dfloydr

Memo to AT&T: Help Me to Help You

My niece in Korea has internet service at four time the speeds available around the U.S. from AT&T and it's competitors. My niece reports Japan is even further ahead than Korea. China is lagging our speeds still but moving fast towards higher speeds.

Guess we are a second world country already. As long as dim wits run our services simply determined to milk every penny from what they have rather than grow the overall pie we might be lucky to retain second place. Imagine a NASCAR racer settling for yesterdays best.

Phoenix Rising: Day 1 Update

"Tax cheats" either paid up or got thrown out of contention. More than you can say for past administrations. Take off your Limbaugh blinders.


On Feb 25 08:07 AM NITRAM wrote:

> I agree. With a socialistic president, tax cheats, and incompetant
> cabinet and congress members, we will break under 7000 on the Dow.
> More importantly we will enter a full depression. This pretend president
> is the greates spin doctor ever to be in office.

The Money Trail Grows for DXO

One good reason to put an end to DXO: I held it a couple of times and it seldom did much to mirror the price of oil. In fact at times it's price movements were completely contrary to the price of oil as manipulators tried to play with it as opposed to the real stuff.

When Unemployment Peaks, The Bottom Should Follow

Wrong! Throw away your outdated talking points! The stimulus is already kicking in.

1. Thursday a week ago the Arizona Republic reported that $155 million of stimulus aid had just landed in our state coffers. The article went on to report how it was being spent. Oddly the biggest piece, $53 million is going immediately towards rehabbing homes on our Indian reservations to stop huge amounts of wasted energy. This will boost sales of caulk, fiberglass insulation, weather stripping, double paned windows, etc..

That day a link appeared to a map of the United States and by clicking on any given state you could see how much had gone to that state and for what purpose. Many states have received far more than Arizona.

2. Home sales are booming here in the Phoenix area. Not in price, in quantity. December 1, 2008 we had 47,000 homes (55,000 including condos) listed for sale on our Multiple Listing Service. A month ago that was down to 41,000 and this month it is 39,000. We have 9600 homes in escrow and although not all of those will close, enough will to keep the backlog of unsold homes moving downwards. Each week this year the inventory has dropped by 500 homes. Home sales are running at the rate of 100,000 a year, up from last year's total of 59,000.

Why?

a. Changes introduced recently have unclogged the process of getting mortgages. Rates are down thanks partly to government actions specific to mortgages and partly due to the flight of panic capital to safety which has driven Treasury yields down.

b. Banks have staffed up to process their problem loans. A year ago no banker knew where to turn to get approval for a short sale or a negotiated sale and so the system was impassable. Today, answers are available and negotiations can proceed in most cases.

You would be right if you were to argue that not all the stimulus will hit right away, but your statement as written is disproven by the facts on the ground.

On Mar 06 12:29 PM cash wrote:

> Good points. The obama stimulus does not kick in (if it does even)
> for several months more, to pick up some slack in the labor force.
> No private company is hiring now on their dime. So the bad numbers
> will continue to show up until later this year.

Verizon Launches Direct Ad Attack Against the iPhone

That name?

Is that so it in ads jingles it can rhyme with hemmeroid?

Did President Obama's Speech Cause the Market Decline?

Recent reports indicate 98% of the nation's banks have adequate capital. True, many are small. It is just a few of the megabanks that are bleeding buckets of financial blood.

So instead of giving those megabank dopes all the TARP money, how about we give money to the banks that are doing it right. They would immediately get on with doing normal business in greater volumes. That sure would beat watching the dopey Wall Street bankers paying themselves bonuses and dividends. Let those megabanks spiral off into the sunset. The good banks would soon pick up where they left off given the piles of capital the Fed is dishing out.

Homebuilder Blues Here to Stay

I am a Realtor in Phoenix.

Talking today to Pulte and Lennar in one of their projects I learned that sales are cooking. From Nov08 to Mar09 they closed about 2 homes per month each. April, May and now June are running 14 closings a month each and they are busily breaking ground on more spec homes to meet this surge of demand.

Valley wide our MLS inventory reached 58,000 at the end of Nov08. That is now down to 33,000 and declining at the rate of 800 a week inspite of any new foreclosures and short sales, and in many of the moderately priced areas inventories represent less than a one month supply.

95% of all closing this year have been under $400,000. Presently there are over 9,000 homes in escrow around the Valley. Some will take a while to close given the chaos at the buyers' lenders, many of which can't get their loan documents out fast enough to meet the closing dates required by the sellers' lenders who have agreed to short sales. Its crazy out there.

The glut remains in high end homes. The various plans coming out of DC have aggressively helped the bottom and middle of the market. DC and the banks have done little to nothing about the high end of the market. We are starting to see price adjustments in the $1 million plus inventory. Some are huge.

Private Sector Employment Picture Is Shrinking

Duh! You are in a recession. What does that mean. Private industry is contracting. How many people do you hire when contracting ... zero.

What happens to the public sector ... demand grows. So what happens? They have to hire.

Shocking. Shocking that people do not understand that is fairly normal.

Surviving Financial Hurricanes 2.0

I have followed the principals at Runnymede since about 1973.

In the summer of 1987, they headed for cash and when the 1987 market collapsed that Fall they were in a great position to buy.

Later I became trustee of accounts under their management. One day about four months before the dot com bubble burst, I got a call while having lunch: would I mind if they liquidated the stockholdings in the accounts. I gave them the green light, and once again they rode out the storm in cash.

Most recently, duplicate sales confirms started showing up in my mail box starting in November 2007 and that turned into a steady stream of sales over the next three months. Today the accounts are mostly in T-Bills.

Sure these sales sometimes incurred capital gains taxes, but avoiding market down turns has more than made up for any taxes paid. And if you do not loose in bad times, you do not have to do anything very spectacular between the hurricanes to do very well overall.


On Mar 06 08:43 AM Dave Shafer wrote:

> So an article was written? What did you actually do for your clients?
> Or is this more hind-sight bias? Did you selectively pick stocks
> to shed before they crashed or did you call for you clients to get
> out of stocks all together? If one were to have some formula for
> getting in and out of the stock market or going long and short then
> publish it and lets see how accurate it is back-tested. If not,
> then it was just luck [assuming you did get your clients out of stocks].
> I think the issue is more about matching mutual funds with buy and
> hold strategies and asset management strategies all the time forgetting
> to tell folks about systemic risk! If your clients could not withstand
> drawdowns of 50% then what were they doing in stocks? Finally, if
> you can outperform such luminaries as Buffett and Soros, or trend
> followers like Dunn, etc. over any reasonable time frame then you
> should make public that performance, it will make you a very rich
> man!
>
> Otherwise it is just rhetoric!
>
> If you are not judgeing based on performance, but on safety, then
> that is a different ballgame and you should admit to it. CDs over
> the last 10 years have outperformed the S & P and they are very
> safe backed by the FDIC insurance as long as you keep them under
> the limits!

Connecticut: Hedge Fund Haven Gets Hit by New Regulation

This is why this industry needs some form of universal regulation. If left to each state or nation to rein in the madness, the players will just move to the most advantageous location making moot any state by state effort.

Why Are Foreclosure Rates Much Higher in California, Arizona, Nevada and Florida?

Those four states are where the merchant builders were producing the most new homes. When the speculators showed up to buy two, four or ten homes, they could do so all in one place in one day while submitting a single set of (fraudulent) documents to the on site lender, and be sure to have nice new product to hopefully flip or rent out.

For a year or more the developers were raising prices on all models in a given project at the rate of $10,000/house/month. The speculator only had to wait a couple of months until the developer had moved his new price range up several notches, and then he could flip his homes for a profit.

U.S. Home Prices Sink to Lowest Levels in Almost Five Years

Those C/S reports of extreme price declines are somewhat deceptive and probably overly negative.

What is happening in our market here in Phoenix is that:

1. At long last the banks are getting staffed up to dispose of some of their problems. As a result they are aggressively marking down the homes they now own to get rid of them. This plays into the hands of the first time home buyer and the pent up demand at the bottom end of the market that has not been able to act during the past eighteen months.

2. Interest rates on "conventional" loans are far more reasonable now, and, for a change, they are available.

The combined result is that much of the action that is happening, is happening at the bottom end of the market. This skews the "average price" downwards.

A closer look at our market by zip code shows large differences in pricing patterns. Remote areas are showing the biggest declines. Naturally that is where recent new construction has taken place and where in 2005/6 the speculators were able to buy up two, four, six or ten homes at a time. Now with rising commuting costs and declining employment, those areas are getting smashed. -35% is already there. Don't expect even half of that decline in choice close in areas unless there is a foreclosure involved. Some strong areas hardly show any decline.

The good news is that activity has picked up and our MLS inventory that stood at 47,xxx homes two months ago is now around 42,xxx.

That is still above what we consider a "normal" inventory of 25,000, but it is headed down for a change.

SunPower Cuts Guidance Triggering Solar Selloff

Fair enough, it is SPWRA's best guess as to currency efects at this point in time.

However, who is to say, in these days of gyrating currency rates, that the dollar will stay strong or the Euro weak?

Coeur d'Alene Mines: Compelling Silver Investment

Over the past two years the market price of silver has gone up and down. CDE stock has remained more or less flat .... for a reason. I suspect you might want to forget all those demand and production numbers and look at the people running CDE. Whatever it is, that stock started dead, stayed dead and will continue so until something in internal to their business changes.

Go To Africa, Young Investor

A few companies make sense, for example Sasol, but most of Africa is still riddled with corruption.

South Africa has succumbed to the disease. Companies are being told that they now have three consultants to manage their relationship with the government. These three never show up but they are to be paid big consulting fees which are to be applied to their coming to own say 15 - 25% of the company stock. Nice no show jobs with big rewards.

The recent power outages were no mystery. Escom, the national power company, used to maintain large inventories of coal. The new owners sold off their coal inventory to China last year given the high price of coal, and as a result they were able to show a big profit and get paid huge bonuses. That set up a vicious downward spiral. Without inventories of coal at power plants, when any glitch showed up, the power company could not put out electricity. With no electricity local mines could not produce coal .....

No thanks, Africa's human risks are outside of my ability to evaluate what turn might suddenly crop up to destroy the value of my investment.