The Crack of Doom – Week of Dec 18, 2006

One week to go, and the shoppers at Doom Castle are in full panic mode.

Please wrap up a nice RE link or two and send them to Igor at the Reply box.  We promise to open them before Xmas!

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31 Comments for this entry

  1. jan-martin feddersen says:
    December 18, 2006 at 2:11 AM

    No more bubbles to bail out the housing bubble
    /fleckenstein

    http://tinyurl.com/tqpso

  2. jan-martin feddersen says:
    December 18, 2006 at 2:12 AM

    Performance Notes, Ouija Boards, Bollinger Bands, and Valuations / hussman

    full
    http://www.hussmanfunds.com/wmc/wmc061218.htm

    summary
    http://immobilienblasen.blogspot.com/2006/12/pe-equivalent-valuations-hussman.html

  3. jan-martin feddersen says:
    December 18, 2006 at 2:13 AM

    THE NEXT ROGUE WAVE
    by Jim Puplava

    very good!

    http://www.financialsense.com/stormwatch/2006/1215.html

  4. jan-martin feddersen says:
    December 18, 2006 at 2:13 AM

    In a Merger Wave, a Dangerous Undertow for Stocks

    http://immobilienblasen.blogspot.com/2006/12/in-merger-wave-dangerous-undertow-for.html

  5. jan-martin feddersen says:
    December 18, 2006 at 2:29 AM

    Five Macroeconomic Myths

    economist Ed Prescott “busts” the myth that the US public debt is “high”, and in specific, burdensome to future generations.

    and the anti spin from aaron crowne

    http://www.autodogmatic.com/index.php/sst?blog=10&p=404&page=1&more=1&c=1&tb=1&pb=1&disp=single#c3522

  6. jan-martin feddersen says:
    December 18, 2006 at 2:32 AM

    Realogy Agrees to Buyout By Apollo Management for $6.4 Billion

    http://www.bloomberg.com/apps/news?pid=20601087&sid=aseFA4dTmAoA&refer=home

  7. jan-martin feddersen says:
    December 18, 2006 at 3:07 AM

    Five Things You Need to Know: Vanished, Deflation Is Good… Until it Isn’t, Dear Prudence, Sounds Like a Plan… A Very Bad Plan, Who Needs Dollars Anyway

    4. Sounds Like a Plan… A Very Bad Plan

    More than half of recently surveyed British mortgage brokers said their clients admit to buying property to supplement poor retirement savings, according to the Telegraph.

    A lack of confidence in the stock market is fueling increased investment in rental properties despite the fact the income from the properties in many cases fails to cover interest and management costs, the Telegraph said.
    Borrowing by so-called “buy-to-let “investors will rise more quickly than borrowing by home owners and will account for 13% of gross lending in 2007 and 14%in 2008, up from 11% in 2006, according to the Council of Mortgage Lenders.
    The phrase “buy-to-let” is simply the British vernacular for buying a residential property to lease for a profit and the particular category of mortgage loans used to purchase the property for leasing.
    A survey published this week shows eight in 10 mortgage brokers expect to see an increase in buy-to-let lending in 2007 from today’s already record levels.
    Claire Burston, at financial consultancy Penrose which commissioned the study, told the Telegraph: “People are becoming increasingly aware of the need to supplement their existing savings prior to retirement and this will result in a boom in the buy-to-let market.”
    Meanwhile, two weeks ago UCB Homeloans announced it was relaxing buy-to-let lending criteria.
    So, let’s see if we got this right. What we have here is people who haven’t saved enough money for retirement buying property they can’t afford (thanks to relaxed lending standards) and renting the property for less than the cost of carry to other people who apparently can’t afford to buy a home either.
    If we hated money this is exactly what we would do to get rid of it.

    the rest is also worth reading!

    http://www.minyanville.com/articles/index.php?a=11788

  8. jan-martin feddersen says:
    December 18, 2006 at 6:16 AM

    Inflation Vanquished ?
    anti spin from barry

    http://bigpicture.typepad.com/comments/2006/12/retail_booming_.html

  9. John M. says:
    December 18, 2006 at 6:35 AM

    Jan-Martin (comment #2) -

    Hussman seems baffled that the markets can continue being irrational for so long.

    “Again, however, nothing prevents investors from driving the market higher over the short-term so long as Wall Street analysts propagate the same sort of ignorance that they encouraged in the late 1990′s. In any event, further market gains on the hallucination that P/E multiples are ‘reasonable’ will only make the long-term resolution worse.”

  10. John M. says:
    December 18, 2006 at 7:15 AM

    Jan-Martin (comment #3) -

    (lots of important stuff today)

    Letters-of-fire time for Puplava.

    “The titans of finance are jumping headfirst into the mortgage business at the same time that the people who know this market best are scaling back.”

  11. NVmike says:
    December 18, 2006 at 10:28 AM

    Boulder Realtor(tm) stands up and says what everyone else already knows: David Lereah is a clown:

    “[Lereah's] widely quoted sound bites sound like they’re written by a PR firm. They’re filled with contradictions and are sloppy and vague. His statements are not an accurate reflection of market conditions and his predictions have little value.”

    Entire article here: [corrected JM, score two for Boulder RE professionals last Friday!]

    “Not My Favorite Clown”, by OSMAN, BoulderRealty blog, December 15, 2006.

  12. John M. says:
    December 18, 2006 at 10:48 AM

    Mr. Twist found the good stuff in this [1] Friday article by a Boulder CO based mortgage broker and columnist. The message is that the regulators’ nontraditional guidance is being ignored. There is a slight error in the piece. OFHEO’s letter [2] to F&F requiring them to follow the guidance was actually published on Wednesday, not Thursday.

    The quote in [1] is just a teaser. Reading the whole piece is recommended.

    ———————————–

    [1]: “Housing still far from hitting bottom”, by Lou Barnes, Inman / Mortgage101, December 15, 2006.

    Back in September, the Fed rounded up every money-lending regulator to issue a “guidance” to banks, S&Ls, credit unions, and Fannie Mae and Freddie Mac, ordering them to tighten underwriting and advertising standards for “nontraditional mortgages,” defined as any loan with interest-only or negative-amortization provisions of any kind. In the world of banking, a Fed guidance is a bolt of Jovian lightning — fail to pay attention, and you will fry.

    The events involved resemble policy-making in the Green Zone:

    1. The guidance is about five years too late.

    …

    4. The entire mortgage industry ignored the guidance. Totally. Our firm has not received a single e-mail from any wholesaler even considering compliance with the interest-only and negative-am requirements. [my emphasis]

    [2]: Press Release: “OFHEO Directs Fannie Mae and Freddie Mac to follow nontraditional mortgage risk guidance”, OFHEO, December 13, 2006.

  13. John M. says:
    December 18, 2006 at 11:30 AM

    Twist -

    Sounds like might like to contact Mr. Osman Parvez of the Re/Max Silver Fern Team, Boulder CO area. He’s a fan of MISH and looks to be doing research there a bit like yours around Phoenix. NVmike dug out a piece on their research blog about David Lereah (comment 11 above), and the same article is being discussed over at HP.

    Adding this find to Mr. Twist’s discovery of the Lou Barnes article, it sounds like there’s some deep thinking going on in Boulder’s RE community. There have been stories about Colorado’s weak regulation causing a spike in foreclosures, so perhaps that’s focusing their minds up there.

  14. John M. says:
    December 18, 2006 at 12:44 PM

    Jan-Martin & NVmike & Mr Twist -

    Great stuff today, and there hasn’t even been time to look at 6,7,8 yet

  15. jan-martin feddersen says:
    December 19, 2006 at 1:58 AM

    After the buyout boom: The bust?
    itulip

    http://www.itulip.com/forums/showthread.php?t=717

  16. jan-martin feddersen says:
    December 19, 2006 at 2:58 AM

    thai´s to control speculation, stocks down 16%!

    http://immobilienblasen.blogspot.com/2006/12/thais-to-control-speculation-stocks.html

  17. jan-martin feddersen says:
    December 19, 2006 at 3:00 AM

    peter shiff on bulls and bears / fox

    on houisng. great video 2-3 minutes

    http://www.europac.net/Schiff-Fox-12-16-06_lg.asp

  18. jan-martin feddersen says:
    December 19, 2006 at 3:48 AM

    hovnanain faces reality.

    details warning!

    http://immobilienblasen.blogspot.com/2006/12/hovnanian-faces-reality.html

  19. jan-martin feddersen says:
    December 19, 2006 at 4:04 AM

    U.S. Current Account Deficit – Foreign Investors Making It Up On Volume?
    by Paul Kasriel

    http://www.safehaven.com/article-6542.htm

  20. jan-martin feddersen says:
    December 19, 2006 at 5:57 AM

    update on the billings bubble

    a must see video

    http://www.topoimagery.com/billings/

  21. John M. says:
    December 19, 2006 at 8:35 AM

    Jan-Martin -

    Finally catch up. :) Thanks especially for #20, the Billings video.

  22. NVmike says:
    December 19, 2006 at 6:53 PM

    Report Reveals 2.2 Million Borrowers Face Foreclosure on Subprime Home Loans

    Tuesday December 19, 1:30 pm ET

    Billions of Home Ownership Wealth to be Lost by Minority Americans; Chart Contains Detailed MSA-Specific Projections of Home Foreclosure Impacts

    WASHINGTON, Dec. 19 /PRNewswire/ — A new Center for Responsible Lending (CRL) study reveals that 2.2 million American households will lose their homes and as much as $164 billion due to foreclosures in the subprime mortgage market. Titled, “Losing Ground: Foreclosures in the Subprime Market and Their Cost to Homeowners,” the CRL study is the first comprehensive, nationwide review of millions of subprime mortgages originated from 1998 through the third quarter of 2006.

  23. jan-martin feddersen says:
    December 20, 2006 at 12:37 AM

    MBA: Mortgage Applications Decrease / CR

    http://calculatedrisk.blogspot.com/2006/12/mba-mortgage-applications-decrease.html

  24. jan-martin feddersen says:
    December 20, 2006 at 12:58 AM

    Rising Inventories and Price Cuts = Bottom of the Housing Recession?
    by Paul Kasriel

    http://www.safehaven.com/article-6548.htm

  25. jan-martin feddersen says:
    December 20, 2006 at 1:12 AM

    uk builder feel the us blues….

    George Wimpey down 2.7% after reviewing U.S. land bank

    http://www.marketwatch.com/news/story/george-wimpey-sees-adjusted-pretax/story.aspx?guid=%7BAA82D3B7%2D342F%2D404F%2DBF20%2D6F1434D0703A%7D

    U.K. homebuilder George Wimpey said that poor trading conditions in the U.S. market means that it has been reviewing its U.S. land bank and option carrying values, a move that is expected to impact net assets by 2.5% after tax. U.K performance has been strong, the company said, adding that it’s expecting record home completions in 2006. Last year, the company completed 17,021 homes in total. Pretax profit for 2006 is expected to be in line with expectations, prior to U.S. option exit costs and land value provisions, the company said. In the U.K. current market conditions are similar to those experienced throughout 2006 and the company said it believes the outlook for 2007 is stable. It remains difficult to predict the U.S. market outcome for 2007, however the company said that it expects both volumes and margins to be materially below 2006

  26. jan-martin feddersen says:
    December 20, 2006 at 2:21 AM

    Riskiest Mortgage Bonds May Fall as Fannie Mae Cuts Purchases

    http://immobilienblasen.blogspot.com/2006/12/riskiest-mortgage-bonds-may-fall-as.html

  27. jan-martin feddersen says:
    December 20, 2006 at 3:14 AM

    Beware the overpriced debt markets in 2007

    full
    http://www.economist.com/finance/displaystory.cfm?story_id=8459490

    my take/summary
    http://immobilienblasen.blogspot.com/2006/12/beware-overpriced-debt-markets-in-2007.html

  28. jan-martin feddersen says:
    December 21, 2006 at 3:04 AM

    Gussied-Up Land-Flippers?

    http://jeffmatthewsisnotmakingthisup.blogspot.com/2006/12/gussied-up-land-flippers.html

  29. jan-martin feddersen says:
    December 21, 2006 at 3:07 AM

    World Needs Better “Face of American Capitalism” than Private Equity / itulip

    long but very good!

    http://www.itulip.com/forums/showthread.php?t=724

  30. jan-martin feddersen says:
    December 21, 2006 at 3:12 AM

    Global Rebalance, Consumer Imbalance / us spillover risks / pimco!

    summary
    http://immobilienblasen.blogspot.com/2006/12/global-rebalance-consumer-imbalance-us.html

    or full (warning very long)
    http://www.pimco.com/LeftNav/Global+Markets/Global+Macro/2006/GMT+December+2006.htm

  31. jan-martin feddersen says:
    December 21, 2006 at 3:34 AM

    Five Things You Need to Know: More PPI, Investment Standards? We Don’t Need No Stinking Investment Standards!, Thai Me Up, Thai Me Down, Relationships, One Has a Theory About This…

    http://www.minyanville.com/articles/index.php?a=11815

    or just

    dow theory
    http://immobilienblasen.blogspot.com/2006/12/dow-theory-minyanville.html

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