Wednesday, October 31, 2007
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.
Posted by Chris at 3:03 PM
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.
Posted by Chris at 4:46 PM
Monday, October 29, 2007
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 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.
Posted by Chris at 10:51 PM
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?
Posted by Chris at 1:11 PM
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. : )
Posted by Chris at 7:53 AM
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.
Posted by Chris at 7:35 AM
Friday, October 26, 2007
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.
Posted by Chris at 6:38 AM
Thursday, October 25, 2007
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.
Posted by Chris at 8:08 AM
Wednesday, October 24, 2007
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.
Posted by Chris at 3:24 AM
Tuesday, October 23, 2007
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.
Posted by Chris at 12:28 AM
Monday, October 22, 2007
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.
Posted by Chris at 10:33 PM
o% interest rates didn't work out to well for Japan and their housing market.
Are we headed in the same direction?
Posted by Chris at 7:16 AM
Sunday, October 21, 2007
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:
Posted by Chris at 7:22 PM
Saturday, October 20, 2007
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"
Posted by Chris at 3:10 AM
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
By reading this blog you agree to these terms and conditions
HOUSINGFEAR (aka "HF", "We", "blogger") is an opinion blog (the “Service”) which we offer to you subject to these terms and conditions of use (“Terms”). By accessing, viewing, creating or contributing to HOUSINGFEAR and in consideration for the Services we provide to you, you agree to abide by these Terms. Please read them carefully before accessing, viewing, creating or posting to the blog
1. Webblog Host
This webblog is dedicated to providing general information which is of interest to our readers. The opinions expressed on this webblog are the opinions of the individual contributors.
2. Rights in the Content You Submit
Any and all works of authorship copyrightable by you and posted by you to this webblog (“Content”) are submitted under these Terms. By posting your Content using the Services, you are granting the HOUSINGFEAR a non-exclusive, royalty-free, perpetual, and worldwide license to use your Content in connection with the operation of the Services, including, without limitation, the license rights to copy, distribute, transmit, publicly display, publicly perform, reproduce, edit, translate and reformat your Content, and/or to incorporate it into a collective work.
When publicly displaying, publicly performing, reproducing or distributing copies of your Content, or Content as incorporated into a collective work, we will make best efforts to credit your authorship. You grant HOUSINGFEAR permission to use your name for such attribution purposes. You, likewise, agree to represent yourself accurately. You acknowledge that misrepresentation may lead us, in our sole discretion, to cancel your use of the Services and delete any of your Content.
As a general matter, you may post content or responses to content in a blog freely, so long as the content of such post is not illegal, obscene, defamatory, threatening, infringing of intellectual property rights, invasive of privacy or otherwise injurious or objectionable. However, we reserve the absolute right to edit content. We may also determine not to post content if we determine that such content is not in the best interest of the blog or for any other reason.
You may not use the HOUSINGFEAR name to endorse or promote any product, opinion, cause or political candidate. Representation of your personal opinions as institutionally endorsed by the blog is strictly prohibited.
By posting content or response to content in any blog, you warrant and represent that you either own or otherwise control all of the rights to that content, including, without limitation, all the rights necessary for you to provide, post, upload, input or submit the content, or that your use of the content is a protected fair use. You agree that you will not knowingly and with intent to defraud provide material and misleading false information. You represent and warrant also that the content you supply does not violate these Terms, and that you will indemnify and hold us harmless for any and all claims resulting from content you supply.
You understand that all content posted to this webblog is the sole responsibility of the individual who originally posted the content. You understand, also, that all opinions expressed by users of this site are expressed strictly in their individual capacities.
You agree that HOUSINGFEAR will not be liable, under any circumstances and in any way, for any errors or omissions, loss or damage of any kind incurred as a result of use of any content posted on this site. You agree that you must evaluate and bear all risks associated with the use of any content, including any reliance on the accuracy, completeness, or usefulness of such content.
4. Disclaimer of Warranties and Limitation of Liability
This site is provided on an “as is” and “as available” basis. We make no representations or warranties of any kind, express or implied, as to the site’s operation or the information, content or materials included on this site. Information appearing in the content or materials included on this site is general information only. It is not meant to be, nor should it be considered as constituting legal or other professional advice. To the full extent permissible by applicable law, We hereby disclaim all warranties, express or implied, including but not limited to implied warranties of merchantability and fitness for any particular purpose. We will not be liable for any damages of any kind arising from the use of or inability to use this site. You expressly agree that you use this site solely at your own risk. Links to external sources are provided solely as a courtesy to our webblog visitors. We are not responsible for and do not endorse or warrant in any way any materials, information, goods or services available through such linked sites or any privacy or other practices of such sites.
We won't knowingly share user details with anyone.
We reserves the right to change, at any time, at our sole discretion, the Terms under which these Services are offered. You are responsible for regularly reviewing these Terms. Your continued use of the Services constitutes your agreement to all such Terms.
7. Copyright Complaints
HOUSINGFEAR respects the intellectual property of others, and requires that our users do the same. If you believe that your work has been copied and is accessible on this site in a way that constitutes copyright infringement, or that your intellectual property rights have been otherwise violated, please contact HOUSINGFEAR@GMAIL.COM
8. Defamation Disclaimer
HOUSINGFEAR cannot accept responsibility or liability (express or implied, contractual, tortious or otherwise) for any material contributed to this website. The views and opinions expressed by any contributor to this page are not necessarily those of the blog or blogger. HOUSINGFEAR is a 100% personal-opinions-only blog.
The content on this blog is provided as general information only and should not be taken as investment advice. All site content, including advertisements, shall not be construed as a recommendation to buy or sell any security or financial instrument, or to participate in any particular trading or investment strategy. The ideas expressed on this site are solely the opinions of the authors who may or may not have a position in any company or advertiser referenced above. Any action that you take as a result of information, analysis, or advertisement on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions
Posted by Chris at 10:19 AM