Elvis writes:
I know quite a few people getting their homes ready to sell in the spring. Hope springs eternal. This is far from the bottom.
Elvis | 03.24.08 - 10:27 am | #

Anonymous writes:
Odd that they would make a mistake on the low side for months of supply.

Now how could such a mistake have occurred from the NAR, those wholesome truthseekers.

My worldview is shaken.
Anonymous | 03.24.08 - 10:28 am | #

Brian23 writes:
If more people put their homes on the market in the spring, it will just put downward pressure on prices. There are less buyers with more inventory. This is not rocket science.
Brian23 | 03.24.08 - 10:29 am | #

Lawrence Yun writes:
My numbers show the exact opposite. Somebody here is wrong, and it ain't me - I'm an expert. Check my creds.
Lawrence Yun | 03.24.08 - 10:31 am | #

jin writes:
But this number sets a short term stock market rebounce.
jin | 03.24.08 - 10:32 am | #

Windowdog writes:
I've already had one co-worker tell me the housing crisis is over and was just a blip.
Windowdog | 03.24.08 - 10:34 am | #

Anonymous writes:
CR, unless my calculator was commissioned by the NAR, I'm getting 9.6 months of supply. You might want to revise that part.

Simply estimated 4/5 = .8 times 12 = 9.6
Anonymous | 03.24.08 - 10:36 am | #

12th Percentile writes:
Big red "breaking news" banner on CNN's home page touting the 2.9% increase in sales in february.

Crisis averted. CNN certainly isn't trying to sway public opinion. Now, take your 20% you have saved and go buy a house. You do have 20%, right?
12th Percentile | 03.24.08 - 10:36 am | #

edhopper writes:
I am bothered by their "annual basis" model. Looking at the graph it appears there are always more sales in Feb. than Jan. (Did they account for the extra leap day?). So their "annual sales" only grew because of their extrapolated model, not due to the actual numbers.
If they are wrong about the annual sales, then they are also wrong about months of inventory.
edhopper | 03.24.08 - 10:36 am | #

Elvis writes:
National Association of Revisionists.

Not About Reality.
Elvis | 03.24.08 - 10:41 am | #

CalculatedRisk writes:
Anonymous, yes, my spreadsheet had an error - oops. Thanks for the correction.

Best to all.
CalculatedRisk | Homepage | 03.24.08 - 10:41 am | #

Anonymous writes:
As always, they report the (adjusted) increase from last month, not the undogly drop from last Feb.

What a joke.

And stocks rally. Yay!

I'm beginning to think Jas Jain is right about his 'crooks' rants. Harumph.
Anonymous | 03.24.08 - 10:42 am | #

wally writes:
All-in-all this is still a high rate of home sales, considering the tighter lending standards that are presumably in effect.
Hope springs in the Spring... but it is hard to see how sales could continue at roughly the 2004-2005 level.
wally | 03.24.08 - 10:42 am | #

Ralph Cramdown writes:
I don't suppose % REO figures are available anywhere for sales and inventory?
Ralph Cramdown | 03.24.08 - 10:45 am | #

AllenM writes:
According to CNBC, the crisis is over.

I think that the spin that the crisis is over is working on Wall Street, not Main street.

Well, I for one, will be shocked if they manage to do 5 million this year.

Excluding foreclosures.

Someday this war's gonna end...
AllenM | 03.24.08 - 10:46 am | #

duediligence007 writes:
"The national median existing-home price for all housing types was $195,900 in February, down 8.2 percent from a year earlier when the median was $213,500."

so let me get this straight...the 8% drawdown in price lowered inventories from just over 4.5mm at the peak to today's 4.03mm. from CR's graphs, it seems we need to get inventories back to sub 3mm range to achieve more of a healthy housing market...a little scarry to think about how much pricing needs to drop in order to get inventories to really move.
duediligence007 | 03.24.08 - 10:47 am | #

iceman writes:
I'm in Durham, NC and the housing market here, which was stronger than the rest of the nation, seems to be starting to flop ... much higher inventory levels and much lower sales volume.
iceman | 03.24.08 - 10:47 am | #

Elvis writes:
Don't homes that sell in February generally get placed under contract in December or January? Who looks for homes during the holidays in December? Wasn't January a horrible economic month that saw the stock market bomb most of the month? Lending appeared to remain tight during these months. Why would sales increase from January? Doesn't seem right to me, so, my guess is the number probably aren't right.
Elvis | 03.24.08 - 10:48 am | #

Bill Melater writes:
The good news is up 2.9%

The not-good news is: off 28.3% YoY

But there is no not-good news. You're either with us or you're with the turerists.

Put another way, we were eyebrows-deep in the septic tank. Now we're only chin-deep. So it's good news.
Bill Melater | 03.24.08 - 10:49 am | #

Windowdog writes:
Elvis,

If you look year on year in the NAR chart Feb was higher than Jan for all four years shown.
Windowdog | 03.24.08 - 10:50 am | #

Interesting Times writes:
We're now at Financial Meltdown Threat Alert Level ORANGE. Down from RED.

Nothing more to see here... please move along. Go shopping.
Interesting Times | 03.24.08 - 10:50 am | #

Anonymous writes:
Lawrence,

Everyone has model problems these days, from CR to Spitzer, from NAR to SIFMA, from Moody's to Heather Mills, so don't fell like it's just yu!
Anonymous | Homepage | 03.24.08 - 10:50 am | #

Observer writes:
The existing homes sales figures look good, but in some markets as much as 40% of the homes being sold are REO units. From that perspective (and since REO units are often not counted as part of the existing home inventory), these "improved" numbers don't mean nearly as much as the market seems to think.
Observer | 03.24.08 - 10:52 am | #

Windowdog writes:
Typo, I meant the NSA chart shows a Feb rise for the last four years.
Windowdog | 03.24.08 - 10:52 am | #

idoc writes:
someone explain something to me. banks don't trust lending to each other as reflected in TED spreads. smart money has fled to short end of UST curve. so why would anyone buy their stock?
idoc | 03.24.08 - 10:53 am | #

Elvis writes:
Finally, if prices continue to fall, won't that be a disincentive to buy? Won't falling prices contine to slow sales until prices stabilize? So, as long as sales continue to fall/collapse, rational buyers will stay on the sidelines and sales numbers will fall. The buyers right now are the irrational or the ill-informed.
Elvis | 03.24.08 - 10:53 am | #

ac writes:

Another rough day for permabear cat.

ac | 03.24.08 - 10:54 am | #

TradingStats writes:
idoc, i'm surprised you ask such a question


o
p
m
TradingStats | 03.24.08 - 10:55 am | #

Interesting Times writes:
idoc - Didn't get the memo? Everything is fine. Banks have found new capitalization - the FED.
Interesting Times | 03.24.08 - 10:55 am | #

Marcus Aurelius writes:
Of course Jas Jain is right, and should be believed, regarding the crooks running the system. He's right, but that doesn't mean he has to be an a-hole about all Americans.
Marcus Aurelius | 03.24.08 - 10:55 am | #

Pondering the Mess writes:
The housing crisis is over! Buy now or be priced out forever! Buy, Buy, Buy!

Oh, wait... houses STILL cost about 5 to 6 times median income for the area, if not more. Well, we can always get a toxic loan... or maybe not (Until Fanny and Freddie start offering them, anyway.)

Nevermind!
Pondering the Mess | 03.24.08 - 10:55 am | #

Bill Melater writes:
Anonymous the Anonymous said: I'm beginning to think Jas Jain is right about his 'crooks' rants. Harumph.

Jeez. A similar thought wafted through my mind as well. It's becoming more difficult to completely discount JJ's ravings.
Bill Melater | 03.24.08 - 10:56 am | #

idoc writes:
not to worry. the housing hammer will continue to fall.
idoc | 03.24.08 - 10:57 am | #

Pondering the Mess writes:
The hammer may fall, but will prices?

-8.2% is nowhere near enough since prices have doubled to tripled in many Bubble Areas, while salaries have gone nowhere but down.

Considering the Powers That Be and their vested interest in NEVER marking any of this crud to market, it'll be a long, slow unwind of this Bubble. Pathetic...
Pondering the Mess | 03.24.08 - 10:59 am | #

Elvis writes:
Windowdog,
3 year trends might be an excuse to fudge the numbers.

"Mr. Yun, these sales numbers are abysmal. Down 10% from January alone."

"Oh, young research person, your numbers must be wrong. The last 3 years homes sales went up in February from January. The same must have happened this year, put the sales up 5.0% from January."

"But, my numbers are right. An increase would be misinformation."

"Don't you have a family to support?"

"OK. Well, how about 2.9%, Mr. Yun?"

"Fine."
Elvis | 03.24.08 - 10:59 am | #

Anonymous writes:
All those new FHA loans should start flooding in any day and the inventory of overpriced homes will vanish within weeks (like maybe 150 weeks).

Re: Under the plan, the homeowner would be able to refinance the mortgage with the U.S. Federal Housing Administration, based on the current value of the home. So instead of a US$240,000 mortgage, he would now have a US$198,000 mortgage (we're assuming US$2,000 was paid in cash).

The FHA would buy the US$240,000 loan from Bank ABC, giving it US$200,000 and a "negative equity certificate" for the remaining US$40,000. Were the homeowner to eventually sell the home, the FHA loan would be paid off first, then the original lender, up to the value of the certificate. Any money left over would go to the homeowner.

The homeowner wins because he is now paying down a smaller debt and if interest rates are the same or lower than when he first bought the home he also has lower monthly payments.
Anonymous | 03.24.08 - 11:00 am | #

idoc writes:
nothing ever goes down in a straight line. we are on the verge of exploding inventories now that we're nearing Spring selling season. should be interesting to watch.
idoc | 03.24.08 - 11:01 am | #

m writes:
off topic. wonderful interview

http://www.pimco.com/LeftNav/ Fea...+March+2008.htm
m | 03.24.08 - 11:03 am | #

Anonymous writes:
Elvis,

right on! If NAR has any class as a pumping org, they should be smoothing out this current trend with averaging data from 5 or 6 years ago. Why look at a simple trend now, when you can blend in the very best of the bubble years? Go NAR!
Anonymous | 03.24.08 - 11:04 am | #

Anonymous writes:
"Put another way, we were eyebrows-deep in the septic tank. Now we're only chin-deep. So it's good news."

Nice, perfect level to feed us more shit.

http://news.yahoo.com/s/ap/ 20080...6WSqxd8NHas0NUE
Clinton calls for panel on housing woes

"Clinton also proposed greater protections for lenders from possible lawsuits by investors, a version of so-called tort reform more often associated with Republicans than Democrats."

Gee, do you think Bob Rubin wrote that line for her?
Anonymous | 03.24.08 - 11:05 am | #

YLSP writes:
Re: Elvis
Finally, if prices continue to fall, won't that be a disincentive to buy? Won't falling prices contine to slow sales until prices stabilize?

Some people have the money but are waiting for some type of "timing". I know a co-worker who is destined to by at the end of this year. Nothing I say or nothing that happens could persuade him from plunking down his saved-up money to buy at the end of this year. In fact (as mentioned before) he was talking with another co-worker who stated, "Make sure you buy before the prices go up again!". Maybe that person is a Realtor or married to one...

This type of "irrational" behavior kind've creates a problem for those of us who think housing is really overpriced... as more people who jump in as the knife falls provide some relief and should be better at paying off their mortgage. Of course it should also help at lowering prices... but I don't think many people are going to admit their home isn't worth what they think it is... kind've like the BSC shareholders.

In my neck of the woods I don't think prices have begun to unstick... maybe they never will... (argh!)
YLSP | 03.24.08 - 11:06 am | #

idoc writes:
notice how the rising price line of the dow is pretty much uninterrrupted today. OTOH when the dow drops 200-300 pts there is a stair step slow decline as if someone were there to prevent steep declines. tinfoil please...
idoc | 03.24.08 - 11:10 am | #

Anonymous writes:
"Jas's right, but that doesn't mean he has to be an a-hole about all Americans.
Marcus Aurelius | 03.24.08 - 10:55 am | #"

And he shouldn't come to the one arena on the planet where most already know and are not the ones needing to be preached to. He's attacking the few who don't deserve it, and yet is he preaching on the blogs that deserve it? Drudge? Kudlow? Cramer's? For some reason, I doubt it. The dude's one possible target here is Seb, and Jas likes him!!

That and he's damn repetitive, just stop already.
Anonymous | 03.24.08 - 11:13 am | #

ac writes:

"Clinton also proposed greater protections for lenders from possible lawsuits by investors, a version of so-called tort reform more often associated with Republicans than Democrats."

Clinton should join forces with Bill Gross and McCulley to form the new Corporate Socialists party.

Nothing better for voters than to funnel all their tax dollars into companies that can't handle hard times, right?

ac | 03.24.08 - 11:14 am | #

negative equity certificates writes:
RE: 3. The Response

Among the proposals being considered are broad "rescue bills" that would enable the government to purchase outright some troubled mortgages and even a plan offered up a few days ago by the Office of Thrift Supervision that would create a system allowing borrowers to refinance into government-insured loans that cover the current value of their homes while the refinancing package would pay part of what's owed to the original lender with the remainder of the balance that isn't covered issued to the lender as a "negative equity certificate." The lender could then redeem the certificate if the home is eventually sold at a higher price.

http://www.minyanville.com/artic...s/index/a/ 16013
negative equity certificates | 03.24.08 - 11:15 am | #

ac writes:

notice how the rising price line of the dow is pretty much uninterrrupted today. OTOH when the dow drops 200-300 pts there is a stair step slow decline as if someone were there to prevent steep declines. tinfoil please...

No, that's exactly what I'd expect to see if the hedge fund industry were artificially trying to pump the market by squeezing shorts.

That said, I've found it's best just to assume that's what's going to happen and stop fighting it so much.

Of course once everybody makes that decision the market will collapse.

ac | 03.24.08 - 11:16 am | #

cd writes:
idoc-Where do you see resistance in this bear market bull run up? 12700dow
1370-s&p

This run up since the worst financial disaster since the depression is unreal..btw-holding short..
cd | 03.24.08 - 11:16 am | #

e writes:
March 24, 2008,Hyperinflation Lemming Strategy begins in the
US. The FHLB system will be the vehicle that will provide the Stealth Bailout. The additional $100 billion approval today will be incremented to total trillions. The United
States of Securities will debase the currency. Debasement
is a drug, and the Banks will prod the Government to RUN ON
MONETARY CRACK, UNTIL THE WITHDRAWALS BEGIN WHEN THE DOLLAR
INDEX IS AT 10. Personally I loaded up on commodities when
they attacked gold. I prefer FOOD! IT IS SAFE!
Soft Commodities do well when HYPERINFLATIONARY MADNESS BEGINS. LET THE CENTRAL BANKS ATTACK GOLD AGAIN(they will
sell the IMF gold). I will just load up some more!!! I WILL
ONLY SELL MY COMMODITIES WHEN VOLCKER COMES BACK!!!
By the way. The Professor is a Genius, and I am a dummy who
knows when he is reading a genius. I just ride the coatails!!! hyperinflation will take us over the falls,
when the fiat currency loses confidence and deflation will
rule the day. They will raise rates when they see that prospect. In the meantime, THE ORGY WILL CONTINUE!!
I WAS NOT BORN IN THIS COUNTRY AND I AM DEEPLY SADDENED
AS A REFUGEE, THAT SUCH A TRAVESTY IS VISITED ON THE
SUCCESSORS OF THE GENIUS OF JEFFERSON! Americans! wake up
and use democracy, or you will be betraying the founding
fathers! You take this country for granted. History is littered with empires that failed due to debasement of currency!
e | 03.24.08 - 11:16 am | #

michael schumacher writes:
I seem to have "found" losses that I never had before today. With today's wonderful "happy bomb" that no one is apparently liable for any of this I am now going to join the crowd and take what is mine by creating value ala "price discovery"

Seriously??? A fuckin' LLC .....what's next a joint partnership between these a-holes???

Ciao
MS
michael schumacher | 03.24.08 - 11:17 am | #

blackhat writes:
Anyone else noticing how expensive tinfoil is getting?

Did wages inflate? no.
Did the dollar strengthen? no.
Did real value get created anywhere? no.

Does it occur to the media that given the current financial environment that Americans loading up on more debt (even if slightly less debt than last year) is a bad thing? A very bad thing? As in, any kind of correction of the fundementals is getting deferred that much more...tinfoil: so we are going to put this polished-turd of an economy into a flaming brow bag onto the doorstep of the next whitehouse occupant...sigh.
blackhat | Homepage | 03.24.08 - 11:18 am | #

Name writes:
CR,

"The third graph shows the 'months of supply' metric for the last six years.
"

should read:

"The fourth graph shows the 'months of supply' metric for the last six years.
"
Name | 03.24.08 - 11:18 am | #

e writes:
I have six last words.
Time to move to Costa Rica http://www.costarica.com/
e | 03.24.08 - 11:24 am | #

idoc writes:
No, that's exactly what I'd expect to see if the hedge fund industry were artificially trying to pump the market by squeezing shorts.

its the declines with artificial propping that bother me so much. i know many here don't believe in a PPT but there is so much evidence for one. the lengths at which FRB and Treasury are propping mkts in public make assumptions of what they're doing in private a reasonable extension. oh well, its true that times like these challenge guys like me but i do think these interventions are unsustainable due to their 100 yr flood nature. of course it could cost me dearly if i'm wrong but i do think most americans and the rest of the world see what is happening and won't "buy" in. that leaves it to the PPT and Wall st. to buy and thats fine with me. at least my commodities have rebounded today.
idoc | 03.24.08 - 11:26 am | #

Outsider writes:
He's right, but that doesn't mean he has to be an a-hole about all Americans.

I agree! So from now on for all his posts, an automatic response system: "I'm rubber, you're glue, whatever you say bounces off of me and sticks to you." Followed by "ppffffftttt!"

Or, well, we could just ignore him...
Outsider | 03.24.08 - 11:26 am | #

e writes:
IDOC

Its all a sham, scam. for those who can think and reason, it has just been proven the JPM, Morgan "deal" was nothing more than a headline to settle people down. JPM buys Bear Sterns - nothing more than a headline.


JPMorgan Chase & Co. agreed to quadruple its offer for Bear Stearns Cos. in an effort to overcome opposition from the shareholders of the crippled securities firm. Bear Stearns stock almost doubled....

Bear Stearns surged almost 70 percent in early trading in New York after the New York Times reported the pending offer. The new terms value Bear Stearns at about $2 billion. JPMorgan Chief Executive Officer Jamie Dimon needs a majority of Bear Stearns shareholders to approve the deal and has been wooing its employees with cash payments.

``This will help the deal go through,'' said George Ball, who's worked on Wall Street for more than 40 years and now leads brokerage firm Sanders Morris Harris Inc. ``The price is still catastrophically low, but it will change the attitude of people who stay at Bear. Those are the people Jamie needs to win over.''....

JPMorgan also struck a deal with Bear Stearns's board to purchase 39.5 percent of the company in a transaction that wouldn't require shareholder approval, the companies said in the statement. Bear Stearns board members will vote in favor of the transaction, the companies said in the statement.

To complete the deal, Dimon now needs only an additional 10 percent of shareholders to approve it. About one third of the outstanding shares were owned by the employees before the dilution today with the newly issued shares that the firm is selling to JPMorgan directly....

``The Fed must have given the nod; this wouldn't have been announced otherwise,'' said Sanders Morris's Ball....

Bear Stearns employees, directors and lawyers are prohibited from seeking an alternative transaction, according to the agreement, which was filed with regulators last week.

Bear's financial troubles began in July, when two hedge funds that invested in securities tied to U.S. subprime mortgages collapsed. The firm, once the biggest underwriter of U.S. mortgage bonds, had to bail out the funds and take possession of many of the instruments.
e | 03.24.08 - 11:28 am | #

Anonymous writes:
The yield inversion remains in full force on short bonds:

2 yr @ 1.78%

3 yr @ 1.67

3 year discontinued last yr, but still on mkt and thus indicates confirmation of recession.

09:10 am - Sold on Open, Sinking Lower : Treasuries are going to get hurt further as the jockeying around Bear and JPM goes on, while talk of the Fed stepping in to buy up bad mortgage paper makes the rounds, taking some of the scare out of the market. Trade is working on extremely light size and giving up the bulk of Wed's gains. Some worry that the Fed has become something beyond the "bank of last resort" and may be just a bunch with buckets to assist in bail-outs. The market will see another round of TAF cash while contending with a run of 2-and-5-yr auctions later in the week. Shorter maturities are suffering harder while mixed global bonds are offering little support.
Anonymous | 03.24.08 - 11:32 am | #

jd writes:
e writes:
IDOC

Its all a sham, scam. for those who can think and reason, it has just been proven the JPM, Morgan "deal" was nothing more than a headline to settle people down. JPM buys Bear Sterns - nothing more than a headline.

Well, it worked. Welcome to the new Amrica. But, wait till all those little mortgae boms start resetting soon. How mnay headlines will it take then to calm the masses. Its all bs to me and many others.
jd | 03.24.08 - 11:32 am | #

nades writes:
So now is good time to buy?


I just hope I don't get priced out forever...

........
nades | 03.24.08 - 11:33 am | #

Bill Melater writes:
Or, well, we could just ignore him...

That's the prevalent tactic. It's just that in the absence, his theme (minus the abuse) stirs a twinge of longing.
Bill Melater | 03.24.08 - 11:33 am | #

Anonymous writes:
Fitch Ratings announced it is maintaining its Financial Strength and debt ratings on MBIA (MBI 14.28, +1.51) and it subsidiaries for the foreseeable future.

Currently, Fitch believes that should the ratings of MBI be changed as a result of this review, MBI's Insurer Financial Strength ratings will be no lower than the 'AA' category, which represents very strong capacity to meet policyholder and contract obligations on a timely basis.

LOL!
Anonymous | 03.24.08 - 11:34 am | #

jd writes:
nades writes:
So now is good time to buy?

are you nuts. you buy only if you are a day trader and dont hold any positions overnight. many shorts got slugtered today. This dead cat seems to have a lot of bounce in it. stay in cash. Thats what the smart mutual fund managers are doing. They are so heavy in cah now.
jd | 03.24.08 - 11:35 am | #

nades writes:
jd I meant a house. Should have clarified.

On a totally different note just tried to short BSC and got this message:


Currently, there are no shares of BSC available for shorting. Please call your local branch.

Ha....
nades | 03.24.08 - 11:36 am | #

Alan Greenspend writes:
e said -
"I have six last words.
Time to move to Costa Rica http://www.costarica.com/\"

It is nice there, but I'm liking Nicaragua more, cheap, safe, clean and bike friendly.

http://www.nicaliving.com/image/tid/21
Alan Greenspend | Homepage | 03.24.08 - 11:37 am | #

jd writes:
Litmus Tests

This crisis is the worst in the last 60 years (according to George Soros).
So ... it's definitely worse than the Savings & Loan Crisis of
the 1980's and 1990's. During that crisis, scores of savings
and loan institutions in the USA went bust.

#1 Have you seen scores of local banks go bust in America yet?
Even Ben Bernanke said he expected local bank failures.
Has that happened?

#2 both the ABX and CMBX indices are
showing major fallout in the residential and commercial real estate securitizations. The worst of the commercial property problems
are still ahead of us, and the worst of the re-sets on residential
variable-rate loans have not hit yet.

#3 Have you seen people on the NYSE crying and tearing up their
stocks?

Have we reached a bottom yet? That's your decision, and
it's your investment money.

But for anyone under 50 years old - you've never seen a hard
recession in the USA. The last one was in the early 1980's.
Something to think about.
jd | 03.24.08 - 11:38 am | #

Ralph Cramdown writes:
exactly what I'd expect to see if the hedge fund industry were artificially trying to pump the market by squeezing shorts.

its the declines with artificial propping that bother me so much. i know many here don't believe in a PPT but there is so much evidence for one.

Hedge funds squeezing the shorts? i.e. themselves? I think the HFs are the major players on the short side, as mutfunds are typically long-only and individuals have been convinced that shorting is Un-American. And I think your thoughts about coordinated moves belie the ruthlessness of the big players. It's like a poker game, and nothing's sweeter than taking a lot of cash from the guy across town in one big move.

Regarding the PPT, do you thing it's just small futures traders covering before end of day? I think margin requirement is higher if you hold positions overnight, plus of course something might happen with the market closed, and these positions are highly leveraged, so small adverse moves typically wipe out positions.
Ralph Cramdown | 03.24.08 - 11:39 am | #

jd writes:
why is lehman down today?
jd | 03.24.08 - 11:40 am | #

Not Cramer writes:
According to CNBC, the crisis is over.

Who advertises on (i.e., pays the bills for) CNBC? Oh, right.

You have to admit, "The American Public doesn't know jack!" if they believe what CNBC is spewing.

^
Not Cramer | 03.24.08 - 11:41 am | #

lawyerliz writes:
Housing is much worse than it was in the early 80s. Then, it was slow, but things were moving a little. Mtges were still being made-albeit at very high rates. Foreclosures were nowhere near where they are today.

Supposedly use of the word "recession" in the media is an excellent predictor of recession. I see the word depression more and more, if only to say we aren't going to have one. (Can't use the metric for the d word because of its use in mental illness. I suppose we are going to have a lot more of that also.)
lawyerliz | 03.24.08 - 11:44 am | #

Anonymous writes:
People are going to be very tempted to refinance, get HELOCs and speculte on stocks, just like many did in The Dotcom era, whn people bet 401Ks on JDSU and various sure bets!

Thank you Fed for goosing the market and helping to push the stocks back up in a new bubble, versus tearing the shit out of wall street for collusion, corruption, fraud, misleading information, etc....

By allowing accounting fraud and then bailing out wall street will force people to reaccess valuations and fundamentals of biased, skewed and distorted fantasy that is the stuff of lotto ticket commercials.

Thank you Fed for for showing yourself to be the mafia run org that you are!
Anonymous | 03.24.08 - 11:44 am | #

Tanta Confusion Meter writes:
We have 357+ this morning as people wonder what's going on with a skyrocketing market that looks like disconnected from reality.
Tanta Confusion Meter | 03.24.08 - 11:48 am | #

jd writes:
Anonymous writes:
People are going to be very tempted to refinance, get HELOCs and speculte on stocks, just like many did in The Dotcom era

Have you tried getting a heloc? you need a credit score of 3,000.
jd | 03.24.08 - 11:49 am | #

Ralph Cramdown writes:
We have 357+ this morning as people wonder what's going on with a skyrocketing market that looks like disconnected from reality.

I say people coming to a Real Estate blog for stock market information might be a little disconnected from reality. Oh, and to the poster wondering why Lehman is down: More sellers than buyers.
Ralph Cramdown | 03.24.08 - 11:51 am | #

sam writes:
to anonymous

this dead cat bounced once. now the gvt is picking it up and throwing it in the air a few times. A blind dog could see that. But the masses are the asses. I day trade and am out of all my positions at the end of the day. I dont trust this market nor will I ever again.
sam | 03.24.08 - 11:52 am | #

neil writes:
Jd said:
But for anyone under 50 years old - you've never seen a hard
recession in the USA. The last one was in the early 1980's.
Something to think about.

Nitpick, I'm under 40 and I clearly remember the 1974 and 1980's recessions. The later as I was in college and it was impacting career plans. The former as I had to ask "mommy, why are are the adults crying?" Actually, in both recessions I was at the mall and was shocked by how, just one day, everyone broke down.

Got Popcorn?
Neil
neil | Homepage | 03.24.08 - 11:52 am | #

Anonymous writes:
As you can see in this slide, Freddie Mac single-family ABS portfolio is comprised of three main asset classes. Subprime backed ABS is the largest component and totals about $100 billion, $25 billion of Alt-A backed ABS, and approximately $21 billion of securities backed by MTA ARMs. The remainder is comprised of pools backed by HELOCs, manufactured housing loans, closed end second liens, and FHA/VA loans.

Now, let me pause for a moment

Freddie Mac 2008 Investor/Analyst Conference - Final

http://insurancenewsnet.com/ arti...85167ab321c1c65
Anonymous | 03.24.08 - 11:53 am | #

m writes:
Ralph Cramdown your astute observation on lehman is one for the books, comic books. Take a breather buddy.
m | 03.24.08 - 11:53 am | #

Bob Dobbs writes:
"Supposedly use of the word "recession" in the media is an excellent predictor of recession. I see the word depression more and more, if only to say we aren't going to have one. (Can't use the metric for the d word because of its use in mental illness. I suppose we are going to have a lot more of that also.)"

I've been seeing it pop up in financial columns in the MSM, along the lines of "some save privately that a depression is possible but unlikely."

Which would lead me to believe that this is going to be a _bad_ recession.
Bob Dobbs | Homepage | 03.24.08 - 11:55 am | #

jd writes:
CHICAGO (MarketWatch) -- You might be tempted to think that there was a remarkable resurrection in the housing market in February, given the news that existing-homes sales rose for the first time in seven months. But remember, Easter wasn't until March.
If there was an epiphany a month early, it came from home sellers who seem to have gotten the message that the way to move inventory in this dismal market is to beat the competition on price. The median price of existing homes sold in February dropped a record 8.2% from a year earlier, to $195,900.
Lo and behold, you drop prices and sales go up, nearly 3% for the month. That isn't what you'd call spectacular, especially given that sales are still down almost 24% year over year. But you can't expect miracles in a month like February, a short 29 days of generally dismal weather in most parts of the country when sales are usually sluggish as everyone gears up for spring.
The sales were enough to lop 3% off of the inventory of existing homes for sale. There are now just over 4 million houses on the market, a 9.6-month supply at the current sales pace. That's down from a 10.2-month supply in January, but nowhere near the 6-month supply that housing experts consider to represent a balanced market and a far cry from the 3- and 4-month supplies routinely seen at the peak of the current cycle in 2006.
The market may be poised to ascend, but there are still some pretty big stones that have to be rolled out of the way before any revival is more than fleeting:
March traditionally kicks off the spring selling season, and a flood of inventory onto the market now could easily reverse February's gains.
Prices are falling, making homes more affordable, but in many markets they are still wildly out of relation to buyers' ability to pay.
Rates are affordable in the mortgage market, but only the most-creditworthy borrowers are getting the chance to obtain those rates; many marginal borrowers are still frozen out.
The number of delinquencies and foreclosures is continuing to grow and will likely do so for several quarters yet, threatening to pour more inventory on the market and take more buyers out of it.
Even with February's numbers, the evidence that new life is being breathed into the housing market is scant. If you want to believe, you'll just have to take it on faith.
jd | 03.24.08 - 11:59 am | #

Anonymous writes:
I guess NAR and Fannie are working on the same models with Countrywide and other Fed experts, along with Moody's, etc. They continue to tweak Monte Carlo dice rolls and place shims under the craps table in an effort to re-balance the warped playing field.

Re: PATTI COOK: You know it's interesting, I have only been at Freddie Mac for four years, but even if you look beyond that, we went to relatively stable periods of house prices where the adjustments to the model, in terms of the median expectation were relatively rare. What we have had to embark on over the last several quarters is sort of a governance process, whereby we consume, I will call it, recent information in terms of what house prices are actually doing to try and refine our best assessment of where house prices are going to go. So, there is a lot of judgment. The reason we changed the house price forecast after the fourth quarter was, frankly, the surprise in the numbers for the fourth quarter. The index that we use, that is a reflection of our own portfolio, was down 3.4% in the fourth quarter. Case-Shiller was down also a large amount.

Based on that, based on the propensity for house prices to follow, they are on a more recent trajectory. We decided to take the median house price path down further. But, a lot of judgment on the part of the business team as well as management teams. Once we have agreed on a median house price path, we then run a Monte Carlo simulation. I think there are 300 additional paths that we ran that come out with, I will call it, an average expectation on what all those paths mean for default, severities, and therefore an EDC number. So, the thing I would stress in that discussion is that this is -- this is a model. It is an estimate. And, the range of expectation around that estimate, frankly, is pretty wide, but that's the process.
Anonymous | 03.24.08 - 12:03 pm | #

Alan Greenspend writes:
Now here's some hot foreclosure property!


http://io9.com//welcome-to-the-c...the-vegas- strip
Alan Greenspend | Homepage | 03.24.08 - 12:04 pm | #

Anonymous writes:
Wait a second, that did seem retarded, can we rewind that clip again:

PATTI COOK: You know it's interesting, I have only been at Freddie Mac for four years, but even if you look beyond that, we went to relatively stable periods of house prices where the adjustments to the model, in terms of the median expectation were relatively rare.

>> Ok, what I think Patti was saying, was that in four years of playing with model simulations and doing lunch with the boys, she has faith that the models can be adjusted and the good times are built into the model. I think, but I also think she sounds retarded, so if anyone else can understand that babble please help out, because it's retards like this that are being given the keys to The Treasury vaults and taxpayer cash!
Anonymous | 03.24.08 - 12:08 pm | #

Anonymous writes:
In an interview after Molinaro's remarks, Bear Stearns spokesman Russell Sherman said the New York-based firm's subprime trades are a ``hedge'' against potential losses on investments in higher-rated mortgages, he said.

``We are using short positions to offset other long positions in our mortgage inventory,'' he said. He didn't provide details on specific trades.
Anonymous | 03.24.08 - 12:17 pm | #

Anonymous writes:
Housing starts in the U.S. dropped in February and building permits fell to the lowest level in more than 16 years, new signs that slowing construction will continue to hurt economic growth.

Builders broke ground on 1.065 million homes at an annual rate, down 0.6 percent from a revised 1.071 million pace in January that was higher than previously reported, the Commerce Department said Tuesday. Building permits, a sign of future construction, sank 7.8 percent to a 978,000 pace, fewer than projected.
Anonymous | 03.24.08 - 12:22 pm | #

Anonymous writes:
So far this year, sheriff sales resulting from foreclosure have outnumbered single-family home starts. The telephone at a Lafayette foreclosure counseling office is ringing as much as ever, said Marie Morse, interim executive director of Lafayette Neighborhood Housing.

Richard Murray, vice president of administration with Lafayette Community Bank, traces the foreclosure crisis back to 2002. From November 2002 to July 2004, he said, the Federal Reserve Bank left the prime interest rate virtually untouched.

That created a "false housing market" in which lenders fell over themselves extending credit to current and prospective homeowners.

http://www.jconline.com/apps/pbc...30375/1152/ NEWS
Anonymous | 03.24.08 - 12:26 pm | #

Anonymous writes:
For a company that lost $334 million last year, The Ryland Group sounds awfully confident about its business model. The Calabasas, Calif.-based builder, which operates in 28 states, told investors at Wachovia's Home Building and Building Products Conference in Las Vegas yesterday afternoon that its strategies for land acquisition and construction haven't changed, and that it would continue to focus on growing capital and earnings per share, and on scaling down its size to proportions best suited for current market conditions.

Milne said that he is encouraged by recent building permit data which showed a 61 percent decline in permits issued nationwide since September. "When you see that kind of fall, you've got to believe that the industry is getting better." He also pointed to data showing how home prices have been coming down, although he added that it's going to take some "pricing power" for Ryland to raise its gross margins--which were 17 percent in the fourth quarter last year, and negative 2 percent when impairments were included--back up into the 20 percent range it prefers.

The one area from the recent boom that Ryland misses, said Milne, is the disappearance of Alt-A mortgages, which in 2005 accounted for 17 percent of the loans its mortgage subsidiary wrote. By the end of last year, Alt-A and subprime loans accounted for zero percent of Ryland Mortgage's business. "Alt-A was a big loss," said Milne.

Retard!

http://www.builderonline.com/bus...The- Course.aspx
Anonymous | 03.24.08 - 12:32 pm | #

Anonymous writes:
Delinquencies on alt-A mortgages pooled into securities between 2005 and 2007 continue to rise, Standard & Poor's said in a report released Wednesday.

Mortgage-backed securities are pools of mortgages combined and sold to investors. Alt-A mortgages are loans given to customers with minor credit problems or who do not have enough documentation to receive a traditional, prime loan.

Retards!
Anonymous | 03.24.08 - 12:34 pm | #

Anonymous writes:
About 15.9 percent of securities rated in 2006 were delinquent in February, a 9.7 percent increase from January.

Delinquencies for securities rated in 2007 increased 14.3 percent in February to about 10.2 percent.

S&P said seriously delinquent loans -- loans at least 90 days past due, in foreclosure or homes owned by banks -- continued to rise in February for all three vintages as well, with 2006 deals performing the worst. About 10 percent of 2006 loan volume was seriously delinquent at the end of February.
Anonymous | 03.24.08 - 12:35 pm | #

Anonymous writes:
So what’s a Jonesville contractor to do?

“It’s so stagnant right now that I took a job out of state,” he said. “I’ve had three menial calls in three months ... I would do anything, but you just can’t make enough money to survive.”

Such is the effect of a high foreclosure rate, something that has hit Hillsdale County hard in the last two years. Since January 1, banks have foreclosed on 71 properties in the county.

The reasons are common — job losses and a flat e–conomy make it near impossible for some to make high housing payments.

But foreclosures have ripple effects for others as well. Without residents, cities and townships are losing part of their tax base; the city of Hillsdale already is forecasting a budget deficit for 2008–09.

Contractors like Wright find themselves without new construction projects, competing for the few that are available.

And real estate agents have left the business in the last couple years because the county is losing population, making it tough to earn a commission–based living, said Anne Fike, marketing agent with Century 21 Action Associates.

“There are more houses on the market but less buyers,” Fike said. “There just aren’t a lot of sales.”

The county reported 194 foreclosures in 2006 and 269 in 2007. There were 31 in January, 20 in February and 20 so far in March.

In fact, Nevada, California and Florida had the highest foreclosure rates in February in the country, with Michigan and Ohio near the top. The overall rate was one filing for every 557 homes.
Anonymous | 03.24.08 - 12:38 pm | #

ipodius writes:
The interesting part of this was that sales increased a whopping 11.3% in the Northeast, 2.5% in the Midwest, and 2.1% in the South. The only region down was the West and that was 1.1%.

I've said all along that here in the NE we've been in decline longer than other parts of the country, and we'll be the first to show a leveling out. By this and my anecdotal data around here, I'd say that looks to be the case. Mind you, I don't think we're done here yet with the price declines by a long shot, but I think there is a lot of pent-up demand. As prices get more realistic, the numbers will improve as people go shopping for bargains.

But the attitude on this thread! A lot of you sure waste a whole bunch of energy trying to argue that the numbers don't show what they do. If the next couple of months show a similar pattern, coupled with the slight reduction in new house inventory that CR pointed out in an earlier post, then it will seem some stabilization is taking place. Schadenfreude aside.
ipodius | 03.24.08 - 12:54 pm | #

Anonymous writes:
BUY, BUY, get in before the market goes to high!! Don't be priced out!!!

First, the CBOE Market Volatility Index (VIX – 26.28) hit a high of 35.60, which was just shy of the August and January highs of 37.50.

Bloomberg News Service reported that through Wednesday, March 19th, the S&P 500 had moved up or down by > 1% on 28 trading days so far this year, or 52% of the time.

Thursday's big up-move made that number an even larger percentage.

Bloomberg noted that the 52% rate was the highest such reading since 1938. In 1938 the S&P 500 rose or fell during 57% of the trading days. The VIX index inception date was during 1928.

http://www.marketwatch.com/quote...vix? sid=1704273

http://www.marketwatch.com/tools...e&freq=7& time=3

VIX @ 24.76 @ 12:53

25.01
Anonymous | 03.24.08 - 1:02 pm | #

Anonymous writes:
Re: up or down by > 1% for 30 days will be closer to insane and a great time to bet the farm!!!!! Stocks will only go up and up and up and all the bad news is priced in and nobody gives a crap, this is great!
Anonymous | 03.24.08 - 1:05 pm | #

Lionel writes:
I don't love my SRS anymore.
Lionel | 03.24.08 - 1:09 pm | #

Anonymous writes:
52 Week High 37.57


Last Sale 25.01

up or down by > 1% for 30 days

BET THE F__KING FARMS!!!!! THE FED is giving away money and houses and NAR, SEC, Moody's all scream BUY!!
Anonymous | 03.24.08 - 1:13 pm | #

Anonymous writes:
Volatility closer to 60% now and climbing and this is a great time to bet the farms, the kitchen sinks, the granite counters, carpet, HELOC, go baby go, bet on green chips, bet on black dogs and bet your 401Ks!!! Bet on Fed, bet on Fed!! Go dod go, simple stuff here, go baby go, go to the moon!!
Anonymous | 03.24.08 - 1:18 pm | #

Anonymous writes:
Keep an eye on 12,500 and 12,100 for near-term direction Monday, as a breakout from this range will likely spark a test of the outer limits of the range, which lie at 12,800 and 11,700.

This could go well over 13K any day this week and no worries on the downside. Dow will break 14K by May 27th and 15K by summer, back over 20K by XMAS!!
Anonymous | 03.24.08 - 1:22 pm | #

Anonymous writes:
Watch tonight, 2K pop in Asia and parabolic upward spike of neaver-before seen explosions to to the moon! Don't be priced out with this volatility!
Anonymous | 03.24.08 - 1:24 pm | #

Paul writes:
NAR's "home sales" number isn't actually homes sold it's sales closed. February has 20 days when houses can close. The courts are closed on weekends.

This February was a leap year and the 29th was a FRIDAY. That gave February 5 Fridays. That means, not only did February have 5% more days (or the equivalent of 16,000 closings) it had one extra heavy closings day. (People push stuff off their desks on Friday.)

If you take out the 5% for the extra day (which would have been like adding March 1 to this year) You get the biggest Feb on Feb drop in housing sales in US history, a drop that would be an eye popping 400% higher than last years Feb to Feb drop.

Lat year had the biggest January to June inventory increase in history. Last month had the biggest price drop in 40 years.

If this is a positive for housing, I'd hate to see a negative.
Paul | 03.24.08 - 1:52 pm | #

azurite writes:
Do the February numbers represent completed sales or sale contracts that could still be canceled w/forfeiture of deposit?
azurite | 03.24.08 - 2:01 pm | #

jd writes:
The housing number the street is rallying off is more hocus-pocus attributed to seasonal adjustments. On a YOY% basis, home sales have plunged over 24%! Yup, that is good news isn't it. And that is with home prices falling 10%! Imagine what happens when they fall another 10%...
jd | 03.24.08 - 2:08 pm | #

Pondering the Mess writes:
Prices more realistic in the Northeast? No way! We've seen, oh, maybe a 10% drop from peak here in MD - and that is after more than doubling the price of housing in the past 7 years. Incomes, of course, are going nowhere.

Here's my own theory: there is more of a case of "keeping up with the Jones" here in the Northeast vs. most other places in the nation. So, we have a greater number of knifecatchers getting "bargains" that they still can't afford just to avoid the horrible stigma of being a "bitter renter" and living within one's means.
Pondering the Mess | 03.24.08 - 2:26 pm | #