Weekly Twitter Digest (Link Roundup) for 2010-06-26

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About The Tim

Tim Ellis is the founder of Seattle Bubble. His background in engineering and computer / internet technology, a fondness of data-based analysis of problems, and an addiction to spreadsheets all influence his perspective on the Seattle-area real estate market.

16 comments:

  1. 1

    I suspect that the Kirkland Mansion people have succeeded in their goal of obtaining free housing. It just won’t be co-ed.

  2. 2
    Dirty_Renter says:

    ‘As we go down the rabbit hole of the housing meltdown.’
    Has this Seattle Times writer caught the SB bug?

  3. 3
    JChristoph says:

    Wow.. Interview with Zillow CEO was great.

    He shed some really important light on two subjects.
    “People don’t wake up in the morning and say, ‘mortgage rates are low, I think I’ll buy a house all it does it give them more purchasing power.'”
    This would explain why we can’t find a good correlation between rates and home values.
    Then he followed up with “I shudder to think what [the state of the housing market would be] if rates were high.”.
    I think he hit the nail on the head in both. You can’t create much demand by adjusting interest rates, but you can adjust buying power.
    Home values are a function of available buying power and demand, which we must consider to be two dimensions. That is why you can’t find a correlation between JUST interest rates and home values. You need to correlate between TWO variables, one of which (demand) is very hard to measure.

    You guys.. I can smell it in the air now. I was skeptical, that there would be a second wave of foreclosures and housing value decline, but now I’m terrified.
    Now for my political rant:
    Obama is by far the WORST president in the history of the USA and we have altogether the worst set of politicians, and all of their government intervention has royally F***ED. Obama dumped S*** loads of money into the economy all for NOTHING. Now we’ve got this giant debt to pay and nothing to show for it.
    Ignorant Seattle liberals wanted “CHANGE”. I can’t tell you how many of my “friends” voted for Obama and didn’t know what he actually stood for. It turns out that all of the things they hated about Bush were the things that defines liberalism. We need a true conservative leader that won’t dump trillions into inflating an unsustainable bubble. We need to take action. We as the people need to take responsibility by appointing leaders that will stop giving out money to those who don’t deserve it and allow the people that work hard for their money to keep it.

    Zillow CEO was right when he said that Fanny/Freddie are holding up the housing. By in my opinion, I say let them die. Stop subsidizing home purchases. Then we can all afford housing without their help.
    Their very existence is the only thing that makes them necessary.

  4. 4
    softwarengineer says:

    RE: JChristoph @ 3

    Did Anyone With a Brain Believe That Seattle’s Economy Has Bottomed Out Hogwash?

    Suzie Orman stated last week that the fundamentals need to happen to support Seattle home prices, like new jobs added bringing in new well paid employees….she says that isn’t happening anywhere in America right now.

  5. 5
    CCG says:

    “You guys.. I can smell it in the air now. I was skeptical, that there would be a second wave of foreclosures and housing value decline, but now I’m terrified.”

    Welcome to the club. Thanks to all the horrendous downside “surprises” to the economic numbers recently, I imagine membership is growing quite a bit.

    “It turns out that all of the things they hated about Bush were the things that defines liberalism. We need a true conservative leader that won’t dump trillions into inflating an unsustainable bubble.”

    Back in 2004 a conservative journal actually recommended voting for Kerry on the basis that Bush was a “uniquely noxious cocktail” of all the worst aspects of liberalism and “conservatism” – unnecessary war, gross fiscal and monetary irresponsibility, complete failure to regulate Wall Street, failure to defend the border, etc etc. Likewise, recently someone said that Obama is merely serving Bush’s third term. I totally agree.

  6. 6
    Scotsman says:

    Well, well- three years on Snig and I are no longer alone.

  7. 7
  8. 8

    RE: karl @ 7 – I commented on that change earlier, but that piece you link is sort of strange. It’s basically an article quoting reader comments to other articles on the topic.

  9. 9
    karl says:

    I think the story was on the “firestorm” rather then the policy shift. Was interesting to read some of the comments. Everyone seems to know that the GSEs are in deep trouble and the sooner we can unwind these things the sooner things will get back to normal.

  10. 10
    ray pepper says:

    “Only in America! We should rename Fannie and Freddie “Stalin Mae” and “Lenin Mac,” screamed a reader of the Wall Street Journal today. “If folks nationally only knew how many real homes are being purposely defaulted upon in the over $500k price range, it would turn their stomachs. Current estimates show that the strategic default rate is actually HIGHER as a percentage in homes with high credit scores and no loss of income. The higher the income, the greater the likelihood of default! ****Of course, these people know full well that it is the most intelligent business decision of their lives to walk away from these underwater albatrosses.”****

    We have seen nothing yet!!

  11. 11

    RE: karl @ 9 – I’m not sure what your “back to normal” is, but these entities have been around for decades. It’s not their existence that is the problem. It’s that they were pushed into making risky loans by politicians.

  12. 12
    karl says:

    Oh, I agree Kary.
    The Feds financial policy for the last decade was flawed. Low interest rates pushed fixed income investors into risky over the counter securities fueling a unsustainable housing boom. Which left unregulated became the greatest pyramid scheme ever.

    Normal is a healthy fixed income market. LIBOR is dead and can’t compete with goverment money at 25 basis points. That market did a good job keeping the banks honest.

    True, they did serve a function for many years. The MBS market ,with no oversight killed them for sure, but for the last 2 years the FEDs have been using the GSEs as an under the table “bad bank” giving the banks a chance to bundle up their risky assests and get them off the books (or they should have). Now lets take the pain and deal with it. You can’t start a recovery until you hit the bottom. The policy of spending our way out of this is clearly not working.

    There are large parts of the country that had very little exposure to the housing melt down. A long protracted recession and a flat bond market is going to pull them down too.

    The pain will run deep and needs to be spread out. There are few innocent parties. It is really hard to have much sympathy for those caught up in flipping.

  13. 13
    softwarengineer says:

    RE: ray pepper @ 10

    My Friend Was Going to Offer $175K Cash for a Property Next Door to Him

    But a destitute couple [one is on Social Security disability] and the other is a low income worker grabbed it up with a Freddie/Fannie no credit rating and dinky down payment for $225K….my friend is just waiting for it to be back on the market in a couple years, after the slam-dunk foreclosure.

  14. 14
    CCG says:

    By softwarengineer @ 13:

    RE: ray pepper @ 10

    My Friend Was Going to Offer $175K Cash for a Property Next Door to Him

    But a destitute couple [one is on Social Security disability] and the other is a low income worker grabbed it up with a Freddie/Fannie no credit rating and dinky down payment for $225K….my friend is just waiting for it to be back on the market in a couple years, after the slam-dunk foreclosure.

    Should be even cheaper then, as the new owners will trash it to “pay the system back” for “screwing” them.

  15. 15
    Pegasus says:

    By Kary L. Krismer @ 11:

    RE: karl @ 9 – I’m not sure what your “back to normal” is, but these entities have been around for decades. It’s not their existence that is the problem. It’s that they were pushed into making risky loans by politicians.

    Politics are only part of the problem for Fannie Mae. The bigger part is the crooks in the past who have run it into the ground and gotten caught fabricating profits for bonuses, etc. and did not get prosecuted for their criminal behavior. What happens when a crook like Frank Raines gets caught? He becomes an advisor to Barrack Obama. None of these crooks go to jail. Fannie has been a nightmare since President Clinton.

  16. 16

    By Pegasus @ 15:

    By Kary L. Krismer @ 11:

    RE: karl @ 9 – I’m not sure what your “back to normal” is, but these entities have been around for decades. It’s not their existence that is the problem. It’s that they were pushed into making risky loans by politicians.

    Politics are only part of the problem for Fannie Mae. The bigger part is the crooks in the past who have run it into the ground and gotten caught fabricating profits for bonuses, etc. and did not get prosecuted for their criminal behavior. What happens when a crook like Frank Raines gets caught? He becomes an advisor to Barrack Obama.

    What part of that isn’t politics? ;-)

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