on oil prices... keep rising!

Unfortunately I need to disagree. I can not afford to compete with Skippy. I don't do pencil search, I don't look for high or low values and I don't appraise properties for deep deep discount just to have a client. In the end I don't appraise period.
Oil prices will not hurt some skipies at least some that I seen in the past. I drove a Toyota Corolla when they had BMW, Lexus, Mercedes and once I even seen a guy with a new Lincoln Navigator. (that must bee hard to feed I agree).
I wish you are right, however, I have serious doubts.

 

[Jozsef Poor]

Anyone who thinks the higher gas price is going to eliminate Skippy is dreaming.
We have .......They told him that current fee for drive by was $115 and for interior $175. The Skippy offered them $110 for drive by of any property type such as foreclosure, purchase, complex properties, over $2 million properties and $170 for interior of any kind of property.
In this dead market, the Skippy is getting 2-3 assignments a day. He has no E&O insurance and didn’t require having one and he has no assets of any kind.

wow... I know several good appraisers who left the business because they could not compete in such manner.

 

[Terrel L. Shields]

Skippy doesn't drive comps, so how is high gas prices going to run them out of business?

The gas mileage on that Lexus isn't that good...

left the business because they could not compete

the mistake is to attempt and compete on their level. Value added service is the only way to go.

I long ago quit predicting oil prices...it didn't work in the 80s and won't work now. It could get cheap if the Saudis actually can increase the flow, which they say will happen. If the Nigeria government controls the bandits. If Russia opens the tap just a little. If China lets their currency float. If India goes into recession. Any of the above the opposite and prices rise. And of course, if a frog had a pocket to carry a pistol in, he wouldn't be afraid of snakes.

 

[Kevin Mc]

What is a conspiracy? There are several definitions and I certainly do not want to imply anything illegal is going on. But by the fifth definition of conspiracy, plans to increase profit flow between two or more persons are by definition a conspiracy.

No arguement from me Jim. I agree with your post somewhat. What all the pundits fail to realize ( and to some extent why the CFTC does dick) is that we are now in a global market. Hamstringing our traders with regulations will only hurt us on the global market, thus the "Enron Loophole". in other words, it is happening globally. Restricting our traders will only put us in a bad spot. That is the mindset anyway.