The fog of battle [1] of "Slightly-Less-White Thursday" [2] has now dispersed a bit. Numerous commentators declared that the weakness in subprime, made manifest by the New Century and HSBC announcements, would not spread beyond that narrow category. The remainder of the week seems to have proved the optimists right. What caught my attention during this exercise, though, was this Street article [3] that put forth a theory as how the firewall around subprime is constructed. As quoted by the author, senior economist at Deutsche Bank Torsten Slok implies that subprime’s customers rest mostly in the bottom 20 percent of…
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Today we are going to speak with Mr. I.M. Fullofit, president and CEO of Just Like Housing, Inc. Twist: "Good afternoon sir, I appreciate the chance to talk with you this afternoon.  May I call you ‘I.M.’?" Fullofit: "Sure thing Twist.  Most people call me ‘Fullofit,’ but you’re welcome to call me I.M." Twist:  "I appreciate that.  As you know, I contacted you because you have said that you feel companies should take the same approach to their annual reports that the housing industry does.  Am I correct?" Fullofit:  "Absolutely.  I have shareholders on my back all the time with…
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The groundhog stuck his head out of his burrow last Friday (He’s a sensible old fellow- no exotic mortgage on his pad!) looked at all the excess inventory, and said the housing market is going to be chilly awhile.  Then he went back to bed. John and I are up and about though, and anxious to read your links, stories, comments and insights. We would like to thank Oc-Ed for sharing his talent with us again.

In a February 2 Review Journal article by Hubble Smith, Perma-Pollyana Steve Bottfeld of Marketing Solutions stated: "We’re creating this atmosphere of fear from nonsense, from negative national press," he said. "Everybody will say 2006 was a bad year, sales were off, prices went down. Wrong. What happened is we started the transition from a suburban market to an urban market and with transition, certain things happen." Here are some of the "transitional" things that are happening in the Las Vegas housing market, and mostly they are transitioning down. The Greater Las Vegas Association of Realtors is reporting 1,397 home…
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"This house just came back to us yesterday," the salesman told me.  "The buyer loved it, but they just weren’t able to sell their other house.  We’ve had several homes come back to us, and that’s the main reason buyers give us- they just can’t sell the old one." I’ve had that conversation, or variations on it, when I’ve visited different developments.  Larger homebuilders are reporting cancellation rates up to nearly 50%, so they must be having that conversation a lot.  That brings up the question- what about the deposit?  Is it refundable? At the height of the boom, builders…
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Yesterday the US Senate Committee on Banking, Housing, and Urban Affairs held a hearing "Preserving the American Dream: Predatory Lending Practices and Home Foreclosures". The hearing site presently has the video of the hearing available, a member statement from Senator Dodd (the Chairman) and witness statements from all panel members. There is not yet a transcript of the testimony. Below are gathered up some reference links to additional stories relating to this hearing.

I’m not gone yet.[0] Since retirement (from my day-job) I’ve largely ignored defense issues like the actual reason America, the UK, Canada, … are trying to occupy southern Afghanistan, but Monday’s post [1] by Russ Winter caught my eye. Russ’s assertions about increasing tensions in the Upper Persian Gulf theatre of the war for Western energy security seemed a bit random, but at least they had me awake for the news [2] later in the day that the new US budget included significant defense increases for the next couple of years. Then something clicked when I read Fleckenstein’s judgment [3] that…
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It’s a comfort to know that the National Association of Realtors (NAR) has the "best interests" of the American consumer at heart:  (Hat tip to Keith at Housing Panic!) Senators Hillary Rodham Clinton (D- N.Y.) and Senator Wayne Allard (R-CO) are introducing The Community Choice in Real Estate Act, S.413.  This act: Amends the Bank Holding Company Act to prohibit financial holding companies and national banks from engaging, directly or indirectly, in real estate brokerage or real estate management activities. Bend (OR) Weekly is reporting: In a letter circulated earlier in the week, Clinton and Allard explain that allowing banks…
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It’s post-Superbowl bounce season, and all the Bears, financial and otherwise, are skulking off to hibernate.  Goldilocks rules!  Or does she?

The Safety Net That Never Was – Part XXIII (and last)   SPECULATORS SPINDERIVATIVE DOUBLE BINDSOF RISK FREE ILLUSION Contributed by poet1 under Friday’s "Housing Haiku" post   Hail and farewell. This will be my last "Safety Net" post. I’ve been fascinated by derivatives and the GSEs since this 10 March 2004 Fannie Mae rebuttal of a Financial Times piece where reporter Steve Schurr estimated Fannie’s derivatives losses for 2003 at $14.4 billion. That was just about exactly a year after Warren Buffett called derivatives "financial weapons of mass destruction" and, well, I’ve had my eyes squeezed shut and my…
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Whenever I graph median price appreciation, I always indicate that the actual median is probably lower, as the median is being kept artificially high by seller incentives.  Here’s a case in point:

Mr. Lereah- In the English speaking world, we have had a way of recognizing those men who, for better or worse, have epitomized a concept in our eyes- we name that concept after them.  In 1814, Elbridge Gerry’s name became synonymous with redistricting political districts along party lines, or "gerrymandering."  In the 1920s, Charles Ponzi’s name became synonomous with "swindle."  In 1987 the term "borked" was coined for Robert Bork, who failed to be confirmed for the Supreme Court after intensive questioning during Senate confirmation hearings. I believe that you sir, like Robert Bork, are destined to become a verb as…
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Here’s a translation of a haiku by one of the great Japanese masters. Just to say the word home, that one word alone, so pleasantly cool Issa A couple of months ago, Twist and I got to talking about housing and poetry. Twist thought we might someday ask Doomers for their contributions of housing and bubble haiku. Mr. Twist knows Japanese and even has some strong opinions about Robert Hass, an American haiku expert, so who knows, he might have one or two up his sleeve. Anyway, last Monday my poetry class [1] workshopped haiku. Twist had already shown me…
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It’s Groundhog Day, and according to Weather.com- likely as not, groundhogs are going to need their sunglasses here in Phoenix today.

In spite of repeated assurances by David Lereah that "the worst is behind us," the Phoenix housing market continues it’s downward slide.  One of our favorite agents gave us an unofficial "sneak peak" at January’s numbers: ALL MLS- January 2007 Sold-                     3,895Active-                44,912Under Contract-   7,027 According to historical MLS data provided by our friend- realtor Jonathan Dalton, this is the slowest January since 2001, and the first month since that time that sales fell below 4,000. Inventory however, has started to pick up again.  44,912 listings is slightly above December’s 44,247. In November the NAR’s chief economist…
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