58robbo

Obama Administration Won't Release Mortgage Modification Figures

"The Making A Home Affordable" program?! Does anyone buy into this nonsense? it's more like "the spending trillions to make sure homes remain unaffordable" program!

U.S. and U.K. Property Bubbles: Bounce, Then Bust Again

end to the stimulus? As much as i'd like to see that, it isn't going to happen. if the current stimulus loses its effect, they'll just create a another bigger one. it is quite clear that this administration doesn't quite care about deficits (neither did bush for that matter). $2trillion or $3 trillion or even $4trillion! what difference does it make?

Three Factors that Will Drive New Home Sales

some people believe this idea that population growth necessarily drives demand for housing is a fallacy. is it not possible that many of these mcmansions will start housing an extra generation or two? what i mean is that is it totally inconcievable that 25yr olds might move back home and retirees might move in with their kids etc?

On Nov 04 01:31 PM Stephen Rosenman wrote:

> clreed1252 and 58robbo:
>
> The point of the piece is that new home sales are depressed far below
> anything that has been seen in most of our lifetimes. If you go back
> through new home sales records that have been kept (about 46 years),
> it is hard to find anything similar. If you take into account the
> growth of the U.S. population, the numbers are even more startling.
> Were new home sales to rise to levels seen at any time in the 1960s
> or 70s, the builders' revenues would be tremendous. Whether a return
> to more normal sales will occur because of tax credit extensions,
> low rates, or simply population pressures, who cares? Quite simply,
> they will. Short term influences may do the job quickly; if not,
> certainly longer term pressures will move these sales back at least
> to those which held firmly for the last 45 years. Currently the eleven
> largest publicly traded builders account for about 17% of residential
> building. Their share prices have been smashed. I don't think that
> will continue.

Three Factors that Will Drive New Home Sales

If you look at demographics, take into account the gargantuan shrinkage in money supply through mortgage delinquency etc and study the velocity of money in todays market. then look at production capacity and supply in my opinion all of this makes a pretty strong argument for deflationists.

the reality is that this administration, the federal reserve and just about every think tank with any sway anywhere believes in the inflationary solution to the economic crisis we find ourselves in.

in the tax credit they have found themselves a relatively popular way of putting cash into the hands of consumers. at a time when the pressure to regulate banking transactions is at fever pitch (which will ultimately remove some cash from consumers), there is no way in hell they will allow this tax credit to die. not now and not in april 2010! in an environment with so much uncertainty, it's hard to predict anything these days. the tax credit however, WILL be extended to everyone soon and i expect it to grow in size. i'd wager the crown jewels on that!


On Nov 04 09:25 AM clreed1252 wrote:

> Two of the three factors this article identifies as driving new home
> sales are almost assuredly short term influences. If Congress does
> extend and expand the tax credits, it will only be until April of
> 2010. Low interest rates are being maintained by the Fed's purchase
> of mortgage backed securities; a practice scheduled to end in March
> of 2010.
> The third factor identified in this article, larger U.S. population,
> is negligible. With unemployment at 9.8% and expected to go higher,
> home buying will remain sluggish.

For Your Perusal: The Glory of Free Market Oil Supply

What an asinine depiction of free markets! for a start western oil supply is not free market. it is laced with subsidies. it doesn't help that price went down to $30 because of demand destruction. obviously physical limitations exist on oil, but supply does always respond to price just not in the way you think of it. i'd argue that when oil sat at $5 the market went looking for alternatives. that is to say that people started car pooling instead of going alone. people switched off the heat in their homes when it wasn't necessary, some people chose to walk, buy prius's, some invested in solar panels and electric vehicles. backyard inventors started coming up with all sorts of ideas. i personally know people in the garden maintenance business, who set up micro palm oil extrusion plants using the trimmings from the gardens they maintained. i'd give more examples but don't have the time right now.

Shiller: More than Stimulus Driving Home Prices Higher

i'd have to inspect that data in greater detail before concluding that like for like homes went up in value. could it not be that the recession affected different income groups at different times and that might've skewed the figures somewhat? be that as it may, there has been a lot of talk about the tax credit driving this market. while i don't disagree with that, i believe that the biggest driver has been the banks distorting the market by witholding supply!

i don't really have a problem with the banks doing this with their own money. what i do object to is the banks holding on with taxpayer money whilst hundreds of thousands if not millions of people are being forced onto the street

the thing which perplexes me most though is the double std. one set of insolvency rules for the common man. rules which force us to liquidate regardless of time and price. then there are insolvancy rules for the big guns who have a direct credit line with the taxpayer for any amount. for this there can be no justification!

Have We Reached Peak Oil?

who knows? the problem is that govt intervention is distorting the markets ability to deal with the potential pitfalls. what do i mean? By subsidizing oil exploration, production and security (through the military) we have transfered the true cost of oil from the consumer to the taxpayer. by doing this, we have led the consumer to make choices they wouldn't otherwise have made were the full cost to be paid at the pump.

Home Sales Highest and Inventory Lowest in More than Two Years

yup, and there's this tower in paris which i have for sale....

Rolling Stone's Taibbi on Naked Short Sales: Close but No Cigar

i think i answered this post in my reply to dialectical above!


On Oct 22 02:52 PM Michael Clark wrote:

> The problem is: they do go running to the government for the bailout.
> That is: the casino runs to the government for a bailout. But is
> the government supposed to protect Las Vegas from the gamblers in
> Las Vegas (when things go wrong)?
>
> Laws exist to protect the lambs from the lions. Lambs get taken in
> quite often by the lions on Wall Street. If we have enough laws now
> to protect the lambs, then so be it. If not, then we need the laws
> to be updated. In fact, one definition of 'civilization' is the updating
> of 'civil laws' over time.
>
> If we have a government that is owned by the lions and is, thus,
> kept from enforcing the laws on the books, then we have a whole different
> problem on our hands. The lions have too much money and power and
> need to be liberated from their excessive influence.

Rolling Stone's Taibbi on Naked Short Sales: Close but No Cigar

i'm well aware what NAKED shorting is Dialectical. the point i'm trying to make is this: the only person who has anything to fear from a naked short seller is the counterparty ie the person to whom you sell the stocks you don't own. As long as they are aware you don't own the stock ie you haven't missrepresented your position (this would constitute fraud) and they are happy that you will be in a position to fulfill your obligations should the stock price rise, i don't see why this needs to be regulated.

this belief that naked shortsellers adversely affect stock prices is also way over stated.

the bottom line is that i don't believe the state should be there to protect people from their own stupidity. i understand that my view is no longer popular in america today or the world for that matter. this worries me because behind every stupid thing people do (smoking, drinking, j-walking, unprotected ---, going into personal debt, driving too fast, eating fast food..... i really could go on all year....) there is a bureaucrat/politician who wants to 'help you' by regulating 'your' behaviour!

unfortunately for me george orwell had a profound effect on my psyche!


On Oct 24 05:49 PM Dialectical Materialist wrote:

> I am not against shorting stocks. I am against naked shorting. <br/>
>
> NAKED short selling is when the shares which are being shorted are
> not borrowed and in some cases DON'T EVEN EXIST. This is a critical
> distinction that it seems you're not getting. If you disagree with
> me, fine, but my argument is not against selling something short.
> It is about selling something that isn't there... and that is what
> is at the root of Karl's article.

Housing Tax Credit D.O.A. Now What?

There is no way on this earth they will allow the tax credit to die. it might change form or be RE-BRANDED but it will not expire. if i were a betting man i'd say that they'll probably double or triple its size and i'd bet the farm that they'll extend it to everyone at the earliest opportunity not just first time buyers.

Rolling Stone's Taibbi on Naked Short Sales: Close but No Cigar

do you think that because someone shorts a stock the price automatically goes down? have you considered that if you short something, you have to first find someone who thinks that the price will go up to sell to. ie when you sell short all you are doing is effectively betting the stock will go down. obviously then the person who you are betting against believes the stock will go up. where i come from that's called a zero sum game.
generally, people only short when they believe something to be overvalued and people go long when they believe something to be undervalued. if the stock in your portfolio is neither, you have nothing to worry about. bears can short your stock all day but fundamentals will eventually prevail.


On Oct 23 11:21 AM Dialectical Materialist wrote:

> I agree that you have to be able to accept the losses and "caveat
> emptor". The problem with naked short selling in particular is that
> others outside of the transaction are affected. You could own all
> 10000 shares of a company valued at $8 a share. I could sell 10000
> shares of that company by shorting them even though I don't own them
> (naked short selling) and this would drive the price down. But there
> is no reason for the value of your stock to drop when you own all
> the shares and you aren't even selling. The fraud I am committing
> (even if I have willing participants on the other end of my transaction)
> is negatively affecting you, the ONLY rightful owner of the shares.
> If the real owner of the Brooklyn Bridge, for example, could not
> find a buyer because several fake Brooklyn Bridges had already been
> sold (likely at ever decreasing prices) then we have a problem. That
> is the nature of what's wrong with naked short selling. It's not
> that your chickens come home to roost. It's that they're not your
> chickens.

Rolling Stone's Taibbi on Naked Short Sales: Close but No Cigar

if you have lied and told parties to the deal that you own the brooklyn bridge, that is fraud. if all the parties are aware that you don't own it and they're willing to take that risk that is their problem.

i really don't see any difference between naked shorting and spread betting for instance. it's all gambling in my opinion, everyone knows it and if you're willing to step up to the table and accept massive gains you have to be able to accept the potential losses. you also have to understand counterparty risk.

caveat emptor


On Oct 22 11:04 PM Dialectical Materialist wrote:

> I can't agree. I can't sell you the Brooklyn Bridge, even if you're
> willing to accept the risk that you can find another sucker to buy
> it from you. It is simply fraud to sell something you don't own regardless
> of whether the buyer is willing to play along or not. Why? Well for
> one thing, ownership is partially defined by who can and can not
> sell an asset. So when a company is having shares of its stock sold
> when they don't even exist (aka naked short selling), it is having
> something it has a right to stolen from it. And stealing is one of
> the few things even libertarians agree has to be a no-no. Without
> laws against stealing, the concept of private property doesn't work.
> This kind of counterfeiting and fraud is simply stealing.
>
> On Oct 22 02:42 PM 58robbo wrote:

Rolling Stone's Taibbi on Naked Short Sales: Close but No Cigar

i still don't believe this should be regulated or outlawed. we're supposed to be living in a free country. if all parties are happy with the risk that their partners are selling naked shorts then so be it. they just shouldn't come running for bailout money.

in gambling terms, if someone walks into a casino and wants to place bets with money they don't have it's up to the casino to decide whether they're happy to take those bets. as an investor in said casino, i understand what the casino's credit policy is and if i'm not happy with that risk i shouldn't invest. likewise if i'm a punter i should question the casino's ability to pay out. if i'm not happy with that risk i shouldn't gamble there.

the big problem with our system is that we seem to outsource some of our most important life decisions without fully researching the risk. we then sit back and pray that bureaucrats have done their jobs.

Commercial Real Estate: The Gathering Storm

there will be no storm! if the residential market is anything to go by, banks will just repo commercial re, board it up and that will be that! the property taxes and maintenance are minor expenses yet the value of this worthless real estate will appear on their balance sheets at 2006 prices. where is the storm now? it's almost as if you still believe that the insolvency rules which apply to you and me, apply to the banks!