Alan Blinder, an economics professor at Princeton University and former Federal Reserve vice chairman, talks with Bloomberg's Kathleen Hays from Princeton, New Jersey, about the impact of record oil prices and home foreclosures on the U.S. economy, the outlook for growth and Federal Reserve monetary policy.
As a Fed insider Professor Blinder can't admit that we're actually in a recession, but he certainly admits we are dealing with major, major problems.
Showing posts with label Mainstream Media. Show all posts
Showing posts with label Mainstream Media. Show all posts
Saturday, May 17, 2008
Sunday, April 27, 2008
US warns Iran -- $10 Gas?
Back in February 08, I wrote: Iran’s Oil Bourse Set to Open this Sunday which explained how Iran's new Bourse was provoking future military action by posing a huge long-term threat to both the US Dollar & continued American global hegemony.
I warned that rhetoric w/regard to Iran would probably soon ratchet up again; a catalyst to military action would likely be found; and that bombs might be falling from the sky before November 08, as the Bush administration would not take lightly this deliberate slap in the face of US global economic power; nor did they trust leaving the problem for the the next regime.
Times Online today: US warns Iran of retaliation over Iraq action
America's top military officer has ratcheted up the pressure on Iran by issuing an unusual public warning that the Pentagon is planning for “potential military courses of action”. .”
Admiral Mike Mullen, chairman of the joint chiefs of staff, blamed the Iranian government and Quds force of the Iranian Revolutionary Guard for its “increasingly lethal and malign influence” in Iraq. He said conflict with Iran would be “extremely stressing” for America’s overstretched forces, but added: “It would be a mistake to think that we are out of combat capability.
Mullen said he was increasingly concerned about Iran’s growing involvement in supplying munitions and training to rebel Shi’ite militias and “killing American and coalition soldiers in Iraq”.
Speaking at a Pentagon news conference late on Friday, he said recent operations in the southern port city of Basra had revealed “just how much and how far Iran is reaching into Iraq to foment instability”. A Pentagon source said the admiral’s frankness was “extremely significant” and could pave the way for some form of attack on Iran. However, Mullen said: “The solution right now still lies in using other levers of national power, including diplomatic, financial and international pressure.”
Mullen’s tough rhetoric came shortly after General David Petraeus, the US commander in Iraq responsible for the troop surge, briefed Congress about the “nefarious activities” of the Quds force in stirring violence in Iraq. There were a total of 923 civilian deaths in Iraq last month, the highest number since August 2007.
“We should all watch Iranian actions closely in the weeks and months ahead, as they will show the kind of relationship that Iran wishes to have with its neighbour,” Petraeus said.
Petraeus was nominated last week to take over as commander of all US forces in the Middle East from Admiral William Fallon, who resigned in March after becoming an outspoken critic of American policy towards Iran.
StopIranwar.com
Which City do we want to lose?
I warned that rhetoric w/regard to Iran would probably soon ratchet up again; a catalyst to military action would likely be found; and that bombs might be falling from the sky before November 08, as the Bush administration would not take lightly this deliberate slap in the face of US global economic power; nor did they trust leaving the problem for the the next regime.
Times Online today: US warns Iran of retaliation over Iraq action
America's top military officer has ratcheted up the pressure on Iran by issuing an unusual public warning that the Pentagon is planning for “potential military courses of action”. .”
Admiral Mike Mullen, chairman of the joint chiefs of staff, blamed the Iranian government and Quds force of the Iranian Revolutionary Guard for its “increasingly lethal and malign influence” in Iraq. He said conflict with Iran would be “extremely stressing” for America’s overstretched forces, but added: “It would be a mistake to think that we are out of combat capability.
Mullen said he was increasingly concerned about Iran’s growing involvement in supplying munitions and training to rebel Shi’ite militias and “killing American and coalition soldiers in Iraq”.
Speaking at a Pentagon news conference late on Friday, he said recent operations in the southern port city of Basra had revealed “just how much and how far Iran is reaching into Iraq to foment instability”. A Pentagon source said the admiral’s frankness was “extremely significant” and could pave the way for some form of attack on Iran. However, Mullen said: “The solution right now still lies in using other levers of national power, including diplomatic, financial and international pressure.”
Mullen’s tough rhetoric came shortly after General David Petraeus, the US commander in Iraq responsible for the troop surge, briefed Congress about the “nefarious activities” of the Quds force in stirring violence in Iraq. There were a total of 923 civilian deaths in Iraq last month, the highest number since August 2007.
“We should all watch Iranian actions closely in the weeks and months ahead, as they will show the kind of relationship that Iran wishes to have with its neighbour,” Petraeus said.
Petraeus was nominated last week to take over as commander of all US forces in the Middle East from Admiral William Fallon, who resigned in March after becoming an outspoken critic of American policy towards Iran.
My Thoughts:
As a USAF veteran, let me assure you that my following comments are not un-patriotic, but I can NOT buy into ANY of this administration's B.S. propaganda.
The whole middle east issue (Iraq, Iran, Afghanistan, you pick who may be next) is all about controlling Oil, maintaining US dollar hegemony and supporting massive contracts for companies like Haliburton -- to make Dick Cheney's rich friends richer.
Our troops are dying in a futile attempt to (1) save our dying currency (caused by excessive Gvt spending/debt and a Federal Reserve Banking system that has created one too many popping bubbles -- which has ultimately led to the present crashing financial/banking system that will require a hyperinflationary event to save it from a full-blown collapse) and (2) to control dwindling worldwide oil supplies.
Food for thought: The world can currently extract and bring to market ~ 87 Million Barrels of Oil per day (Mbpd) and we consume ~ 86Mbpd -- 40% of which comes from the Persian Gulf market and must traverse through the very narrow Strait of Hormuz (see picture below)... Note where Iran sits on this narrow Channel...
If we DO start dropping bombs on Iran, they will likely mine the Strait and/or sink a supertanker or two with missiles/etc -- locking up 40% of the world's oil supply. You think gas/oil prices are painful today? Better start preparing for $200+ barrel oil and $10+ gallon gas (if you can actually find it anywhere)
Regards
Randy
StopIranwar.com
Which City do we want to lose?
Wednesday, April 16, 2008
Stocks Surge On Good News
The Dow Surged 256 points, NASDAQ up 64, and S&P gains over 30. Certainly an impressive day for major equities!
So, why the surge?
Well, according to the Mainstream media, Intel and JP Morgan both reported strong earnings and were the primary drivers of the rally. Intel was up 6% and JP Morgan gained 7% on the day.
So, what "specifically" was the good news for JP Morgan?
Let’s take a look:
JP Morgan profits dive 50% on mortgage losses
JPMorgan Chase reported a 50 per cent drop in its first quarter profits as America's third biggest bank took a $5.1 billion (£2.5 billion) writedown against investments in mortgage-backed securities and its portfolio of homeloans.
The US investment bank, which last month bailed out former US rival Bear Stearns, said today that first quarter profits for the three months to March fell to $2.37 billion compared with $4.79 billion during the first quarter last year
Well that certainly wasn't “Good News”.
What about Intel?
Intel profit narrowed in the first quarter, but the chipmaker posted sales that were slightly ahead of Wall Street expectations and rebutted fears of a tech spending slowdown with a strong sales outlook for the current quarter…
That wasn’t bad news, but it certainly wasn’t good either.
Could something else be responsible for the dramatic rally today?
Lets peruse today's business news releases and find out…
1) Oil price crosses 115 dollars for first time on supply jitters
April 16 (AFP) Oil prices streaked into new record territory for the second straight day Wednesday, boosted by a decline in US energy reserves and as the weakening dollar drew investments in commodities.
2) Dollar Falls to Record Against Euro as EU Inflation Quickens
April 16 (Bloomberg) -- The dollar fell to a record low against the euro as European inflation accelerated last month. The currency had its biggest decline versus the euro in three weeks, weakening to $1.5979 as U.S. housing starts dropped more than twice as much as forecast to a 17-year low. The Canadian and Australian dollars and the Norwegian krone increased after crude oil touched a record $115.07 a barrel.
3) Housing Starts Slide to Lowest Level in 17 Years (Update3)
April 16 (Bloomberg) Housing starts in the U.S. dropped more than twice as much as forecast in March to a 17-year low, signaling that declining construction will keep eroding economic growth this year.
4) Sallie Mae: Can Only Lend At Loss, Weighs Options
April 16 (CNN Money) SLM Corp. (SLM) swung to a first-quarter loss and warned it can't make profitable loans at this time, prompting the nation's largest student lender to assess its operation and call for a "system-wide liquidity solution."
5) Steep Loss at American Airlines Illustrates Industry’s Woes
The parent company of American Airlines, the AMR Corporation, posted a $328 million first-quarter loss as surging fuel prices sent the industry into a downturn.
6) Fed Beige Book Says Economy `Weakened' Since February (Update3)
April 16 (Bloomberg) -- The Federal Reserve said economic growth has slowed in nine of its 12 districts since February, hurt by ``anemic'' real estate markets and a slowdown in consumer spending.
7) CPI Shows Inflation Is Still Chugging
The consumer price index figures for March weren't the runaway disaster many had feared, but that only shows how rough things have become, as the U.S. economy deals with the twin problems of inflation and a slowdown.
The Labor Department reported on Wednesday that the CPI, which measures the prices of a mix of consumer goods and services such as transportation, energy, food and medical care, inched higher in March after a flat reading in February.
April 16 (Forbes) U.S. Treasury Secretary Henry Paulson's blundering is becoming more breathtaking with each passing week… Until the Fed dumps inflation targeting and the U.S. abandons its weak-dollar policy, inflation will rule the day. Retain (and add to) your gold hedges.
Well, after reviewing the presses, I’m completely baffled... If today was a “good news day”, I’d certainly hate to see what a bad one looks like.
Please feel free to post your thoughts on this issue
Regards
Randy
Thursday, December 20, 2007
Brains Filled with Mush while Nation Crumbles
It absolutely baffles my mind. Turn on the news to see what’s happening in the world and what are they talking about? The latest murder mystery; which mega-star is sleeping or breaking up with whom, etc; I could go on and on with the idiotic list, but my new favorite is the mainstream BREAKING NEWS that 16year old Lynn Spears (Britney Spears’ younger sister) is pregnant. WOW, thanks for telling me because that certainly IS important…. It then gets worse, as they waste available airtime with analysts dissecting the issue in detail. WHO REALLY CARES?
So I turn to the next available news channel and lo and behold they are discussing the same… Geesh, I got to turn this crap off.
On my drive home from work, I tune in to AM talk-radio hoping for some intelligent discussion. I typically listen to Savage or Beck, but it’s a bit early today, and as I’m scanning through my usual channels, guess what the topic of the day is? You got it--Spears! Holy cow--I’m really irritated now. Aren’t there any intelligent people out there? Aren’t there more important things going on in the world?
Maybe it’s not really the media’s fault, as they are only catering to the attention span of the majority--ignorant consumers who live for today and care more about Dancing with the Stars, Cribs, the latest celebrity gossip and the next football game spread than most anything else.
Possibly these folks are just trying to vicariously live through someone else’s experiences, wondering what it would be like to be rich and famous for a day. Perhaps it just that people are just too shallow and superficial to relate to the realities of the world--(oh, it’s all so confusing out there, so I’ll just stick with what I know).
Or maybe, just maybe, the media conglomerates have been successful in their efforts to dumb-down society to the point that by discounting real-world problems (and real-world solutions), the nation’s people stay ignorant/oblivious, while the monied elite influence government policy through new legislation—to their own benefit and bottom lines (example—outsourcing of jobs and the fleecing of America).
It’s all a facade:
No longer do we have a Government of the people for the people. Our leaders have been and are continuing to neglect us--to the benefit of corporate interests. Sure they make huge promises to get elected, but once in office, it’s all about the high power lobbyists and corporate bottom lines. I can’t tell you how disgusted I am with the current administration (who I helped to put in office) and the entire pack of leading presidential candidates—they are all con men/women who are going to tell you what you want to hear, get into office then turn the other cheek. Don’t believe for a minute that they care about you or your future—they are interested in themselves, their futures, their wallets and once in office they will act just like everyone else—bowing to corporate special interests.
Power and Greed are two very powerful forces:
Though I highly doubt our current and future politicians actually have a set agenda to intentionally harm our country, I do believe many of these elected leaders are just as ignorant as the masses who elected them, and once in office, the power and greed gets the best of them, and they are easily persuaded (by others who have already kowtowed to special interests) to work an agenda at the behest of corporate desires--unwittingly working to the detriment of the people and of the country…
The ironic part is: these detrimental agendas are usually sold to the public as “Good Things”… and we believe.
The sad part is: those who question the issues or who believe differently than the message our mainstream propagandists spew are labeled “Conspiracy Nuts” by the media and ignorant masses.
To summarize:
The media conglomerates constantly fill our brains with mush to distract us from reality, while politicians pass legislation to take away our rights, spend like drunken sailors, devalue our currency, outsource our jobs, increase our debt, take away our sovereignty (e.g. North American Union), ignore our immigration concerns, create booms, bubbles and busts, etc and the masses could care less, because American Idol is on tonight - the majority are oblivious, ignorant and happy and the powers that be like it that way…
As I stated in a previous post (3rd World America): American society has made it an accepted norm to be caught up in trivial things (fashion, keeping up with the Jones', reality TV, the latest unsolved murder mystery, sports, shopping, Hollywood, petty lawsuits, material things, etc), and the truly important things in life (family, values, education, hard work, social courtesies, respect, religion, caring for others, etc) have fallen by the wayside. Each and every day our brains are filled with mush and we become far too ignorant to realize that the things that once made us a great nation are slipping away.
Well, our once great nation is now collapsing before our eyes. Foreigners own HUGE PORTIONS of US Domestic Industries, Banks are insolvent (soon to fail w/banking runs), millions of families are going to lose their homes, inflation is raging, the dollar is tanking, Government spending is out of control, outsourcing continues, the North American Union plan continues while immigration issues are ignored, etc, yet we fail to open our eyes to see what is happening. It’s quite appalling that we’ve sunken this far and unless the masses pull their heads out of the sand quickly, we are doomed.
Randy
So I turn to the next available news channel and lo and behold they are discussing the same… Geesh, I got to turn this crap off.
On my drive home from work, I tune in to AM talk-radio hoping for some intelligent discussion. I typically listen to Savage or Beck, but it’s a bit early today, and as I’m scanning through my usual channels, guess what the topic of the day is? You got it--Spears! Holy cow--I’m really irritated now. Aren’t there any intelligent people out there? Aren’t there more important things going on in the world?
Maybe it’s not really the media’s fault, as they are only catering to the attention span of the majority--ignorant consumers who live for today and care more about Dancing with the Stars, Cribs, the latest celebrity gossip and the next football game spread than most anything else.
Possibly these folks are just trying to vicariously live through someone else’s experiences, wondering what it would be like to be rich and famous for a day. Perhaps it just that people are just too shallow and superficial to relate to the realities of the world--(oh, it’s all so confusing out there, so I’ll just stick with what I know).
Or maybe, just maybe, the media conglomerates have been successful in their efforts to dumb-down society to the point that by discounting real-world problems (and real-world solutions), the nation’s people stay ignorant/oblivious, while the monied elite influence government policy through new legislation—to their own benefit and bottom lines (example—outsourcing of jobs and the fleecing of America).
It’s all a facade:
No longer do we have a Government of the people for the people. Our leaders have been and are continuing to neglect us--to the benefit of corporate interests. Sure they make huge promises to get elected, but once in office, it’s all about the high power lobbyists and corporate bottom lines. I can’t tell you how disgusted I am with the current administration (who I helped to put in office) and the entire pack of leading presidential candidates—they are all con men/women who are going to tell you what you want to hear, get into office then turn the other cheek. Don’t believe for a minute that they care about you or your future—they are interested in themselves, their futures, their wallets and once in office they will act just like everyone else—bowing to corporate special interests.
Power and Greed are two very powerful forces:
Though I highly doubt our current and future politicians actually have a set agenda to intentionally harm our country, I do believe many of these elected leaders are just as ignorant as the masses who elected them, and once in office, the power and greed gets the best of them, and they are easily persuaded (by others who have already kowtowed to special interests) to work an agenda at the behest of corporate desires--unwittingly working to the detriment of the people and of the country…
The ironic part is: these detrimental agendas are usually sold to the public as “Good Things”… and we believe.
The sad part is: those who question the issues or who believe differently than the message our mainstream propagandists spew are labeled “Conspiracy Nuts” by the media and ignorant masses.
To summarize:
The media conglomerates constantly fill our brains with mush to distract us from reality, while politicians pass legislation to take away our rights, spend like drunken sailors, devalue our currency, outsource our jobs, increase our debt, take away our sovereignty (e.g. North American Union), ignore our immigration concerns, create booms, bubbles and busts, etc and the masses could care less, because American Idol is on tonight - the majority are oblivious, ignorant and happy and the powers that be like it that way…
As I stated in a previous post (3rd World America): American society has made it an accepted norm to be caught up in trivial things (fashion, keeping up with the Jones', reality TV, the latest unsolved murder mystery, sports, shopping, Hollywood, petty lawsuits, material things, etc), and the truly important things in life (family, values, education, hard work, social courtesies, respect, religion, caring for others, etc) have fallen by the wayside. Each and every day our brains are filled with mush and we become far too ignorant to realize that the things that once made us a great nation are slipping away.
Well, our once great nation is now collapsing before our eyes. Foreigners own HUGE PORTIONS of US Domestic Industries, Banks are insolvent (soon to fail w/banking runs), millions of families are going to lose their homes, inflation is raging, the dollar is tanking, Government spending is out of control, outsourcing continues, the North American Union plan continues while immigration issues are ignored, etc, yet we fail to open our eyes to see what is happening. It’s quite appalling that we’ve sunken this far and unless the masses pull their heads out of the sand quickly, we are doomed.
Randy
Saturday, December 01, 2007
Las Vegas Housing Bubble Update
I’ve lived in Las Vegas for 12 years and had the rare opportunity to watch our Valley housing market explode with the largest, quickest, most irrationally exuberant run up in prices ever witnessed (back in 2005 Lost Wages {Vegas} was rated the fastest growing city in the US and housing prices better than doubled in less than five years).
Knowing that prices were rapidly rising and with interest rates soon to rise, I started (in late 2003) seriously researching housing issues. Eventually I decided to act on my basic understanding of the problem and ultimately sold my home late in the mania phase (end of 2004--just a bit early, but no one can pick THE top), and made out quite well.
Later, though completely out of the housing ownership market and now renting, I continued on with my voracious research and gained a much better understanding of the myriad of complex economic issues that impacted this housing bubble. I eventually tried to pass my knowledge on to those around me, but to many, I was merely a gibbering lunatic who didn’t know what the heck he was talking about. In due time, I became frustrated with my unsuccessful attempts in convincing these media-hyped & fed, brainwashed individuals, so I decided to take to the web--to possibly help others who were themselves trying to understand the developing situation. Ultimately, I started this Blog back in December 2005 with my first post.
Though I didn’t specifically target Las Vegas’s housing bubble in my routine posts, I did occasionally address this booming Valley bubble market (see links below):
Las Vegas—A House of Cards Bound to fall
Las Vegas Housing Inventory Breaks 20,000 Mark
Las Vegas Housing Party is Nearly Over
Today’s post (LV housing bubble update) is based on recent developments in the market, so please allow me to share with you some new data and current media releases that (I believe anyway) irrefutably prove that my Las Vegas bubble predictions have been correct (thus far anyway—as we have much farther to deflate):
REAL ESTATE COMPANIES GOING BANKRUPT:
Prudential Americana Group Filed For Bankruptcy
Nov 28, 07: Prudential Americana Group, one of the largest residential real estate firms in the Las Vegas Valley, is filing for Chapter 11 bankruptcy so it can reorganize its debts while continuing operations.
Prudential Americana is the second big Las Vegas realty firm to seek bankruptcy protection in recent months.
Jimmy Dague, president of Vision Properties doing business as Century 21 Advantage Gold, filed for Chapter 11 bankruptcy protection in August 07.
Knowing that prices were rapidly rising and with interest rates soon to rise, I started (in late 2003) seriously researching housing issues. Eventually I decided to act on my basic understanding of the problem and ultimately sold my home late in the mania phase (end of 2004--just a bit early, but no one can pick THE top), and made out quite well.
Later, though completely out of the housing ownership market and now renting, I continued on with my voracious research and gained a much better understanding of the myriad of complex economic issues that impacted this housing bubble. I eventually tried to pass my knowledge on to those around me, but to many, I was merely a gibbering lunatic who didn’t know what the heck he was talking about. In due time, I became frustrated with my unsuccessful attempts in convincing these media-hyped & fed, brainwashed individuals, so I decided to take to the web--to possibly help others who were themselves trying to understand the developing situation. Ultimately, I started this Blog back in December 2005 with my first post.
Though I didn’t specifically target Las Vegas’s housing bubble in my routine posts, I did occasionally address this booming Valley bubble market (see links below):
Las Vegas—A House of Cards Bound to fall
Las Vegas Housing Inventory Breaks 20,000 Mark
Las Vegas Housing Party is Nearly Over
Today’s post (LV housing bubble update) is based on recent developments in the market, so please allow me to share with you some new data and current media releases that (I believe anyway) irrefutably prove that my Las Vegas bubble predictions have been correct (thus far anyway—as we have much farther to deflate):
REAL ESTATE COMPANIES GOING BANKRUPT:
Prudential Americana Group Filed For Bankruptcy
Nov 28, 07: Prudential Americana Group, one of the largest residential real estate firms in the Las Vegas Valley, is filing for Chapter 11 bankruptcy so it can reorganize its debts while continuing operations.
Prudential Americana is the second big Las Vegas realty firm to seek bankruptcy protection in recent months.
Jimmy Dague, president of Vision Properties doing business as Century 21 Advantage Gold, filed for Chapter 11 bankruptcy protection in August 07.
NEVADA FIRST IN PREFORECLOSURES:
Nevada First in Preforeclosures
Nov 27: Nevada leads the nation in the actual number of preforeclosure filings through October with 40.5 preforeclosure filings per 1,000 households.
Nevada had 30,276 preforeclosure filings through October, an increase of 106 percent from last year. The state's per capita rate of 4.05 tops Florida (2.86), Arizona (2.05) and Colorado (2.04).
Foreclosures.com also showed Nevada was No. 1 in real estate owned filings, or properties owned by the lender, at 10,703 through October, or 1.45 per capita. Real estate owned filings climbed to 54,418 nationwide in October, up 24 percent from 43,941 in September.
The numbers are grim for hundreds of thousands of homeowners trapped by rising mortgage payments, stagnant home prices and tightened credit markets, Foreclosures.com President Alexis McGee said.
31,000+ Clark County Foreclosures
Based on Realtytrac Data, > 31,000 homes in Clark County are in some state of foreclosure
FUTURE WEAKENING EXPECTED:
Mortgage Meltdown
Nov 28: U.S. homebuilders meeting in Las Vegas said the housing market probably will weaken in 2008 as foreclosures rise and banks tighten lending standards.
Demand has deteriorated in many markets, limiting the prospect of a rebound in new home sales, chief executive officers for D.R. Horton and Beazer Homes USA said Tuesday at a JPMorgan Chase & Co. conference at Mandalay Bay.
Next year "is going to be worse than '07 for us and for the industry in general," said Donald Tomnitz, CEO of Fort Worth, Texas-based D.R. Horton, the fourth-largest U.S. homebuilder.
The housing slump that began in 2005 has erased about $36 billion in stock market value for the largest 15 homebuilders this year through Monday. New home sales dropped 23 percent in the year through September.
California and Florida housing markets continue to weaken and the Las Vegas market is "soft," Tomnitz said. New home sales in Phoenix will likely worsen in 2008, he said.
MEDIAN PRICES FALLING; INVENTORY GROWING YoY:
Existing home sales (median prices)
Based on Housingtracker.net Data, existing home inventories have increased >25% and median prices have dropped >10% YoY
HOMEBUILDERS DESPERATE; SLASHING PRICES:
Ryland reduces prices; Deep Discounts
Every Ryland Homes community across the United States will offer special savings on quick move-in homes during the Ryland Homes Savings Spectacular Nov. 9-11, said Dana Rogers, Ryland's vice president of sales and marketing.
The builder will offer unprecedented savings at all of its communities, including those in the Las Vegas area, Rogers said.
"It takes a lot to impress today's home buyer," Rogers said. "That's why we're going big and offering savings of up to 25 percent or more off the base price of the home."
Rogers gave specific examples illustrating the extent of the discounts. At the Providence community, the price of the Pearl residence, home site No. 199 in the Auburn Collection, will be reduced from $442,990 to $316,990 -- a savings of $126,000, he said. The Angora residence, home site No 167 in the Ellingwood neighborhood at Mountain Edge, will be reduced from $541,790 to $393,790 for a savings of $148,000, he said.
Lennar Real Deal—HUGE REDUCTIONS MUST SEE (Very Small Sample Below)
Nevada First in Preforeclosures
Nov 27: Nevada leads the nation in the actual number of preforeclosure filings through October with 40.5 preforeclosure filings per 1,000 households.
Nevada had 30,276 preforeclosure filings through October, an increase of 106 percent from last year. The state's per capita rate of 4.05 tops Florida (2.86), Arizona (2.05) and Colorado (2.04).
Foreclosures.com also showed Nevada was No. 1 in real estate owned filings, or properties owned by the lender, at 10,703 through October, or 1.45 per capita. Real estate owned filings climbed to 54,418 nationwide in October, up 24 percent from 43,941 in September.
The numbers are grim for hundreds of thousands of homeowners trapped by rising mortgage payments, stagnant home prices and tightened credit markets, Foreclosures.com President Alexis McGee said.
31,000+ Clark County Foreclosures
Based on Realtytrac Data, > 31,000 homes in Clark County are in some state of foreclosure
FUTURE WEAKENING EXPECTED:
Mortgage Meltdown
Nov 28: U.S. homebuilders meeting in Las Vegas said the housing market probably will weaken in 2008 as foreclosures rise and banks tighten lending standards.
Demand has deteriorated in many markets, limiting the prospect of a rebound in new home sales, chief executive officers for D.R. Horton and Beazer Homes USA said Tuesday at a JPMorgan Chase & Co. conference at Mandalay Bay.
Next year "is going to be worse than '07 for us and for the industry in general," said Donald Tomnitz, CEO of Fort Worth, Texas-based D.R. Horton, the fourth-largest U.S. homebuilder.
The housing slump that began in 2005 has erased about $36 billion in stock market value for the largest 15 homebuilders this year through Monday. New home sales dropped 23 percent in the year through September.
California and Florida housing markets continue to weaken and the Las Vegas market is "soft," Tomnitz said. New home sales in Phoenix will likely worsen in 2008, he said.
MEDIAN PRICES FALLING; INVENTORY GROWING YoY:
Existing home sales (median prices)
Based on Housingtracker.net Data, existing home inventories have increased >25% and median prices have dropped >10% YoY
HOMEBUILDERS DESPERATE; SLASHING PRICES:
Ryland reduces prices; Deep Discounts
Every Ryland Homes community across the United States will offer special savings on quick move-in homes during the Ryland Homes Savings Spectacular Nov. 9-11, said Dana Rogers, Ryland's vice president of sales and marketing.
The builder will offer unprecedented savings at all of its communities, including those in the Las Vegas area, Rogers said.
"It takes a lot to impress today's home buyer," Rogers said. "That's why we're going big and offering savings of up to 25 percent or more off the base price of the home."
Rogers gave specific examples illustrating the extent of the discounts. At the Providence community, the price of the Pearl residence, home site No. 199 in the Auburn Collection, will be reduced from $442,990 to $316,990 -- a savings of $126,000, he said. The Angora residence, home site No 167 in the Ellingwood neighborhood at Mountain Edge, will be reduced from $541,790 to $393,790 for a savings of $148,000, he said.
Lennar Real Deal—HUGE REDUCTIONS MUST SEE (Very Small Sample Below)
REAL ESTATE: Everything must go
Builders are sparing little expense in a bid to entice hesitant buyers into a soft housing market.
Virtually every major builder in the Las Vegas Valley has pushed big sales this fall, and the price breaks have been steep.
Pulte Homes marked down prices 15 percent on certain models, with discounts of up to $80,000 on some completed new homes during one October weekend. The builder's Del Webb subsidiary sliced $55,000 from some of its asking prices. Rhodes Homes has offered as much as $100,000 off on finished houses. Lennar Corp. has slashed prices on some models by about a third; Lennar cut the cost of a 5,000-square-foot home in its Earlstone community from $911,490 to $662,490, and a 4,498-square-foot home in its Silver Creek subdivision went from $807,290 to $612,290. Centex Homes has clipped $25,000 to $100,000 off the prices of some of its existing homes, and is ponying up as much as $21,000 in closing costs on some models. American West Homes' valleywide "liquidation sale" on Nov. 10 and Nov. 11 featured savings of up to $143,000.
After Astoria Homes dropped prices on standing inventory by as much as $200,000, or 27 percent, Oct. 12-14, traffic at least doubled across the board at Astoria communities, and even tripled in some cases, said Tom McCormick, the company's president.
SLOWING CONSTRUCTION:
Data signal slowing construction
Southern Nevada's construction industry showed more signs of slowing in the third quarter, the Las Vegas chapter of Associated General Contractors reported.
Taxable construction spending fell 14.8 percent over the past 12 months to $3.13 billion, largely a result of declining residential building permits. After three years of high-volume development, Las Vegas has experienced a 46 percent drop in single-family permits and 56 percent drop in multifamily permits.
Clark County has the nation's sixth-highest foreclosure rate and has one of the highest concentrations of subprime and adjustable-rate mortgages, the AGC market brief noted. Many housing analysts suggest the trend will worsen in the next 12 months as some 2 million mortgages nationwide reset to higher interest rates.
Construction employment fell 1.2 percent from a year ago to 108,500 in September, representing 11.6 percent of Southern Nevada's total employment base.
TAX REVENUE FALLING:
Nevada Taxable Retail sales falling
Taxable sales in Nevada faltered yet again in September, marking the sixth straight monthly slide in a key revenue generator for state government.
Thursday's report showed a statewide 1.5 percent drop compared with September 2006, tabbed to the housing slump as well as a growing reluctance overall to spend.
"People may not have as much discretionary money. That's how I read it," state economist Jim Shabi said.
Taxable sales are the state's biggest source of revenue, and the Department of Taxation report shows the general fund portion of the state budget is down $24.4 million, or 2.3 percent, from Economic Forum projections a third of the way into the 2008 fiscal year.
Collections on business tax and license fees as well as excise taxes also are lagging, the report showed.
Last month, Gov. Jim Gibbons directed state agency heads to prepare contingency plans to cut spending by 8 percent.
State Tax Revenue off the mark
CARSON CITY -- State government's financial woes worsened Thursday, when the Department of Taxation released reports showing tax revenue falling further behind projections.
Revenues from four major taxes -- sales, business payroll, insurance and real property -- were below expected levels for July through September, the department announced Thursday.
As a result, Gov. Jim Gibbons might have to cut more than the anticipated $285 million from the state's $6.8 billion, two-year budget when he hacks state spending in January. "It is certainly going to make the hole bigger," state Budget Director Andrew Clinger said. Gibbons has refused to identify where he might cut.
Clinger denied that Gibbons has asked state agency directors to request employees voluntarily take two weeks off without pay to avoid layoffs. That option, however, might be gaining favor with department directors, he said. "The departments are looking at anything they can to make the cuts," Clinger said.
SOUTHERN NEVADA ECONOMY: Indicators plummet to '07 low
The downturn in Las Vegas' real estate market, combined with a 5.4 percent decline in gaming revenue for August, dragged the Southern Nevada Index of Leading Economic Indicators to its lowest level of the year.
The October index, based on August data, dropped to 132.67, with six of the 10 series contributing negatively. Its down from 133.46 in September, but remains slightly higher than a year ago. The index has relinquished its gain from the beginning of the year, when it stood at 132.98.
"The Las Vegas economy in August performed at less than a stellar rate," economist Keith Schwer of the Center for Business and Economic Research said.
Residential building permits continue to plummet by more than half and commercial permits are off nearly 20 percent. Taxable sales fell 5.2 percent in August. Housing has "taken a bite out of the robust expansion" of the past few years, he said.
Based on the data above, I hope that you are now inclined to believe that my Las Vegas Housing market forecasts have, thus far, been correct. With that, I would now like to state for the record that I believe Commercial Real Estate is the next bubble to pop.
Builders are sparing little expense in a bid to entice hesitant buyers into a soft housing market.
Virtually every major builder in the Las Vegas Valley has pushed big sales this fall, and the price breaks have been steep.
Pulte Homes marked down prices 15 percent on certain models, with discounts of up to $80,000 on some completed new homes during one October weekend. The builder's Del Webb subsidiary sliced $55,000 from some of its asking prices. Rhodes Homes has offered as much as $100,000 off on finished houses. Lennar Corp. has slashed prices on some models by about a third; Lennar cut the cost of a 5,000-square-foot home in its Earlstone community from $911,490 to $662,490, and a 4,498-square-foot home in its Silver Creek subdivision went from $807,290 to $612,290. Centex Homes has clipped $25,000 to $100,000 off the prices of some of its existing homes, and is ponying up as much as $21,000 in closing costs on some models. American West Homes' valleywide "liquidation sale" on Nov. 10 and Nov. 11 featured savings of up to $143,000.
After Astoria Homes dropped prices on standing inventory by as much as $200,000, or 27 percent, Oct. 12-14, traffic at least doubled across the board at Astoria communities, and even tripled in some cases, said Tom McCormick, the company's president.
SLOWING CONSTRUCTION:
Data signal slowing construction
Southern Nevada's construction industry showed more signs of slowing in the third quarter, the Las Vegas chapter of Associated General Contractors reported.
Taxable construction spending fell 14.8 percent over the past 12 months to $3.13 billion, largely a result of declining residential building permits. After three years of high-volume development, Las Vegas has experienced a 46 percent drop in single-family permits and 56 percent drop in multifamily permits.
Clark County has the nation's sixth-highest foreclosure rate and has one of the highest concentrations of subprime and adjustable-rate mortgages, the AGC market brief noted. Many housing analysts suggest the trend will worsen in the next 12 months as some 2 million mortgages nationwide reset to higher interest rates.
Construction employment fell 1.2 percent from a year ago to 108,500 in September, representing 11.6 percent of Southern Nevada's total employment base.
TAX REVENUE FALLING:
Nevada Taxable Retail sales falling
Taxable sales in Nevada faltered yet again in September, marking the sixth straight monthly slide in a key revenue generator for state government.
Thursday's report showed a statewide 1.5 percent drop compared with September 2006, tabbed to the housing slump as well as a growing reluctance overall to spend.
"People may not have as much discretionary money. That's how I read it," state economist Jim Shabi said.
Taxable sales are the state's biggest source of revenue, and the Department of Taxation report shows the general fund portion of the state budget is down $24.4 million, or 2.3 percent, from Economic Forum projections a third of the way into the 2008 fiscal year.
Collections on business tax and license fees as well as excise taxes also are lagging, the report showed.
Last month, Gov. Jim Gibbons directed state agency heads to prepare contingency plans to cut spending by 8 percent.
State Tax Revenue off the mark
CARSON CITY -- State government's financial woes worsened Thursday, when the Department of Taxation released reports showing tax revenue falling further behind projections.
Revenues from four major taxes -- sales, business payroll, insurance and real property -- were below expected levels for July through September, the department announced Thursday.
As a result, Gov. Jim Gibbons might have to cut more than the anticipated $285 million from the state's $6.8 billion, two-year budget when he hacks state spending in January. "It is certainly going to make the hole bigger," state Budget Director Andrew Clinger said. Gibbons has refused to identify where he might cut.
Clinger denied that Gibbons has asked state agency directors to request employees voluntarily take two weeks off without pay to avoid layoffs. That option, however, might be gaining favor with department directors, he said. "The departments are looking at anything they can to make the cuts," Clinger said.
SOUTHERN NEVADA ECONOMY: Indicators plummet to '07 low
The downturn in Las Vegas' real estate market, combined with a 5.4 percent decline in gaming revenue for August, dragged the Southern Nevada Index of Leading Economic Indicators to its lowest level of the year.
The October index, based on August data, dropped to 132.67, with six of the 10 series contributing negatively. Its down from 133.46 in September, but remains slightly higher than a year ago. The index has relinquished its gain from the beginning of the year, when it stood at 132.98.
"The Las Vegas economy in August performed at less than a stellar rate," economist Keith Schwer of the Center for Business and Economic Research said.
Residential building permits continue to plummet by more than half and commercial permits are off nearly 20 percent. Taxable sales fell 5.2 percent in August. Housing has "taken a bite out of the robust expansion" of the past few years, he said.
Based on the data above, I hope that you are now inclined to believe that my Las Vegas Housing market forecasts have, thus far, been correct. With that, I would now like to state for the record that I believe Commercial Real Estate is the next bubble to pop.
COMMERCIAL REAL ESTATE BUBBLE WILL BE THE NEXT TO POP:
Commercial Real Estate Bubble Economicrot
Back in early 2006, my Blog was mentioned in a BusinessWeek article discussing the fact that there were many folks ranting about the housing market bubble, but few thought that there was a Commercial Real Estate bubble. I quickly fired back that we would, in due time, see this one pop too. Though, at the time, I did feel we would be in a recession by now and that Commercial Property would have already followed suit, I do believe the first signs have finally appeared and the Commercial Property Bubble is ready to let out some major pressure.
Commercial Real Estate next: WSJ & Calculated Risk
The value of commercial real estate, which nearly doubled in the past seven years, is now starting to decline due to the credit crunch, according to a report set to be released today by Moody's Investors Service.
The report found that the value of commercial property declined 1.2% in September from the previous month. Particularly hard hit were apartments in the West and office property in most states other than California.
The report is an early sign that the commercial-property sector is being dragged down by the growing reluctance of lenders to extend credit for anything related to real estate.
Historically the Commercial real estate market trails the residential real estate market by about a year and half. So it appears the CRE slump is right on schedule
Commercial Real Estate next
Nov. 28 (Bloomberg) -- In the bond market, commercial property investors are about as creditworthy as U.S. homeowners with subprime mortgages.
``Commercial real estate is a full-blown bubble that feels very much at a bursting point,'' said Christian Stracke, an analyst in London at CreditSights Inc., a fixed-income research firm. ``There's a fairly toxic mix of factors at work.''
The cost of derivatives protecting investors from defaults on the highest-rated bonds backed by properties more than doubled in the past month, according to Markit Group Ltd. Prices suggest traders anticipate defaults rising to the highest level since the Great Depression, according to analysts at RBS Greenwich Capital in Greenwich, Connecticut.
The seven-year rally in offices and retail properties ended in September when prices fell an average of 1.2 percent, according to Moody's Investors Service. Banks worldwide are holding $54 billion of unsold commercial mortgages, according to data compiled by New York-based Citigroup Inc. that includes fixed and floating-rate debt.
SUMMARY/WRAPUP:
Growth in LV has been absolutely phenomenal over the last decade--a decade of prosperity driven by cheap credit (both business and personal) and rising asset values, creating a consumer wealth effect and influencing a carefree lifestyle. People (both local and tourist) had lots of cheap, easy money and access to huge credit lines if they needed more to spend in the City of Sin (all in the name of having a good time and living for the here and now). That is however coming to an end! Credit has started to dry up, (right now it is mainly influencing mortgage credit--months from now it will impact a myriad of other areas—Commercial credit, Car loans, Credit Cards, etc) and the huge party bills are coming due.
As stated in previous posts, Las Vegas’s economy has been completely dependent on the discretionary spending of vacationers (Airlines, Hotels, Restaurants, Shows, Gambling, Drinking, Strip Clubs, etc) and the city lacks any real or substantial diversification. When tourism & discretionary spending finally start to decline (due to National negative savings rates, rising inflation and falling home values), gaming revenues will drop, hotel occupancy rates will fall, and thousands of layoffs will follow.
Those locals who find themselves unemployed will quickly find that they have very limited options, as the entire hotel & gaming industry will be feeling the same economic pains. The lack of industry diversification in the city will be a killer!
Currently, with housing values falling, the wealth effect is under strain and many people are having difficulty understanding what has happened to the housing market, while most are still holding on to the false hope it will recover somewhat quickly. In the meantime, these folks have a mortgage that must get paid, all while coping with higher gas, food prices, tuition, insurance, energy bills, etc. Many are already strained to the max and the black hole of upcoming teaser rate mortgage resets will finally set them over the edge. (Note: refinancing will not be an option for those who have purchased within the last 3 years because they are already underwater; additionally many who have owned for decades used the cheap rates and housing boom to extract available equity--to live beyond their means; so they too cannot refinance). This same problem is beginning to impact millions from across the nation!!!
Additionally, the home ATM machine that people used to draw money out of regularly has finally dried up, so they have ended up resorting back to the credit cards (the same ones they paid off with that home equity line of credit last year) just to make daily ends meet. This is going to end horribly!!!
BOTTOM LINE: When tourism starts to wane, due to people running out of discretionary cash, gaming/hotel industry layoffs will follow, cascading the impacts of the already doomed Valley housing market, as more locals will be unable to meet their monthly mortgage obligations. Reduced spending levels, increasing layoffs, magnified home foreclosures and tightening credit conditions will cause a doubly painful domino effect on the Commercial real estate market and in due time, the impacts will be extremely painful to the entire economy. State Tax revenues will tank, crys for budget cuts will prevail and the government layoffs to follow will only exacerbate/compound the situation.
I think one of my readers summarized the situation best: “ Las Vegas lives off the margin. Good times, fat margins; lean times, no margin. LV has no plan B, there's nothing to take up the slack from a decrease in visitor volume. Even dollar rich foreigners aren't going to hold up employment that is based on a volume service industry and housing construction.”
Guess only the future will tell...
Regards
Commercial Real Estate Bubble Economicrot
Back in early 2006, my Blog was mentioned in a BusinessWeek article discussing the fact that there were many folks ranting about the housing market bubble, but few thought that there was a Commercial Real Estate bubble. I quickly fired back that we would, in due time, see this one pop too. Though, at the time, I did feel we would be in a recession by now and that Commercial Property would have already followed suit, I do believe the first signs have finally appeared and the Commercial Property Bubble is ready to let out some major pressure.
Commercial Real Estate next: WSJ & Calculated Risk
The value of commercial real estate, which nearly doubled in the past seven years, is now starting to decline due to the credit crunch, according to a report set to be released today by Moody's Investors Service.
The report found that the value of commercial property declined 1.2% in September from the previous month. Particularly hard hit were apartments in the West and office property in most states other than California.
The report is an early sign that the commercial-property sector is being dragged down by the growing reluctance of lenders to extend credit for anything related to real estate.
Historically the Commercial real estate market trails the residential real estate market by about a year and half. So it appears the CRE slump is right on schedule
Commercial Real Estate next
Nov. 28 (Bloomberg) -- In the bond market, commercial property investors are about as creditworthy as U.S. homeowners with subprime mortgages.
``Commercial real estate is a full-blown bubble that feels very much at a bursting point,'' said Christian Stracke, an analyst in London at CreditSights Inc., a fixed-income research firm. ``There's a fairly toxic mix of factors at work.''
The cost of derivatives protecting investors from defaults on the highest-rated bonds backed by properties more than doubled in the past month, according to Markit Group Ltd. Prices suggest traders anticipate defaults rising to the highest level since the Great Depression, according to analysts at RBS Greenwich Capital in Greenwich, Connecticut.
The seven-year rally in offices and retail properties ended in September when prices fell an average of 1.2 percent, according to Moody's Investors Service. Banks worldwide are holding $54 billion of unsold commercial mortgages, according to data compiled by New York-based Citigroup Inc. that includes fixed and floating-rate debt.
SUMMARY/WRAPUP:
Growth in LV has been absolutely phenomenal over the last decade--a decade of prosperity driven by cheap credit (both business and personal) and rising asset values, creating a consumer wealth effect and influencing a carefree lifestyle. People (both local and tourist) had lots of cheap, easy money and access to huge credit lines if they needed more to spend in the City of Sin (all in the name of having a good time and living for the here and now). That is however coming to an end! Credit has started to dry up, (right now it is mainly influencing mortgage credit--months from now it will impact a myriad of other areas—Commercial credit, Car loans, Credit Cards, etc) and the huge party bills are coming due.
As stated in previous posts, Las Vegas’s economy has been completely dependent on the discretionary spending of vacationers (Airlines, Hotels, Restaurants, Shows, Gambling, Drinking, Strip Clubs, etc) and the city lacks any real or substantial diversification. When tourism & discretionary spending finally start to decline (due to National negative savings rates, rising inflation and falling home values), gaming revenues will drop, hotel occupancy rates will fall, and thousands of layoffs will follow.
Those locals who find themselves unemployed will quickly find that they have very limited options, as the entire hotel & gaming industry will be feeling the same economic pains. The lack of industry diversification in the city will be a killer!
Currently, with housing values falling, the wealth effect is under strain and many people are having difficulty understanding what has happened to the housing market, while most are still holding on to the false hope it will recover somewhat quickly. In the meantime, these folks have a mortgage that must get paid, all while coping with higher gas, food prices, tuition, insurance, energy bills, etc. Many are already strained to the max and the black hole of upcoming teaser rate mortgage resets will finally set them over the edge. (Note: refinancing will not be an option for those who have purchased within the last 3 years because they are already underwater; additionally many who have owned for decades used the cheap rates and housing boom to extract available equity--to live beyond their means; so they too cannot refinance). This same problem is beginning to impact millions from across the nation!!!
Additionally, the home ATM machine that people used to draw money out of regularly has finally dried up, so they have ended up resorting back to the credit cards (the same ones they paid off with that home equity line of credit last year) just to make daily ends meet. This is going to end horribly!!!
BOTTOM LINE: When tourism starts to wane, due to people running out of discretionary cash, gaming/hotel industry layoffs will follow, cascading the impacts of the already doomed Valley housing market, as more locals will be unable to meet their monthly mortgage obligations. Reduced spending levels, increasing layoffs, magnified home foreclosures and tightening credit conditions will cause a doubly painful domino effect on the Commercial real estate market and in due time, the impacts will be extremely painful to the entire economy. State Tax revenues will tank, crys for budget cuts will prevail and the government layoffs to follow will only exacerbate/compound the situation.
I think one of my readers summarized the situation best: “ Las Vegas lives off the margin. Good times, fat margins; lean times, no margin. LV has no plan B, there's nothing to take up the slack from a decrease in visitor volume. Even dollar rich foreigners aren't going to hold up employment that is based on a volume service industry and housing construction.”
Guess only the future will tell...
Regards
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