Housing Bubble Bursting?

[Mike Garrett RAA]

Remember..."It is always the appraiser's fault!"

 

[Randolph Kinney]

Cash out refi replaced with growing credit card debt

Credit card debt is ready to blow

After every financial crisis over the past 10 years, the Federal Reserve has cut interest rates and pumped money into the economy. Each rescue solved the problem - and created a new one.

The next bomb from this chain reaction of bailouts and blowups will be credit-card debt. Hardly anybody is talking about it yet, but banks and consumers are laying the ground for a wave of credit-card defaults, bankruptcies and asset write-offs for 2009 or so.

Regulators and investors have discouraged excessive mortgage lending, so banks are turning to credit cards as the next growth business. They're starting to raise credit limits, lower lending standards and increase recruitment.

The percentage of banks tightening credit-card lending standards is hovering near its lowest levels in a decade, according to a Federal Reserve survey.

This can end only one way. The only question is how bad it will be.

 

[Randolph Kinney]

Short sales flood SoCal markets - listings constant, sales dropping

Record 10,000+ Short Sales in Southern Calif

While everyone is talking about multiple housing related issues, it seems that people are failing to report on the monumental record we set this week. Southern California, for the first time this millennium has hit a record of 10,000 short sales.

 

[Steve Owen]

Today's top ten list.

http://www.brokeragentnews.com/news/residential/2007_10/10_15_2007_rn_1192512221.html

 

[Austin]

http://www.ft.com/cms/s/0/1ed4bb86-7bf8-11dc-be7e-0000779fd2ac.html

Foreign investors flee US securities

By Michael Mackenzie in New York
Published: October 16 2007 17:07 | Last updated: October 16 2007 21:16

Foreign investors slashed their holdings of US securities by a record amount as the credit squeeze intensified, according to the latest Treasury figures.
The Treasury International Capital report – known as the Tic – for August will be closely watched because it appears amid growing concerns about the weakness of the US dollar, which hit a record low recently against a basket of major currencies.
“The bad news is that [the data] plainly show how vulnerable the dollar is to a continuation of the credit crunch-risk averse environment,” said Alan Ruskin, chief international strategist at RBS Greenwich Capital. “There is no way to get away from the lack of corporate bond inflows, the foreign selling of US equities and the countervailing strong US purchases of foreign equities and bonds.”

 

[Randolph Kinney]

Housing Downturn Takes Toll on Cities’ Revenue

Across the country, local governments are feeling a financial strain driven largely by the nation’s real estate downturn and some are considering higher taxes.

 

[Greg Bell]

Careful, all this negative talk will make the stock market go up , talk about a bubble..

 

[Randolph Kinney]

Careful, all this negative talk will make the stock market go up , talk about a bubble..

Do not worry Greg, the FED is in control.

Just picture this as cascading buckets; as one market falls (water flows out), another one rises (water flows in). Who is in charge of making sure there is enough water (money) to keep the buckets from going dry? Or buckets from over flowing?

 

[Greg Bell]

They FED needs more helicopters to hold the buckets of cash that will be tossed to the hovering masses..

 

[Restrain]

Greg:

RE, calling a mortgage.

All due respects, but I saw a LOT of commercial loans called in the 80's. The regulators would demand that people with performing loans, where the property had declined in value, come up with cash to pay off the difference to reduce the loan back to the percentage level where they originally got the loan. So, a loan that had been performing, but was now upside down, would be called because the property owner couldn't come up with several hundred thousand in cash. This resulted in the RTC being one of the biggest property owners in Texas.

We may see this again.