Wednesday, October 31, 2007


Federal Reserve Cuts Rate by 1/4 Point today and Dooms America's Middle Class and Poor.

Good Job Bernanke, You just Doomed America.

You are a traitor, a puppet of Wall Street, and I hope you face the consequences for your treasonous actions today.

Bernanke and The Federal Reserve cut the federal funds rate by a quarter point today, Lets look at some of the aftermath of this decision.

1) Canadian Loonie hits 130-year high vs US-Dollar.
TORONTO -- The Canadian dollar rose to its highest level in nearly 130 years against the U.S. dollar on Wednesday, hitting US$1.0617 as the greenback slide lower in the aftermath of a U.S. Federal reserve rate cut.

2) Oil prices surge to US Record $95.00 a Barrel.
NEW YORK -- Oil surged 5% to a record US$95 a barrel on Wednesday after a steep drop in U.S. inventories fueled winter supply concerns and the U.S. Federal Reserve cut interest rates

3) Gold closes in on $800.00 per ounce.
An ounce of gold gained $6.50 to $794.30 in midday trading on the New York Mercantile Exchange. Silver futures jumped 19.7 cents to $14.525 an ounce.

4) Dollar falls to record low
NEW YORK (Reuters) - The dollar dropped to a record low against the euro on Wednesday as investors discounted as old news strong U.S. data, concluding that risks to economic growth persist and the Federal Reserve would cut rates as has been expected later in the day.

Time to get your wheelbarrows out next time you go shopping, because you will need something to carry all those extra worthless US dollars it will take to buy those groceries and other necessities.

We are in a lot of trouble... But atleast Wall Street is happy.

Tuesday, October 30, 2007

The Housing Market has created such fear, people can't even sell Cash flow Positive Properties in Auburn Hills, Michigan anymore.

This is really getting interesting now.

This property is a 2 Bedroom, 2 bath LOFT condo in Auburn hills within walking distance to Oakland University. Granite counter tops, Hardwood floors, View of a pond, 1,150 Sq foot. or $82.50 per sq ft.

In 2004 this place sold for about $120,000 and is now being discounted to about $95,000. Housing Fear has taken hold to the point where people will not even touch this cash flow positive property.

This place can easily be rented out by simply placing a flier on the bulletin boards in OU just a block away. I think it could be rented out for $850 a month no problem, because this is what these units went for before the condo conversion took place a few years ago and there was always a waiting list.

At $95,000 dollars you have to figure your total housing expense even with taxes and association fee's will only be about $725 a month tops.

This is a $125 a month cash flow positive property, and now cost less to own than equivalent rent in the area but people are still afraid to buy.

Warren buffet said when people get greedy... be afraid, and when people are afraid... be greedy.

Housing Fear is creating some great buying opportunities in Oakland County Michigan. To bad no one can get a loan!

I just wanted to add I really feel bad for this guy, the picture has snow, and this place has been on the market a long time with many price drops and no takers. He is probably listing it at a price where he is losing money just to unload it and still can't do it.

Monday, October 29, 2007

The Housing Crash is on! Can you feel it?

Thanks to John Elco over at Youtube for continuing to produce more great Housing Crash videos. For those of you who don't know the voice at the end is Peter Schiff who predicted all of this before it happened.

Will you be Paying for that with Cash, Check, Charge or 7 years of indentured servitude?

You want something you don't deserve or can't afford? No problem! Just get no down payment mortgage thanks to non existent lending standards, or better yet, put it on the credit card!!

Millions of Americans are so cash strapped that they are now using credit cards simply to cover Gasoline and Food because their income does not even make enough to survive. Now it is to the point where people are paying their mortgages with credit cards. Check out this article from Yahoo:

In August 2006, Reeves and her husband bought a $214,000 home with almost no money down, leaving them with a monthly payment of $1,636 -- higher than they planned on, especially with her husband's furniture sales job largely commission-based and business not good due to the U.S. housing slowdown.

An attempt this spring at refinancing with another lender fell through, leaving them behind on payments and struggling.

But as part of her efforts to avoid defaulting on the mortgage, Reeves said she has "maxed out" all her credit cards, spending to the limit on basic needs. "Now all I'm doing is making the minimum monthly payments."

Welcome to the new paradigm in America. Doesn't it ring eerily familiar to the coal mines of the 1800's, and that song sixteen tons by Tennesse Ford.
You load sixteen tons, what do you get?
Another day older and deeper in debt
Saint Peter don't you call me 'cause I can't go
I owe my soul to the company store
Miners were usually paid monthly. By the end of the month, they owed the company for the company house they were living in, for the tools they used to mine, for groceries to feed their family, and for any doctor bills. Miners had no choice but to buy from the companies. They were paid in scrip, not real money and this could only be spent at the company store.

Naturally this enabled the company to charge the miners whatever they wished. Most miners with families were constantly in debt to the company. When the miners did get paid at the end of the month, if there was any money left after they paid their employers, it was certainly not enough to last them another month. So it was a viscious cycle, and the next month, they again had to pay the company first and were lucky to have anything left for their families.

Credit cards are the new "miners script" my friends, allowing people to go deeper in debt just to buy the basic necessities to survive. This can't go on forever, and when it does finally reach critical mass its going to be very, very bad.

Ron Paul Commerical

If you are actually able to watch this Ron Paul campaign ad without getting emotional then you are not human.

Please God, let Ron Paul be elected, and restore America to the great country it was and still can be.

Ron Paul, 2008. Hope for America.

Heading towards Hyperinflation

We all loved hearing the stories as kids about how you could move to some third world country with $10,000 American dollars and live like a king. When 1 American dollar was worth 100 or even 1,000 dollars of another country's currency it made us feel all warm and fuzzy inside knowing that taking vacations or buying products from a foreign country was a great value.

Now the tables have turned and foreigners are buying up our real estate because our currency is becoming so devalued that they can buy an equivalent house here for 50% less than they could in their own country due to exchange rates.

When Bernanke cuts rates again, this problem will be further exacerbated. It is time to face the truth that Wall Street and the fed are destroying the middle class. How much longer can stagnant wages continue to endure $4.00 a gallon gas and milk?

Wake up!

Are any US-Americans reading my blog?

If any US-Americans that have maps are reading my blog please feel free to leave me a comment. You can leave an anonymous comment and do not have to register to do so. It is kind of demoralizing writing with no one reading, so if you are out there and enjoy my blog please leave me a comment. : )

Oil soars past $93 a barrel

Don't kid yourself, $93.00 a barrel oil at the end of October has little to do with supply and demand and everything to do with the tanking dollar.

Bernake's irresponsible and treasonous decision to lower interest rates is resulting in rampant inflation. Oil, gold and other commodities are soaring to all time highs. Why is the main stream media not covering this? Do they think that the sheeple won't be able to understand the correlation between lowered interest rates and inflation?

The next fed meeting will be critical, If bernake does cut rates again then this country is doomed.

Friday, October 26, 2007

Country Wide Admits even Prime option-arms are Screwed.

How did people who took out these loans not understand how they work, and how did the lenders not realize the ramification's?

You mean people with bad credit who have long histories of not paying their bills or filing bankruptcy will continue to behave the same way once we put them in a half a million dollar house?!?!? No way!!!! Who could have possibly known?!?

Negative Amortization Option-arm:

If people can only afford 900 a month on a house payment, and you qualify them on an option arm where 900 is the absolute minimum payment that does not even cover the interest....Are you really trying to say that mean those people will have a mortgage balance that grows every month and will default once it resets to include principle? You must be kidding me, lol. We could have never known.

The stupidity of this whole situation really astounds me.

Thursday, October 25, 2007

I guess Rock Financials "Secure Advantage Loan" Wasn't so secure after all.

Nice going D-Hall, with your scrupulous advertising blitz's and admittedly catchy theme song heard every 5 minutes on Detroit radio you have destroyed the lives of thousands.

The Secure Advantage Loan was a highly advertised negative amp, option-arm loan that was being promoted as a way to “lower your payment and get more cash flow”. Here lies the problem: The more cash flow comes at the expense of your mortgage balance GROWING every month that only the minimum was made. Of course people were qualified for the home purchase based on the minimum payment only so what did he really think would happen giving these people this toxic mortgage.

Well, now its time for the shit to hit the fan. Only 80% of the people with these loans are currently making more than the minimum negative equity payment. YES ONLY 80%. When these loans reset to include principle + additional principle tacked on via the –3% minimum payment, all of those people will surely lose their homes. Luckily the fun won’t really begin to 2009.

When you choose to pay the minimum payment, you’re paying less than the full interest that is due for that month. By deferring your interest, the unpaid interest is added each month to your outstanding principal loan balance.

If you defer payment of interest, your outstanding loan amount could exceed the value of your home. This may affect your ability to refinance your loan or sell your home since you will owe more than what your home is worth. A higher loan amount may also result in larger payments down the road.” [Quicken Loans website]

On October 14, 2007 Quicken loans suspended the Secure advantage and most of their other non conforming loans… I guess it was not so secure after all.

Wednesday, October 24, 2007

Michigan Homebuilder Goes Belly-up

As predicted homebuilders around the nation are starting to file for bankruptcy.

WARRENVILLE, Ill. (AP) — Neumann Homes Inc., a large homebuilder in Detroit, Chicago, Denver and Wisconsin, is filing for Chapter 11 bankruptcy protection because of the slump in housing markets.

The company said late Monday that it had been unable to secure adequate funding to operate its business and had closed its sales, production and customer service offices. It said it has laid off most of its employees, but did not give a number.

Chief Executive Kenneth Neumann blamed the situation on a "significant downturn" in housing markets in Detroit, Chicago and Denver.

"Even after the significant help we have received from our lenders this year, the company can no longer weather this storm," he said in a statement.

As the housing crisis worsens we are going to see a lot more builders take the chapter 11 route. I think the only builders that survive will have to have the capital reserves to "weather the storm" untill 2010, 2011 when the market will start to recover. This is clearly just the beggining.

How far we've come

I doubt that Matchbox 20 wrote this song about the housing collapse, the fires in California, and the impending economic Armageddon. However, it still gives me chills listening to the lyrics. Great song and video.

Tuesday, October 23, 2007

California fires a godsend to FB's

You heard it hear first folks!

Housingfear is predicting that for the first time in history people are celebrating their houses burning down.

Oct. 23 (Bloomberg) -- Fires in Southern California have burned more than 267,000 acres (106,800 hectares), making them among the worst in the state's history as the blazes destroyed hundreds of homes.

``This is what is left of my home,'' Larry Himmel, a reporter for San Diego's Channel 8, said yesterday during a broadcast while standing in front of his house in flames. ``This is what I came home to.''

More than 4,000 firefighters are fighting 15 wildfires in seven counties, according to Mary Ann Aldrich, a spokeswoman for the State Joint Information Center. At least 576 homes and 102 commercial buildings have been destroyed and more than 15,000 additional homes are threatened, she said.

15 fires set in seven counties? Anyone want to place bets that Orangezillo is somehow involved and is trying to, "clear some inventory ". All joking aside, one thing is clear, fire and the corresponding insurance payment will bail out these fb's a lot quicker than water.

Monday, October 22, 2007

50% off condo's in Miami Florida. Can you smell the fear in the air?

Imagine what it feels like to close on a unit and a month later have the developer auction identical units for 50% less, wiping out most if not all of your equity and resulting in a loss of a couple hundred thousand dollars.

What if you were one of the thousands who watched this auction knowing that the date for your condo's closing was just around the corner.

Lets assume you had put down a 75,000 deposit on a pre-construction, 850 sq foot, 1-1, unit that cost $375,000. (Yes they really did sell for that in 2005)... Do you...

1. Walk away from your 75,000 deposit


2. Close on the unit anyway paying 375,000 for a depreciating asset that’s now only worth 200k.

I have a strong feeling fear is starting to take hold.

Is America in store for a Japan-like housing correction?

o% interest rates didn't work out to well for Japan and their housing market.
Are we headed in the same direction?

Sunday, October 21, 2007

Mortgage Fraud

I was reading an article in the Arizona Republic today about the rampant fraud that was being commited by some mortgage brokers during the bubble. Why do we pay a middleman thousands of dollars to screw us?

I will pay you 5,000 dollars to give me .25% higher interest rate then I qualify for so you can make a bigger yield spread premium. While you are at, how about you take on some hidden points in the guise of "lender's attorney fee," " document preparation fee," and " endorsement fee's".

This really is criminal, and I can't understand why this occupation has not been fazed out the way of the gas station attendant and the travel agent. There is just not reason we should be paying someone to defraud us when we can deal directly with the lender now online the same way we do with a car loan, credit card, or any other form of banking.

I hope that the credit crunch and housing collapse will be the asteroid that exterminates these dinosaurs.

Enjoy the article:

Saturday, October 20, 2007

Friends help friends get toxic mortgages

This century 21 commercial is hilarious. It really gives insight into how prices in California soared to such ridiculous levels. "Whats that? You can't speak English, that’s OK, buy a house from me anyway...I have a nice subprime arm mortgage with a low teaser rate to qualify you"

The Purpose of this Blog

I am a big fan of Keith and the Housing Panic Blog.

He inspired me to create my own housing blog, because I feel that there are a lot of interesting things that he happens to overlook. This blog gives me an opportunity to share those and also give my own takes on this debacle.

Housing fear has set into the nations psychology and the bubble has officially popped. Enjoy!

Friday, October 19, 2007

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