Housing Doom is pleased to present the third installment of our unauthorized annotated transcript of the American Enterprise Institute’s March 17, 2009 seminar "The Deflating Bubble, Part V: Forecast and Policy Recommendations for the Next Six Months." [1] This is the presentation by Tom Zimmerman [scroll down]. The event site has several resources, including both an audio and a video recording of the 2 hour proceedings. There is a brief summary, but as yet no official transcript. Zimmerman’s presentation makes use of a slide deck.[2] Highlights   … Because this does not get better as each time you turn around,…
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This needs to be repeated every time someone pleads, "Who could have known?" Plenty of people did see the disaster coming. Most of them were marginalized, however, laboring at out-of-the-way econ departments, blogs and B-list think tanks. They were excluded and even ridiculed because their larger understanding of the economy was not one that fit well with the sort of Wall Street worship preached by the likes of CNBC. [1] Here’s the response I sent along to Wall Street Journal Op-Ed contributor Thomas Frank. From: john@housingdoom.com To: Thomas@wsj.com Cc: twist@housingdoom.com Sent: Wed, 18 Mar 2009 10:23 am [that would have…
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By now the Citi bailout is almost certainly in the bag, so that should keep everyone busy over the short pre-holiday week.  However, I’d like to get one thing out of the way before everyone starts agonizing over Black Friday and Ben’s mea culpa. Yesterday one of the local Seattle papers had a speculative piece about WaMu’s recent collapse.[1] Since the moment Washington Mutual became the nation’s largest bank failure, blindsided executives and devastated investors have spun conspiracy theories about what did it in. The obvious answer is the implosion of a runaway mortgage market in which WaMu had been…
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Yep- the market is rough all over-even in Seattle:  

  A big hat tip to the Big Picture for this great "press release" from Capitalist Banter: DES PLAINES, IL – McDonald’s Corp. held a press conference today to unveil its latest sandwich: the Big Freddie Mac. Priced at 50 cents, the Big Freddie Mac is the first fast food hamburger to be subsidized by the federal government. “The economy – not that there’s anything wrong with it – is causing Americans to cut back on eating hamburgers,” explained McDonald’s spokesperson Donald McDonald (no relation). “Washington has decided that the burger is too big to fail, so the Treasury Department…
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Hat tip to William for pointing out this strange plan from San Diego City/County: A San Diego city-county task force is considering ways to buy empty homes — before speculators and investors swoop in — and reserve them for lower-wage workers, many of whom were shut out of the housing boom when home prices rose out of their reach. (In December 2005, the median home price in San Diego reached $500,000.) Jim Bliesner, director of the City-County Reinvestment Task Force in San Diego, is proposing that a nonprofit group or a local housing agency purchase homes priced under $400,000 that…
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Here’s Bill Donoghue of Marketwatch who’s Wednesday’s article gave me a "Dang, I wish I’d said that ." moment this morning.:  [Thanks L!] SEATTLE (MarketWatch) — Call this the perfect financial storm or what you will; Wall Street has made fools of financial institutions around the world with their CMOs, CDOs, and greedy boo-boos. At least they didn’t lose as much as their customers. The stock market is in distress, bond insurers are looking for a $200 billion bailout, junk-bond markets are at risk of further losses and life-, home- and auto insurers’ risk has not yet been fully assessed….
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The real estate bust has played out like a roller coaster- cities that rose dramatically early in the game- Miami, Las Vegas, Phoenix, San Diego, were also where the cracks first started to show.  Other markets around the nation ignored the warning signs however, feeling that somehow their markets were "bullet-proof".  Buyers looked at above average appreciation and decided to buy, not wanting to believe that their market would follow the same pattern as others. Case in point, Seattle.  This Seattle Times article from July 16, 2006 was typical for the period: As the residential real-estate market cools in other…
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You can’t say "containment" with a straight face after this- look what is happening with Starbucks: SEATTLE- Starbucks Corp. fired Chief Executive Jim Donald on Monday, handing the reins back to Chairman Howard Schultz as part of a major restructuring initiative aimed at pulling the company out of a downward slide. The move, coupled with plans to close some U.S. stores and slow down opening new ones, comes as the world’s largest chain of coffee houses has seen its stock plummet 50 percent over the last year and declining traffic in its domestic stores. What has happened to this former…
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Every time I think Yun can’t get any more off the wall, he manages to exceed my wildest expectations.  Consider these remarks he presented at the National Association of Realtors® 2007 REALTORS® Conference & Expo:  “In some ways, the extended real estate boom from 2001 to 2005 created unrealistic expectations that housing is a short-term high-yield investment,” said NAR Chief Economist Lawrence Yun. “2007 will be the fifth best year for housing on record. Places like Houston, the Kansas City area, Indianapolis, and the vast middle section of the United States offer affordable prices and continued job growth. On either…
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Hat tip to CM from Seattle, who sent us a great link on Seattle’s cooling housing market.  I could not believe it when I read the story of Meridith McDonald, however, a new home owner in the Seatttle area.  Meridith would be my candidate for a high profile jury trial, as she obviously doesn’t follow current events.  After seeing all the stories of "duped" buyers losing their homes to ARM resets and the hazards of rising house payments, I thought we had all pretty much come to the conclusion that rising mortgage payments are a Bad Thing.  Not so Meridith:…
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Every now and then, common sense prevails in Arizona government: Zillow.com, the popular real estate Web site, is in the clear for offering its home-value estimates in Arizona. Earlier this week, Gov. Janet Napolitano signed into law Senate Bill 1291, with an amendment that allows Zillow to operate in the state. The Arizona Board of Appraisal a year ago ordered Seattle-based Zillow to stop offering its property estimates because it does not have an Arizona appraiser’s license. I did a post on the "cease and desist" letters by the Arizona Board of Appraisal last April.  Apparently the Board has had…
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AEI’s March 28, 2007 Subprime Seminar – V For many of the people involved, the high point of AEI’s March 28th seminar on the Subprime Mortgage Crisis [1] was UBS researcher Tom Zimmerman’s 25 minute presentation and PowerPoint slide show.[2] His two key points are simple enough. Eroding house prices, or House Price Appreciation (HPA) in Zimmerman’s talk, is the driving force behind rising delinquencies and defaults in the US housing market today. A sudden and unforeseen rise in Early Pay Defaults (EPDs) is what imploded the subprime sector, starting in late 2006.   The value in Zimmerman’s talk comes…
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Will Zillow be the new on-line platform for For Sale By Owner (FSBO)? "John Doe" reports [1] from his SoCalBubble blog. "Man the battlestations, NAR, the fort is under siege from all sides… first the DOJ lawsuit, then the tanking housing market, and then this… I don’t know if anyone else has posted on Zillow’s new functionalities, but when I stumbled back to their site today, I realized that they have made some changes… and this is how I believe this is a groundbreaking change." You can navigate to SoCalBubble to read JD’s summary of Zillow’s press release.[2] Several MSM…
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I have seen several complaints recently about mercenary bubble bloggers.  Patrick charges for links now, other sites have ads and Paypal buttons. (Including this one.)   Heck, Ben Jones even bubble blogs (Can you use that as a verb now?) for a living.  The occasional comment I’ve seen accuses bubble bloggers of trying to profit from the bubble, and trying to drive traffic to their sites in order to make money.  (I’ve even seen that accusation for a site with no advertising!)  So what gives, anyway?