Housing Bubble Bursting?

[Restrain]

We REALLY need the Lounge. This election is quite probably going to determine if the US survives as a economic power, or if we become a second rate debtor state. We need to be able to talk about it.

Just my 2 cents.

 

[Scott Kibler]

Good thing there are other venues of discussion not occupied by children and tatle-tales.

 

[Big ole Boy]

I'd like to see 40 new nuclear power plants attached to 40 new desalination plants here in Florida,

and get started yesteday, along with a new highway system that seperates large transit from commuters ......

.... a "new deal" of new deals for a new "buck Rodgers" skyline that works in harmony with nature, but builds larger infrastructure for sentient soceity ....

 

[Greg Bell]

They can put an oil rig in my back yard.It must be bad if the goofballs want to send us a check.I can't wait till my welfare style check arrives , off to the liquor to support the economy...

 

[Randolph Kinney]

Actually, for those who have not noticed before, this thread is the lounge.

It was never popular for claiming a housing bubble existed (Shiller's graph) and hotly contested. Even now, there are forum members who deny an over heated, over inflated housing market on a national scale.

Now that the economics are coming in to play as never before, we see the politicians scramble to cobble something together that will win them votes and not solve the problem as the layoffs mount and retail sales decline along with falling home prices and rising defaults and foreclosures.

And we see a FED being politically correct concerning any specific bail out and dragging its feet on providing liquidity and credit to prevent insolvency claiming it is concerned about inflation as the dollar continues to decline.

I have just filed a complaint against a mortgage banker with the California department of corporations for non payment of my invoice for appraisal services rendered. Too bad this company is licensed in this state as a corporation, as mortgage lender and broker.

And I am loving the suit against WaMu by the coerced appraiser. What? The regulators and law inforcement can't see or find the problem for loan losses?

I hear the sound of a flushing toilet, any one else? :laugh:

 

[Lost Cause]

Flush twice. It's a long way to Washington.

 

[Austin]

Heard on the news today that the unemployment rate in California hit 6.1% today. Headed right up with their with their fellow believer in Michagan. They will take the state down the toilet before they give up their faith/religion in socialism.

 

[Randolph Kinney]

Heard on the news today that the unemployment rate in California hit 6.1% today. Headed right up with their with their fellow believer in Michagan. They will take the state down the toilet before they give up their faith/religion in socialism.

Don't sugar coat the situation in California, Austin.

The state has been hemorrhaging revenue with declining sales tax (all last year), declining property tax, declining income tax. The governor has submitted a budget that calls for a 10% across the board cut in all spending including education. The legislature wants to raise taxes to cover the $14 billion short fall, however, the constitution requires a 2/3 majority vote in both houses in order to pass any tax increase.

I suspect we will see a ballot initiative to raise taxes. The voters will be tested; stupid vote yes, not stupid vote no and with their feet.

 

[Randolph Kinney]

The very short history of bubbles - this time around

A brief history of bubbles

It's not surprising that it will take so long to work through this mess, if you remember how it all began. The current crisis is yet another in a string of financial bubbles -- the tech bubble that burst in 2000, the housing bubble that burst in 2007 and the debt-market bubble that's bursting now. Behind each bubble stands a global flood of cheap money created by:

• Central banks running their printing presses to fend off economic slowdowns or financial-market crashes.

• A weak yen that let traders and speculators borrow for almost nothing in Japan in order to buy stocks and bonds in other markets.

• A huge surge of exports from countries such as China determined to hold down domestic consumption.

• Soaring oil prices that gave oil producers billions of dollars to invest somewhere.

All of those dollars chased a limited supply of real assets and traditional stocks and bonds, bringing down returns just as a falling dollar and signs of inflation lowered real returns more. Everyone wanted something as safe as U.S. Treasurys that paid more than Treasurys.

Wall Street obliged by packaging and then slicing debt backed by mortgages, so that even the riskiest mortgages could earn a safe AA or AAA rating from Standard & Poor's, Moody's (MCO, news, msgs) or Fitch. It performed the same magic with credit card debt, with auto loans and finally with corporate debt -- even the riskiest kind, called high-yield because it pays out a higher dividend to compensate for its higher risk. It's known as junk because in hard economic times it can become worthless.

It worked out just fine until reality stuck a pin in the bubble. It turns out that you can't lend more and more money to less- and less-qualified home buyers without driving up the number of borrowers who pay late or can't pay at all.

 

[moh malekpour]

Sorting Out the New Housing Market

A year ago, having a home that had appreciated in value meant that an owner could trade up to a more expensive home. Now it means that the homeowner cannot move until the old home is sold, and that is getting more difficult.

First, the seller has to find a buyer who can get a mortgage. Second, the price has to be high enough to pay off the old mortgage and leave enough cash for the down payment on a new home. Both were taken for granted a year ago. In many markets, neither is a sure thing now.

That has created a daisy chain of delays and cancellations that has frustrated builders, homeowners and real estate agents.

Selling one house depends on the buyer’s selling another house, and that deal in turn depends on yet another sale, and so on and so on.

A failure to get a mortgage approved at any stop along the way can halt the sales of an entire series of homes.