It’s Op-Ed Friday, and I have to share this from Ambrose Evans-Pritchard:
Over the last three months we have seen a rolling collapse of speculative debt and real estate across half the global economy, yet friends still come over to my desk at the Telegraph, with that maddening look of commiseration on their faces, and jab: “so when is the sky going to fall then, eh”?
Well, excuse me. The sky has fallen.
The rest of the article is a good read, and it looks like the Chicken Littles of the world have a strong case.
We’d love to hear what you think. Are the Chicken Littles just crying wolf? Please share your links, stories, comments….
As always, this thread’s for you!
Northern Virginia Housing Bubble Fallout
Mish's Global Economic Analysis
Ohio Fraudclosure
Bubble Meter
UK House Bubble
Breaking News Relevant Articles© Copyright 2012 Housing Doom | Copyright© 2011, AuthentiCraft, Inc.
Bank of England set to win power for covert rescues
http://ftalphaville.ft.com/blog/2007/10/26/8398/bank-of-england-set-to-win-power-for-covert-rescues/
OPEC to Fed: Go Ahead, Make My Day
China, Emerging Markets Can’t Fill U.S. Shoes: Michael R. Sesit
Deutsche Bank Considers Participating in $80 Billion SIV Fund
Bank of America to Exit the wholesale mortgage business? Is this a sign of the times? Will the mortgage broker be a thing of the past?
Jan-Martin-
I thought your link on the Bank of England was particularly concerning. I think a lack of transparency is what has created a number of market excesses in the first place, and while I suppose these “white knight” rescues will keep troubled banks on life support a while longer, it just seems unlikely to me that hiding problems fixes anything.
A big story earlier in the week in my view was the earnings reports from the home builders Centex and Pulte. It wasn’t the results so interesting, but the fact that both took writedowns on assets, mostly land, of around $1Billion. Thinking about the scale of adjustments for each homebuilder- that’s on the order of $50,000 reduction for 20,000 homesites. This finally clears the decks for these builders to readjust to selling at much lower prices to sustain their business. While for them it is quick book adjustment, how many of their recent buyers of the past 2 or 3 years are going to be spending the next 5 years working off the loss on their existing house?
Aaaaudio-
Between the cutbacks in wholesale lending and the “blame it on the brokers” campaign by lenders, I think mortgage brokers are being caught in the squeeze. A lot of the bottom feeders deserved to be squeezed out of the industry, but I don’t think that eliminating brokers is the answer.
I suspect things are going to get much worse before they get better.
What I would like to see is how Countrywide will achieve profitability in Q4, as it so claims.
BofA did not exit the mortgage business.. it simply bought a stake in Countrywide
When Will Housing Bottom?
Mish has a great write up on the housing market from a historical persprective. It is a great read.
Anyone think it’s a good time to buy brokers or bank stocks? Seems CFC is providing a little lift for the sector…might only be temporary though. Even bad stocks don’t got straight down, they sucker in some buyers with a bounce (like today) and then the downward spiral could continue in a week or two.
The rebound in Countrywide stock today is almost certainly because of one reason: short covering. CFC has been one of the most heavily shorted stocks in the past several months, and today’s price rise wasn’t a sign of increased confidence, it was shorts crowding the exit.
Seriously, how can anyone who’s paying any attention think that CFC is going to have a good Q4 after today taking a $1.2B loss?
What, are they going to suddenly get back in the high-fee exotic-loan business? Are home-debtors suddenly going to start making their payments again, on time, as we go through the X-mas shopping season? Not to mention CFC is going to probably take a short-term financial hit on the loan workouts it has planned.
Tell me, where is this Q4 profit going to come from? I’m not buying it, based solely on some pie-in-the-sky quotes today. After all, it’s not like these guys have ever lied to us in the past, right?
– The Judge
{Tell me, where is this Q4 profit going to come from?}
Maybe if they fire 80% of the work force and just maintain a loan servicing operation it could be profitable?
Happycamper-
With all the defaults and foreclosures, I think loan servicing isn’t as profitable as it used to be. CFC’s lending practices may come back to haunt them.
As long as the housing market continues to deteriorate, I think mortgage lenders are going to have to deal with a lot of risk.
I agree with the Judge that this looks like shorts covering- there’s no genuine good news on the immediate horizon.
Maybe the orange man knows the fix is in the bag. And he is counting on a rate decrease next week from the FED. Otherwise I think everything is flipped upside down they loose 1.2 billion and their stock goes up only in an inverted gravitational field.
4Q usually means less buyers. This year its gonna be more sellers too, here and elsewhere in the nation. We are reaching 58K soon.
Active – 57940 Properties Found
Thanks for a great link, Twist. I will definitely add that blog to my favorites list.
I don’t think the sky has fallen yet. But the walls holding it up sure have.
Sometimes I like to look towards leadership to gauge the outlook. Look at Bush, ok, he’s kind of a dumbass. Well.., while he was in office I’ve seen other government leaders follow right in his wake, going the cronyism route for example. People stopped saving while he was in office. People borrowed against their homes, kept buying cheap junky walmart crap. The IPOD which just creates more anti-socialism, or tuning out from the outside world gained popularity..
Less good jobs, less pay, insurance up, food quality down, more stupid people everywhere. Murder rates consistent, divorce rate, constant, domestic problems, constant.
Money printing up, inflation up, oil company profits up, military industry up, war up, country debt way up, bubbles up.
Interesting times. The guys on Mish seemed to think the rate cut is going to come in December for Christmas.
We’ve all heard the “2 million vacant homes for sale” statistic, but this piece from Bloomberg claims a total of 17.9 vacant homes:
U.S. Home Vacancies Rise to Record on Foreclosures