Posted: Tue Dec 04, 2007 9:03 pm Post subject: Re: Housing Boom Officially Over - Collapse Imminent
Here we go... saw this coming when homeboy (Nardelli) bailed with his $3 million bonus or $7 million depending on who you talk to. good timing for sure!!!
I wonder how many people who work for home improvement stores have a mortgage to pay? I also wonder how many Home Depot/Lowes credit cards are being defaulted on.
950 isn't that many though... probably one or two people per store? The economy should be able to obsorb this temporary housing downturn pretty easily
Quote:
In September, Home Depot said it planned to close its 11 Landscape Supply stores - geared for professionals and project-oriented do-it-yourselfers - as part of the company's efforts to focus on its core retail business.
now I'm scared. I do computer consulting for a large landscaping company and I've been present while the head honchos discussed the lack of projects coming on... do you think I could be losing a customer? naw... everything should pickup in the spring....
Posted: Tue Dec 04, 2007 10:41 pm Post subject: Re: Housing Boom Officially Over - Collapse Imminent
You might be under estimating the capabilities of back yard machinists. I machined a bullet sizing die to the 10,000ths just the other day. It took three hours to make the piece and temper it. My lathe is a 1947 south bend. The old girl works just fine. I picked her up in a garage sale from a retired tool and die maker. I am not a machinist. I push a pen.
Joined: Dec 18, 2004 Posts: 4467 Location: One Mile From the Columbia River
Posted: Wed Dec 05, 2007 1:37 am Post subject: Re: Housing Boom Officially Over - Collapse Imminent
You might be under estimating the capabilities of back yard machinists.
You got that right!
I saw a book years ago describing post- revolution PRC copies of the famous M1911 45 auto. They looked rough and battered in the pictures. These were made with very primitive metal- working tools and most apparently fired just fine. No, I'm not talking about the NORINCO 45, which appeared much later.
Plus, look what's being made in small NW Pakistan villages; the most amazing functioning copies of weapons, all done by the equivalent of backyard machinists. _________________ Got Dharma?
Joined: Mar 12, 2007 Posts: 1004 Location: As close as I can get to the beginning of the pipe.
Posted: Wed Dec 05, 2007 10:51 am Post subject: Re: Housing Boom Officially Over - Collapse Imminent
I was in Home Depot last night looking for LED christmas lights, and it was a tomb. Ditto Safeway. The salespeople appeared almost frantic to help; who knows what lectures they're getting during staff meetings. Didn't Home Depot just hire a huge stack of employees in the past year? To replace all the ones that they fired the year before?
"I see debt people." (stolen from some wag at Housing-Bubble.com)
Posted: Wed Dec 05, 2007 11:19 am Post subject: Re: Housing Boom Officially Over - Collapse Imminent
Cloud9 wrote:
You might be under estimating the capabilities of back yard machinists. I machined a bullet sizing die to the 10,000ths just the other day. It took three hours to make the piece and temper it. My lathe is a 1947 south bend. The old girl works just fine. I picked her up in a garage sale from a retired tool and die maker. I am not a machinist. I push a pen.
Be careful with toolpost grinding BTW.
Fine abrasive dust produced in this process can screw your bedways and rectifying of that is tedious (if you know how to scrape it) or expensive, if you don't.
Anyway I am Mayford ML7 owner.
Good old girl born 19/12/1967, a bit older then I am but works very well.
Joined: Aug 11, 2005 Posts: 252 Location: Vancouver, BC
Posted: Wed Dec 05, 2007 12:47 pm Post subject: Re: Housing Boom Officially Over - Collapse Imminent
What the Heck would I use a CAT 9 for? Is that not used for excavating? I don't need to BUILD any more buildings. There will be plenty of abandoned ones around. Thats my point. BTW, when I googled it, I got about 30+ used machines available for sale on one site alone. I'm sure once all the Home Depots liquidate and the home builders go out of business, there will be alot more available.
I'm not saying "we are saved", I think you are totally underestimating the breadth of knowledge and recycling available. Nothing is going to replace oil at the same level of energy we have enjoyed.
BTW, I DO know how to cast iron I learned that in Grade 9! Maybe the Canadian education system is just better so I have a more optimistic view of what can be accomplished. Its not that hard to enlarge the scale. Look at what the Egyptians accomplished with just ppl power.
I do agree with most of what is posted here. I just think sometimes we ignore all but that which supports our theory. I've been in the environmental industry for 9 yrs now and I see the same thing there.
Joined: Sep 16, 2004 Posts: 4464 Location: Southwest WI
Posted: Wed Dec 05, 2007 12:55 pm Post subject: Re: Housing Boom Officially Over - Collapse Imminent
Just my .02 here, but i tend to make the rounds at HD and our local chain Menards(--its a WI chain, private owned). HD has always been dead, but omg, they were empty the last couple of times i was in there. Menards seems to be business as usual. I think this weather we've been having has helped.
Another thing i've noticed is that HD has had some AWESOME clearances lately. I've bought several items that were 75% off!?? They have to be LOSING money cutting prices like that? _________________ "Oil is going up because we use too much oil, and the capacity to replace reserves is dwindling"
-President Bush 11/07/07
Posted: Wed Dec 05, 2007 1:33 pm Post subject: Re: Housing Boom Officially Over - Collapse Imminent
Cloud9 wrote:
You might be under estimating the capabilities of back yard machinists.
Good stuff, guys. There has to be enough of you for a whole country. Success or failure of the whole depends on that criterion being met. I am not taking that for granted.
"A seismic change in mindset is required to begin to unwind the chronic debt issues we face in the UK.
"Pinning your hopes on housing equity or thinking that insolvency is the easy way out of debt is financial suicide," she added.
Common sense coming too late.
Today's newspapers caught my eye: the Financial Times, Guardian and Independent all had the UK credit crisis on their front pages. I don't think the Telegraph did, but only because it buries its (far gloomier) economic coverage deep inside the paper. The spark was the FSA's warning to lenders, as covered yesterday by the BBC. The Guardian's coverage was particularly interesting for one specific point:
The Guardian wrote:
As it urged lenders to cut back on granting new loans to build up their financial strength, the FSA also warned them not to race to repossess the homes of customers in difficulties.
It is to inspect the approach of up to a dozen major lenders by the end of March and those which have breached the rules over arrears will face fines, public sanctions and could even be barred from conducting further business.
Make of it what you will, but I think the spectre of an American-style hollowing out of cities through eviction is a no-go. Hopefully lenders are learning from the American experience that it is better to become a landlord and receive whatever the ex-"owner" can afford in rent than it is to own an unoccupied derelict property on its way to being condemned. Hopefully the government is similarly aware of the explosive social problem mortgage lenders could generate across the country by kicking hundreds of thousands of people out into the street.
Disturbingly, the interest rate issue resurfaced out of the blue this week. Up until a few days ago, the word everywhere was hold, now there is something akin to panic and hysteria in the coverage. The media has never got this excited about an MPC decision before. It is a monthly footnote, not a lead item. Many voices calling for a cut.
I don't understand something:
If LIBOR is the problem, how does a rate cut change the situation when it has already decoupled from the target rate due to a crisis of confidence in the financial services industry? Is it really going to make secretly insolvent companies float to the surface or recover? If the crisis remains behind closed doors, how will paranoid banks know to become less paranoid?
On the other hand if the housing market is the problem, does everyone have a short memory? The reasoning behind the recent batch of rate increases was to cool an overheated housing market. Lenders' and surveyors' figures suggest this is happening. Desired effect reached? Then hold rates. There is also well-documented and widely acknowledged inflation in food and energy that only adds support to this argument. Why then re-inflate a bubble only a couple of months after halting it? What has changed to make the bubble a preferred outcome? Preferable to what?*
Posted: Wed Dec 05, 2007 1:39 pm Post subject: Re: Housing Boom Officially Over - Collapse Imminent
frankthetank wrote:
Another thing i've noticed is that HD has had some AWESOME clearances lately. I've bought several items that were 75% off!?? They have to be LOSING money cutting prices like that?
Joined: Mar 12, 2007 Posts: 1004 Location: As close as I can get to the beginning of the pipe.
Posted: Wed Dec 05, 2007 2:09 pm Post subject: Re: Housing Boom Officially Over - Collapse Imminent
Twilight wrote:
I don't understand something:
If LIBOR is the problem, how does a rate cut change the situation when it has already decoupled from the target rate due to a crisis of confidence in the financial services industry? Is it really going to make secretly insolvent companies float to the surface or recover? If the crisis remains behind closed doors, how will paranoid banks know to become less paranoid?
On the other hand if the housing market is the problem, does everyone have a short memory? The reasoning behind the recent batch of rate increases was to cool an overheated housing market. Lenders' and surveyors' figures suggest this is happening. Desired effect reached? Then hold rates. There is also well-documented and widely acknowledged inflation in food and energy that only adds support to this argument. Why then re-inflate a bubble only a couple of months after halting it? What has changed to make the bubble a preferred outcome? Preferable to what?*
* Asks question with feigned innocence.
Mish can answer the question about the LIBOR:
Quote:
"On the other hand, if these conditions, most importantly LIBOR, temporarily return to normal, perhaps we have a Santa rally. Regardless of what happens in December, the problems are too many and to severe to be permanently fixed by anything other than a major recession and deflationary writedown of debt.
Right now there is a big disconnect between the equity markets and the credit markets. This is not a stable situation. Perhaps we have a hint of what December will bring given a rare November stock market decline and a negative start to December.
But regardless of how December concludes, the current conditions are not going to be resolved by a 50 basis point cut or even a 100 basis point cut by the Fed. We are facing solvency problems, not liquidity problems.
The ability of consumers and businesses to take on credit has been stretched to the limit regardless of what the interest rate is."
Nothing is going to help; we are at the pushing on a string phase of things. The Fed is using the only tools it has as it bears witness to the collapse of the economy.
Posted: Wed Dec 05, 2007 4:11 pm Post subject: Re: Housing Boom Officially Over - Collapse Imminent
Think about this too:
You know how after mortgages and equity release, the next lot of bad loans to begin to default are credit cards and car loans?
Well, say you are out on your ass and someone like GE Money owns your F-150. Both of them.
Unless you live or can move to a walkable area, you are pretty much Fark, right? I mean, ten miles to the grocery store if you have a job, food bank if you don't. No public transport. Bankruptcy means you lost everything you owned. That means any car you had too, doesn't it? I know it's America, but if it's basically brand new and still has resale value, they will take it, right? You don't have some crazy taboo against that, do you? You can buy a used one, but how many people in that position are going to have even a thousand dollars in ready cash they set aside and didn't burn through, still lying around? Remember, nice middle class people don't hide cash. They don't need to, they have credit and a regular paycheck. A new auto loan, after defaulting on the last one and the house? Not likely. So that leaves tapping the retirement fund to buy a used car if the family comes up empty? Desperation!
You know, we talk about gasoline inventories, demand and MOL in one thread, the necessity of living somewhere in another (here), the political headache this situation presents to a system that is not accustomed to thinking in terms of societal needs... but put it together, and what do you have? Demand destruction courtesy of a tow truck pulling away a millonfold.
Housing is becoming a hot political issue, everyone has a right to shelter it seems, even if they could not afford the loan. Well how about transport to access otherwise inaccessible essential services? Not on the radar now, but when was the last time a whole demographic lost their wheels? Keeping Americans in their homes... keeping Americans in their cars?
Joined: Dec 06, 2005 Posts: 856 Location: Stopped at the border.
Posted: Wed Dec 05, 2007 7:15 pm Post subject: Re: Housing Boom Officially Over - Collapse Imminent
I think bankrupt people are pretty good at keeping their cars and trucks. They adopt behaviors to hide them at all times when they aren't actually standing watch with a .357.
In a years time good repo men will be making a fortune. In two years time the repo men will be afraid to admit to anybody what they have done. _________________ "Hope encourages men to take risks; men in a strong position may follow her without ruin, if not without loss. But when they stake all that they have to the last coin (for she is a spendthrift), she reveals her real self in the hour of failure."
The administration plan is designed to deal with the crisis by letting subprime borrowers who are living in their homes and are current on their payments to avoid a costly reset for five years. The hope is that by that time the housing downturn will have stabilized, clearing out the glut of unsold homes and halting the steep slide in prices that is hitting many parts of the country.
With sales and prices once again rising, the expectation is that homeowners will be able to renegotiate their current adjustable rate mortgages into a more affordable fixed-rate plan.
^^^ Are prices & sales rising again, or is this a hypothetical outcome of Bush's plan? It's being sold like it's a foregone conclusion. _________________ "It's called the American Dream because you'd have to be asleep to believe it."
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I learned that in Grade 9! Maybe the Canadian education system is just better so I have a more optimistic view of what can be accomplished. Its not that hard to enlarge the scale. Look at what the Egyptians accomplished with just ppl power.
