3 degrees of seperation

High-End Housing Sits Out 'Rebound'

I don't think they will be bulldozed, but they will eventually sell at steep discounts of 50% or more in short sales or foreclosure sales.

If a seller put enough cash in to still have equity, well I don't know what they will do. Probably will not sell at the required discount, and just keep waiting for a miracle.

Options Trader: Monday Outlook

Hi Phil:

The chart for SPY may not look so strong if measured in Euros. You are exactly right about the weak dollar effect on stocks.

Keep up the good work.

Looking at Case-Shiller Levels

It was the low end of the market that went down the furthest and fastest, due to the high level of forclosures and distressed sales that followed. Now the foreclosure epidemic is spreading to the mid and upper price levels. As the distressed sales pick up in these levels, it will pull up the median sales price. This is not really a sign of the market bottoming but a sign that the cancer is spreading to higher price levels. I have been watching this market in south west Florida and the number of foreclosures in the mid to higher priced markets are just now starting to kick into gear. This shift upmarket in distressed sales is not a sign of happy days returning but a sign of further weakening into a broader segment of the market that is simply creating an appearance of a bottom. While sales at the lower price levels may be bottoming, sales in the mid to higher priced levels are still anemic because prices have not come down nearly as much as at the lower levels and have much further down to go, in my opinion.

Expect Housing Prices to Continue to Rise

I think prices may start to rise, but not for any positive reasons. I think rising prices is a sign that the cancer of distressed sales is spreading to the higher priced levels of the market. That will pull up the median sales price but is not a sign of happy days ahead.

The Looming McMansion Attack

I have my eye on a just such a house in a prime area of Florida. Problem is that asking prices have not come down at all yet, in fact the sellers are still asking a premium over what they paid in 2007. I am ready with a cash offer when prices get discounted by 35% off of the peak, but don't know if we will ever get there in this area of Florida. It is frustrating to continually hear how much prices have come down, yet it is not happening where I want to buy. I should note that nothing is selling at the current asking prices, but that doesn't appear to be influencing sellers to do an discounting. Many of the homes in this development are unfurnished and never lived in, so I know speculators bought a good number of these homes.

Case-Shiller Home Price Declines Ease

Or this could simply indicate that the contagion of the low end market is moving upmarket to the mid and upper price ranges and as sellers (or banks) capitulate, some sales are beginning to get done in these higher price strata.

More Companies Get TARP Money, Or Seek It

The table of underfunded Pension plans is scary, yet it is only the tip of the iceberg. You can add just about every government pension fund to that list, then top it off with social Security and Medicare. It is one hell of a Ponzi Scheme!

Options Trader Friday Outlook: EU GDP Disappoints

Hey Phil, I think it's time for another chart of the SPX in Euros? The drop in the US$ vs Euro & Pound roughly corresponds to the rally in the markets. So is it really a rally or more of a dollar devaluation caused by the Fed. Same with the "rally" in the price of oil?

What do you say?

Bill Gross: What?

I think Gross is saying "this is the end of the financial world as I knew it". I also think he is reading too much into the situation. I do not like the direction the President is leading us either, but I do not think it the end of the financial world quite yet.

Geithner Was the Right Choice, But He Should Go

That "Timmy the Tax Dodger" refuses to let even one big bank fail, meaning letting both shareholders and bondholders get stiffed, tells me that he is the wrong man for the job.

Why bother with stress tests if you can't let go of the lossers? At least a few of these banks have to be worthy of restructuring. Yet Geithner will not pull the trigger.

Netbook Rumors Swirl on the Applevine

A rumor I heard was an ITouch with an 8 inch screen, which could be dynamite with their new Kindle app. Also, an Itouch with large screen could compete with a netbook with a few upgrades and bigger memory. ITouch app developers could have a field day with an 8 inch screen to work with.

Florida Real Estate Showing Signs of Life

I am trying to buy a house in Estero FL and at the development I am interested in, the sellers are still asking 20% more then the prices they paid at the peak in Apr 2007, I do not know what they are smoking, but they are all holding out for some delusional price. I guess I will just keep waiting for prices to get down to realistic levels.

The U.S. Dollar's Dominance: The Beginning of the End?

Who would control the exchange rates on such a super currency? The United Nations or some similar America hating body? This idea scares me.

Hussman (and Toles) on Geithner's Toxic Menu

Geithner's plan is worse then bad.

I have to go puke now!

Geithner Releases Plan Details, Taxpayers Will Suffer

Geithner's plan as described here makes me want to puke!