Dans Deep Creek Blog

Why We're Still Listening to Economists

Could be worse, we could still be listening to real estate agents. Check out this whopper I found today:

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January 21, 2008: "This is a great time to buy a second home at Deep Creek Lake!"

"local developers realize that Deep Creek has always been in high demand and that prices will go back up this summer"

That's summer 2008 mind you!

Dividends: There's No Such Thing as a Free Lunch on Wall Street

I touched on this same topic on my blog today in reponse to a realtor's dicussion about cap rates on investment properties. My view is that some of these solid dividend plays offer better value than high-end real estate with low cap rates and prices still near all-time highs.

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25 Cash Cows to Ride Out the Storm- Barron's

Definitely some surprises on this list.

No KFT, no JNJ, I guess no one consulted Mr. Buffett.

Big Troubles for the Euro

And now they (the EU members) are bickering much like our Congress was just in the last few weeks. Politicians around the globe are being challenged by this mess. Let's all hope they don't screw it up!

Have We Learned Anything Yet?

"Recessions are necessary and a pain that no one enjoys enduring, but they are required. What I would rather have is a sharp & quick recession vs. something long & drawn out which, appears to me, is what we're getting with this current mess. "

Peter Schiff has been saying this for over two years .. people should have been ready for this.

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Why the Bailout Bill Alone Won't Solve the Credit Crisis

Steve C,

If they get rock bottom prices there is no point because it doesn't really help the banks.

Why the Bailout Bill Alone Won't Solve the Credit Crisis

On top of that you still have real estate agents out there promoting "no money down" buying and potentially talking people into horrible decisions that will come back to bite us all over again.

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O Bailout Package, Where Art Thou?

People should have listened to smart people like Peter Schiff and Warren Buffett. Then we would not need a bailout.

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Fannie/Freddie Nationalization: Where Will It End?

Excellent article.

As I've said from the day they announced this plan what exactly is the plan when 2010 comes and they can't sell these loans then either?

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And as for more regulation, in 2002 didn't we pass massive regulation to aimed at rooting out accounting fraud and protecting shareholders? Bear, Lehman, Merrill, Fannie, Freddie and AIG shareholders aren't exactly feeling like it protected them. The problem of course is that these things always solve the last problem, after the fact, and yet here only 6 years later we have another crisis of a slightly different nature. Hopefully at least we have realized along the way that not everyone should own a home and that it actually makes sense to have renters and lending standards. Shocking as it is.

Some Housing Schadenfreude

Funny how a few years ago the NAR economist was writing books on why housing would go up forever and now this. On the way up it's a can't miss and on the way down everyone is ready to jump on the pile, but even more shockingly you still have real estate agents promoting the "power of no money down buying."

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Yes it is very powerful indeed for the agents.

Foreclosures Actually Dropped (If You Don't Count Five States)

In Maryland, where I am they also dramatically extended the foreclosure waiting period .. no surprise foreclosures are apparently down (for now). Just wait a few months for these dislocations in the foreclosure market to pass and we'll likely see a dramatic spike out of nowhere (at least to those who believe everything they are being fed from the media).

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Could Lehman's Failure Cause a Systemic Meltdown?

RP,

He most likely didn't sketch that picture. He probably just took a regular photo and used a photo editor (there are many available) to apply that effect.

NAR's Chief Economist: Totally Clueless

Here's another good example of a clueless Realtor:

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NAR's Chief Economist: Totally Clueless

Realtors are in the "it's a good time to buy business," always have been, always will be. For months they had been preaching about it being a great time to buy because of low interest rates. Now that they are even lower do you think they're telling all those people they persuaded to buy over the last few months that they should have waited for even better deals in terms of both purchase price and interest rate? I don't think so! Patience is a virtue and from my experience the Realtors I have dealt with have none of it, they all want the full commission right now. And they got all of them a few years back, now they want next year's commission right now too.

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Fannie Mae: 'Business As Usual'

dlaw,

So if they fully intend to nationalize the home loan industry where does it stop? Do they make mortgage brokers and loan officers agents of the federal government as well?

I do not believe that they can be successful in artificially propping up home prices forever, so eventually something has to give. Look at the home price index from 1890-2000 and then 2000-2005 (en.wikipedia.org/wiki/...), something is clearly wrong with the picture and something is unbalanced. Then look at this new chart (seekingalpha.com/artic...) from another Seeking Alpha writer within the last few hours and observe how Fannie and Freddie debt relative to GDP exploded in the same time.

My question then is can the government really step in and provide long-term support to bubble prices or is it only a short-term allusion of doing so? Even if they really do not intend to re-privatize Fannie and Freddie in 2010 or beyond.

On Sep 10 09:39 PM dlaw wrote:

"They are not going to sell at 10% a year. That's a nonsensical soak to the laissez-faire crowd.

The GSE book will expand ad infinitum."