Does Anyone feel like Bailing

[TheMercenary]

Another relevant article concerning Fannie and Freddie and the current mess of the financial climate.... It makes for an interesting read, if for nothing else a nice synopsis of where it all started.

http://www.realclearmarkets.com/arti...omission.html#

[Undertoad]

Here is the motto:

The government can fuck things up, and the private sector can fuck things up, but to majorly fuck everything up requires a partnership between both of them.

[TheMercenary]

And taxpayer funds.

[classicman]

Housing crash is getting worse: report

What a foolish boondoggle those tax breaks for home buyers have turned out to be. The government spent an estimated $22 billion between 2008 and 2010 on tax breaks to prop up the housing market. All it achieved was a brief suckers’ rally that ended last summer.

“As we said at the time, it was a giant waste of money,” says Mark Calabria, economist at the conservative Cato Institute. “None of these things really turned the housing market around. They just put off the adjustment for awhile.”

It’s hard to overestimate the scale of the carnage in the housing market. Zillow found prices fell in all but four U.S. metro areas.

Falling real-estate prices mean spiraling hidden losses throughout the economy, from banks to homeowners.

Remember Japan’s “zombie banks”? These were the financial institutions that haunted that country’s economic recovery after the 1990 crash. They staggered on with huge losses they could never repay — the walking dead.

Link

I thought that things were turning around in the housing market.
WTF?

[glatt]

Based on my unscientific observations, the housing market is picking up. At least sellers are more confident now. In the last few months, I've seen a lot of new houses enter the market here, and they seem to be selling. Our neighbors moved and sold their house in a couple days.

[classicman]

Thats what I was noticing in my area as well, then I spoke with a real estate friend and she told me that things had slowed considerably in the last few weeks when it normally would be picking up.
Goofing around on google and I saw this. Whats it like in other areas of the country? Anyone?

<glatt - you and I are pretty close, geographically speaking.>

[tw]

Originally Posted by classicman

I thought that things were turning around in the housing market.

Depends upon who is doing the talking. Nationally, a housing oversupply. Builders are hurting except where specialty demands exist or regional problems were not so severe. Banks have done virtually nothing to clear a backlog of foreclosures. That has just begun. Will finally encourage all prices to drop. With so many underwater, many workers (especially, for some reason, males) cannot go elsewhere for new jobs. They are stuck in houses in towns where jobs are less available. Those venues could remain a stagnant market.

Also required was time for many to admit to and take their losses.

Some markets (ie NJ, PA) were not hit badly. Other markets (ie CA, Vegas) still have serious problems. Therefore some prices will fall more than others.

I have been watching a nearby home once offered for something like $4million. Apparently (due to divorse), it is something less than $2million. Still not sold after two years. But the homeowner will be (and can afford) to sell for less. That one will probably move soon. Some needed time to admit how much they must surrender to the market.

Market must be judged from real estate agents, builders, and homeowners at various prices and in various states. All will see something different as the market changes to adapt to new realities.

[Happy Monkey]

They built far too many housing units during the real estate boom, so there is a glut there. And people are being foreclosed on a lot, so there's a glut there. It'll take a little while for population increases to absorb the glut.

[tw]

Originally Posted by Happy Monkey

They built far too many housing units during the real estate boom, so there is a glut there.

Meanwhile, in a few towns where the richest reside, I am watching construction continue with maybe a 10 or 20 percent cutback.

[classicman]

Originally Posted by tw

Meanwhile, I am watching construction continue with maybe an 85 percent cutback.

FTFY

[classicman]

Not sure where to dump this so its going here...

That's the going rate for Zimbabwe's highest denomination note, the biggest ever produced for legal tender—and a national symbol of monetary policy run amok. At one point in 2009, a hundred-trillion-dollar bill couldn't buy a bus ticket in the capital of Harare.

But since then the value of the Zimbabwe dollar has soared. Not in Zimbabwe, where the currency has been abandoned, but on eBay.

The notes are a hot commodity among currency collectors and novelty buyers, fetching 15 times what they were officially worth in circulation. In the past decade, President Robert Mugabe and his allies attempted to prop up the economy—and their government—by printing money. Instead, the country's central bankers sparked hyperinflation by issuing bills with more zeros.

The 100-trillion-dollar note, circulated for just a few months before the Zimbabwe dollar was officially abandoned as the country's legal currency in 2009, marked the daily limit people were allowed to withdraw from their bank accounts. Prices rose, wreaking havoc.

The runaway inflation forced Zimbabweans to wait in line to buy bread, toothpaste and other essentials. They often carried bigger bags for their money than the few items they could afford with a devalued currency.

Today, all transactions are in foreign currencies, mainly the U.S. dollar and the South African rand. But Zimbabwe's worthless bills are valuable—at least outside the country. That Zimbabwe's currency happened to be denoted in dollars has amplified appeal, say currency dealers and collectors, particularly after the global financial crisis and mounting public debts sparked inflationary fears in the U.S.

"People pick them up and make jokes about when that's going to happen here," says David Laties, owner of the Educational Coin Company, a currency wholesaler based in Highland, N.Y

Honey? I'm running out to get some bread...

Link

[lookout123]

Pffft, that'll never happen in the US! The dollar is the world's currency.

*leaves to stock up on tuna, beans, and toilet paper*

[gvidas]

I always got a kick out of the Zimbabwe story. I don't think it has any relevance as an allegory (or, I'm not interested in buying into the paranoia and fear that the allegory hints at), but I love how the story ends:

In 2009, Gideon Gono, governor of Zimbabwe’s Reserve Bank, was awarded the Ig Nobel prize for Mathematics "for giving people a simple, everyday way to cope with a wide range of numbers — from very small to very big — by having his bank print bank notes with denominations ranging from one cent ($.01) to one hundred trillion dollars ($100,000,000,000,000)."

[ZenGum]

Originally Posted by lookout123

Pffft, that'll never happen in the US! The dollar is the world's currency.

*leaves to stock up on tuna, beans, and toilet paper*

Yes to the tuna and beans, but you've got plenty of toilet paper. I just hope you're not allergic to the ink.


Seriously, the US$ shouldn't go crazy like that - the US economy has a lot of real activity going on in it, and the trump card is that most US debt is denominated in US$. So devaluing the currency also devalues the debt. For other cases (Zimbabwe, Weimar Germany) debt was denominated in foreign currency, so devaluing thier own currency meant they needed more and more of their own currency for trade, and that is how the spiral goes.