art is definitely a bit frothy…..

Barry has had a piece on the declining ratings from Cramer´s Mad Money….

maybe the audience has discovered that there is little value ……

but when you don´t take him seriously he has some entertainer/clown qualities

Best of luck with your communication.

Letter To The Editor
Boston Globe

Boston-area housing affordability

Regarding Home costs stay beyond reach of many (June 11, 2007)

Mr. Retsinas claims that this real estate downturn will be different than the last one.

That affordability levels of the mid-1990s will not return. And why will this downturn be different? Because of “Boston’s rapidly growing immigration population.”

Let’s think about that for a second: immigrants can’t afford houses, but they’re going to drive the prices up? That’s ridiculous. Potential buyers who cannot afford an item don’t drive the price up! They drive it DOWN.

Right now, Boston-area housing prices have fallen faster in the first 18 months of this downturn than in the prior downturn and in spite of the monthly claims from the NAR that “we’ve hit bottom!” and “it’s a great time to buy! (or sell!),” there is no upturn in sight and there is no credible reason for why this downturn should end differently than the last.

I believe that we will see prices return to the affordability levels of the mid-1990s.

Just one more thing: Before quoting Mr. Restinas and his Harvard JCHS as an objective source, the Globe might want to peek at the list of Board Members of the JCHS and note that every single one of those members has a vested interest in pumping up the real estate market.

[ NVmike ]

Here’s an interesting piece. This very mainstream source is starting to sound a bit like Mike Whitney

“Are global market bubbles set to blow?”, by Ben Richardson, BBC News, June 14, 2007.

Flattening out

The view of the optimists on the housing and private equity markets is not so different.

• It may become more expensive to get mortgages and do deals, but that is likely to slow rather than reverse the current trend.
• Rather than the bursting of a bubble, expect a plateau of demand.
• …

Now where have I heard that one before?

Jim Cramer quote so out of context:

“… no rigor, that has been my whole career …”

http://www.businessweek.com/bwdaily/dnflash/content/jun2007/db20070613_321601.htm?chan=top+news_top+news+index_businessweek+exclusives

http://videoplayer.thestreet.com/?clipId=1373_10362333&channel=Cramer+On+Demand&cm_ven=&cm_cat=&cm_ite=&puc=dm&ts=1181798534250

http://www.winknews.com/news/local/7896352.html?video=YHI&t=a

$300,000 homebuyers pissed off that the builder is dumping excess inventory at auction for $180,000.

Subprime Crash Squeezes Out First-Time Home Buyers (Bloomberg)

The article explains:

“Subprime mortgage lenders have tightened credit guidelines so much they’re squeezing about 500,000 first-time buyers out of the market,according to the National Association of Home Builders.”

But what does that mean, exactly? How tight are the credit guidelines now?

“Tullis’s latest clients are a married couple that banks ought to love. Between them they make $70,000 a year and they’ve been renting the same apartment for three years with zero late payments, he said.

Lenders won’t approve them because they don’t have enough money in the bank, said Tullis, Virginia sales director at A. Anderson Scott Mortgage Group in Falls Church.

With mortgage companies cracking down due to rising subprime defaults, Tullis needs them to sock away two months of payments for the $500,000 townhouse in Fairfax.”

So, old, loose rules: no money down, no money in the bank; new, tight rules: no money down, 2 mortgage payments in the bank – and you qualify for $500K on $70K income, that’s more than 7x income!

Oh yeah, this change should help end the flood of foreclosures …

A quarter of a billion dollars, like, wow!

A Bear Stearns spokesman declined to comment. Several hedge fund managers also didn’t respond to an e-mail request for a comment. But in a June 7 letter to investors, Bear Stearns says it’s suspending redemptions because the “investment manager believes the company will not have sufficient liquid assets to pay investors.” Bear Stearns’ asset management group, led by Ralph Cioffi, took the action after investors stormed the gates, seeking to redeem about $250 million, sources say.

http://tinyurl.com/37f8xh

http://www.bloomberg.com/apps/news?pid=20601087&sid=a6F6StSPKNig&refer=home

http://www.businessweek.com/bwdaily/dnflash/content/jun2007/db20070612_748264.htm

http://www.realestatejournal.com/buysell/markettrends/20070612-hagerty.html

http://forum.themarkettraders.com/read-m/8/9160/9160#msg-9160

http://paper-money.blogspot.com/2007/06/bust-from-past-june-2007.html

thanks very much!

Effort to Advise on Risky Loans Runs Into Snag

http://www.nytimes.com/2007/06/12/business/12counsel.html?_r=1&ref=business&oref=slogin

RE: Harvard Study

You have to wonder how Retsinas can reconcile saying:

It’s clear that we’re in for a prolonged slump. Subprime lending and its implosion has certainly (delayed) any recovery.

and then say:

The resale housing market recovery could begin later this year, while the recovery could be delayed until the end of 2008 for the new-home market.

In my mind prolonged is a longer term than 6-12 months, but maybe this way Retsinas covers his bases no matter what happens.

“Who’s Holding the Bag? (PPT slide deck)”, Pershing Square Capital Management, L.P., May 2007.

Absolute, I’m-not-kidding *** MUST READ *** post for anyone who’s the least bit interested in that Fleck piece. This is the real deal …

” ‘Uneconomic Transactions,’ Or Why I Hate Wall Street”, by Tanta, CalculatedRisk blog, June 10, 2007.

This is the point where the Total Pains in the Ass (TPITA, a sophisticated market term) step in and bloviate about how if we didn’t have all those brave hedgies out there speculating with OPM on defaults, the bond investors wouldn’t have touched this stuff with a ten-foot pole, and then the lenders wouldn’t have made the loans because they wouldn’t have been able to hold that risk themselves, and then those borrowers wouldn’t have been given the “opportunity” to become debt-slaves on some overpriced real estate with granite countertops, if they’re lucky, or in line in bankruptcy court or evicted by the sheriff if they’re really lucky. Maybe some of you all aren’t old enough to remember how we used to have to destroy the village in order to save it, but I for one have no nostalgia for those days.

http://www.marketwatch.com/news/story/sp-warns-ratings-pressure-uk/story.aspx?guid=%7BCEDEFBE2%2D27EF%2D41D3%2D9A4C%2D5F75F100D2D4%7D

http://www.hussmanfunds.com/rsi/privequityval.htm

Public pension funds take a risky gamble / Fleck

http://articles.moneycentral.msn.com/Investing/ContrarianChronicles/PublicPensionFundsTakeARiskyGamble.aspx