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Here is your open thread for the mid-week on April 25th, 2012. You may post random links and off-topic discussions here. Also, if you have an idea or a topic you’d like to see covered in an article, please make it known.
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By The Tim @ 17:
Beyond that, an article dated April 23, 2012 which talks about there being too few buyers and too much supply is obviously written by someone rather out of touch with the market.
I would also note, that while he was quoting CNN, more short sales is not necessarily a bad thing. A big part of the problem and why we’re where we are is because banks have not been processing short sales well at all. To the extent they are processing them better, and the word of that gets out, that’s a positive because that means higher prices for short sales and fewer foreclosures.
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I stumbled across this 2009 interview with Eli Broad. Interesting comments about mortgage “cramdown” (he agrees with me), the Fed and mortgages, and the downfall of AIG (including government action on AIG).
http://www.forbes.com/2009/03/20/eli-broad-aig-intelligent-investing-transcript.html
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Who Do You Believe?
CBS Marketwatch or the Seattle Times on Boeing’s Health?
http://seattletimes.nwsource.com/html/localnews/2018065885_apusearnsboeing2ndldwritethru.html?syndication=rss
Durable-goods orders off a steeper-than forecast 4.2% in March; commercial aircraft cited
http://www.marketwatch.com/story/us-orders-for-durable-goods-sink-42-in-march-2012-04-25?siteid=bnbh
A Ouji Board is sometimes more news reliable than MSM lately.
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RE: softwarengineer @ 3 – Could be a difference in methodology. Maybe the durable goods figure doesn’t include orders for planes that have not even been designed yet, or planes that won’t be delivered for over X years?
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Here are some interesting stats on short sales and REOs, as a percentage of the market.
http://www.washortsales.com/Statistics_Page.html
Note that the percentages are seasonal, rising in the winter, because the REOs and short sales tend to plug on at about the same rate, while the total sales tend to fall.
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RE: softwarengineer @ 3 –
I don’t care to read either. We’ve seen this dozens of times. Every time the economy slows down or fuel prices go up, plane orders are cancelled and Boeing has a slump. This last cycle the Asian economies kept buying even though the US airlines were largely on the ropes.
Guess what? All the growth in plane orders is part of the debt bubble too. Once it’s realized China is slowing down, they’ll also have trouble borrowing and they’ll have to cancel all their pie in the sky projects. A “firm” order for an airplane more than a few months in the future is about as firm as a sand castle.
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RE: softwarengineer @ 3 – First, the article on the Seattle Times is not written by them, it’s an AP article.
Second, the difference is simple:
AP:
Marketwatch:
The AP is reporting on actual deliveries, the very last stage in a multi-year process. Marketwatch is reporting on bookings (initial orders), the very first stage in the process, and furthermore, Marketwatch reporting on commercial aircraft in general, not Boeing specifically.
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By Kary L. Krismer @ 1:
I don’t get why you’re getting the thumbs down….the above is spot on. The more short sales the better for the long term health of the housing market. Clear ‘em out. Wipe out the bad debt. Free up the zombie houses. Short sale is but one method. Foreclosure is another. Deed in lieu is another.
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Oh come on guys – the housing bust is over. It is all rainbows from here on out…
http://www.bloomberg.com/news/2012-04-25/housing-declared-bottoming-in-u-s-.html
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RE: The Tim @ 7 –
Order bookings are also extremely inconsistent for any durable goods reporting period and have to be looked at over more than just a couple of months to have any meaning. Supposedly, Boeing is close to signing a very large (up to 200 planes worth16B) order from United for 737′s, and as we know also has standing orders for much of its production for years in advance anyway.
http://travel.usatoday.com/alliance/flights/boardingarea/post/2012/04/Lufthansa-Flyer—United-Picks-Boeing-For-Exclusive-Negotiations-For-200-Jets/679021/1
That’s probably more than a full years production which will come as an order in one durable goods reporting period. The number of orders plane orders for any short term period are kind of irrelevant to true current economic activity at the B.
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RE: Kary L. Krismer @ 1 –
Why are higher prices for short sales better, and to whom?
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RE: The Tim @ 7 –
I Know, There’s Another American Commercial A/C Company Besides Boeing Affecting the Stock Market
What its name Tim?
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By No Name Guy @ 8:
I think this thumbs up/down feature is just a silly popularity contest.
Seems to me that there is a set of people that vote down every post for users with whom they disagree, regardless of content.
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By Ira Sacharoff @ 11:
I was addressing that from the bank’s point of view. Their taking 120 days or more to review offers means less money for them. That’s been obvious to most everyone except the banks. Either that, or the banks don’t care how much they get, which is also a possibility.
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By No Name Guy @ 8:
It could be my post attracted readers of that other website.
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Big news! I was at a seminar at it was reported by a well known (and respected) real estate attorney that she is seeing judicial foreclosures starting. Three clients in the past 30 days versus none in the past 15 years.
For agents, the instructor was Annie Fitzsimmons. If you ever have a chance to take her Core class, I would highly recommend it. Lots of good information.
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RE: Kary L. Krismer @ 16 –
It doesn’t pay to be late to any strategy, even strategic default. Who was that guy that’s always pushing it on here?
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Getting ready for the end times?
http://seattle.craigslist.org/est/rew/2975627721.html
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RE: Scotsman @ 18 –
“We would love to find a place in Preston / Issaquah but are not against finding a place as far north as Carnation / Duvall or around the Snohomish area as long as the parcel works for us.”
It seems that even in the end times one wants to be north of I-90.
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RE: Kary L. Krismer @ 16 –
Did she say who the lenders were? I’ve seen private lenders and commercial lenders do it before, but never a residential lender. That story is interesting, but it would be a lot more interesting if it involves somebody with a big portfolio.
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RE: One Eyed Man @ 20 – No, she did not say. I’m assuming none were private lenders.
My guess is this is a side effect of the Foreclosure Fairness Act. If a good percentage of people are taking advantage of the extra 60 days, pushing the total time of a non-judicial to 180 days, maybe a judicial doesn’t look that bad in comparison? The whole point of having a non-judicial waive a deficiency is that the bank was trading that for a quick process. If the process is no longer quick . . ..
Still I’m sure it depends on what they know about you, the size of the loan and what they think the property is worth. No bank is going to go judicial on every property, IMHO.
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RE: Scotsman @ 18 – If I was preparing for end times, I would get far away from King County. To me this looks a hipster couple that wants to tell their friends at cocktail parties that they are ‘sustainable’. They are making a big mistake in looking for sloped land if they plan on using a tractor at all. Not fun, as my ROPS and I know this from personal experience.
By the way, when did a Duvall -> Seattle commute become “not too long”?
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RE: Kary L. Krismer @ 21 –
You’re right about the time issue, but I think from a bottom line standpoint many of the deficiencies are so large now that the time value of an extra year or two at 4% should be a secondary issue to collectability. But of course that requires the bank to actually do some financial analysis. Being as now they’ve probably got to dig up the document files to confirm they have the original note, I would assume that they’ve finally started looking at the financial data on the loan apps and are waking up to the idea of making more rational business decisions based on whether the strategic defaulters have assets from which to recoup the anticipated deficiency plus atty fees. Its about time they stopped doing the stupid one size fits all mode of loss mitigation and gave somebody the authority to make case by case business decisions. What a bunch of idiots.
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RE: Kary L. Krismer @ 21 – I doubt they are going to do this in mass. Probably for strategic defaulters that they know that they can afford to pay. They go judicial and they will actually have to start producing valid paperwork instead of the crap that is still out there. I think if they think that this is the way to go they will open Pandora’s Box and I doubt even if they have the proper paperwork to proceed legally that it will be any faster than a non-judicial foreclosure. Maybe they are planning on the court system to open a kangaroo-style rubber stamping “rocket docket” court with retired judges like they did in Florida?
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RE: Pegasus @ 24 – Again, I don’t think they’ll do it in mass either. It will be interesting to see though if they do enough to put a strain on the court system–the point you raised. I believe it has been going through some funding issues.
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By whatsmyname @ 19:
Sure, who wants to deal with zombies from south of I-90? Usually lower-class with bad taste in clothes.
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RE: deejayoh @ 13 –
Well one nice thing is that it let trolling shills like Pfft know that most of his commentary was simply garbage. If nothing else, he (to pick an example) comments less often and he’s actually had a few thoughtful things to say unlike before the feature.
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RE: wreckingbull @ 22 –
Agreed- gotta go a lot further east.
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RE: Scotsman @ 28 – No, west. But not Long Beach.
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I only need one chart to prove that austerity is a total failure.
The Most Powerful Chart Yet In Favor Of Stimulus
http://www.businessinsider.com/the-most-power-chart-yet-in-favor-of-stimulus-2012-4#ixzz1tCh8qU8d
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By No Name Guy @ 27:
I don’t even know who you are and I don’t care. rate that.
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Here is another chart showing the failure of austerity.
http://krugman.blogs.nytimes.com/2012/04/26/the-new-voodoo/
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hey i posted an article here earlier today about big banks and foreclosures and it got deleted. i’d like to know why?
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RE: pfft @ 32 –
If you want to study the socialism/communist model at its peak just take a look at the Soviet Union in 1993. I don’t think the US can afford many more trillion dollar stimulus packages. How many times can we print a trillion dollars in fake money until it’s worthless?
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RE: Natalia Orinko @ 34 –
You are obviously a rich right-wing wacko. Please send pfffffft a check for whatever amount is required to right all the wrongs in his/her life. ;-)
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RE: pfft @ 32 – RE: pfft @ 30 –
You can’t compare United States stimulus to European brand austerity.
Europe is more socialist than the United States. You point out the health care system all the time when it suits you, but now you are saying that they should just infuse more stimulus?
Europe needs income, but I think they already have a pretty high tax rate. So even if they had less austerity, and borrowed more, how would they pay it back? How much can they devalue the Euro? A better question is if the Euro is sustainable. That was the question just a year ago, and I think you have suggested breaking it up.
You can’t have it both ways.
Now for the United States we don’t need stimulus. We have a low tax rate, and low productivity. The United States can grow economically.
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RE: pfft @ 30 –
I’m sure you’ve been following the spat between Benny B and the Krugster. Pretty entertaining, given they are both going to be proven wrong. A cat fight of epic proportions.
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By Natalia Orinko @ 34:
low interest rates are screaming spend more money! the market wants more stimulus. 70+ plus years of economics and the hard-won experience of the Great Depression scream we need more growth.
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By Scotsman @ 35:
it’s just textbook economics.
or not.
Fiscal Policy in a Depressed Economy
http://delong.typepad.com/sdj/2012/03/delong-and-summers-fiscal-policy-in-a-depressed-economy-conference-draft.html
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By David Losh @ 36:
I don’t know what you’re saying. what I am saying is the following. how do you pay back debt? you pay back debt through growth and employment. how do you get growth and employment in a financial crisis liquidity trap? you borrow tons of money to get people back to work.
http://en.wikipedia.org/wiki/Liquidity_trap
europe is slowly starting to figure out that austerity doesn’t work. Let’s hope Hollande wins in France.
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By Scotsman @ 37:
I thought that was already supposed to have happened by now. did you think I’d forget that little prediction of yours?
you’re wrong anyways. austerity has been disproven as we speak.
http://graphics8.nytimes.com/images/2012/04/23/opinion/042312krugman1/042312krugman1-blog480.jpg
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RE: pfft @ 40 –
Please explain to me how consequences like austerity are transformed into policy prescriptions and/or curative. You still have the cart before the horse. Silly pffft.
And this: “low interest rates are screaming spend more money!”
Really? Financed purchases just steal from future production and income, leaving us ever less in the future.
Did the fact that the Titanic was “unsinkable” scream “full power ahead” as it hit the ice?
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RE: pfft @ 38 – “low interest rates are screaming spend more money!”
I’m an idiot for responding to your idiotic post, but gosh, imagine if the Fed set the short term interest rate at something approaching reality. Let’s say, 3%? Or, if you object to 3%, can you suggest at better rate? Here’s a question for you which you should be able to easily answer: what should the short-term interest rate be?
Indulge me for a moment, but imagine a world where the market set the interest rates, and there was no Federal Reserve. A nightmare, I know, but this won’t last for much longer.
If we had such a scenario, can’t you imagine the happiness of a million plus retirees rejoicing in their new-found wealth? Well, not really wealth, since 6% interest is actually a pretty reasonable expectation, and it would be quite interesting to go back to the mid-80′s to see who was expecting a 6%+ interest rate…
So, now that we’ve established that economists are actually nothing more than charlatans…
You don’t pay back debt, not if the debt has to be paid by *all* the people, even though only the top 1% stood to benefit from the initial bet. Let me repeat: the 99% will not repay the debts that the 1% incurred.
I’m surprised that Le Pen didn’t do better in France, but I expect that the other EU nations (Netherlands, Ireland, Italy, etc) will learn the lesson. Is that what you hoped?’
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By Scotsman @ 42:
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By Scotsman @ 42:
I don’t understand the first paragraph. What are you trying to say? I don’t think pffft is advocating austerity.
As to the rest, not all of borrowed spending is for consumption. Much of it is for investment, and part of that is for investment of the type that creates jobs.
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