Empiric Student Property Share Discussion Threads

[briarberry] 24/1/2008 20:21

yep end of an era...


The worst market crisis in 60 years - By George Soros

Published: January 22 2008 19:57 | Last updated: January 22 2008 19:57

The current financial crisis was precipitated by a bubble in the US housing market. In some ways it resembles other crises that have occurred since the end of the second world war at intervals ranging from four to 10 years.

However, there is a profound difference: the current crisis marks the end of an era of credit expansion based on the dollar as the international reserve currency. The periodic crises were part of a larger boom-bust process. The current crisis is the culmination of a super-boom that has lasted for more than 60 years

[briarberry] 24/1/2008 16:18

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HOUSE LEADERS, WHITE HOUSE AGREE ON $140 BLN IN ECONOMIC-STIMULUS MEASURES

[briarberry] 24/1/2008 15:44

Resales of U.S. homes fell 2.2% in December to a seasonally adjusted annual rate of 4.89 million, the lowest in nine years, the National Association of Realtors reported Thursday. Resales are down 22% compared with the previous December and are down 32% from the peak two years ago. Sales of single-family homes dropped 2% in December to a 4.31 million annual rate, the lowest in 10 years. For all of 2007, the median sales price of an existing single-family home fell for the first time in the 40-year history of the data, dropping 1.8%. Resales of single family homes fell 13%, the largest decline since 1982.

[briarberry] 24/1/2008 14:25

Sallie Mae, the embattled student lending giant, said Wednesday that it lost $1.6 billion in its fourth quarter as it prepared for a jump in student loan defaults and took a hit from bad bets on its stock price.


Bank of America announced on Wednesday that it planned to raise $6 billion by selling preferred shares, one day after reporting a 95 percent decline in quarterly profit.

[briarberry] 24/1/2008 11:55

San Diego was one of the hottest property spots on the way up...


Foreclosures up 353% in S.D. County in 2007

Setting dismal records, home foreclosures more than tripled and notices of mortgage default more than doubled in San Diego County in 2007.

DataQuick Information Systems reported yesterday that foreclosures rose 353 percent to 7,349, while default notices – the start of the foreclosure process – increased 128 percent to 20,138. The numbers were the highest since DataQuick began keeping track of county foreclosures in 1988 and defaults in 1992.

The county's previous foreclosure record was 4,077 in 1996, when Southern California was in a housing slump caused partly by a decline in defense spending.

Today, the inability of borrowers to keep up with mortgage payments is putting downward pressure on median home prices, which have fallen 17 percent since the peak of the housing boom in November 2005.

chart:

[briarberry] 22/1/2008 22:25

Apple 1Q Results Blow Past Estimates but Forecast Disappoints

SAN JOSE, Calif. (AP) -- Apple Inc. blew past Wall Street's bullish expectations in the first quarter with a 57 percent jump in profit, but a dramatically lower forecast sent shares plunging on fears about slowing consumer spending on electronics.




Motorola reported an 84% decline in fourth-quarter profit, as it shipped fewer wireless phones and suffered a steep loss in its struggling handset division.

[briarberry] 22/1/2008 22:18

PST SAN FRANCISCO -- Foreclosures and default notices skyrocketed to record peaks in California in the fourth quarter of 2007, according to a report released Tuesday. The information was a fresh reminder that the slumping real estate market is continuing to have a serious impact on homeowners, particularly those with risky subprime mortgages.

Lenders repossessed 31,676 residences in California in the October-November-December period, according to DataQuick Information Systems, a La Jolla research firm. That was a dramatic 421.2 percent increase from 6,078 in the year-ago quarter.

[briarberry] 22/1/2008 18:57

UK Nationwide becomes the latest lender to raise mortgage rates
By James Daley, Personal Finance Editor

The cost of borrowing money is continuing to rise this month, despite a cut in the Bank of England base rate at the start of December and a sharp reduction in Libor, the rate at which banks lend to each other, over the past few weeks.

Yesterday, Nationwide, the UK's largest building society and fourth-largest mortgage provider, became the latest lender to announce price rises across its tracker mortgage range. It will increase rates for new borrowers by up to 0.15 percentage points as of tomorrow.

Brokers said Alliance & Leicester is gearing up for a similar move this week; Woolwich, which is owned by Barclays, announced price hikes for new customers only last week. Other lenders are expected to follow suit in the coming weeks

[briarberry] 22/1/2008 16:34

Ambac Posts $3.26 Billion Quarterly Loss - AP

Ambac Financial Group Inc. swung to a deep fourth-quarter loss after taking a $5.21 billion write-down, and is reviewing ways to raise capital, the troubled bond insurer said Tuesday

[briarberry] 22/1/2008 16:24

Fed CUTS 75 basis points!

WASHINGTON (AP) -- The Federal Reserve, confronted with a global stock sell-off fanned by increased fears of a recession, slashed a key interest rate by three-quarters of a percentage point on Tuesday and indicated further rate cuts were likely.

The surprise reduction in the federal funds rate from 4.25 down to 3.5 percent marked the biggest funds rate cut on records going back to 1990.

[briarberry] 21/1/2008 23:26

1993, The WSJ thought there was too much debt in 1993, look how bad it is now...


The Wall Street Journal: A quote from 1993

"History shows that once nominal growth slows in a heavily indebted economy, there can be no recovery until the excess debt is eliminated. Political efforts to expand debt do nothing to lift the burden of debt service, which is the cause of slow growth and faltering incomes in the first place.

"Too many people have become complacent about deflation. But watch out. Debt has grown too large to be sustained out of cash flow. As soon as the balance sheet is depleted, a deeper crisis of asset liquidation will catch the world by surprise."

Source: James Dale Davidson, The Wall Street Journal, 1993.

[briarberry] 19/1/2008 22:29

it looks like we're at the end of an era, unless they can revive the house ATM somehow ??


the good old days...

Shania Twain - Ka-ching


When you're broke go and get a loan
Take out another mortgage on your home
Consolidate so you can afford
To go and spend some more when
you get bored

[briarberry] 19/1/2008 17:56

US initial claims are probably a lot higher than reported !!!


More BLS BS - by John Mauldin - January 18, 2008

The Bureau of Labor Statistics (BLS) reported that jobless claims dropped a significant 21,000 in the last week to 310,000 and down by 56,000 in the last four weeks. As a Bear Stearns analyst wrote: "Although claims are volatile early in the year, and in recent years have been prone to upward revision, the magnitude of the decline in initial jobless claims in the first two weeks of the year suggests that job creation did not deteriorate further in January."

However, this claims data does not square with the employment numbers which came out last week and showed a significantly weaker jobs picture. Note that continuing claims is in a decided rising pattern, while initial claims seem to have turned back down.

So what gives? It seems that BLS statistics, like making sausage, is a very messy process. The key factor here is that the number (301,000) is seasonally adjusted. This means the BLS smoothes the data on an annualized basis, which makes the number less volatile from week to week. And as you might guess, that process of seasonally adjusting looks at prior data points and projects future trends

This of course leads to large revisions at turning points. For example, the BLS is now indicating it expects to revise the year ending in March of 2007 downward by some 300,000 jobs. And you can expect further downward revisions as time goes on.

But let's return to the initial claims data. Every week I get an analysis of the claims data from long-time reader John Vogel. Mostly it is not very exciting, but he does a very thorough job of examining the actual data and comparing it to previous years. Stick with me here as I run through a few numbers.

Last week there were actually 521,280 initial claims. That number rose to 547,637 this week. So why didn't the seasonally adjusted number rise? Because in week three of previous years the number dropped, often considerably. In 2007 the number was essentially flat. But in 2006, the drop in the third week was 116,000 and in 2005 it was 226,000. There were also big drops in 2004 and 2003, 187,000 and 172,000 respectively.

So, when you smooth the number out by making seasonal adjustments, you expect a large drop in week three from week two. Except that we did not get that drop, we got a rise of 26,000, which is clearly not the trend for the last five years. That also squares with last week's employment survey which shows job weakness.

So, why use the seasonally adjusted number? Because the actual number is very volatile. Last week's number was considerably lower than the years of 2003-5, by an average of 175,000 or so. That would be considered good, yes?

But this week's number is the highest since 2002. That would be considered bad, of course. What it really means is that the BLS numbers should be taken with a huge grain of salt around periods when the economy is changing, as it is now. And using them to make a case that the economy is not weakening, as a number of pundits did, could be considered misleading. But now, gentle reader, if that did not put you to sleep, you know more than most pundits.

Let me make a quick point. The staff at the BLS does a very good job in a very difficult environment. As time goes on, they revise their statistics into something that is accurate and useful. But to use the data as it is initially reported to make investment decisions is not a wise thing. The data is not intended for that purpose.

[briarberry] 18/1/2008 13:36

Earnings estimates for the fourth-quarter have plunged. At the beginning of the fourth quarter S&P 500 earnings were expected to increase by 11%, now S&P 500 earnings are expected to drop by 10%.

A significant amount of bad news has been priced into the market and investors will take solace if the bad news stops. Unfortunately, it's much more likely that that bad news is really just starting.

Chad Hudson - Mid-Week Analysis - PrudentBear.com

[briarberry] 15/1/2008 20:07

2:31 (Dow Jones) Citigroup's © whirlwind trimming of its balance sheet by
$176B last quarter, a cut of 7.4%, worries Gaurav, an Indian blogger whose
thoughts are distributed on the Seeking Alpha blog. If banks like Citi are
deleveraging at the same time that the commercial paper market has stalled, it
bodes ill for consumers and corporations who need to borrow money. "People who
are saying that liquidity will be created because [the] Fed is cutting rates
do not realize who creates liquidity," writes Gaurav, described as a market
professional focusing on Indian equities. "It is not the Fed - it is the
banks." (JED)

[briarberry] 14/1/2008 14:29

MEW, it must be getting harder to get home loans to pay off credit cards...


Americans Cut Back Sharply on Spending

At the same time, the number of overdue payments on American Express cards is surging, the company said - and this among well-heeled cardholders who charge up to $12,000 a year, on average, on each card. American Express has called some cardholders in the last few weeks to ask if they will have trouble paying their bills.

"We are seeing a correlation with housing prices," said Michael O'Neill, a spokesman for American Express. "The falloff in spending is everywhere in the country, but it is greatest in those areas like south Florida and California, where home prices have fallen the most."

[briarberry] 14/1/2008 14:17

1910, a talk about the secret plans for the formation of the Fed...

I guess everyone knows all this by now but I've not seen it on youtube before...

Second Look at the Federal Reserve by Edward Griffin

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[briarberry] 11/1/2008 14:16

Deflation (retail), people have been mislead by a fake low CPI for so many years that I'm not surprised they expect deflation, so this doesn't really prove anything, not yet anyway...


* Meanwhile, we saw this interesting statement from Sherif Mityas of
the consulting firm, A.T. Kearney, in a Bloomberg story on retail sales:
"Retailers have created a bunch of procrastinators waiting for the markdowns
they knew were going to come," Mityas said.

* That statement caught our interest because the psychological process
of pushing back purchases in anticipation of price decreases is the hallmark
of a deflationary spiral.

* The Federal Reserve has been able to "create" some inflationary
pressures, but they are failing to decrease the purchasing power of money
fast enough to counteract the underlying, secular deflationary psychology
now becoming entrenched on the back of a collapse in housing prices.

For more retail sales analysis check out
Minyanville's Retail Roundup by Jeff Macke.

[briarberry] 11/1/2008 13:11

The credit crunch could push lots of over-leveraged companies into default...


CENTRO Properties Group and Centro Retail Group securities have been placed in a trading halt pending the release of an announcement by the company.

Securities in Centro Properties, Australia's second largest shopping centre owner, closed down 22.52 per cent yesterday, or 25 cents, to 86 cents, having touched an intra-day low of 85 cents.

Centro, which is also the fifth largest shopping centre owner in the United States, lost more than 80 per cent of its market value in December when the group revealed it was having difficulty refinancing about $1.3 billion of maturing debt.

At the end of fiscal 2007, the group's portfolio included 810 properties, two-thirds of which are in the United States, and it had about $26.6 billion under management.

[briarberry] 11/1/2008 12:22

1/11/2008 7:04:56 AM Bank of America Corp. (BAC) announced a definitive agreement to purchase Countrywide Financial Corp. (CFC) in an all-stock transaction worth approximately $4 billion.

[briarberry] 11/1/2008 01:47

it seems the USA is going to start lying about everything...


PHILADELPHIA FED INDEX REVISED UP

Annual revisions to the Philadelphia Fed's manufacturing activity index show that the general business conditions index in December was -1.6 compared with the originally reported, more worrisome -5.7 reading..



Debt is Wealth
Inflation is Economic Growth
Oil is Peace

[briarberry] 11/1/2008 01:35

Credit Card Debt Soars as House Prices Plunge - January 9, 2008

By Dean Baker

"The current rate of house price decline will destroy $2.2 trillion of wealth this year."

The Federal Reserve Board reported yesterday that credit card debt rose at an 11.3 percent annual rate in November after rising at an 8.5 percent rate in October. By comparison, credit card debt rose at a rate between 2 percent and 4 percent from 2003 to 2005.

The explanation for this surge in credit card debt is that millions of homeowners are losing the ability to borrow against their home.