Headlines...

NEW -> Contingent Buyer Assistance Program
Couple of interesting tidbits from the OC Register today:





Article No. 1:


Headlines: O.C. Home inventories skyrocket.





Quote:


"Recent jitters in world financial markets helped nudge the inventory of Orange County homes for sale past one year's worth of current demand, according to a report by Steve Thomas at Re/Max Real Estate Services in Aliso Viejo.


<strong>By Thomas' calculations, as of Aug. 24, it would take 12.12 months for buyers to purchase all existing Orange County homes listed for sale at the current pace of deals vs. 9.76 moths two weeks earlier and vs. 6.79 months a year ago.</strong>





Article No. 2:


Headline: O.C. auto sales drop 10.2% in July and 6.8% year to date.





Quote: "Sales of cars and trucks in Orange County continued their downward journey in July, falling 10.2 percent for the month and 6.8 percent through the first seven months of 2007 compared with 2006...<strong>Making the new ever worse is the fact that 2006 auto sales fell 6.1 percent from 2005.</strong>"





There are also the national headlines of:





1) Home prices falling 3.2% in the second quarter.





<a href="http://www.cnbc.com/id/20475524">www.cnbc.com/id/20475524</a>





BTW: That's before the "credit crunch occurred"





2) Lowest Consumer Confidence levels in a year.





<a href="http://www.cnbc.com/id/20476406">www.cnbc.com/id/20476406</a>





Dominoes. . . fun game, not so fun economics.
 
<p><em>1) Home prices falling 3.2% in the second quarter.





</em><a href="http://www.cnbc.com/id/20475524"><em>www.cnbc.com/id/20475524</em></a></p>

<p>Too much schadenfreunde today. That made me smile even though my stocks are being kicked in the groin.</p>
 
<p>Fed Minutes: <a href="http://www.federalreserve.gov/fomc/minutes/20070807.htm">http://www.federalreserve.gov/fomc/minutes/20070807.htm</a></p>

<p><em>The recent strains in financial markets posed additional downside risks to economic growth. Members expected a return to more normal market conditions, but recognized that the process likely would take some time, particularly in markets related to subprime mortgages. However, a further deterioration in financial conditions could not be ruled out and, to the extent such a development could have an adverse effect on growth prospects, might require a policy response. Policymakers would need to watch the situation carefully. For the present, however, given expectations that the most likely outcome for the economy was continued moderate growth, the upside risks to inflation remained the most significant policy concern. In these circumstances, members agreed that maintaining the target federal funds rate at 5-1/4 percent at this meeting was appropriate. </em></p>

<p>Translation: Yeah, we know some people are going to get f***ed, but we have bigger things to worry about.</p>
 
<p>Eff said: <em>Calculated Risk has discussed auto sales in the past. It's one of the more reliable leading indicators of general recession.</em> </p>

<p>That is so true now watch retail sales and retail jobs. If they continue to struggle it is almost guaranteed there will be a recession. It happens every time.</p>
 
Last I heard, it was doing better than projected. I expect a long bear market in RV's due to demographics, though. We still have a few more years before boomer retirements really get cookin'.
 
<p><strong>Subprime Mortgage Crisis Spreading to High-End Housing Market</strong></p>

<p><a href="http://biz.yahoo.com/ap/070829/expensive_homes.html?.v=2">http://biz.yahoo.com/ap/070829/expensive_homes.html?.v=2</a></p>

<p>Not exactly breaking news, but a headline nonetheless.</p>
 
<p>Hat tip <a href="http://seattlebubble.com/blog/2007/08/22/suzanne-researched-this-part-2/">Tim at the Seattle blog</a> and Keith at HP for this real life <a href="http://housingpanic.blogspot.com/2007/08/heres-result-of-letting-your-spouse-and.html">suzanne researched it</a>. </p>

<p>Personally I do not think this is the norm, so ladies don't flame me. I just found the audio clip entertaining and I actually can't stand Dr. Laura.</p>
 
California is doomed...





<a href="http://www.bloomberg.com/apps/news?pid=20601087&sid=apbjRCn0Q7iE&refer=home">Bernanke Says Fannie, Freddie Asset Caps Should Stand</a>







 
<p>Inflated prices are doomed. Nuttin' wrong with that.</p>

<p>I hope his resolve (to not raise the cap) remains. It's going to be back to reality for CA housing prices.</p>

<p>SCHB</p>

<p> </p>
 
WASHINGTON (AP) -- Banks increased their borrowing from the Federal Reserve for a second straight week as the central bank worked to deal with a credit crunch that has roiled global financial markets.

<p>The Federal Reserve reported that the daily borrowing averaged $1.315 billion for the week ending Wednesday. That was the highest average borrowing since the attacks of Sept. 11, 2001. The average surpassed last week's average of $1.2 billion, which also had been the highest since the 2001 terrorist attacks.</p>

<p>Last week, four of the nation's biggest banks -- Citigroup Inc., JPMorgan Chase & Co., Bank of America Corp. and Wachovia Corp. -- announced they had borrowed a total of $2 billion</p>
 
<p>Just now joining the blog, what fun!! Full disclosure: I owe a full measure of gratitude to our friend IrvineRenter !!!... he/she helped slap the kool aid away from my lips and remember my own advice regarding this goofy housing market. My fiance and I bailed out of escrow on a home in Lake Forest and it's the smartest damn thing I've ever done!(IrvineRenter -- I'll be sending a more personal thank you shortly, along with details of the sale I walked away from, certainly an interesting case study in a bag-holder!)</p>

<p>A quick comment on the local OC economy and the impact of the housing crash ... Let's not also forget that many of the folks who worked at these loan companies were also either "homeowners" and/or flippers in the local housing market. They were all making money hand over fist ... do you suppose that's happening now? The easy money has evaporated and I would imagine their ability to afford their investment properties and sadly, maybe even their own homes, has gone with the wind. Talk about insult to injury?! So we'll see their homes and investments on the market shortly too because you would have to imagine they drank the kool-aid fully and mortgaged their own futures down the drain too. </p>

<p>I hope they really like that Range Rover they bought cuz they're gonna be living in it soon. Schadenfraude indeed.</p>

<p>Peace. Keep the faith.</p>
 
<p>WoeIsMe - reference RE the mystery trader who made an enormous bet that stocks would fall by 1/3 in Sept... debunks some conspiracies...</p>

<p align="left"><a href="http://www.thestreet.com/newsanalysis/optionsfutures/10377063.html"><u>http://www.thestreet.com/newsanalysis/optionsfutures/10377063.html</u></a> </p>

<p>... and if someone can explain this to me, I'd be much obliged - I have no financial background to speak of.</p>
 
<p>Me again. Speaking of printing money ... did anyone see this little tidbit on TheStreet.com? </p>

<p><a href="http://www.thestreet.com/s/mozilo-cashed-out-at-top-of-market/funds/followmoney/10376833.html?puc=_tsctten">http://www.thestreet.com/s/mozilo-cashed-out-at-top-of-market/funds/followmoney/10376833.html?puc=_tsctten</a>&</p>

<p>Countrywide's CEO has sold the bulk of his stock over the past year or so. Hmm. Did he know something the rest of us poor, unwashed masses didn't? Isn't this kind of thing criminal? Boy would I love to see Sir Schadenfraude nail this bastard! How do these sleezebuckets sleep at night?</p>

<p>On another note ... a much earlier post on this thread discussed the weakening US dollar, generally speaking, against other major world currencies. My question is isn't this sort of a fools errand, race to the bottom kind of proposition? For instance, let's compare to China. We assume a weakening dollar generates foreign investment because their currency buys more $$$. But other markets are suffering massive losses due to the credit crunch, just as our markets are. So from what foreign assets do the investments come? Additionally, we know China artificially suppresses the value of the Yuan (or RMB) to support it's massive export business with the US (among others), which in turn attracts excess US dollars which they then, purportedly, re-invest into the US economy. If our dollar weakens against the RMB, then wouldn't the Chinese gov't have to act to further suppress their currency to maintain export levels? Like I said, a race to the bottom. Or am I missing something fundamental here? (I must admit, I'm not an economist ... but I play one on TV!!! :-) </p>

<p> </p>
 
<p>The socialists at the OCR are at it again with their <a href="http://www.ocregister.com/news/association-estate-real-1837111-housing-mortgage">doom and gloom</a>. Jeff Collins' bitterness of being a renter permeates through out the article. Why can't they talk about all those jobs being created in loss mitigation?</p>

<p>{sarcasm off}</p>

<p>It's a good article and Jeff is a homeowner. </p>
 
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