There’s always something to howl about.

Month: April 2013 (page 1 of 1)

Zero Hedge: “Presenting: The Housing Bubble 2.0”

Tyler Durden:

It was just seven short years ago that the prices at the epicenter of the housing bubble, Los Angeles, CA rose by 50% every six months as the nation experienced its first parabolic move higher in home prices courtesy of Alan Greenspan’s disastrous policies: a time when everyone knew intuitively the housing market was in an epic bubble, yet which nobody wanted to pop because there was just too much fun to be had chasing the bouncing ball, not to mention money. Well, courtesy of the real-time real estate pricing trackers at Altos Research, we now know that the very worst of the housing bubble is not only back, but it is at levels not seen since the days when a house in the Inland Empire was only a faint glimmer of the prototype for BitCoin.

Urf.

A lot of the people I talk to in Phoenix are trying to time their exit. It wasn’t this way in 2005-2006; I had people still eager to buy ten months after the market had turned.

The Samsung Galaxy S4 is the world’s first peripatetic computer: You walk, you work and you thrive.

You walk, you work – and you get the job done.

I was walking around the house Saturday — busily working away, headset in my ear, making phone calls and dealing with emails — when it hit me:

The Samsung Galaxy S4 is the world’s first peripatetic computer.

It’s easy and natural to work — to do real work — while walking. Salesmaniacs know that you work better on the phone when you’re walking and talking, but that’s just one aspect of the the sheer utility of doing the desk work where the work is, instead of trying to disgarble the mangled reports of intermediaries.

Comprehensive reviews of the S4 abound, pick your poison. I’m Apple to the core since 1985, so this was a big move for me. I have zero doubt that all smartphones are rip-offs of Apple, that without the iPhone, cell phones would still look and disappoint like the the Nokias and Motorolas of yore. But Samsung is number two and it is trying harder than Apple is now — a lot harder.

The unique features of the phone are gee-whiz and boy-howdy both, doubt you nothing, but that’s all just geekery (and the whole Android universe is rife with the kind of self-satisfied jargonistic needlessly-arcane asshattery that made normal people shun Unix (Eunichs?) geeks even before they made DOS for the dumb ones). What makes the S4 work is the way it’s made for work.

Like this:

* Size: Nice in my hand, maybe just a touch big for the wimminz, but very pocketable, unlike the largely-comparable Galaxy Note 2. (Between the lines: Leaving the phone out of the iPad and iPad Mini was an unforced error on Apple’s part.)

* Weight: That plastic shell feels cheesy, but it makes the phone super-light. I can hold it stationary in one hand indefinitely, easily, without rest or stress. I sold my iPad 2 because the weight of the thing made it, de facto, a crippled laptop, not a usefully-mobile computing solution.

* Software: This is still the weakest link for true peripateticism, computing while ambulating, working while you walk, but we’re getting there. The whole “app” diversion has been a disaster, with millions of people possessed Read more

The end-times are upon us: DocuSign spam…

From my mail this morning:

DocuSignSpam

That’s a spoofed email — no links back to the mothership, and a big, fat executable at the bottom. I’m betting it’s WinPoison, so it probably won’t hurt my iMac, but I won’t be researching that question.

But: Be alert. Whether it’s spam, malware or a phishing line, nothing goes wrong until you make the mistake of clicking on the wrong file or link.

Kotkin: “Why the next great American cities aren’t what you think.”

Joel Kotkin at The Daily Beast:

Once considered backwaters, these Sunbelt cities are quietly achieving a critical mass of well-educated residents. They are also becoming major magnets for immigrants. Over the past decade, the largest percentage growth in foreign-born population has occurred in sunbelt cities, led by Nashville, which has doubled its number of immigrants, as have Charlotte and Raleigh. During the first decade of the 21st century, Houston attracted the second-most new, foreign-born residents, some 400,000, of any American city—behind only much larger New York and slightly ahead of Dallas-Ft. Worth, but more than three times as many as Los Angeles. According to one recent Rice University study, Census data now shows that Houston has now surpassed New York as the country’s most racially and ethnically diverse metropolis.

Why are these people flocking to the aspirational cities, that lack the hip amenities, tourist draws, and cultural landmarks of the biggest American cities? People are still far more likely to buy a million dollar pied à terre in Manhattan than to do so in Oklahoma City. Like early-20th-century Polish peasants who came to work in Chicago’s factories or Russian immigrants, like my grandparents, who came to New York to labor in the rag trade, the appeal of today’s smaller cities is largely economic. The foreign born, along with generally younger educated workers, are canaries in the coal mine—singing loudest and most frequently in places that offer both employment and opportunities for upward mobility and a better life.

Over the decade, for example, Austin’s job base grew 28 percent, Raleigh’s by 21 percent, Houston by 20 percent, while Nashville, Atlanta, San Antonio, and Dallas-Ft. Worth saw job growth in the 14 percent range or better. In contrast, among all the legacy cities, only Seattle and Washington D.C.—the great economic parasite—have created jobs faster than the national average of roughly 5 percent. Most did far worse, with New York and Boston 20 percent below the norm; big urban regions including Philadelphia, Los Angeles, and, despite the current tech bubble, San Francisco have created essentially zero new jobs over the decade.

[….]

The reality is that most urban growth in Read more

If the condominum is not VA-approved, how do I get a VA home loan offer accepted?

Many veterans in California purchase properties which are classified as condominiums.  Some are large complexes, with professional HOA management, some are small complexes (under 6 units) with no monthly HOA fee and an informal cost-sharing agreement, and some are townhomes.  All share on thing in common–they are listed on the county records as a condominium.  This, the VA loan can not be funded until the condominium complex is approved.

The Southern California market has shifted, seemingly overnight from a buyer’s market to a seller’s market.  Many listing agents are presenting multiple offers to sellers.  Sadly, sellers leave some money on the table because the best offer is one using a VA home loan.  The sellers believe that the VA home loan can not be used because the condominium complex does not have a VA approval.

Buyer’s agents jobs then, are to present the VA offer with an eye towards minimizing the risk associated with it.

First, the buyer’s agent would do well to present documentation which demonstrates that the veteran is a strong buyer.  Some successful agents go so far to present my automated underwriting findings along with asset and income documentation (with the veteran’s permission, of course).  Demonstrating that the veteran has the credit, income, and asset requirements, to be approved for the loan amount, shows that the veteran is “bankable”.

Second, the buyer’s agent might address the three common concerns, sellers have with VA loans in the cover letter.  The cover letter should highlight that the veteran earned the no-down payment loan as compensation for his or her service to our country.  I sometimes call this “wrapping the offer in the flag” and the buyer’s agent should not be shy about doing it.  If the veteran served overseas, highlight it. If the veteran earned a distinctive award, highlight it.

The buyer’s agent should be clear about whether the seller is being asked to pay for the VA non-allowable costs and specify the dollar amount.  If the offer does not include seller-paid costs, the letter should state who is paying for those costs (usually the lender) and reference the section in the offer which states Read more

What’s big, dumb, sclerotic and panics on command? A California Association of Realtors member, apparently.

So this big dumb robot shows up on the front porch this morning:

Believe it or not, it’s from the California Association of Realtors. The robot exists to support this video:

Get it? There’s a meet-cute featuring pre-tween pretend robots, and this clunky piece of junk communicates… what…?

My reaction? “Urf. Now I’m going to have to waste time mocking this nonsense…”

Okayfine. You will note that the robot seems to be suggesting that California Real Estate is something of a slot machine.

But at least your CAR member agent has his squarish mechanical head screwed on right.

And in a batteries-not-included world, your mechano-Realtor comes complete with two enormous D-cells, which must have added considerably to the postage.

The box didn’t provide a lot of insight into why one should choose a CAR-certified RealtorBot, but it was fun imagery:

Ultimately, though, it’s the test of the marketplace that matters. And a CAR-approved RealtorBot can panic mindlessly like no other.

Hey, CAR members: No tar, no feathers in California? This is your money I’m having such a good time with…

Apparently, insanity is buying the same house over and over again, even though you never qualify.

You just can’t make this shit up: Obama administration pushes banks to make home loans to people with weaker credit. Why not? It worked out so well the last time.

The Obama administration is engaged in a broad push to make more home loans available to people with weaker credit, an effort that officials say will help power the economic recovery but that skeptics say could open the door to the risky lending that caused the housing crash in the first place.

President Obama’s economic advisers and outside experts say the nation’s much-celebrated housing rebound is leaving too many people behind, including young people looking to buy their first homes and individuals with credit records weakened by the recession.

In response, administration officials say they are working to get banks to lend to a wider range of borrowers by taking advantage of taxpayer-backed programs — including those offered by the Federal Housing Administration — that insure home loans against default.

Housing officials are urging the Justice Department to provide assurances to banks, which have become increasingly cautious, that they will not face legal or financial recriminations if they make loans to riskier borrowers who meet government standards but later default.

Officials are also encouraging lenders to use more subjective judgment in determining whether to offer a loan and are seeking to make it easier for people who owe more than their properties are worth to refinance at today’s low interest rates, among other steps.

Obama pledged in his State of the Union address to do more to make sure more Americans can enjoy the benefits of the housing recovery, but critics say encouraging banks to lend as broadly as the administration hopes will sow the seeds of another housing disaster and endanger taxpayer dollars.

“If that were to come to pass, that would open the floodgates to highly excessive risk and would send us right back on the same path we were just trying to recover from,” said Ed Pinto, a resident fellow at the American Enterprise Institute and former top executive at mortgage giant Fannie Mae.

Can Bernanke Keep Mortgage Rates This Low Into 2015?

I’ve been a vocal critic of Ben Bernanke.  I thought his Quantitative Easing schemes would eventually create a bubble in the Treasury and mortgage-bond markets.  Bernanke has committed to keeping rates low for another 18-24 months.

I was wrong.  I violated the first rule of market prognostication (from the late Marty Zweig):  Don’t Fight the Fed

Let me give you some background.  Mortgage rates are driven by the secondary market (which is a fancy word for bond buyers on Wall Street).  I offered an abbreviated history of secondary mortgage marketing , six years ago, here on Bloodhound Blog.  Essentially it works like this:

  • Home buyer applies for a loan with a mortgage originator
  • Originator processes the loan for submission to a lender
  • Lender underwrites the loan to agency guidelines (FHA, FNMA, FHLMC, VA)
  • Lender funds the loan
  • Lender secures guaranty from agency
  • Lender retains servicing rights but assigns rights to principal and interest to an investment bank
  • Investment bank packages loans in a pool, carves up the pool into bonds, and sells them to individual investors

Two things are important in secondary marketing:  the agency guaranty and the ability to sell the bonds.  The agency guaranty offers a sense of security to the investors and the demand for the bonds must be there.  When I thought rates would rise, because of runaway inflation, I posited the the Federal Reserve Bank’s power was quickly deteriorating.  What I hadn’t anticipated was that central banks, all over the word, were in even worse shape.  The Fed might be ugly but she’s the prettiest gal at the dance.

Last month, I asked Alan Nevin, economist with the London Group, “What if the buyers run away?”  To which, he replied, “Where will they go?”.

This is not a pollyannish answer.  Where WILL investors go?  I offered these options:  Hong Kong, Australia,  and Canada

Then it hit me–the world wide capital market is huge and the options for capital investment are limited.  Imagine the global capital market as a 64-gallon trash can.  The Hong Kong, Australian, and Canadian bond markets are like a shot glass, a pint bottle, and a quart can.  Even if you tried to dump all that Read more