Like the illusion of Wall Street, with its vast and powerful investment banks, now shuttered, China too is an illusion perpetuated by the Globalists that gave us the 15,000 mile Caesar salad, poisoned cat food and lead based paint on babies' pacifiers. Like the illusion that money would come from thin air to always push housing prices higher, China has spent a generation pursuing its illusion. Pursuing an unattainable dream to be like the West, while 6000 years of its carefully shepherded top soil blows into the sea.
Posted: Tue Apr 15, 2008 9:23 am Post subject: Re: Housing & Economic Collapse - In Progress
Quote:
John Hussman: "Clearly, as we enter April 2008, we appear to be quite early in the mortgage crisis, with only about a quarter of the cumulative resets having occurred. That places us near the start of the third inning, where we can expect each of the nine “innings” to be about three months in duration. Unfortunately, the next three innings (quarters) are when the heavy hitters on the opposing team will come up to the plate, as the cumulative amount of resets will surge. With that surge, loan losses and foreclosures will also predictably spike higher. Moreover, because of the bundling, securitization*, and slicing and dicing of mortgage obligations, financial companies have little ability to take the required writedowns in advance, because they don't know yet which ones will go into default. To opine that we are in some late “inning” of the mortgage problem, without reference to the reset data, is just naive. If anything, the probable rate of foreclosure on later resets will be higher, not lower, than the earlier resets, because those later resets represent the mortgages initiated at the peak of home prices and the trough of lending standards."
Quote:
Foreclosures increased 70.6% compared with a year ago, the foreclosure information company said. An additional 0.7% of homes were in some stage of default, potentially leading to repossession, the Sacramento, Calif.-based company said.
As the FED takes more junk collateral on to their books, they are increasing the exposure of the dollar to these declining and troubled assets. Sometime in the near future we are in for a death spiral, as the dollar’s degradation flows over into the bond market. Long bonds, 10 and 30 year treasuries, will get plummeted. Interest rates will skyrocket as bonds tumble, and the crash of the mortgage and real estate market will accelerate.
We will soon be experiencing the most difficult economic period in modern history!
Quote:
According to[b] Bloomberg, the $6.3 trillion-a-day repurchase agreement, or repo, market is a barometer of sentiment because it's where firms finance trades. A narrowing of the spread between the so-called general-collateral and federal-funds rates may suggest declining demand for U.S. government debt. Treasuries have lost 0.8 percent on average since March 20, when the central bank expanded the type of debt it would take in return for the securities to include mortgage and commercial real estate bonds.
Don Quixote:"Sanity may be madness but the maddest of all is to see life as it is and not as it should be."
Posted: Tue Apr 15, 2008 10:15 am Post subject: Re: Housing & Economic Collapse - In Progress
Foreclosure filings up 57% YOY.
Quote:
AP
US Foreclosure Filings Jump in March
Tuesday April 15, 5:12 am ET
By J.W. Elphinstone, AP Business Writer
Foreclosure Filings Against US Homeowners Soar 57 Percent in March; Bank Repossessions Surge
The onslaught of homes facing foreclosures has yet to ebb, a research report showed Tuesday, with bank repossessions skyrocketing last month as more troubled homeowners mailed in their keys and walked away.
And the worst isn't over: the wave of adjustable-rate loans resetting to higher rates will crest in May and June. And that's expected to push more homeowners into default and foreclosure in the third and fourth quarters of this year, according to RealtyTrac Inc. of Irvine, Calif.
"Once we're through that batch of loans, the worst will have been worked through the system," said Rick Sharga, RealtyTrac's vice president of marketing.
Joined: Mar 12, 2007 Posts: 1009 Location: As close as I can get to the beginning of the pipe.
Posted: Tue Apr 15, 2008 11:56 am Post subject: Re: Housing & Economic Collapse - In Progress
Quote:
"The wealth effect was a particular feature of the residential mortgage business. Funds were available from many new banking and non-banking sources, including hedge funds and private equity, as well as pension and mutual funds; and sources that, in their magnitudes, were new, such as the carry trade. Funds marketed wholesale and retail mortgages. Liability could be shifted even or especially for debt in the deepest sense sub-prime. Mortgages also enabled homeowners to expand consumption through mortgage-equity withdrawals (MEW).
In a real sense, MEWs were symptomatic of multitudes of individuals - and, in effect, whole societies - high-living it off their capital. That enabled a process of growth that was both irresistible and inherently unsustainable.
However, the Ponzi scheme to shame all others may yet be waiting to deliver its coup de grace. One commentator has drawn attention to "the bad news [which] is the US$500 trillion derivatives market". He says that "This is an area that the general public does not even know exists. Few professionals understand this market. There is no regulation as government just let it go ... and go it did. You must expect a 5% default problem. That is a $25 trillion number ... It can create insolvent institutions all over the world ... It is the making of the first global depression. The world is not ready.""
Posted: Tue Apr 15, 2008 12:05 pm Post subject: Re: Housing & Economic Collapse - In Progress
I thought most of the derivatives were offsetting? I hear the real fun is in the CDS (credit-default swap) markets. _________________ "It's called the American Dream because you'd have to be asleep to believe it."
Joined: May 19, 2005 Posts: 812 Location: Merry Ol' USA
Posted: Tue Apr 15, 2008 12:23 pm Post subject: Re: Housing & Economic Collapse - In Progress
I think the main colleges will survive fine - the quasi-independent ones will probably go belly-up. Middle-ground private college will be ate up for sure without the government teat to suck on. The big name privates will be fine.
A lot of these changes are already going on at the colleges. I teach a graduate course at a state college and make pitiful money as an adjunct faculty member. If I didn't like doing it, I sure wouldn't be doing it for the money. The college has significantly increased the use of adjuncts over the past 10 years at the expense of bringing on regular, tenured professors. The administration level has also soared as well. I suspect some of the administration fat will be trimmed as things go south. _________________ After fueling up their cars, Twyman says they bowed their heads and asked God for cheaper gas.There was no immediate answer, but he says other motorists joined in and the service station owner didn't run them off.
Posted: Tue Apr 15, 2008 12:35 pm Post subject: Re: Housing & Economic Collapse - In Progress
Iaato wrote:
Somebody finally answered my question about what happens with FDIC insurance when a bunch of banks go belly up. This remains my most solid argument for why TPTB are being forced to be committed to inflation and hyperinflation when it becomes necessary.
"If one medium-large bank collapse could wipe out the FDIC by a factor of nearly 8, what do you suppose would happen if there were multiple, simultaneous bank failures? At this point, my guess would be that Congress would be sorely tempted to borrow additional funds to remedy the situation, but I worry that hardship and losses might result while the laws were amended and sufficient funding avenues identified. So how many bank failures could the FDIC endure? The data suggests slightly fewer than one big one. "
If they are suggesting pre-empting a drain on FDIC by bailing out banks, that would be incredibly stupid. It is far less inflationary to print the necessary dollars to bail out FDIC if/when the time comes than it would be to bail out the banks in order to prevent the draining of FDIC. There is no need, when guaranteeing depositors and attempting to spare them inconvenience, to achieve this by guaranteeing shareholders, bondholders, counterparties, the rest of the pyramid, at the cost of making the currency worthless.
Take Northern Rock, what would have been more inflationary, printing the <£10bn in deposits left behind or printing the £100bn now loaned to cover its obligations?
The inconvenience associated with relying on depositors' insurance systems and a helping hand from the government is acceptable compared to that particular means of bypassing it. The possibility of inconvenience in life is one reason why non-perishable food and non-electronic cash still exist. _________________ Volatility. When life isn't exciting enough.
Joined: Jun 13, 2007 Posts: 3904 Location: Minniesotuh
Posted: Tue Apr 15, 2008 12:44 pm Post subject: Re: Housing & Economic Collapse - In Progress
Like everything else that has been ever so slowly eroded under our very noses (especially in the last seven years) , the US educational system is starting to get hit badly.
Did I already mention that Bush was cutting $80 million in funding to schools this fall?
Availability to acquire loans diminishing.
Teacher layoffs.
Smaller schools closing.
US pulled out of international testing competitions.
And, there's the cost of diesel going up, affecting the ability to get kids to the schools.
Yep, dumb Americans are going to be getting a Lot dumber!
got children now? Better add some basic reading, writing and arithmetic books to your library. _________________ "RRrrruuuunnnn!!!" ~Apocalypto
Posted: Tue Apr 15, 2008 3:52 pm Post subject: Re: Housing & Economic Collapse - In Progress
What a lousy looking neighborhood - just a bunch of houses surrounded by dusty land. To me anyone who bought into this neighborhood is obviously brain-damaged enough to be more likely to wind up in bad loan agreements...
I also worry about the kids in these neighborhoods - there's almost nothing to do when school's out!
Joined: Apr 13, 2005 Posts: 3211 Location: St.Louis, Mo
Posted: Tue Apr 15, 2008 4:50 pm Post subject: Re: Housing & Economic Collapse - In Progress
ChadP wrote:
What a lousy looking neighborhood - just a bunch of houses surrounded by dusty land. To me anyone who bought into this neighborhood is obviously brain-damaged enough to be more likely to wind up in bad loan agreements...
I also worry about the kids in these neighborhoods - there's almost nothing to do when school's out!
I am not sure where that particular area is, but Denver is one of the most beautiful cities in the US. I have been there and to Keystone skiing 6 times. Absolutely loved it.
Posted: Tue Apr 15, 2008 5:39 pm Post subject: Re: Housing & Economic Collapse - In Progress
Twilight,
Everything you say is good sense. I think the problem in the US is strictly political. NO politician wants to talk about the elephant in the room. So, they try to hide it, put it under a carpet, lie about the size of it, and do knee-jerk responses to immediate crises.
The trouble is, soon it will be too big to hide, even from our clueless population here. The present regime wants desperately to keep the lid on it all until the new prez takes over, and try to blame it all on him. The Democrats don't want to talk about it, because there are no answers. So, they fiddle while Rome burns.
We hid talk about sexual relations the same way for hundreds of years, then, when it became permissible to talk about it, the subject was overdone. I expect something similiar here. I fear for the US facing this now, with no planning and no cogent responses in waiting. _________________ Local fix-it guy..
Posted: Tue Apr 15, 2008 5:55 pm Post subject: Re: Housing & Economic Collapse - In Progress
Armageddon wrote:
I am not sure where that particular area is, but Denver is one of the most beautiful cities in the US. I have been there and to Keystone skiing 6 times. Absolutely loved it.
On that photo above - the neighborhood in question is far to the east, out by DIA (north of I-70). "Exurbs," you might say... _________________ "It's called the American Dream because you'd have to be asleep to believe it."
Posted: Tue Apr 15, 2008 10:11 pm Post subject: Re: Housing & Economic Collapse - In Progress
We've got a spike in foreclosures filings here in Florida. St. Lucie county has a year over year increase of 580%!
Quote:
'Sinister' cycle cited in foreclosures
Florida's flood of foreclosures continued to swamp homeowners in March.
Lenders filed notices of lawsuits on 1,765 Palm Beach County mortgages last month, nearly four times more than the 445 filings in March 2007, according to an analysis from RealEstat.com, a local data firm.
In Martin County, the number of foreclosures jumped from 15 in March 2007 to 104 in March 2008.
And in St. Lucie County, foreclosure filings jumped from 54 in March 2007 to 368 in the first 28 days of March 2008. RealEstat.com foreclosure data were unavailable for the final three days of the month.
Declining home prices and stricter lending requirements have exacerbated the foreclosure environment. Homeowners stuck in unmanageable mortgages aren't able to sell their homes or refinance into cheaper loans before payments on their adjustable rate mortgages reset higher. That leads to a glut of foreclosed homes for sale, which depresses prices even further.
"It's really a very sinister, spiraling devaluation, and it's feeding on itself," said Bill Davis, president of the Palm Beach Gardens mortgage firm Private Funding Specialists Inc.
Statewide, one in 282 homes was in some stage of foreclosure in March, according to a report being issued today by RealtyTrac, an Irvine-Calif.-based real estate data concern.
Filings counted by RealtyTrac include default notices, auction sale notices and bank repossessions. In Florida, 30,254 homes reported at least one filing, down nearly 7 percent from February but up 112 percent from the previous year.
The state's foreclosure rate trailed only Nevada and California.
Posted: Wed Apr 16, 2008 7:08 am Post subject: Re: Housing & Economic Collapse - In Progress
Machine and metal fabricating shops have been going out of business at an alarming rate here in the Rust Belt for 3 or 4 years. During that time, my shop received an average of 6 to 8 auction flyers a month for close outs. Some were manufacturing plants, such as Tokheim, who made most of the gas station pumps in the US for 50 or more years, and South Bend Lathe, a premier metal lathe builder. The last I heard, Haas Inc. is the last surviving CNC machine mfr. in the US, that once had several.
Since last August the number of sales has slowed to maybe one a month, because there simply are very few more to be sold out. One of the last in the area was auctioned last November, a sheet metal fabricator, where the largest pieces of equipment ($100,000+ expected) did not get a bid. Most of the stuff was sold to a couple scrap dealers. That guy went out because he had lost a contract that was 20% of his business and got behind on his payments. HIS DAD WAS FINANCING HIM AND FORCED HIM TO SELL!
I got a call yesterday from an older guy who had to shut down due to heart problems, and can't find buyers for even a single piece of equipment, let alone the shop as a whole.
The big picture here includes the fact that not only is manufacturing disappearing from the US, but the toolmaking capability and machine tool builders are also gone,due to lack of business. The term "Rust Belt" will still be appropriate for a few years, while the unwanted machines sit outside and grow rust. The US is rapidly losing the capability to produce anything of made of metal. That bodes ill for the US sustaining it's military, a security issue, IMHO. _________________ Local fix-it guy..
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