Beat And Battered

Time for another get together. Mark your calendars, cancel your trips, and tell the inlaws to buzz off.

This Saturday, August 2nd at 5pm
Shannon Rose - http://www.theshannonrose.com/
98 Kingsland Road, Clifton NJ

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From Bloomberg:

Hamptons Home Prices Fall on Wall Street Jobs, Economic Outlook

Home prices in the Hamptons, the summer haven of New York financiers and socialites, fell almost 12 percent in the second quarter from a year earlier as Wall Street firms cut jobs and the economy teetered near a recession.

Sales dropped 26 percent and the median price slid to $970,000 in the resort towns on the East End of Long Island, New York-based broker Prudential Douglas Elliman Real Estate and appraiser Miller Samuel Inc. said in a report today.

“We used to think of the Hamptons as insulated and that’s not the case,” said real estate developer Arthur Rauscher, who is trying to sell his four-bedroom custom-built East Hampton house for the second time in three years. He’s asking $1.3 million and hasn’t received any offers. “It’s not what it used to be.”

The housing slump is hitting the Hamptons as financial firms have announced more than 76,000 U.S. job cuts sparked by mortgage- related losses and writedowns. The nation’s economic expansion may slow to the weakest pace in six years in the fourth quarter, according to a Bloomberg News survey, and New York Governor David Paterson has said a 20 percent drop in securities industry bonuses this year will cut state revenue by $700 million.

Homes in the Hamptons — where billionaire Ronald Perelman, director Steven Spielberg and “Sex and the City” star Sarah Jessica Parker own — took an average of 143 days to sell in the quarter, up 18 percent from a year earlier, said closely held Miller Samuel. The company appraised more than $5 billion in property in the past year. Sellers in towns including Southampton, Quogue and Amagansett got an average of 9 percent less than their final asking price.

Time for another get together. Mark your calendars, cancel your trips, and tell the inlaws to buzz off.

This Saturday, August 2nd at 5pm
Shannon Rose - http://www.theshannonrose.com/
98 Kingsland Road, Clifton NJ

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From the WSJ:

Amid Housing Slump, Glut Eases Slightly
Rising Foreclosures, Tighter Credit Still Pushing Down Prices; Economists Don’t Expect Big Boost From Congressional Package
By JAMES R. HAGERTY
July 29, 2008; Page D1

The number of homes on the market is finally falling in much of the U.S., but tight credit and a flood of foreclosures are still pushing home prices down.

Making things worse, a sputtering economy is destroying jobs. That means even more foreclosures and fewer potential home buyers.

Mark Zandi, chief economist at Moody’s Corp. Economy.com, says he doesn’t expect a major rebound in home sales and prices before the spring of 2010. “The recovery will vary considerably across the country, with California recovering quickly and Florida much more slowly,” Mr. Zandi says.

“We have the added weight of a recessionary economy” on what was already the weakest housing market since the 1930s, says Jeffrey Otteau, president of Otteau Valuation Group, an East Brunswick, N.J., appraisal firm. He says the market won’t recover fully until employment starts growing again and credit becomes more readily available.

The Wall Street Journal’s quarterly survey of housing data in 28 major metropolitan areas showed that the supply of homes listed for sale declined from a year earlier in 19 of them. (See table on the back page.) If that trend continues, it will signal an eventual rebound. For now, though, supplies remain so ample that potential buyers generally can take their time.
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Perhaps the biggest factor pushing down home prices is the growing glut of foreclosed homes that banks and mortgage investors must sell. In May, such homes accounted for nearly 22% of all sales nationwide, Barclays Capital estimates in a report released last week. In California, Arizona and Nevada, the share was around 40%.

There are about 721,000 foreclosed homes on the market nationwide, up from 112,000 two years ago, Barclays Capital estimates. Analysts at Barclays expect the total to rise 60% before peaking in late 2009.
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Many potential buyers are on the sidelines because they no longer qualify for a mortgage under today’s tougher standards. “They’re having to clean their credit up” and save for a down payment, says John Wood, who owns Re/Max Partners, which operates in the Raleigh, N.C., area. “That is certainly hurting our market.”

Those who can get a loan are finding it more expensive. Rates for 30-year fixed loans that conform with the standards of Fannie and Freddie last week averaged 6.69%, up from 6.55% a month before and about even with the year-earlier level, according to surveys by HSH Associates, a financial publisher. For “jumbo” mortgages, those too large to be purchased by Fannie or Freddie, rates last week averaged 7.70%, up from 7.65% a month earlier and 7.02% a year before, HSH says.

As always, the market varies considerably from city to city and even block to block. The most attractive neighborhoods with short commutes and excellent schools are holding up well.
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Manhattan, a market that until recently seemed immune to the housing slump, is suffering from the loss of Wall Street jobs and expected cuts in bonuses. A modest price fall in 2009 is “a distinct possibility” for Manhattan, says Jonathan Miller, chief executive officer of Miller Samuel, an appraisal firm based in New York. Jeffrey Jackson, chief economist at the appraisal firm Mitchell, Maxwell & Jackson, says prices already have fallen on mediocre Manhattan apartments — such as those that have little natural light or need repairs — and are likely to fall further. “Demand is very weak right now,” he says.

Point of order:

A] Almost 600$ in sales Thursday – me likes.

B] Got a call from a former woman (would link her blog but that would be foul-lol), she don’t call unless she wants something. Aint talked to her in a while. She asked me to pay for her tuition (gumption) – I said no. Couldn’t figure out why she would ask me instead of the one she is talking to and desires. Guess prior post was prophetic – go figure.

C] Not sleepy, so made a rib eye and fried 3 eggs at 145am. – Yummy. And don’t forget 5 pieces of bread.

D] Babz blessed the shop, and started taking pictures like the blogger she is LMBAO. She partook in vino.

Was gonna have another thought amnesty today since a many folk say i’m deep or that I think to much, or that I just plane ole hate when I go on my thought crime spree’s. I was either gonna put up the speaking Memphisian #2 or Riddle me this #3. But I decided against such. As you read under point of order A, I have a penchant for paying myself. Now that said, I am reminded of how I have been taught what money was, how to use it and more importantly How to save it. Now I have not nor did I have a desire to watch the talking heads CNN producers aggregated for rating purpose, talk out the side of their necks about what I suspect many already know and experience. Not to mention the folks likely didn’t represent me nor my beliefs and that if it is on TV, it will eventually, like in math, be reduced to the least common dominator of Entertainment.

Now of all folk, I know it’s hard for the average person in America. I know that the value of the dollar aint like it used to be. I know that many of us struggle just to keep a roof over our heads – I know I do. But what I don’t understand is how and why folks say it is hard and even difficult to save.

I mean it seems we have loot for what we want, but not what we need. Sure like I said it is hard, but not that hard. I figure that if a person goes out to a club or bar (which is cool) they will spend somewhere between 20 to $30 on the low end. That’s reasonable. But if we do it twice a week or four times a month, that’s about $2080 to $3120 a year in the first example and $960 tom $1440 a year in the second. Believe it or not that is a lot of loot if such habits persist for 3, 5, 7 years – for which many of us do.

Sure you are or may say it is easy for me to talk, I got a PhD. True I do, but even before then I saved my money. Yea I invest, which think a lot more folk should do, and I see the volatility in the stock market, but I did so since high school and my family didn’t teach me that. I aint never need a flashy car or nothing and I have never had a desire to go to a club and covet the VIP section nor make it rain on a stripper. If I did have the urge to make it rain, it would likily be on a homeless person or in homeless shelter.

Then we add to the problem, for we don’t even recognize how our loot is degraded in meaning. We can go to a club and be made to pay valet parking, and pay $20 to get in when on the regular or for lack of a better descriptor – on white night, one can park they car and walk in free. We don’t even complain, we just stand in line and pay. And don’t let it be a party where some rapper or professional athlete gone be claimed to attend, then we just plum loose our fucking minds

I guess what I am saying is that its cool to enjoy life and make money, but it is not as hard as you think to save it. For although my folk aint invest or teach me how to, they did teach me how to save and that money was to make money and not to spend. Are we the only ones in capitalistic America that cant grasp this concept?

From Bloomberg:

Sales of U.S. Existing Homes Fell to 4.86 Million Rate in June

Sales of previously owned U.S. homes fell in June to the lowest level in a decade, signaling tumbling real-estate prices and consumer confidence are hurting demand.

Resales dropped 2.6 percent to a lower than forecast 4.86 million annual rate from a 4.99 million pace the prior month, the National Association of Realtors said today in Washington. The median home price dropped 6.1 percent from June last year.

The biggest housing recession in a generation, now being exacerbated by a tightening in credit and rising borrowing costs as financial losses spread, threatens to stall economic growth. Mounting foreclosures are depressing home prices even more, prompting some buyers to hold out for bigger bargains.

“People are waiting until prices hit bottom, and credit is still difficult to obtain,” Gus Faucher, director of macroeconomics at Moody’s Economy.com in West Chester, Pennsylvania, said before the report. “We expect to see home sales fall further.”

Economists forecast home resales would fall to a 4.94 million pace, according to the median of 77 projections in a Bloomberg News survey. Estimates ranged from a 4.79 million pace to 5.1 million rate.

From CNBC:

Existing-Home Sales Skid To 10-Year Low in June

Sales of existing homes fell a bigger-than-expected 2.6% in June to a 10-year low, an industry group said, as the housing industry continued to be bruised by the worst slump in more than two decades.

The National Association of Realtors reported sales dropped to a seasonally adjusted annual rate of 4.86 million units. That’s more than double the expected decline.

It leaves sales 15.5 percent below where they were a year ago.

The downward slide in sales is depressing prices, too. The median price for a home sold in June has dropped to $215,100, down by 6.1 percent from a year ago.

That was the fifth largest year-over-year price drop on record.

From Reuters:

Existing home sales fall 2.6 percent

The pace of existing home sales in the United States fell in June to a 4.86 million-unit annual rate, the National Association of Realtors said in a report on Thursday that saw the sales volume hit a 10-year low.

Economists polled by Reuters were expecting home resales to fall to a 4.93 million-unit pace, from the 4.99 million rate initially reported for May. The June rate was the lowest since a 4.83 million rate in early 1998, the Realtors said.

The inventory of homes for sale held steady at 4.49 million homes or an 11.1 months’ supply at the current sales pace. The median national home price declined 6.1 percent from a year ago to $215,100.

From MarketWatch:

Existing-home sales fall 2.6% to 10-year low

Resales of U.S. single-family homes and condos fell 2.6% in June to a seasonally adjusted annual rate of 4.86 million, the lowest level in 10 years, the National Association of Realtors reported Thursday.

Resales have sunk 15.5% in the past year and are down about 33% from the peak in 2005. The pace of sales has been relatively stable since last August at around a 5 million annual pace.
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The inventory of unsold homes on the market rose 0.2% to 4.49 million, an 11.1-month supply at the current sales pace, the second-highest inventory level since the mid-1980s.
The median sales price fell 6.l% in the past year to $215,100.

Sales of single-family homes fell 3.2% to a seasonally adjusted annual rate of 4.27 million, the lowest since January 1998. Sales of condos rose 1.7% to an annual rate of 590,000, the highest since November.

About a third of sales are distressed sales, either foreclosures or short-sales. Many foreclosures aren’t included in the data at all because they are not sold through the realtors’ multiple-listing service.

From the AP:

Existing home sales fall 2.6 percent in June

Existing home sales fall 2.6 percent in June, more than double the expected amount

Preliminary June sales and inventory data for Northern New Jersey (GSMLS) is in. Please note that this data is subject to revision.

The first graph plots the unadjusted sales data (closed sales) for the counties listed. Please note the lower bound of the graph, it is set to 500, not to zero. I do this to emphasize the seasonal nature of the Northern NJ market.

(click to enlarge)

The second graph is another view at the sales data for the full year. Please note that this graph does cross at zero.

(click to enlarge)

The third graph displays only June sales, 2001 to 2008 YOY.

(click to enlarge)

The fourth graph displays an overlay of Sales and Inventory from 2003 to 2007.

(click to enlarge)

The fifth graph displays the year over year change in inventory on a month by month basis.

(click to enlarge)

The sixth graph displays the year over year change in sales on a month by month basis.

(click to enlarge)

The last graph displays the absorption rate (not seasonally adjusted), in months:

(click to enlarge)

Bonus Graphs!

(click to enlarge)

(click to enlarge)

From the NY Times:

Given a Shovel, Americans Dig Deeper Into Debt

For decades, America’s shift from thrift could be summed up in this familiar phrase: When the going gets tough, the tough go shopping. Whether for a car, home, vacation or college degree, the nation’s lenders stood ready to assist.

Companies offered first and second mortgages and home equity lines, marketed credit cards for teenagers and helped college students to amass upward of $100,000 in debt by graduation.

Every age group up to the elderly was the target of sophisticated ad campaigns and direct mail programs. “Live Richly” was a Citibank message. “Life Takes Visa,” proclaims the nation’s largest credit card issuer.

Eliminating negative feelings about indebtedness was the idea behind MasterCard’s “Priceless” campaign, the work of McCann-Erickson Worldwide Advertising, which came out in 1997.

“One of the tricks in the credit card business is that people have an inherent guilt with spending,” Jonathan B. Cranin, executive vice president and deputy creative director at the agency, said when the commercials began. “What you want is to have people feel good about their purchases.”

Mortgage lenders took to cold-calling homeowners to persuade them to refinance. Done to reduce borrowers’ monthly payments, serial refinancings allowed lenders to charge thousands of dollars in loan processing fees, including appraisals, credit checks, title searches and document preparation fees.

Not surprisingly, such practices generated dazzling profits for the nation’s financial companies. And since 2005, when the bankruptcy law was changed, the credit card industry has increased its earnings 25 percent, according to a new study by Michael Simkovic, a former James M. Olin fellow in Law and Economics at Harvard Law School.

The “2005 bankruptcy reform benefited credit card companies and hurt their customers,” Mr. Simkovic concluded in his study. He said that even though sponsors of the bankruptcy bill promised that consumers would benefit from lower borrowing costs as delinquent borrowers were held more accountable, the cost of borrowing from credit card companies has actually increased anywhere from 5 percent to 17 percent.
…
Just two generations ago, America was a nation of mostly thrifty people living within their means, even setting money aside for unforeseen expenses.

Today, Americans carry $2.56 trillion in consumer debt, up 22 percent since 2000 alone, according to the Federal Reserve Board. The average household’s credit card debt is $8,565, up almost 15 percent from 2000.

College debt has more than doubled since 1995. The average student emerges from college carrying $20,000 in educational debt.

Household debt, including mortgages and credit cards, represents 19 percent of household assets, according to the Fed, compared with 13 percent in 1980.

Even as this debt was mounting, incomes stagnated for many Americans. As a result, the percentage of disposable income that consumers must set aside to service their debt — a figure that includes monthly credit card payments, car loans, mortgage interest and principal — has risen to 14.5 percent from 11 percent just 15 years ago.

By contrast, the nation’s savings rate, which exceeded 8 percent of disposable income in 1968, stood at 0.4 percent at the end of the first quarter of this year, according to the Bureau of Economic Analysis.

More ominous, as Americans have dug themselves deeper into debt, the value of their assets has started to fall. Mortgage debt stood at $10.5 trillion at the end of last year, more than double the $4.8 trillion just seven years earlier, but home prices that were rising to support increasing levels of debt, like home equity lines of credit, are now dropping.

Addendum: Pic to rt.

Point of order: If u dont know y this blog is raw dawg buffalo, u will now. I dont melt under rain nor word.

I am an optimist true, but I have denied inside, that we can make it if we try, for I have failed to acknowledge that we aint EVEN trying. I am putting down what I am reading now to write what I’m finna (im country) write now. I only had about 45 pages of Pursuit: the chase, capture, persecution & Surprising Release of Confederate President Jefferson Davis. Really I have finished the text, I am just going through the 40 or so pages and 270 sum odd footnotes, to check the authors (Clint Johnson) interpretation of the events depicted - great read. In fact checking the footnotes is the best part of reading to me cause you find out about other books. Any who, im finna stop because my blog rounds lead to such. And forgive me if I don’t know when to stop because Im listening to Chuck Brown and the Soul searchers “Midnight Sun.” Appropriate cause I hope I can make some of yawl search yawl souls, which in my case is integrated with time, thought and the ability to reason.

We got to get out shit together folk. I mean, I went around the blogoverse over the last few days and all jones hear saw and read was either about Jesse Jackson, The cover of the New Yorker or Mr. Obama. Like dang folk, are we that myopic, limited in our intellectual sphere to consider such to be super important, as if these topics are all we can think about? Or as if they (these issues) were like melanin – super ferrous magnetic. Shit jones, folks could be about to start slavery back in affect and we on the hook, line and sinker tip still. What gives? When will we value free thinking and look for ourselves as opposed to respond to what other dangle in front of us. They say the Bass is a smart fish, but I never figured he was smarter than us. They don’t bite at anything, even if it right in front of their face.

So your outrage over a satirical drawing or an obsolete former jones who ran for president is unwarranted, I mean is it important? Shole aint interesting. But get outraged while jones her say fck that shit mane. What does it do or what purpose does it serve? Chances are folks who think about Obama that way still and would have if they never did it. That Don’t do jack for me. So yawl go ahead, cause Im more concerned about China, the Juan and global inflation. You see the way they control they currency rates, in concert with how fast their economy is growing may be bad for the world, especially US in the country of the New Yorker magazine.

I mean, in my junior high civics class, we talked about inflation and other stuff a lot albeit I don’t know what Civics is to this day, I do recall the hodge podge of subjects it encompassed. From what I learned, if China keep on growing like they are, they can boost the current level of inflation else where cause the gone need more stuff (raw materials) to feed their growth.

Seeing that we in the US have cut interest rates, its gone be hard for China to raise the value of the Juan – since it is pegged on the dollar. This means if oil don’t come down, an increase in the value of the Juan would mean the stuff they send here that we buy like crack (cellphones, TV’s. Cars, Steel, MP3 players and CDs) will make them a lot more expensive and hard for yawl to purchase. They done had the earth quake and some food shortages too – could be on like pop corn. Cause its already real in the field.

So Jones, don’t think for me mane, or tell me what I am supposed see or feel when I read or see an image. Cause im like, fk that shit, Midwest air lines just laid off 1400 workers and we dont know how many GM finna lay off. Its cool if yawl wanna be outraged over a magazine cover that I doubt many yawl read. Care about what impacts you for real though. So with that said, go find your self some Chuck Brown and get that head right and soul search with the master. Other wise, go and suck down some Juan Ton Soup, oh I mean Won.

From Bloomberg:

New 20% Down Payment Makes Savers From Profligate U.S. Spenders

The U.S. housing crisis may accomplish what years of parental hectoring couldn’t: Turn Americans from spenders into savers.

Spending will fall because homeowners can no longer use rising real estate values to borrow cash — $837.5 billion in 2006, according to a report by former Federal Reserve Chairman Alan Greenspan and James Kennedy. With mortgage lenders requiring down payments of 20 percent, the average household, which puts away less than 1 percent of after-tax pay, will have to save 10 percent for 10 years to buy a home.

The housing market shaved almost 1.6 percent off gross domestic product growth in the first quarter and cut in half the growth rate of consumer spending, which accounts for more than two-thirds of the economy, said Mark Zandi, chief economist at Moody’s Economy.com in West Chester, Pennsylvania.

“The loss of housing wealth is the difference between a recessionary economy and a growing economy,” said Zandi, an adviser to presumptive Republican presidential nominee Senator John McCain. “Consumers have powered the global economy for the past 25 years. For the foreseeable future, maybe the next 25 years, the savings rate will move higher.”

The worst housing crisis in at least a quarter century still has a long way to go, Zandi said. It will take until 2015 for the median home price to return to its July 2006 peak of $230,200, while home sales and residential construction will never again reach the record highs of 2005 and 2006, he said.
…
The residential housing decline will “change the structure” of the U.S. economy by forcing Americans to save, said Neal Soss, chief economist at Credit Suisse Group in New York.

“The days of wine and roses are over,” said Soss, who worked at the Federal Reserve for former Chairman Paul Volcker in the 1980s. “We were drunk on money. Getting sober is a painful process.”

From the LA Times:

Fed slaps new rules on mortgage lenders

The Federal Reserve clamped down hard on mortgage lenders Monday, issuing rules designed to curb the sorts of risky and deceptive lending practices that helped trigger the subprime mortgage crisis.

The Fed’s action, although criticized by some for not going far enough, was widely seen as a crucial step in reasserting control over a financial market that had been allowed to run wild.

“There’s lots more to come,” said Thomas Lawler, a former Fed official who is now a housing market consultant. “The pendulum is clearly swinging toward more regulation and more government involvement.”

The central thrust of the new rules is to restore sound underwriting practices, such as requiring lenders to verify that borrowers actually have the income and assets to make their loan payments.

The regulations adopted Monday were significantly stiffer than draft proposals issued six months ago, reflecting regulators’ intensifying concern over the fallout from the free-for-all lending that helped create the bubble in home values and led to the mortgage meltdown.
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In adopting the new rules on mortgage lending, Fed Chairman Ben S. Bernanke traced the lenders’ woes back to their own practices.

“Although the high rate of delinquency has a number of causes, it seems clear that unfair or deceptive acts and practices by lenders resulted in the extension of many loans, particularly high-cost loans, that were inappropriate for or misled the borrower,” Bernanke said in a statement.

The new rules take effect Oct. 1 and will apply to all mortgage lenders, brokers, servicers and banks, not just those already regulated by the central bank.

“These rules are a step forward in returning common-sense business practices to the subprime lending market,” said Paul Leonard, director of the California office of the Center for Responsible Lending, a nonprofit advocacy group.
…
The Fed’s final version of the regulations were much more stringent than draft proposals issued late last year. The new rules include four measures aimed at targeting abuses in the subprime mortgage market, which has been largely unregulated because the loans are securitized and held by private investors.
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Reinhart of the American Enterprise Institute said the rules also reflected an about-face from the relaxed attitude toward mortgage lending that prevailed under former Fed Chairman Alan Greenspan.

“Alan Greenspan believed in the light hand of regulation. How he put that in place was in not moving at all, and that turns out not to be desirable,” Reinhart said. “So now the government is taking an active role.”

Point of order: Sorry for delay in post, forgot I was still a scientist and had two journal articles to proof and correct for Health Education Journal and Global Public Health

Now since I was finally able to post Recess – is- on and PP (which were written in April), back on the grind, which you know in most cases means loot. I am kind of frustrated with America, I mean we aint got what it takes it seems anymore. I can understand how K street gets politicians in a bind but I can’t understand why regular folk don’t see why things are the way they are economically.

We are big on crying and asking folks to do for us, but we never have a good understanding of first what needs to be done or even what or how serious the problem is. Come this November, after the general election, well really before, I hope we can come to an understanding of the aforementioned.

This country has not been in this bad of shape economically since the 1920s and 1030s. I’m sure some will disagree with me, but this is just my opinion. Right now, at least based on numbers from two years go; our domestic financial debt was more than 14 trillion dollars. Fourteen trillion. Today I suspect it is maybe 4 or 5 trillion more, but there aren’t any real numbers available, just estimates so I made my own.

And although we talk about the housing market as being a major contributor to this problem as well as multiple wars, the truth is that the financial sector is mostly to blame, along with republican and democratic leadership at the legislative and executive level. For as I said before, with regulatory constraints basically removed, this created an environment for this particular sector of our economy to go buck wild. Bill Clinton repealed the Glass –Stegall Act and bam.

Long time ago, there were regulated fees for Credit Cards for example, now they can make up fees and even charge you for paying on time or even if you pay off your monthly balance. Don’t even throw in the outrageous and wide ranging interest rates credit card companies (the financial sector) can charge, that is a whole ‘nother story. But to sum it all up, this is where the problem lies. We didn’t have this type of concern when America made stuff and had a strong manufacturing base. Since the financial sector has replaced manufacturing as our largest industry, our national debt has sky rocketed. This sector alone accounts for more than 30% of all of our national debt. Namely as a result of what is called Securitization or what can be called collateralizing debt obligation

Like I said back in the 20s and 30s when we saw similar problems, the national debt was about 250% of our gross domestic product. Today it is about 350%. What does this mean, well in simple terms, maybe a 10% reduction in the values of our houses for those of us who own one, commodity inflation (as mentioned in a prior post) and a 500 trillion dollar debt, which will eventually come back to bite us in the ass one day. I think that is one of the reasons I don’t have an ATM card. Never had one ever. So they next time you go to an ATM machine, just remember that the $3.00 they charge you to use it, is just adding to our national debt. Three cheers for the financial sector. Hip Hip Hooray.

Addendum: Love the fact folks can come in shop with dogs and kids, lay up and drink wine for free – they always end up buying stuff.