Housing Bubble Bursting?

[Midwest Guy]

I already see "The Reaper"

You need to purchase Ammunition , Canned Goods and Twinkies..

 

[Randolph Kinney]

More good news!

Facing Foreclosure? Take A Deep Breath And Don't Panic. I would caution that 'lenders' long ago sold the loans they originated making them 'servicers' which takes the decision making power out of their hands when dealing with the borrower.

The decision to restructure a loan largely depends on the borrower's income and whether a new plan has a chance of succeeding. In many cases, folks encumbered with adjustable subprime and Alt-a loans are too deep in the hole for any plan to work out. I expect to see more foreclosures ending with bank owned properties.

Chrysler Chief Sees Link of Housing to Car Sales

Chrysler was sold Aug. 3 to Cerberus Capital Management, a private equity firm, which hired Mr. Nardelli, the former chief executive at Home Depot.

“We’re going to look hard at the next three years financially, and we’re going to put a plan in place to meet that requirement,” Mr. Nardelli said. That is in addition to a plan that calls for Chrysler to cut 13,000 jobs and close an assembly plant in Newark, Del.

In recent weeks, auto companies and Wall Street analysts have reduced their forecasts for auto sales because of a combination of factors, including high gas prices, consumer uncertainty and the crisis facing mortgage lenders.

Maybe Chrysler does not get it; you layoff 13,000 people, that's 13,000 people who are not going to buy a car. They may not be able to make the mortgage payment. Without a job, there is no hope of restructuring a mortgage.

 

[Doug Smith SRA]

Got Trees?

In a report released this week, the University of Montana's Bureau of Business and Economic Research, stated that nearly all of the large lumber mills in the state were operating below last year's levels through the first half of 2007.

Through June, Montana mills produced 426 million board feet of lumber, a significant decrease from 491 million over the same period in 2006. Employment fell from 3,545 to 3,330 workers with some mills extracting 10% pay cuts from the remaining workers.

According to the Bureau, the decline in demand from new home construction has led to a 25% decline in lumber prices since the first half of 2006.

Wall Street sneezed; we got the flu out here in Montana. Pneumonia predicted in 2008.

 

[Randolph Kinney]

Short term bond & money market funds holding AAA-rated subprime paper

Bond fund investors may be in for shock

WASHINGTON (AP) -- Could the housing market's woes spread to bonds held in mutual funds by millions of ordinary investors?

Some experts - and hedge fund investors who have made big bets that the mortgage crisis will worsen - are saying that's exactly what will happen. Some bond funds that invest in riskier short-term debt already have been whacked by soaring default rates on bonds backed by subprime loans made to borrowers with weak credit.

Critics charge that Standard & Poor's, Moody's Investors Service and Fitch Ratings routinely give triple-A ratings - the safest rating there is - to far too many mortgage-backed bonds backed by subprime home loans.

About 80 percent of debt in bonds backed by subprime loans is rated triple-A, the same rating on virtually risk-free U.S. Treasury bonds, experts say.

If that seems shocking, there are bonds backed by delinquent credit card accounts - one of the riskiest forms of debt - in which up to 40 percent of the accounts in the security are rated triple-A, says Drexel University finance professor Joseph Mason.

"The problem is some of these mortgages were just phenomenally bad," he said. "There was sort of an assumption that house prices would never fall. We now see some markets where they are falling quite a lot."

Home prices are still falling, and rates that reset to higher levels on many loans could spark more defaults in the coming months.

I wonder if a panic will develop where investors demand redemption on money market funds? Send me the cash NOW! :new_multi:

 

[Randolph Kinney]

Banks face 10-day debt timebomb

Are you ready for the storm?

The final phase is a self-feeding panic, where the bubble bursts. People of wealth and credit scramble to unload whatever they have bought at greater and greater losses, and cash becomes king.

 

[Austin]

Had an interesting conservation today with a retired school teacher that works part time for a big real estate maggot in a very upscale high growth Virginia city. We visited her once and she took us out to eat at a big fancy restaurant/bar in an upscale shopping center. The reason she took us there was that the maggot she works for owns the complex along with apartments and numerous commercial projects and she wanted to show me how important her boss is.
Today I asked her what was up in her town real estate wise and she unloaded on me. The maggot is having serious financial problems and is about to lose it. The big fancy restaurant is $60,000 behind in rent, his bills are all past due, he can’t pay his subs, and he is involved in some kind of refinancing scheme with some outfit out of New Jersey. She says to refinance he had to put up $250,000 and had to borrow from his family partners. Then the lenders needed another $150,000 or the deal was off. Then another $125,000 and he has exhausted every bank in the region. He has until tomorrow to come up with another $105,000. She said the contract states if he does not come up with the money he loses the half mill he has already sent them. I can’t imagine what kind of deal that is for a refinancing with up front money. She said he borrowed $60,000 from someone to lend the restaurant so they could pay him the back rent. It goes on and on and on……
The reason I am posting this saga is I think it is a microcosm of lots of other big time commercial development maggots. It is a house of cards just waiting for a breeze to start the domino chain reaction.

 

[ZZGAMAZZ]

The most recent internet headline reads "Amtrack Expects to Hit Ridership Records." Must be talking about R.E. Agents ridin' the boxcar rails (lol)...

 

[Greg Bell]

It will not be to long and we will see the murder suicides that always happen when markets melt down or collapse.The equity markets are melting down and many 401K'S and Government Retirement Funds will start loosing billions.Let the workplace carnage begin.To bad they just don't shoot themselves , they usually GET all those that were out to ruin them.Remember 1987.........

 

[Terrel L. Shields]

outfit out of New Jersey

I can’t imagine what kind of deal that is

raise your hand, class if you can make the connection? I know i know i know. bam....:new_2gunsfiring_v1: Guido rides again.

 

[MARK JOLLIFF]

It will not be to long and we will see the murder suicides that always happen when markets melt down or collapse.The equity markets are melting down and many 401K'S and Government Retirement Funds will start loosing billions.Let the workplace carnage begin.To bad they just don't shoot themselves , they usually GET all those that were out to ruin them.Remember 1987.........

I've read all your posts and I'll be damned if I can't figure out which way you think things are going!