Yoski

18 Comments

    • Inflation Concerns? That's So Yesterday [view article]
      "In other words: inflation without the wage growth component. This means even greater government deficits. "
      Most importantly this means a reduced standard of living for the vast majority of us.
      If we would let poorly run businesses fail instead of bailing them out we might stand a chance to get back on our feet after a while, no matter how painful in the short term. Nationalizing poorly run business and piling onto the debt like there's no tomorrow will guarantee us that we will be a much poorer nation for generations to come.
      While we're at it we should also nationalize brothels, that way at least we can make some money while getting screwed.       Sep 17 06:43 AM
    • Last Gasp of a Doomed Currency [view article]
      "The feedback I have received from people I know in the real-estate Industry is that prices of both bank-owned and non-bank owned properties have bottomed out."
      But they've been saying that every month for the last 2 years. I'd figure eventually even the most gullible people catch on to that. Guess I figured wrong.       Sep 14 06:24 PM
    • Six Situations to Monitor for the Remainder of 2008 [view article]
      $4 trillion later and the guy that master minded the 9/11 attacks is still free. Country bankrupt, economy and banking system failing. Mission accompilshed!
      America despeartely deserves everything it has coming to it!       Sep 09 08:22 PM
    • Welcome to the Mortgage Business [view article]
      The cost to the taxpayer will be more like $200-300 billion given the current state of affairs (5% losses on $5 trillion in assests).
      "To promote stability in the secondary mortgage market and lower the cost of funding, the GSEs will modestly increase their MBS portfolios through the end of 2009."
      This means there will be substantially more questionable mortgages added from now until the end of 2009 and probably well beyond. Banks get to off load all their junk and in addition get to make more sub-prime mortgages. They get to keep the profits and unload the risk right onto the taxpayer. In the end it will probably cost in excess of $1 trillion dollar and might only stop once the US government is insolvent. Let's not forget, in addition we have to bailout auto makers, airlines, monolines and foreign countries we tend to invade from time to time. The leading edge of the boomers is taking early retirement this year. In the end, the only way this can be paid for is the monetization of debt, ie. hyper inflation. It might be another 10-15 years before this happens, but the ground work is being laid today.       Sep 09 06:36 AM
    • The Merits of Staying in Cash [view article]
      "We can produce synthetic oil from natural gas and coal for an average of $65 per barrel"
      Wishful thinking, nothing more. These days it costs about $100 a barrel to produce oil from tar sands, deep water or coal. Natural gas is an alternative, sure. But it is not overly abundant either. Most of it gets used for power generation and heating. Oil service companies are still a decent investment looking forward. Especially oil rich regions that don't have a clue about technology (Venezuela comes to mind) will hire those companies to get production moving again.       Aug 22 06:05 AM
    • Market Outlook: It's Still All About Housing [view article]
      DougM
      " Do you think the commodity bubble is done? "
      I don't think commodities are a bubble. The stuff is scarce and getting scarcer, long term demand is increasing. A typical supply-demand squeeze. Once the price gets too high something breaks...like the world economy. Then demand drops as do prices. That's what we're currently experiencing. Things stabilize for a while. Then demand starts increasing again while supply has been droping all along. You get the next price spike and the economy will contract again, prices will drop again, etc.. I'll wait a bit longer for commodities to pull back and the economic situation to stabilize, then I am back in full force.       Aug 14 06:14 AM
    • Some Real Talk on Housing [view article]
      Once the housing bubble deflates it will most certainly overshot the trend line because:
      1. That's what bubbles do when they deflate.
      2. Declining real incomes of most Americans (affordability)
      3. over supplied market (vacancy rates)
      4. much tougher lending standards
      5. Houses will again be viewed as places to live, not investments
      6. housing will be completely discredited as an investment
      7. far flung places in the burbs will be nearly worthless as the energy crisis takes a hold
      The housing bust still has a long ways to go and will overshoot 2002 levels be a long shot. It will also take a long time to recover. Keep on dreaming about a V shaped bottom. Not going to happen.       Aug 01 06:16 AM
    • Realtors, Prepare to Lose Your 6 Percent [view article]
      I see a lot of angry 6%ters are chiming in. Time to get a real job. A Real Estate Agent is about as obsolete as a travel agent or a used car sales agent. I always avoided those leeches like the plague but I have to admit it is difficult doing so because 90% of all properties are listed with agents. So you are usually out of at least 3% of the purchase price. May 30 04:40 AM
    • Fannie Mae - Or May Not [view article]
      The "Plunge Protection Team" can only put lip stick on a pig for so long. Ben at the FED pawn shop is already taking in gun, tools and old jewlery as colleteral to make payday loans for broke bankers.
      Eventually the government will be hit by too many players that are too big to fail. There won't be enough money to bailout all that needs bailing out. Investors around the world aren't likely to throw any more good money after bad (even so I underestimated the stupidity of foreigners before). At this point government will only have 2 equally bad choices left. Let'em eat cake or print more money. My guess is they'll print more money.       May 09 06:40 AM
    • In Need of Serious Repair: The U.S. Mortgage Finance System [view article]
      I mostly agree with the article. Securitization passes the risk off to somebody else. This creates an environment of excessive risk taking since brokers and lender are largely isolated from the repercussions of their actions.
      I live in Miami and are familiar with the local real estate market. In the end probably around 90% of unmodified subprime loans will fail with recovery rates of around 30-40 cents on the dollar. The losses are far from over.
      Freddie Mac and Fannie Mae need to be abolished. Other capitalist economies do just fine without government interfering with the credit markets. All they do is to artificially drive up the price due to excessive liquidity. Look what happened to college tution since the inception of Ginnie Mae. Besides creating a default risk for taxpayer it also drives up prices for housing and education.
      Looks to me like a bunch of failed specuvestors were commenting on your article earlier. Keep up the good work.       May 06 08:25 AM
    • An Alternative Script for NAR's Chief Economist [view article]
      “If you paid your mortgage off, it means you probably did not manage your funds efficiently over the years,”
      If you lost you life savings gambling on real estate you probably did not manage your funds efficiently over the years.
      Now that's what I call a paradigm shift....bwaaaaaahhh!!...       Apr 25 06:27 AM
    • AIG, Fannie and Freddie Put the Crunch on Condo Mortgages [view article]
      A friend of mine lives in a 2/2 condo in Bal Harbour (Miami area). She rents it at $1600/month. Taxes run $1000/month, HOA are $600 and special assesments (roof, elevators, swimming pool, etc) are another $250. That's a grand total of $1850/month in operating expenses. Even without considering the mortgage the place is a 1600-1850=<250> a month liability. How much would you pay for a place that COSTS you $250/month when rented? Certainly not anywhere close to the $600K aksing price. Personally I wouldn't pay $1 for it. Apr 22 07:02 AM
    • The Decline in Median House Prices Sets New Record [view article]
      In Miami we still have another 50+% to go considering current price levels. That would put us back to 2000 prices. A 1200 sqft 2/1 slum dwelling is still offered (not sold) @ $200K, down from $350K at the peak. Realistically it might be worth $60 - 80K, that's about all you can afford if you make $10/hr and have 2 incomes. Since it appears that sanity has returned to banks lending standards there's absolutely no financing out there for those type of properties unless you have 20% down. Prices still have a very long way to fall here in Miami. Apr 03 06:36 AM
    • The Moral Hazard of Creditors [view article]
      "Regulators can make clear that recently withdrawn funds will be pursued aggressively, in order to treat all creditors equitably. It makes less sense to stage a run on the bank if you know that the bank will come right back and stage a run on you."
      That's not going to work. Once the horse left the stable it's gone for good no matter how aggressive the bank or regulators will pursue it. By the time they catch on chances are that money already found a new home on far away shores. Good luck with that pursuit!       Apr 02 07:15 AM
    • How Far Will House Prices Fall? Implications From the Latest WSJ Survey [view article]
      Prices will return to levels where people can afford to buy again. With exotic mortgages gone and wages increasing less than inflation, home prices will return to the long term mean of price/income ratio. Bailouts and other government intervention can stall this process and spread it out over a longer period, the end result will be the same in any case. Personally I would prefer a short but sharp decline rather than spreading it out over a decade or more, see Japan. Apr 02 06:40 AM
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