Monday, March 17, 2008

100th Post! Just In Time For The Implosion Of Our Financial System! YEAH!

600+ 400+ 200+ comments.. you know what to do... triple down

Agent Smith
: You hear that Mr. Anderson?... That is the sound of inevitability... It is the sound of your death... Goodbye, Mr. Anderson...

Son: "Hey Dad, what's that scary noise?"

Dad: "Oh, that's nothing Son. That's just the sound of America's Collapsing Financial System."

Son: "It sounds like that earthquake in the Bering Sea that killed all those black Antarcticans in 2005."

Dad: "It was the Indian Ocean & Indonesians mainly, but this will be much, much worse than that. But, we had a good run"

Wow. Where to start? I guess we'll start with the Macro-Big Stuff, and work back to the Little Stuff.

Bear bailout sparks concern about other brokers
Crisis of confidence hits ahead of results from Goldman, Morgan, Lehman

SAN FRANCISCO (MarketWatch) - The emergency bailout of Bear Stearns Cos. dented confidence in other securities firms ahead of results next week from some of Wall Street's giants including Goldman Sachs, Morgan Stanley and Lehman Brothers, analysts said on Friday.

The Bear Stearns Companies Inc. was forced to borrow money for 28 days from the Federal Reserve, with help from J.P. Morgan Chase JPMorgan Chase & Co, after clients and counterparties deserted the 85-year-old firm.

Triggering a sell-off throughout the financial sector, Bear shares slumped 47% to $30, their biggest one-day drop in at least two decades.

Bear said the rescue consists of getting short-term financing from the Fed, through J.P. Morgan, after its liquidity "deteriorated significantly" during the past 24 hours.

Bear said the financial support is a bridge to a more permanent solution. Several analysts predicted the firm will likely be acquired quickly by a stronger bank or broker to stop its troubles triggering broader problems in the financial system.

"The financial system supervisors are attempting to prevent this company's problems and the perception of problems from rippling through the system to other financial players," David Hendler, an analyst at CreditSights, wrote in a note to investors. "Given Bear Stearns' huge impact in the mortgage, derivatives and funding markets, we sense that a salvation acquisition is the most likely possibility."

Only days earlier, Bear Chief Executive Alan Schwartz reassured investors that the broker had no liquidity problems and was meeting demands for cash. But concerns grew in the market anyway and on Thursday counterparties withdrew crucial financial support and the firm was hit by a wave of client withdrawals. That pushed the firm into the arms of the Fed.

"If a firm as large and liquid as Bear can be taken down on what appears to us as exaggerated claims about liquidity and counterparty risk which then snow-ball into a market reality as investors, counterparties and lenders shoot first and ask questions later, then what's to stop the same thing happening to other firms facing similar issues," Michael Hecht, an analyst at Banc of America Securities, wrote in a note to clients on Friday.

First-quarter earnings per share for these four firms will likely drop by more than half versus a year earlier, according to analyst estimates compiled by FactSet.

Bear's crisis is the latest sign that the U.S. financial system is cracking under the weight of a global credit crunch that was sparked by last year's subprime mortgage meltdown. As lenders have become more wary of mortgage securities used to back loans, they've pulled back, sparking widespread de-leveraging.

Brokerage firms get the money they need by borrowing it in the market, while big banks like J.P. Morgan get a big chunk of their funding from customers who deposit cash in bank accounts.

That means brokerage firms are more vulnerable to swings of risk appetite and aversion in capital markets. As the credit crunch has spread, creditors have become less willing to lend to these firms, increasing their borrowing costs.

"Financial markets are pretty frozen up. It's a stunner," said Hal Ritch, co-chief executive of investment bank Sagent Advisors and a former Citigroup Inc. banker. "There was so much liquidity just a few months ago, but now there's so little. There's a lot of fear out there."

As leverage, or borrowing, in the financial system is wound down, some market participants arehaving to sell assets to meet their obligations. That's causing prices to fall further.

Falling prices is a problem for brokerage firms because they still hold illiquid assets and will probably have to record the lower market value of these exposures as part of their first-quarter results.

Brokerage firms have already taken billions of dollars in such write-downs, but continuing turmoil in credit markets may mean a few more quarters of valuation hits.

"The problem that Bear Stearns and other financials face is a great unwind of leverage," Meredith Whitney, an analyst at Oppenheimer & Co., wrote in a note to investors on Friday. "When a company that is leveraged over 30-to-1 faces a crisis of liquidity and confidence of creditworthiness, that company will be unable to leverage its collateral and its leverage will be forced down to 1-to-1."

The global financial-services sector may end up writing down the fair value of subprime exposures by $285 billion, mainly from residential mortgage-backed securities and more complex vehicles known as collateralized debt obligations (CDOs), Standard & Poor's estimated on Thursday.

The rating agency gave investors hope when it said the end of such write-downs was in sight. However, it also gave an ominous warning.

The agency said that the broader credit crunch has dented the market prices of many other types of securities in recent weeks. If this continues, banks and brokers could be hit by another round of write-downs, S&P said.

"A major re-pricing of credit risk is taking place across the debt markets," S&P wrote. "If the wider spreads hold to the end of the first quarter or half of this year, financial institutions will suffer further market value write-downs of a broad range of exposures, including leveraged loans." End of Story

The notable sections are highlighted.

THIS is how close Armaggedon is. 24 HOURS.

24 hours before Bear Stearns went completely BROKE (don't believe anything else), the CEO made statements that ALL IS WELL; Zero liquidity problems, Don't Worry, We Are Fine.

Uh huh. Bear Stearns will be sold later this week, if not before I finish this post.

How unusual is this? Well, let's see. From Bloomberg:

Fed Invokes Little-Used Authority to Aid Bear Stearns

By Scott Lanman

March 14 (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke invoked a law last used four decades ago to keep Bear Stearns Cos. from collapsing after the securities firm sought emergency funding from the central bank.

The loan to Bear Stearns required a vote today by the Fed's Board of Governors because the company isn't a bank, Fed staff officials said. The central bank is taking on the credit risk from Bear Stearns collateral, lending the funds through JPMorgan Chase & Co. because it's operationally simpler to accomplish than a direct loan, the staff said on condition of anonymity.

Bernanke took advantage of little-used parts of Fed law, added in the 1930s and last utilized in the 1960s, that allow it to lend to corporations and private partnerships with a special board vote. The Fed chief probably sought to stave off a deeper blow to the financial system from a Bear Stearns collapse, former Fed researcher Keith Hembre said.

``The Fed really doesn't have any obligation to help a non- bank aside from its role or responsibility to keep the financial markets functioning,'' said Hembre, who helps oversee $107 billion as chief economist at FAF Advisors Inc. in Minneapolis. ``They made a judgment, probably an accurate one, that they're not going to function very well if you've got a full-blown crisis with a major Wall Street firm.''

Unanimous Vote

The Fed said in a statement that it will ``continue to provide liquidity as necessary to promote the orderly functioning of the financial system,'' repeating reassurances the central bank has made often since credit strains arrived in August. The statement said the Fed Board unanimously approved the arrangement with JPMorgan and Bear Stearns.

The Fed Board, which met today at 9:15 a.m. Washington time, typically delegates such discount-window lending authority to its regional reserve banks when it comes to loans to banks.

``There's a clear realization among people both in the official sector and the financial markets that some of the institutions we have built over the last 100 years are not well adapted to the modern 21st century financial system,'' said former New York Fed research director Stephen Cecchetti. ``A lot of what we've been seeing have been creative innovations to deal with problems that the institutions were not built to handle.''

The senior staffers declined to describe how large the loan to Bear Stearns is, and whether a private-sector bailout was attempted first before the Fed extended credit through JPMorgan. The staff officials said the Fed used its authorization under the law several times in the 1960s though didn't immediately have further details.

Paulson's Support

Such votes require approval from five Fed governors. The seven-member Fed board currently has two vacancies, and one governor, Randall Kroszner, is serving past the Jan. 31 expiration of his term.

Treasury Secretary Henry Paulson, in a separate statement, said ``there are challenges in our financial markets, and we continue to address them.'' Treasury is ``working closely'' with the Fed and the Securities and Exchange Commission.

``I appreciate the leadership of the Federal Reserve in enhancing the stability and orderliness of our markets,'' Paulson said. ``Our financial system is flexible and resilient and I am confident that the efforts of regulators and market participants will minimize disruption to the system.''

Robert Rubin, the former Treasury secretary who is now chairman of Citigroup Inc.'s executive committee, said at a conference today that the ``risks have reached a point that the right thing is to act and act in a very serious way.''

47% Plunge

Bear Stearns shares plummeted a record 47 percent on news of the bailout. The announcement, coupled with a report showing U.S. consumer prices were unchanged in February, led traders to place 56 percent odds that Fed policy makers will lower their benchmark interest rate by a full percentage point at their March 18 meeting, to 2 percent.

Yesterday, the odds of such a move were 0 percent.

A reduction of that size would be unprecedented since the overnight lending rate became the Fed's main policy tool around 1990, trumping the Jan. 22 emergency cut of 0.75 percentage point.

It's the first time since the financial turmoil intensified in August that Bernanke, 54, has publicly announced Fed assistance to a specific company instead of measures open to broader sets of banks or other financial institutions.

Most recently, the Fed on March 11 announced plans to lend $200 billion in Treasuries to primary dealers in exchange for debt that includes mortgage-backed securities. Last week, the Fed increased funds available through its so-called Term Auction Facility, set up in December to lend funds to banks in exchange for a wide variety of collateral, including mortgage debt.

`All the Problems'

``What they're doing now is going to help, but I don't know that it will solve all the problems out there,'' said Thomas Garcia, managing director of Thornburg Investment Management in Santa Fe, New Mexico, which oversees $50 billion.

Bear Stearns's liquidity problem ``definitely gives some doubt as to whether other firms are releasing all available information, and whether this credit crunch is really over,'' Garcia said.

Bear Stearns isn't alone among financial institutions stung by the credit squeeze to be bailed out. The U.K. government was forced to nationalize Northern Rock Plc last month after the first run on a British bank in more than a century and take on 100 billion pounds ($203 billion) in liabilities. Two German banks have also received emergency aid.

While U.S. authorities have been faster than their U.K. counterparts in announcing the rescue package for Bear Stearns, former Bank of England policy maker Willem Buiter says that doesn't make their course of action was the correct one.

``This creates the same moral hazard issues that we saw with Northern Rock,'' said Buiter, now a professor at the London School of Economics. ``This bank is being given access to public money, and we don't know what the terms are.''

I think it's clear the path we are on. With gold at $1,000/oz, it seems to be a thesis whose time has come. I wrote a bit about how I thought this would unfold in a post wayyyy back when:

Ah yes, good old Zimbabwe. A place where you look to see how disastrous insular governmental corruption can decimate an economy. See any parallels to Bend?
  • Robert Mugabe = Bend City Council
  • Mugabe's Supposed Economic Sabotage = Let's Hire A PR Marketing Firm Cuz We F'd Up Juniper Ridge
  • 120,000,000 Zimbabwe dollars = Bend Median Home Price
  • Economic Meltdown & Refugees = Bends Future
Of course, like Mugabe, Bend City Council feels they have carte blanche to wreck this town just as long as they can continue to peddle economic influence to a microscopic portion of the population, the Bend RE juggernaut. Outcome? Bends Popeil Pocket Fisherman sellers have so far succeeded in bilking some real idiots out of their life savings, but that market is by definition small & shrinking away to ZERO. I have no doubt that like Mugabe, Bend City Council will continue to bang this little fiefdom up the corn chute for all it's worth, and the end result will be economic disaster & a massive flight of REFUGEES out of Bend when the true "hot air" nature of it's primary product is revealed.

I took some heat for even speaking about hyperinflation in a post last July. Well, let's say some people questioned the idea:

IHTBYB,

Could you please explain exactly what might trigger your hyper-inflation model? What bellwether's might there be?

The last serious inflation the US saw was late 70's.

While we're experiencing inflation right now, my feeling is that its because the US dollar is dropping like a rock. That said for most people fixing that simple problem is just a point of buying Euro's.

What in particular to you think will cause hyper-inflation? Your example in Germany happened after a failed war.

Hmmm... failed war? Nope, none in sight.


No, what we have is failed monetary restraint & out of control consumerism & credit issuance.

Coincidentally, I found an article mentioning the "Z" word:

The Fed May Run Low on Unconventional Ammo

Back in 2003, when the Federal Reserve cut interest rates to 1%, the world worried that the Fed was running out of ammunition and would soon have to turn to unconventional tools.

Now, in 2008, it’s worth asking if the Fed could run out of unconventional ammunition. Tuesday’s offer to lend $200 billion of its Treasury holdings to primary dealers in return for mortgage-backed securities both guaranteed by the government-sponsored enterprises (Fannie Mae and Freddie Mac) and not (private-label MBS) means it will have eventually sold or pledged half of its Treasurys, limiting how many more of these tricks it can pull off.

Since August the Fed has announced a series of steps designed to target those pockets of the financial markets facing the most stress rather than rely solely on the blunt instrument of lower short-term interest rates. These steps have primarily involved taking onto its balance sheet something a bit risky — a loan to a bank or a securities dealer, collateralized with paper ranging from corporate loans to private-label mortgage backed securities (i.e. MBS not backed by the federally sponsored agencies Fannie Mae or Freddie Mac).

Left alone, these operations would result in an increase in cash supplied to the banks, boosting excess reserves and pushing down the federal-funds rate. Since the Fed does not want that to happen, it “sterilizes” the operation by getting rid of an equivalent amount of something else on its balance sheet. That something is usually Treasurys. Last December, it announced the creation of the term auction facility under which it auctions off loans to banks against a wide variety of collateral. To keep its balance sheet constant, it decided to let a roughly equivalent amount of its Treasurys mature. Since then, its Treasury portfolio has fallen from $779 billion to $713 billion.

Last Friday, it announced two additional steps: It would expand the size of the Term Auction Facility loans to a total of $100 billion from $60 billion (and the original $40 billion) and lend up to $100 billion to primary dealers in lengthened, 28-day repo operations. To sterilize those operations, Wrightson Associates estimates the Fed will have to shed $100 billion in Treasurys. Friday, it sold $10 billion of Treasury bills, its first outright sale since 1991. It will have to sell or redeem a lot more to keep its balance sheet from ballooning. One of the beauties of the securities lending facility is that it is self-sterilizing: The addition of MBS to its balance sheet is exactly offset by the loan of Treasurys.

From the point of view of normalizing market conditions, it makes sense to replace Treasurys with other stuff because the federal government is having no trouble borrowing right now. Quite the contrary: The flight to safety has driven Treasury yields to unnaturally low levels. In the securities-lending (or repo) market, someone with Treasurys to offer as collateral can borrow at a rock-bottom interest rate. But it does raise the prospect that with a few more similar-sized steps, the Fed will have run out of Treasurys to sell or pledge.

As Michael Feroli of J.P. Morgan Chase notes: “in a short period of time the Fed could have up to $400 billion of mortgage assets on its balance sheet.” Of course, that would still leave it with $400 billion in other assets to sell or pledge. And the Fed doesn’t have to simply sell Treasurys: It can allow some of its $52 billion in shorter-term repo loans to dealers to expire. It could conduct reverse repos, i.e. start borrowing from primary dealers instead of lending to them (although that would tie up Treasurys as collateral for the reverse repos). Fed officials say they have many other ways of increasing their lending capacity though they were not specific.

And, as David Greenlaw of Morgan Stanley notes: “If the situation were to become sufficiently dire, the Fed has unlimited power to monetize the economy’s debt … . They could finance the entire $10 trillion US mortgage market — and then some — via some combination of outright purchases (of the GSE-backed securities) and repo transactions (for the private debt).” Of course, that would quickly send the federal-funds rate to zero and, with a lag, inflation to the moon. Hello, Zimbabwe (inflation: 100,500%).

There doesn’t seem much risk of that now judging from the Fed’s response to Wall Street dealer suggestions that the Fed purchase GSE MBS and bonds. The Fed has the clear legal authority to do so, unlike with private-label MBS, and indeed held some agency debt as recently as 2003. But Fed staffers told reporters Tuesday that such purchases would inevitably influence the prices of such securities and they don’t want their operations distorting relative valuations. Another philosophical barrier is the Fed’s long standing efforts to strip the GSEs of their implied government guarantee, one reason it has let its holdings of GSE debt fall to zero. A more prosaic obstacle: the Fed’s operations are not well equipped to hold MBS with their unpredictable prepayment patterns.

For a similar reason, the Fed does not, at least for now, want to lengthen any of its lending operations to 90 days, as the European Central Bank and the Bank of England regularly do and as dealers would like. The Fed, staffers say, would become the dominant influence on interest rates at that maturity and it would rather that be a market-determined rate.

Many key aspects of the latest plan remain unanswered, reflecting how quickly it was put together. Money market dealers want to know what kind of private label MBS they can pledge: jumbos? Subprime? Alt-A? (The Fed has nixed commercial MBS). They also want to know what haircuts the Fed will apply. Fed officials decline to be specific except to say they will seem conservative for ordinary times and liberal for tumultuous times. (One starting point may be the haircuts imposed on MBS collateral at the discount window: They range from 2% to 15% depending on the maturity and the availability of market pricing.) Those details will be worked out in coming weeks. – Greg Ip

This is from a WSJ blog entry. Sorry no link, it was a 1 day freebie :-)

But we are starting to hear even the most respected financial minds say how dire the situation really is. To wit, Buffett:

PAUL B. FARRELL
Derivatives the new 'ticking bomb'
Buffett and Gross warn: $516 trillion bubble is a disaster waiting to happen

ARROYO GRANDE, Calif. (MarketWatch) -- "Charlie and I believe Berkshire should be a fortress of financial strength" wrote Warren Buffett. That was five years before the subprime-credit meltdown.

"We try to be alert to any sort of mega-catastrophe risk, and that posture may make us unduly appreciative about the burgeoning quantities of long-term derivatives contracts and the massive amount of uncollateralized receivables that are growing alongside. In our view, however, derivatives are financial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal."
That warning was in Buffett's 2002 letter to Berkshire shareholders. He saw a future that many others chose to ignore. The Iraq war build-up was at a fever-pitch. The imagery of WMDs and a mushroom cloud fresh in his mind.

Also fresh on Buffett's mind: His acquisition of General Re four years earlier, about the time the Long-Term Capital Management hedge fund almost killed the global monetary system.

How? This is crucial: LTCM nearly killed the system with a relatively small $5 billion trading loss. Peanuts compared with the hundreds of billions of dollars of subprime-credit write-offs now making Wall Street's big shots look like amateurs.

Buffett tried to sell off Gen Re's derivatives group. No buyers. Unwinding it was costly, but led to his warning that derivatives are a "financial weapon of mass destruction." That was 2002.
Derivatives bubble explodes five times bigger in five years

Wall Street didn't listen to Buffett. Derivatives grew into a massive bubble, from about $100 trillion to $516 trillion by 2007. The new derivatives bubble was fueled by five key economic and political trends:
  1. Sarbanes-Oxley increased corporate disclosures and government oversight
  2. Federal Reserve's cheap money policies created the subprime-housing boom
  3. War budgets burdened the U.S. Treasury and future entitlements programs
  4. Trade deficits with China and others destroyed the value of the U.S. dollar
  5. Oil and commodity rich nations demanding equity payments rather than debt
In short, despite Buffett's clear warnings, a massive new derivatives bubble is driving the domestic and global economies, a bubble that continues growing today parallel with the subprime-credit meltdown triggering a bear-recession.

Data on the five-fold growth of derivatives to $516 trillion in five years comes from the most recent survey by the Bank of International Settlements, the world's clearinghouse for central banks in Basel, Switzerland. The BIS is like the cashier's window at a racetrack or casino, where you'd place a bet or cash in chips, except on a massive scale: BIS is where the U.S. settles trade imbalances with Saudi Arabia for all that oil we guzzle and gives China IOUs for the tainted drugs and lead-based toys we buy.

To grasp how significant this five-fold bubble increase is, let's put that $516 trillion in the context of some other domestic and international monetary data:
  • U.S. annual gross domestic product is about $15 trillion
  • U.S. money supply is also about $15 trillion
  • Current proposed U.S. federal budget is $3 trillion
  • U.S. government's maximum legal debt is $9 trillion
  • U.S. mutual fund companies manage about $12 trillion
  • World's GDPs for all nations is approximately $50 trillion
  • Unfunded Social Security and Medicare benefits $50 trillion to $65 trillion
  • Total value of the world's real estate is estimated at about $75 trillion
  • Total value of world's stock and bond markets is more than $100 trillion
  • BIS valuation of world's derivatives back in 2002 was about $100 trillion
  • BIS 2007 valuation of the world's derivatives is now a whopping $516 trillion
Moreover, the folks at BIS tell me their estimate of $516 trillion only includes "transactions in which a major private dealer (bank) is involved on at least one side of the transaction," but doesn't include private deals between two "non-reporting entities." They did, however, add that their reporting central banks estimate that the coverage of the survey is around 95% on average.

Also, keep in mind that while the $516 trillion "notional" value (maximum in case of a meltdown) of the deals is a good measure of the market's size, the 2007 BIS study notes that the $11 trillion "gross market values provides a more accurate measure of the scale of financial risk transfer taking place in derivatives markets."

Bubbles, domino effects and the 'bad 2%'

However, while that may be true as far as the parties to an individual deal, there are broader risks to the world's economies. Remember back in 1998 when LTCM's little $5 billion loss nearly brought down the world's banking system. That "domino effect" is now repeating many times over, straining the world's monetary, economic and political system as the subprime housing mess metastasizes, taking the U.S. stock market and the world economy down with it.

This cascading "domino effect" was brilliantly described in "The $300 Trillion Time Bomb: If Buffett can't figure out derivatives, can anybody?" published early last year in Portfolio magazine, a couple months before the subprime meltdown. Columnist Jesse Eisinger's $300 trillion figure came from an earlier study of the derivatives market as it was growing from $100 trillion to $516 trillion over five years. Eisinger concluded:

"There's nothing intrinsically scary about derivatives, except when the bad 2% blow up." Unfortunately, that "bad 2%" did blow up a few months afterwards, even as Bernanke and Paulson were assuring America that the subprime mess was "contained."

Bottom line: Little things leverage a heck of a big wallop. It only takes a little spark from a "bad 2% deal" to ignite this $516 trillion weapon of mass destruction. Think of this entire unregulated derivatives market like an unsecured, unpredictable nuclear bomb in a Pakistan stockpile. It's only a matter of time.
World's newest and biggest 'black market'
The fact is, derivatives have become the world's biggest "black market," exceeding the illicit traffic in stuff like arms, drugs, alcohol, gambling, cigarettes, stolen art and pirated movies. Why? Because like all black markets, derivatives are a perfect way of getting rich while avoiding taxes and government regulations. And in today's slowdown, plus a volatile global market, Wall Street knows derivatives remain a lucrative business.

Recently Pimco's bond fund king Bill Gross said "What we are witnessing is essentially the breakdown of our modern-day banking system, a complex of leveraged lending so hard to understand that Federal Reserve Chairman Ben Bernanke required a face-to-face refresher course from hedge fund managers in mid-August." In short, not only Warren Buffett, but Bond King Bill Gross, our Fed Chairman Ben Bernanke, the Treasury Secretary Henry Paulson and the rest of America's leaders can't "figure out" the world's $516 trillion derivatives.

Why? Gross says we are creating a new "shadow banking system." Derivatives are now not just risk management tools. As Gross and others see it, the real problem is that derivatives are now a new way of creating money outside the normal central bank liquidity rules. How? Because they're private contracts between two companies or institutions.

BIS is primarily a records-keeper, a toothless tiger that merely collects data giving a legitimacy and false sense of security to this chaotic "shadow banking system" that has become the world's biggest "black market."

That's crucial, folks. Why? Because central banks require reserves like stock brokers require margins, something backing up the transaction. Derivatives don't. They're not "real money." They're paper promises closer to "Monopoly" money than real U.S. dollars.

And it takes place outside normal business channels, out there in the "free market." That's the wonderful world of derivatives, and it's creating a massive bubble that could soon implode.

Comments? Yes, we want to hear your thoughts. Tell us what you think about derivatives: as "financial weapons of mass destruction;" as a "shadow banking system;" as a "black market;" as the next big bubble dangerously exposing us to that unpredictable "bad 2%." End of Story

Here's a guy who graduated from Paul-doh's Community College of Talking Down A Market With Talk Of Armageddon:


GLOBAL INVESTOR
'Doom and Gloom' has just begun
Bearish newsletter editor finds little cheer in most assets
By Barbara Kollmeyer, MarketWatch
Last update: 10:51 p.m. EST March 7, 2008
LOS ANGELES (MarketWatch) -- "Dr. Doom" sure is living up to his name these days.

Speaking to a packed room of financial planners here on Friday, the famed money manager and newsletter editor Mark Faber literally brought down the house with talk of a worthless dollar, a helpless U.S. central bank and a dire situation in which investors have just a few avenues left to turn to.
"We may now have a hostile environment for all asset classes, with the exception of some real estate and commodities," said the editor of The Gloom, Doom and Boom Report, pointing out that since 2002 all asset classes have been rising -- a phenomenon that hasn't been seen for 200 years.

"The current synchronized global economic boom and universal all-encompassing asset bubble will lead to a colossal bust," he said.

Financial markets, currently in the grips of a credit bubble that worsens by the day, will see a protracted period of high volatility, in which 20% movements either up or down become common and the chances of making a lot of money become very difficult, he said.

He heaps much of the blame for global troubles on years of expansionary U.S. monetary policy that had a flawed fixation on U.S. consumption rather than boosting capital infrastructure and spending. Federal Reserve Chairman Ben Bernanke and his colleagues are clearly backed into a corner now as they cannot tighten money policy without causing a collapse of the entire financial system, he said.

"Easy money and debt growth has had a diminishing aspect on U.S. economic growth -- 'zero hour' may have already arrived," Faber said, adding that he thinks the U.S. is in the throes of recession and has been there for the past four to five months.

Indeed gloomy nonfarm payroll data for February further routed U.S. financial markets Friday, convincing many that recession had arrived.

From bearish to deep in the woods

Faber was spouting his gloomy philosophy a year ago when in an interview with Time magazine he predicted all assets were in danger owing to easy monetary policy in the U.S. and elsewhere, with investors getting too used to constantly rising asset prices across the board. "I believe we're in the midst of the greatest asset bubble ever," said Faber in the January 2007 article.

Fast-forward to the present and you can't blame some of that "I told you so" from Faber.

Indeed, credit markets have been routed and financial markets have seesawed since late October, with some notable bubbles in Asia and elsewhere last year. And he said he's not seeing enough bears out there, with investors still too optimistic.

"Before October, everyone was bullish -- rushing into assets and out of cash. Then...over the last three to six months, people went to buy the rallies. Sentiment is not that bearish. The mood has stayed optimistic and asset markets are still vulnerable," he said.

Nowhere was he bleaker than when addressing the beaten-down dollar, another victim of Fed policy which he said has ensured cash returns below the rate of inflation. "In the long term, the dollar is a doomed currency. It will go to zero," he said, which produced some nervous laughter from the audience.

Bright spots in emerging markets, commodities

Where he does see some options for investors is in some corners of emerging markets, noting that he believes the Chinese yuan could double in value in the next five years or so, which will raise the value of many emerging Asian currencies at the same time.

The Asian property market is also favorable in the long run, given low levels of urbanization and low levels of mortgage debt. He said fears that a Chinese property bubble are on the horizon are overblown given that home prices have gone down as a percentage of gross domestic product and as a percentage of household income.

Among his other emerging Asian investment themes: real estate; health care, such as pharmaceuticals and hospital management; local brands, which could replace international brands; and commodities such as sugar and cotton. Tourism is another big theme that he likes for the Asian markets, including hotels, casinos and airports, along with financial services such as banks, insurances companies and brokers. Infrastructure is also a key theme, with "bottlenecks everywhere," he said.

He is also keen on Cambodia, which he describes as having a relatively open economy, with a regulatory framework and government commitment to attract foreign direct investment. He said the country's young population, strategic location, abundant natural resources and exceptional access to trade privileges make it an attractive investment locale for light industry and agricultural businesses.

With the world population growing, especially in emerging markets, arable farmland will become an increasingly pricey commodity. He highlights First Farms, a Danish company founded by a group of farmers whose land was bought up by developers; Ukraine-based Landkom International and Astarta; and Black Earth Farming, a Swedish-run company that invests in Russian farmland and has an initial public offering forthcoming.

Other commodities worth a look: sugar cane in Brazil, palm oil in Indonesia or vegetables in China. End of Story

Finally, I can't resist this Business Week piece, mainly because of the awesome last line:

Recession Time

As the economy teeters between bad and worse, one question looms: What's the best course of action? Here's what can be done. And what can't

Kevin Van Aeist

Wall Street got its hopes up on Mar. 11. Elated by a Federal Reserve move to stop the credit crunch, the U.S. stock market posted its biggest one-day gain in five years, with the Dow Jones industrial average rising more than 400 points. Look out, though. Fed officials are the first to acknowledge that their initiative attacks only one problem, the liquidity squeeze at big banks. It does nothing about the central risk to the U.S. economy: an unprecedented crash in home values that is sapping households' wealth and confidence while putting an enormous strain on the banking system.

How bad will this downturn get? No one can know because we've never experienced such a headlong slide in the housing market—and this comes at a time when its current value of $20 trillion accounts for the vast majority of most families' wealth. Right now most economists expect the U.S. to experience a mild, short recession in 2008. But there is at least a possibility of a steeper decline that the traditional recession remedies—interest-rate cuts here, deficit spending there—won't be able to handle.

What should be done? For policymakers in Washington—Fed Chairman Ben Bernanke, Treasury Secretary Henry Paulson, and congressional leaders—the sensible course is to insure against the small but scary possibility that things could go very wrong. The potential "insurance policies" are government actions that have a real cost but lessen the risk that a mild recession turns into something worse. The International Monetary Fund endorsed that approach on Mar. 12 as First Deputy Managing Director John Lipsky urged policymakers globally to "think the unthinkable and guard against a downward credit spiral."

Broadly speaking, policymakers have three options for putting a safety net under the economy. Each has its pros and cons, and the cons become most apparent when the measures are taken to an extreme. That's why a three-pronged approach that uses each option in moderation may be the best way to go.

The first option is to depend mainly on aggressive measures by the Fed to flood the economy with liquidity. That's already under way. On Mar. 11, the central bank announced an innovative program to lend $200 billion in high-grade Treasury securities to big commercial and investment banks. It will allow them to use, as collateral for the loans, valuable but harder-to-trade assets such as AAA-rated mortgage-backed securities. The measure could enable them to start lending and borrowing again. The cons: no direct help for distressed homeowners who don't qualify for refinancing.

A second option would be some sort of a government-led bailout of homeowners, which reduces the burden of looming debt and high interest rates, and limits foreclosures. The third option would be assistance to the lenders and holders of mortgage-backed securities in an effort to thaw the credit markets. The trouble is, both of these options are seen as unfair by those who don't require bailouts. And it's up in the air who would have to bear the biggest share of the housing-related losses: homeowners, investors, or taxpayers.

It's indisputable, though, what policy changes cannot accomplish. There's no way to stop home prices from falling; they got way too high, and the current crisis won't end until they get back to what the market concludes is a sustainable level. It's not reasonable to try to avoid a recession, either. When a sector as huge as housing goes into a deep dive, it's pretty much inevitable that the rest of the economy will be affected. "We saw a once-in-a-hundred-years runup in housing prices, and now we're seeing a once-in-a-hundred-years collapse," says Harvard University economist Kenneth S. Rogoff. "It's very, very difficult to do much about it."

"GAMBLERS, LIARS, AND SLEAZY LENDERS"

The airwaves and blogosphere are alive with people who say nothing should be done. They argue that intervening now would only delay the inevitable liquidation of credit-fueled excesses. "Under proposed bailouts, responsible people lose and have to give their money to gamblers, liars, and sleazy lenders,"

And finally, journalists (not in Bend) are actually trying to grope for a bottom:

Mind the Gap: Home-Price Downside

By SCOTT PATTERSON
March 13, 2008

The economic balance hangs in large part on how much further home prices will fall. A look at one important measure -- the relationship between home prices and household income -- suggests we might not even be halfway there.

Over the long run, home prices and income should march along the same path. As households earn more, they can afford to pay for more expensive homes.

But the two can get out of whack. During much of the 1990s, incomes grew faster than home prices. The landscape shifted around 2000. From the start of the decade through the mid-2006 peak, home prices nearly doubled, thanks in part to falling interest rates. Over the same period, income per household rose just 26%, according to Moody's Economy.com.

In certain states, the disparity was extreme. Seven states, including California, Florida and Arizona, saw annualized growth in home prices outpace income growth by 10 percentage points from 2002 through 2006, according to housing expert Thomas Lawler.

The difference between income growth and home prices has started to narrow. Home prices were down 10% through the fourth quarter from their peak in mid-2006, according to the S&P/Case-Shiller national home-price index. But to bring prices in line with incomes, they will need to fall further. If incomes continue to grow in the next year as they have in the past decade -- probably an optimistic assumption -- it would take a 9% to 12% drop in home prices to bring the two measures in line with each other.

In states that saw bigger housing bubbles, the correction will be more severe, says Mr. Lawler.

It is also possible that home prices will overshoot on the downside, just as they did on the upside. Goldman Sachs economists say prices could fall another 15%. Merrill Lynch economists say they could drop another 20% to 30%. Both banks have been more bearish than others on the economy -- and so far look correct to have been so pessimistic.

Retailing Likely Checks In With More Glum Numbers

Consumer spending is one potential casualty of falling home prices. When home values fall, households have less home equity to tap when they want to buy a new flat-screen television.

Today's February retail-sales report from the Commerce Department could provide evidence of that. Sales were up 3.9% in January from a year earlier. That paled in comparison with year-over-year gains of more than 6% that prevailed from 2004 to 2006. It was also less than the 4.3% increase in consumer-price inflation registered in January from a year earlier.

Economists don't expect strong numbers for February. On average, they see an increase of 0.1% from the month before. Auto makers and retailers reported a slow February -- with the exception of Wal-Mart Stores and other discounters, which benefited as shoppers tightened their purse strings. The Federal Reserve's latest "beige book" compilation of economic anecdotes described retail sales as "below plan, downbeat, weak, or having softened" in most of the country since mid-January.

Tax rebates might temporarily boost spending again later this year. But consumers are walking into pretty stiff headwinds.

Funny how a bubble ends so much worse than anyone thinks possible, even supposed "Smart People":

Bear Stearns Co, Inc., 10 year chart

I don't want to repeat any old advice, it's too late. Just look at the BSC chart, and realize that WE are about 18 months behind. And at least 5X more volatile than the rest of the country.

But All Is Well In Bend, right?

No pot of gold: Bend's red ink soars to $20 million

Posted: March 14, 2008 10:50 PM


City's first 2-year budget taking major hit from downturn

By Barney Lerten, KTVZ.COM

When Bend city councilors get their latest update on the city's distressed budget Monday evening, they'll have to look hard for a St. Patrick's Day rainbow. And even if they find it, there surely won't be a pot of gold at the end of it - not with a projected shortfall nearing $20 million for the city's first two-year budget.

A "summary of revenue shortfalls for the 2007-09 biennium," distributed to the public and councilors Friday, shows the current fiscal year's revenue is $7.6 million below projections - and for 2008-09, the current best guess is for a gap of more than $12 million between expectations and reality.

The biggest hits in the update provided by Finance Director Sonia Andrews are of little surprise: planning, building and engineering fees, along with franchise fees and ambulance and FireMed revenue. Planning fees are expected to be down 50 percent from expectations, or $2.1 million for 2007-08, rising to 59 percent, or off almost $3 million in the year starting July 1.

"With the radical drop in residential housing starts, we have to revise our development revenue estimates downwards," Andrews wrote. "Although commercial building activity continued, the decline in residential activity has simply been too great."

"The shortfalls are in revenues that we depend on for operations," she continued. "For the size of these shortfalls, every department will need to make some reductions for FY 2008-09, and certain budget reductions will affect service levels."

The city already has laid off 10 workers this year and not filled 25 vacancies, along with other cuts in materials and services, and vehicle and equipment purchases.

City departments are scheduled to meet with Interim City Manager Eric King over the next two weeks to finalize budget reduction proposals for the coming budget year, to be presented to the city council and budget committee in April.

On Wednesday night, the council's work session will focus largely on councilors' stated 2008 goals, which include financial stability, community relations, the Urban Growth Boundary expansion, Juniper Ridge and transit.

Well, wait a minute. That sounds like Bad News! That sounds like our Benevolent Leaders don't know what they're doing! I thought in Bend we hold certain truths to be self-evident, and such, right? What happened to That Stuff Only Happens To Other Guys, Much Stupider Than Us? What happened to stuff like this Blast From The Past from Life Is Good:

"Look to CACB-Short... if he's right, we'll look back and say, "Hmmmph.". If he's wrong, well....." He bought his short position in October @ 30.4 and it closed yesterday @ 30.91. When he bought the position the prediction was that if a major stockholder sold a large number of "thinly traded" stocks, CABC would be crushed. On November 29, 3 million shares were sold (11% of the outstanding shares). The stock price barely moved in this huge sale that tripled the previous volume record. It doesn't seem to me there is any question that CABC shorter is under water on his investment, and that he totally missed his bet on how a major sale would affect the stock. Thaks to BEM for resetting the page with a more interesting tone. Life is Good

What has happened to:


We Are Bend Oregon, And We Are Different.
We are smarter than the rest, we are better than the rest.
What Happened?

Finally, here are some mid-month sales stats. If you're afraid the Bust will Never Come, this should put your fears to rest.

Here are the mid March stats: As of 3/14/08

36 Sold @ 261k med.

07 95 Sold @ 358k med.

05 118 Sold @250k med.

1997 42 Sold @123k med.

So we are seeing 1997 volume and 2005 medians....SO FAR

Just somthing to chew on. The pending sale volume is going up..as it does this time of year.

And a final word from Jon Markman at msn.com

Although it seems like the debt crisis has been with us for a long time, true panic has been kept at bay because the size of the potential losses has been underestimated at the same time that the redemptive power of government entities like the Federal Reserve has been overestimated.

It's only in the past couple of weeks that investors have been able to determine the potential scope of damage to companies outside banks and brokerages, and those estimates frighten even jaded players.

One leading hedge fund reported in an internal memo this week that "the threat of a death spiral hangs over us" and added, "There is insufficient time for those with the wrong positions to reposition and there is even insufficient time for those with reasonable positions to just get out of the way."


I don't have to really be "negative" anymore. I think it's covered.
$261K medians? Dang it, I could have used that burrito!

625 comments:

«Oldest   ‹Older   201 – 400 of 625   Newer›   Newest»
Anonymous said...

RE: Saving your treasures

When I was a kid I buried some loot in a hole in the ground in a scrub brush lot at the corner of Burnside and 6ht.

When I returned years later to dig it up, there was a medical center on the lot.

The point: There's no safe haven for our loot.

We're all fucked!

IHateToBurstYourBubble said...

NEVER FEAR!

With 30 or so homes going into foreclosure in Aspen Rim, The Bulletin has bravely stepped up & covered...

The opening of a COFFEE & SMOOTHIE STORE.

Tyson Hurst, Owner, gives a play by play:

Hurst envisions the shop becoming a popular “hangout spot” for high school students or a business gathering place that also offers free wireless Internet access, he said.

“It’s a different ambience than Central Oregon is used to seeing,” he said. “It’s not a typical coffee shop.”


There you have it. RIVETING NEWS.

An atypical coffee shop.

Ambience.

I smell a Pulitzer.

tim said...

>>I smell a Pulitzer.

Oh! So that's what they smell like.

IHateToBurstYourBubble said...

ECONOMIC REPORT
Single-family housing starts sink to 17-year low
Building permits drop 7.8%, biggest decline in 13 years

By Rex Nutting, MarketWatch
Last update: 9:42 a.m. EDT March 18, 2008

WASHINGTON (MarketWatch) -- With no end in sight to the housing bust, new construction on single-family homes dropped by 6.7% in February to a seasonally adjusted annual rate of 707,000, the lowest in 17 years, the Commerce Department reported Tuesday.

Starts of single-family homes have plunged 62% since the peak two years ago.

"The housing recession is intensifying," wrote Harm Bandholz, economist for UniCredit Markets.

Total housing starts, including multifamily units, dropped 0.6% in February to a seasonally adjusted annual rate of 1.065 million, better than the 990,000 pace expected by economists surveyed by MarketWatch.

January's starts were revised higher to a 1.071 million pace from 1.012 million reported initially.

Building permits, a leading indicator of construction, fell 7.8% in February to a seasonally adjusted annual rate of 978,000, the lowest since the autumn of 1991. It was the biggest monthly decline in 13 years.

Permits for single-family homes dropped 6.2% in February to a 639,000 annual pace, a 17-year low. Single-family permits are down 65% from the peak.

The report confirms that home building remains extremely weak, with home prices falling and sales tumbling.

"It is clear that we have not yet reached the bottom, and still have a considerable way to go before that claim can be plausibly made," wrote Richard Moody, chief economist for Mission Residential.

The data are likely to have little impact on deliberations at the Federal Reserve later Tuesday. The Fed is expected to slash interest rates, perhaps by an unprecedented full percentage point. The Fed is intently focused on daily conditions in financial markets, and expects a very slow recovery for the housing market.
In a separate report, the Labor Department said producer prices rose 0.3% in February. Core prices, which exclude food and energy, rose 0.5%, more than expected.

In the past year, housing starts are down 28.4%. Single-family starts are down 40.5%. Building permits are down 36.5% in the past year, while single-family permits are down 41.9%, the biggest drop in 26 years.

The government cautions that its housing data are volatile and subject to large sampling and other statistical errors.

In most months, the government can't be sure whether starts increased or decreased. In February, for instance, the standard error for starts was plus or minus 11.2%. Large revisions are common.

It can take four months for a new trend in housing starts to emerge from the data. In the past four months, housing starts have averaged 1.08 million annualized, down from 1.13 million in the four months ending in January.

On Monday, the National Association of Home Builders reported builder sentiment remained at extremely low levels in March, barely bouncing off a record-low set in December.

Details

Starts of multifamily units rose 14.5% in February, continuing a boom in apartment building. Multifamily starts are up 23% in the past year.

Regionally, starts fell 28% in the Northeast, were flat in the Midwest, rose 3.9% in the South and rose 5.1% in the West.

Housing completions fell 8.8% in February to a seasonally adjusted annual rate of 1.208 million, the lowest in 12 years. Home builders are trying to work off their excess inventories, but still have too many homes in the pipeline for the number of sales.

Rex Nutting is Washington bureau chief of MarketWatch.

IHateToBurstYourBubble said...

I have noticed a LARGE NUMBER of subdiv's STILL being started & underway.

The "I'm Different" Kool-Aid was well & truly been imbibed by local builders. There is a HUGE subdiv going up at Eagle & Butler Market, another at Empire & the Parkway, and of course the vast Chameleon subdiv's (aka Destination Resorts).

About a year ago, some builder was quoted in The Bulletin as saying the Death Knell of the local market would be "if builders try to build their way out of the decline".

They are. BIG TIME.

What's worse is they are putting in infrastructure, just tearing up the land, building a model home or two, and then just letting some Realtor slug sit & grow roots waiting for buyers.

MASSIVE DARK MATTER OVERHANGS BEND'S MARKET.

MASSIVE.

IHateToBurstYourBubble said...

And the marketing point of many of these subdiv's is price, pure & simple:

"STARTING UNDER $200,000!"

The ghetto's of tomorrow are being thrown up all over this town. These ultra-dense shitholes are going to hold the meth-shacks of tomorrow, with 3 year half-lives on the livability of these homes. 3-5 years & they will be good for nothing but low-end rentals, if that.

This town has an overhang of MILLIONS of square feet of low-quality residential space waiting to slam into even the slightest uptick. ie SLUMS.

"Quality of Life"? Uh huh. When Bend is an overrun, flat ass broke jerkwater, packed full of shit shack slum meth-huts, that "Quality of Life" bullshit marketing won't fly, and Cali-bangers locusts will move on to the next Pristine Xanadu they can ravage.

Keep your eye on the city's "Budget Crisis"... I didn't put that badboy on the RIP board for nut'n. When this place goes flat-ass broke, and public services start to go away... that's when the methers move in. THAT is when home prices go straight into the shitter.
UNDER $200K. WAY UNDER.

IHateToBurstYourBubble said...

Added Renaissance Homes to the RIP list...

IHateToBurstYourBubble said...

When this place goes flat-ass broke, and public services start to go away... that's when the methers move in.

YEAH! We'll be the "Madras" of Deschutes County!

IHateToBurstYourBubble said...


America was conned - who will pay?


The South Sea Bubble ended in riots as trust was lost. Wall Street also duped the public


Bear Stearns marks the moment when the global financial crisis went critical. Up until last Friday, it had been possible - just about - to believe that the worst was over and that things were about to get better. That pretence was stripped away when JP Morgan, at the behest of the Federal Reserve, stepped in when the hedge funds pulled the plug on the fifth-biggest US investment bank.

It is now clear that no end is in sight to the turmoil, and the reason for that is that the Fed and the US treasury are no closer to solving the underlying problem than they were eight months ago. The crisis will only end when house prices stop falling and banks stop racking up huge losses on their loans. Doing that, however, will require the US government to intervene directly in the real estate market to end the wave of foreclosures. Ideologically, it is ill-equipped to take that step and, as a result, property prices will fall and the financial meltdown will go on and on.

Ultimately, though, action will be taken because there will be political pressure for it. Indeed, it is somewhat surprising that there is not already rioting in the streets, given the gigantic fraud perpetrated by the financial elite at the expense of ordinary Americans.

The US has just had its weakest period of expansion since the 1950s. Consumption growth has been poor. Investment growth has been modest. Exports have been sluggish. But if you are at the top of the tree, the years since the last recession in 2001 has been a veritable golden age. Salaries for executives have rocketed and profits have soared, because the productivity gains from a growing economy have been disproportionately skewed towards capital.

Patriotic

For ordinary Americans, though, it has been a different story. Real wages have been growing slowly; at just 1.6% a year on average over the latest upswing, well down on the experience of earlier decades. Business, of course, needs consumers to carry on spending in order to make money, so a way had to be found to persuade households to do their patriotic duty. The method chosen was simple. Whip up a colossal housing bubble, convince consumers that it makes sense to borrow money against the rising value of their homes to supplement their meagre real wage growth and watch the profits roll in.

As they did - for a while. Now it's payback time and the mood could get very ugly. Americans, to put it bluntly, have been conned. They have been duped by a bunch of serpent-tongued hucksters who packed up the wagon and made it across the county line before a lynch mob could be formed.

The debate now is not about whether the US is in recession but how deep and long that recession will be. Super-bears have started to say that this is perhaps "The Big One", by which they mean the onset of a new Great Depression. The need to rescue Bear Stearns has done little to still those voices.

As the economics team at HSBC recently pointed out, there has been a "catastrophic breakdown" of trust, and when that has happened in the past - the US in the 1930s, Japan in the 1990s - chucking extra money at the banks in the hope that they will start lending again proves ineffective.

It's not hard to see why trust has become such a rare commodity: Wall Street at the height of the securitisation mania had, in effect, become London at the time of the South Sea Bubble crisis in 1720. Vast quantities of funny paper were changing hands even though those involved in the deals had no idea of their true worth. Nor did they care. Inevitably, now the bubble has burst and the huge Ponzi securitisation scam has been exposed, there has been a reaction. The securitisation market is dead, there is less money sloshing round the system, banks are hoarding their cash.

Having allowed the housing boom to rage out of control for too long and then delaying cuts in interest rates until the housing market was gripped by recessionary forces, the Fed is now trying to make up for lost time with a burst of hyperactivity. It will cut interest rates on Wednesday and keep cutting them: financial markets expect the Fed funds rate to be 1% by the summer, and they are probably right. In most downturns, easier monetary policy does the trick. Lower interest rates make it cheaper to borrow and also change the trade-off between saving and spending. This may not be the usual sort of downturn, however, with consumers going through a period of debt revulsion after the excesses of recent years, even so the consensus is that after two or three quarters of falling output, a slow and sluggish recovery will be under way.

Deflation

These hopes are likely to be dashed, unless there is intervention at home and internationally to tackle the crisis. Domestically, the priority should be to stop homes that have been foreclosed being auctioned on the open market, since by selling them at a 50% discount property prices are driven down. The US does not seem to have learned the lessons from Japan, which encouraged a fire sale of property in the 1990s and was sucked into a classic debt deflation trap as a result. Those who argue, with some force, that it would be counter-productive to intervene in the market because the US needs to work the rottenness out of its system must recognise that the cold turkey option will be very long and painful.

The second form of intervention should be to shore up the dollar, the collapse of which is worrying countries that rely heavily on exports and is the main reason for the surge in commodity prices. Co-ordinated intervention by the major central banks needs to be at the top of the agenda at next month's G7 meeting in Washington, and there could be action even sooner if the dollar continues to tank.

In the longer term, lessons must be learnt from the turmoil. One is that you don't solve the problems of a collapsing bubble by blowing up another, which is what Alan Greenspan did after the dotcom fiasco in 2001 - the most irresponsible behaviour of any central banker in living memory.

The second lesson is that there has to be far stricter regulation not just of the US real estate market but of Wall Street, to prevent the return of irresponsible lending as soon as the recovery is firmly under way. If this is, heaven help us, The Big One, one of the only consolations will be that the repugnance at the orgy of speculation that has sapped the strength of the US economy will put a new New Deal on the political agenda.

But for this to happen there has to be a political response and even though this year's presidential election will be held in the shadow of recession, there appears not to be a potential FDR among the contenders for the White House. Yet if this crisis really does get as bad as some are forecasting, the public will rightly demand more than a slap on the wrist for Wall Street.
larry.elliott@guardian.co.uk

IHateToBurstYourBubble said...

Bear Stearns' plunge takes along billionaire

Briton Joseph Lewis is among a cadre of investors who took a financial battering when the besieged New York investment firm agreed to be sold for $2 a share.

By The Wall Street Journal

British billionaire Joseph Lewis made his fortune gambling on currencies. His recent investment in Bear Stearns (BSC, news, msgs) has turned out to be a disastrous bet.

The elusive septuagenarian is one the biggest losers from the New York investment bank's problems. In just a few months, he has lost almost all of the $1.1 billion he spent building up his roughly 9.6% stake in Bear, which agreed last night to be acquired by JPMorgan Chase (JPM, news, msgs) for just $2 a share.

A cadre of investors, often considered some of the best in the business, own big stakes in Bear that aren't looking good. A number of these shareholders are the type of investors who ordinarily would take a hard line in a sale, demanding a higher price. But with Bear on the brink, they have little choice.

* Video: After loss, Lewis still a billionaire

Among the stakeholders: James Barrow, a Dallas money manager who runs the firm Barrow, Hanley, Mewhinney & Strauss, is the single biggest investor, with a 9.95% stake, according to recent regulatory filings.

Bear Stearns Chairman James Cayne, who stepped down as chief executive in January amid criticisms from some investors that he was too hands-off when the mortgage mess unfolded, holds a stake just under 5%. So does activist investor Bruce Sherman, CEO of Naples, Fla., money manager Private Capital Management, a unit of Legg Mason (LM, news, msgs), recent regulatory filings show.

Sherman, who persuaded the media company Knight Ridder to put itself up for sale in 2005, has taken a more active stance with Bear in recent months, say people familiar with the matter. He closely questioned Bear lead director Vincent Tese about the investment bank's problems last summer and made his dissatisfaction with Cayne clear to Bear officials in the weeks preceding Cayne's early-January resignation as CEO, these people said. Sherman's firm held 5.5 million Bear shares as of Dec. 31, or a 4.8% stake. Those 5.5 million shares now are valued at about $11 million, a fraction of what they were a year ago.

Sherman was unavailable to comment, a spokesman said yesterday. Lewis was unavailable to comment, a spokesman said. An assistant in Cayne's Bear office said he was in a meeting and unavailable for comment. Barrow didn't respond to a request for comment.

Lewis made his fortune as a currency trader, once amassing a 30% stake in auctioneer Christie's International, and has spent the past decade investing in an array of businesses, including real estate, oil and gas, and sports.

Lewis, who lives in the tony Lyford Cay development in the Bahamas, got involved with Bear first as a client and became a major investor last year.

Lewis long has been a client of Kurt Butenhoff, one of Bear Stearns's heavy hitters in private-client services. Butenhoff brought the relationship with him to Bear from Salomon Bros., where Butenhoff was a high-net-worth broker in the early 1990s.

Lewis began rapidly building his stake in Bear Stearns last summer, shortly after the bank announced that two internal hedge funds had imploded. In December, his stake rose to just under 10% from about 7% when Bear's stock price fell below $110, forcing him to make good on an options trade he had made with another party.

Lewis could have sold his obligation to buy and washed his hands of an unlucky trade. Instead, he chose to exercise his options, filings show, acquiring hundreds of thousands of new shares. He owns more than 11 million Bear Stearns shares, according to a December regulatory filing.
Son of a cafe owner
Friday, Bear's shares fell 47% to a nine-year low of $30 in New York Stock Exchange composite trading after the Federal Reserve and JPMorgan stepped in to keep the firm afloat following a severe cash crunch. It doesn't appear from reviews of regulatory filings that Sherman, Cayne, Barrow and Lewis have sold shares in recent weeks. It isn't clear whether any of them have hedged their investments.

Lewis, the son of a cafe owner in London's East End, started work there and later expanded the family business to create a small empire of theme restaurants. He acquired the nickname "the boxer" in part because his name is similar to boxing legend Joe Louis and also because of his shrewd approach to business.

Lewis's recent endeavors have included developments in central Florida, where he owns Isleworth and another gated community. About six years ago, Lewis purchased a stake in Tottenham Hotspur, a soccer club based in northeast London. Lewis, a keen golfer, hosts the Tavistock Cup tournament and has befriended golf star Tiger Woods.

This article was reported and written by Cassell Bryan-Low and Kate Kelly for The Wall Street Journal.

IHateToBurstYourBubble said...

Fed's $200 billion loan scheme won't work

The giveaway strategy -- creating a huge pool of cash to lend to securities dealers, with risky mortgage-backed debt as collateral -- is little but stalling for time.

By Bill Fleckenstein

For some time now, the Federal Reserve has been writing a book. It's called "What Not to Do," and on Tuesday it penned a chapter called "The Prudent Bailing Out the Reckless."

That was via the Fed's creation of a $200 billion Term Securities Lending Facility, a pool of money it can lend to securities dealers on top of funds it has already injected into the financial system.

I guess the sight of all those suffering hedge funds and brokers was just too much to bear.

Now, I realize the Fed was created to provide a liquidity backstop in times of emergency. But the Fed has abused its privilege for so long -- by being the creator and proponent of excess liquidity and the problems it causes -- that, in my book, the Fed is nothing short of an abomination. The reality that's eluded Fed "experts" is simple: Credits in much of the financial system are simply no good. And creating liquidity and stalling for time won't make those credits good.

I find it stunning that the Fed is willing to open up its tool kit when faced with liquidity problems -- spawned from bubbles of its own making -- and yet while those bubbles were inflating, the Fed kept it snapped shut tight.
The cheerleader for excess
Former Fed Chairman Alan Greenspan is responsible for this mess. At every juncture, he insisted on getting out a megaphone and cheering the bubbles. That is why we're in dire straits now.

This action by the Fed will temporarily alleviate some pressure, but it will not change the fundamental problem: Home prices were in a bubble that has now burst. People making median salaries in this country can't afford to buy houses. And even folks who make more money often own more house than they can afford.

The Fed's move set off a big rally on Wall Street, but it lasted just one day. This problem is going to run its course. There's no bubble to bail out the housing bubble.

As to the folks who think commodities may be the next bubble: They might be right.

But exploding commodity prices will not help. They're not going to make housing more affordable because less of people's paychecks will be available for mortgage payments.
Will Fed be left holding the bad?
This just goes to show you the Fed will move heaven and earth to try to keep Wall Street (and, by extension, the economy) running. The Fed cares nothing about capitalism, inflation or the dollar, and it really cares nothing about the message that it sends to the world regarding its aims. Just imagine the image that would be projected if the comrades in power here declared Fannie Mae (FNM, news, msgs) to be a ward of the U.S.

Consider the potential ramifications of the Term Securities Lending Facility, under which the Fed will lend Treasurys for a period of 28 days, taking mortgage-backed debt as collateral.

Before its implementation, the chance of the Fed buying a piece of paper that could deteriorate rapidly over the course of a couple of repo terms would have been small. But now that the Fed, through this facility, is willing to accept (exchange for Treasurys, actually) "AAA-rated" paper -- and remember that the rating agencies are suspect -- it's not inconceivable that the following could occur:

The Fed might actually start taking paper at one price and then find out (by the time XYZ financial institution is supposed to take it back) that the paper is trading at a different price. Inquiring minds would like to know what the Fed would do about these losses if the repo'ing entity was determined not to take back the collateral.
The ball is in Bernanke's court
Creating liquidity and stalling for time won't make those credits good. Credit is contracting all across the financial system, in America as well as around the globe. At the same time, credits are going bad. Both of these problems keep lapping up against each other, and their magnitude will render bailouts useless.

Despite that glaring reality, the Fed remains intent on monetizing whatever needs to be monetized, as Chairman Ben Bernanke thinks this can prevent the underlying mass of home-price issues and the economic consequences of the burst housing bubble from doing what they will do.

But in the end, he's going to shred the currency market and at some point the Treasury market. And, though Greenspan deserves all the blame, Bernanke will likely get it -- with history erroneously declaring him to be the worst Fed chairman ever.

foz said...

""When I returned years later to dig it up, there was a medical center on the lot.""

Your loot certainly grew over the years! :-)

Anonymous said...

Just like that, some people’s stakes of $100 million or more in Bear were ravaged, and senior executives like Thomas A. Marano, the head of mortgages, and Bruce Lisman, a co-head of equities, were furious. Entering the weekend, Bear executives felt confident that the firm could be sold for several billion dollars, if not more.

But $236 million — how could Bear have sold for such a price? Why didn’t the firm seek financial help earlier, they and others asked, as they grilled Mr. Schwartz and his chief financial officer, Samuel L. Molinaro Jr., according to people who were briefed on the meeting.

*

Foz ( Our new pathetic APOLOGIST, but now for brokerage houses ), says BS going down is NO problem for shareholders, as it only effects those over $5M, well like the above says, we're talking $100M, ..

Trouble is ALL brokerage houses are going down, because all stock accounts have their cash used as margin bait, backed by SIV's.

The Broker, be IT RE, MTG, or STOCK is fucked, and MR. Foz is trying to keep his local Bend Firm humming, there are NO RUBES here Mr. Foz.

Anonymous said...

Mr. Foz says that "www.treasurydirect.gov", is a gay porno site. He says that the only way to open on off-shore account is through a broker.

The fact is you pass you money through a broker, and you might as well go live in BENDBB's cavernous Hemorhoid hole with Garzini, and BP.

TreasuryDirect.gov is a way for anybody to BUY t-bills without a FUCKING BROKER, NEVER let a broker touch your money, because NOT only will he/she steal a percentage, but now in a depression, they'll STEAL ALL.

Brokers of ALL kinds are now suffering a liquidity crisis, in every city they have sent out "The Foz" ( & Friends ) to pump&dump.

They're FUCKED, don't let them FUCK-YOU.

* www.treasurydirect.gov

About TreasuryDirect

TreasuryDirect is the first and only financial services website that lets you buy and redeem securities directly from the U.S. Department of the Treasury in paperless electronic form. You enjoy the flexibility of managing your savings porfolio online as your needs and financial circumstances change - all the time knowing your money is backed by the full faith of the U.S. government.

We offer product information and research across the entire line of Treasury Securities, from Series EE Savings Bonds to Treasury Notes. Our new TreasuryDirect accounts offer Treasury Bills, Notes, Bonds, Inflation-Protected Securities (TIPS), and Series I and EE Savings Bonds in electronic form in one convenient account.

You can also purchase Treasury Bills, Notes, Bonds and Inflation-Protected Securities (TIPS) in Legacy Treasury Direct. For a discussion of the differences between TreasuryDirect and Legacy Treasury Direct, see My Accounts.

IHateToBurstYourBubble said...

The Feb unemployment rate for Oregon was 6.4% vs 6.2% in Jan, and 6.0% in Feb 2007.

Feb unemployment in Bend has not been released yet, but Jan unemployment was 7.6% in Jan, way up from 6.1% in Dec, and up from 5.5% in Jan 2007.

Looks like Bend MSA will be around the 8.0% unemployment level. Feb should have the highest rate we see this year.

IHateToBurstYourBubble said...

Last time we had unemployment in the "eights" was March 2004.

Anonymous said...

America was conned - who will pay?
The South Sea Bubble ended in riots as trust was lost. Wall Street also duped the public

*

Homer, Read 'grand popular delusion' this author didn't, in reality the rich were imprisoned, had their winnings seized, and their lives destroyed. Once the little-man, and the legal system saw what the south-sea bubble did to the economy, they were running all the rich through courts for years. The rich were only left with enough money for food and shelter, and most ended up as poor as the average citizen.

Ponzi schemes on grand scales always end this way.

Anonymous said...

DELTA is laying everyone off, TRAVEL is dead, NO more RUBE tourists coming to by condos from becky, or BS stock from The Foz.

*

NEWS ALERT
from The Wall Street Journal


March 18, 2008

Delta Air Lines said it will offer voluntary severance payouts to roughly 30,000 employees -- more than half its work force -- and cut domestic capacity by an extra 5% this year as part of an overhaul of its business plan to deal with soaring fuel prices.

For more information, see:

IHateToBurstYourBubble said...

Hmmm... up almost 500 from yesterdays lows... I'd start fading these hard rallies... at +5-10%, you can get some decent prices vs a few panic-sticken days ago.

Housing Crisis Won't End In One Day.

Anonymous said...

Let's NOT shed crocodile tears for Bear-Stearns, they were one of the largest writers of JUNK CDO/CMO MTG bonds in the country, they played lose and fast.

Up to the last OUR the rich bought BS cheap, with the idea it would get bailed, out they lost the bet. That's the problem with BUYING on the cheap, falling knife biz during the onset of a depression. Most of our MTG houses that played CDO will go down, MOST of our Brokerage Houses that have all their customer deposits in SIVS ( worthless money market ) will go down.

MTG brokes, Stock Brokers, and RE brokers that PUMPED&DUMPED will all go down.

I don't feel that "The Foz" is a real person, most likely BEM, or Homer trying to get a new persona of stupidity to rile up the home-front.

That said this site is going to fucking MAIN STREAM, the main media is now pointing, and thus we're getting newbies.

It's FUN for geezers to chat about business, and piss at the Bend rock, in the days of old we would hang at an AM coffee shop and talk economy or a good pub. Today the coffee shop's of Bend are gone, and with the DUI everyone is back home drinking like during the depression.

This is one of the only places where people can talk about the economy. Note, we're only talking, an opinion is like as asshole, everyone has one. Even though may seem that BENDBB has a biggest enough one to hold all of us.

We're here to have fun, and exchange ideas. Nobody is teaching anybody anything as we're all too old to learn new tricks.

This is NO place for a BROKER, whether stock,RE,or MTG. You'll get eaten alive.

Anonymous said...

Bruce, Where is the SONIA report??

On note of reports, I did st-paddy, last night, pub crawl all over town.

Basically everywhere I went young and old were all talking the same thing.

The 'implosion of Bend', when music wasn't blaring, that old you heard, is Bend. I think with over 10% real un-employment everyone in this town knows someone out of work.

Perhaps the SORE&BULL aren't coming clean, but the average person sure in the hell knows that Bend is in the slump.

Our purpose is still to share information, like bruces report on what actually transpired at the meeting last-night.

We share information, and try to figure what in the fuck is going on.

Like this bear-stearns story, anybody should have known for the past year that BS was going down, sure the CEO was out pumping&dumping, but it was going down.

Just like Bend, its going down, but the BULL & friends are still pumping&dumping. The BULL will go down, or layoff +50%, its inevitable.

Right now have lots of cash, at hand. Not buried of course, cuz it will rot. All brokerage houses are at risk. Most banks are at risk, I see BofA, and USBank to be fairly solid, all other Bend banks at risk. I don't see any brokerage houses to be safe, as they're all playing the same SIV game with account balances.

Sure RE will go down to $120k or below median, but like us old-timers have said all along, by the time that happens you'll not what to be here. Us people who are stuck here for the long haul have no choice, we're stuck, we can't sell, and we have to wait it out.

Sadly, the next two years will be more&more like today, newbies coming here, and trying to change the tide, trying to talk up their RE firm, their MTG firm, or their stock firm, because its exceptional.

Brokerage is OUT you want money now deal with a BANK, and if you have good credit and equity, you can get money without fee. A MTG broker will fuck you to death, and collect a fee now, and NOT deliver a MTG, did you know that every proposal now is to have a unique Appraisal, thus the average total-appraisal will soon cost almost $3,000 ( five $600 appraisals ).

MTG BROKERS are fucked, Stock Brokers are FUCKED, faith in them is at the lowest since the 1930's. RE brokers are FUCKED, they lied on the upside, and now their lies are hollow on the downside, and they themselves own the most toxic RE portfolios of them all.

Anonymous said...

Hmmm... up almost 500 from yesterdays lows... I'd start fading these hard rallies... at +5-10%, you can get some decent prices vs a few panic-sticken days ago.

*

Massive quantity of RUBES are getting fleeced daily in this frothy market.

Seems like everytime the DOW goes below 12000, the FED brings out the weapons, trouble is there is almost nothing left to shoot. In a couple more months we'll be down to the 911 7k low and looking at that for support.

This market is going down -90% just like everything else, given that ENTIRE TEAM BUSH is brokerage-house exec's its in their interest to protect themselves with USA treasure, soon their will be nothing, and folks will give up.

Today Homer posted the South-Sea bubble analogy, read the REAL story, they tried several times to support the price, 2 or 3 actually where the SSB brokers came in and bought the stock themselves to support the price, they did that for so long, eventually nobody in the clique would do it anymore. Just like our Stock-Brokers now talking up the market, eventually they get tired of beating their chests, and spending their own money. With housing you don't see realtors buying their own stock.

Certainly we know that CACB had a huge budget since last summer to buy its own stock, that money must be close to gone.

All bubbles are the same, all end the same, and the 500 up today on the DOW is quite normal.

The only thing really sad about all this is OUR US government money is being spent to create these UP-DAYS. Soon people will become tired on these efforts of support, and just let these markets fall to shit.

IHateToBurstYourBubble said...

I don't feel that "The Foz" is a real person, most likely BEM, or Homer trying to get a new persona of stupidity to rile up the home-front.

No... actually I'm all stocked up on stupid.

tim said...

Overheard last night at a high school orientation for parents (before the event started)...

"How's business?"

"Oh, OK. Things picking up. For a while there it was, what's happening here?"

"Yeah, for everyone."

"But now it's...OK."

---

Yeah, it's always "picking up," isn't it? It's always "OK" now, isn't it?

Between the lines, behind the public mask, there's some panic there in that exchange, don't you think?

IHateToBurstYourBubble said...


Fed 'hesitant' to buy brokers' illiquid assets: CFO



By John Spence
Last update: 11:57 a.m. EDT March 18, 2008

BOSTON (MarketWatch) -- When asked Tuesday if the Federal Reserve is ultimately going to have to essentially buy illiquid assets from troubled brokers, Goldman Sachs Group Inc. Chief Financial Officer David Viniar said the Fed would be "very, very hesitant" to do so. "We will see what they end up doing," the CFO said. "I think it is going to depend on how the world unfolds."

IHateToBurstYourBubble said...

Dammit... that last link was this:

Fed 'hesitant' to buy brokers' illiquid assets: CFO

Anonymous said...

Last time we had unemployment in the "eights" was March 2004.

*

This is real unemployment, lets all remember that ALL of our builders, realtors, MTG brokers, ... were all contractors, meaning they weren't salaried employees.

Most MTG & RE brokers I know, paid for their office space.

The BEST way to measure BEND is NOT un-employment, but EMPLOYMENT, which is around 25%. You take the number of known jobs, and a rough population count, and thats the number to watch.

Un-Employment in this town is just a count of how many people who had REAL-JOBS ( an employee ) are looking or work.

Note, like on this BLOG, almost all of us DONT HAVE A FUCKING JOB, this is typical BEND.

Like Bruce said yesterday "I need more revenue stream", I think this typifies the real Bend, in many of my businesses I'm now seeing sales down 90% from last May 2007, my CPA says it will come back in 2009. We'll see, I have seen this before, and NOT surprised.

We have been in a recession since last summer, and I agree with you, Bend is in a Depression, but NO government official will ever admit so, REAL UN-EMPLOYMENT in this town is above 10%. That is depression territory, on a historical basis.

Anonymous said...

Dammit... that last link was this:

Fed 'hesitant' to buy brokers' illiquid assets: CFO


*

First Come, First Served, note this is completely illegal for the FED to bailout BROKERAGE-HOUSES, as they're only chartered to bailout banks.

Given that BUSH ( twisted little shrub ) has fell off the earth. We can only assume that King Paulson will bail out his OWN first, before all the FED money is gone.

The FED balance-sheet is drying up quickly, thus I'm sure Paulson would like to bail-out GS so he has a place to go post 2008.

It's very sad that this entire country is being robbed, and nobody seems to care, of course there is Oprah, & Spitzer girlfriend will soon be in Penthouse.

Why is any of this surprising, BUSH put stock-brokers in charge of the entire US-FINANCIAL-EMPIRE, and nothing has value. All assets are worthless, most US companys are in DEBT, and MOST RE-PAPER is worthless, and most money markets are sitting on SIV's.

Find a good bank, that didn't play the game, and stay put, and cut spending.

There are several good banks.

I can't think of a single fucking Brokerage Housing that was pumping&dumping its own worthless paper, they're all fucked, and MOST banks are fucked.

The FED doesn't have enough money to bail them all out, so its first come first served, and you know that the Brokerage-Houses of Paulson&Co, will be the first & last to be bailed.

We're almost at the end, perhaps two more months, and the FED balance sheet will be negative, and discount-rate zero, and its game-over.

foz said...

No I'm not new, stupid maybe. I followed Paul Doh from the BEM blog because I like his writing. This blog is also a good way remind me that moving from Bend a year ago was a good thing. I've posted a bunch but always anonymous. But posting anonymous just lumps you in with a bunch of pussies with one shrill voice. Not trying to rile up the home front either. I just thought this was going to be a good tradeable bounce and that GS long and oil short was a good way to play it. The GS play is probably done now. The oil short you are betting that if the fed cuts a full point it signals that we are fucked more then we know and oil will sell off and if they cut less the dollar will bounce forcing oil down. On top of that you have a lot of de-leveraging going on and when that happens the money usually comes out of the big recent winners. High risk trade for sure but you have to try different things.

Anonymous said...

No... actually I'm all stocked up on stupid. - homer

*

Thanks for the confirm.

Perhaps it is a newbie. It's sad that your site is becoming so fucking mainstream.

Pretty soon we're going to have to be nice to each other, and politically correct. How much have you made from this site? You must be retired by now?

Anonymous said...

On top of that you have a lot of de-leveraging going on and when that happens the money usually comes out of the big recent winners. High risk trade for sure but you have to try different things. - The Foz

*

So there you have it, there are quicker ways to lose your 401k, and life-savings than Buying RE in Bend, OR.

Losing it all in Bend is a slow burn, buy in 2004, 25%/yr forever, ... watch your $500k shevlin go to $2M, today its worth $250k, ouch, lost 1/2 your money, and the next five years, probably another 1/2, ...

Play the Foz game and you could 'Bend' yourself in a few days.

How do we sign up Foz, do you have a number?

Anonymous said...

So Foz, since you have told us you don't live here, why are you interested in Bend??

Are you going to come back??

Its always interesting to understand the thinking of those not trapped here.

Sounds like you made the exit at the right time.

There will be bargains in 3 years, you coming back?

Anonymous said...

Now this is the kind of news that counts, Brucey read closely, all of BUSHES 'confidants' are on the firing line. Now, its going to get interesting, now the time for tar&feathering will begin. What is MOST curious is the complete silence of hilly-pooh, mrs-stock-broker / trial-attorney herself.

** FINALLY THE MEDIA is PUTTING THE RAT LIGHT ON BUSH ***


Bush Leadership in Meltdown Troubles Investors: Frederick Kempe

Commentary by Frederick Kempe

More Photos/Details

March 18 (Bloomberg) -- The cost of faltering American leadership is growing as quickly as you can say Bear Stearns.

And the stakes in the U.S. election campaign increase with every dismal twist of the economic cycle.

Much of what we are watching feels like an emerging-market meltdown to top international financiers: runaway debt, a declining currency, imploding markets, failing political leadership and the urgent need for outside intervention to provide emergency stability.

But don't expect the International Monetary Fund to step in to impose discipline and provide stabilization. When you are the world's strongest and biggest economy, you do that sort of thing for yourself.

And that's where global investors have their doubts about American leadership. Those doubts weren't eased by the sale of Bear Stearns Cos. for $2 a share to JPMorgan Chase & Co., plus $30 billion of Federal Reserve financing for its dodgier assets.

International financiers lack the confidence in Fed Chairman Ben Bernanke that they had in Alan Greenspan -- though they add that Greenspan helped fuel the subprime crisis by not raising interest rates when he should have.

They complain that U.S. Treasury Secretary Hank Paulson failed last week as a strategic communicator. What irked them wasn't only how little he said to reassure markets, but that he said he didn't really understand the complex financial instruments designed to control risk. That gets noticed when it comes from a former Goldman Sachs Group Inc. boss now responsible for explaining just such things to the White House.

Katrina Reprised

Most of all, they fault George W. Bush for having failed to realize that he has another Katrina on his hands, this time of a financial nature, for which private-sector solutions are useful but not sufficient to keep the levees in place. They believe he has to deploy greater government means to send a message to the financial world that he is drawing a line in the sand.

The details of such a plan are as important as how it is presented. It must include some form of what Democratic leaders are calling for in Congress: between $300 billion and $400 billion in federal guarantees for the refinancing of mortgages.

The Bush administration has objected to such bills, saying they would bail out speculators. Paulson last week opposed more government intervention in the mortgage market, saying ``we are at the right spot'' in terms of policy.

But until someone establishes a bottom for the mortgage mess and thus halts the flood of disclosures, it will be impossible to stabilize the financial system.

Exhausted Administration

Just as important, global financiers want to see Bush get out in front by calling a high-visibility meeting of his Federal Reserve chief, his Treasury secretary and all the heads of the most-important financial institutions to discuss the crisis and announce a more determined government response. Yesterday, he met with the President's Task Force on Financial Markets that consists of Paulson, Bernanke, Securities and Exchange Commission Chairman Christopher Cox and the acting chairman of the Commodity Futures Trading Commission, Walter Lukken.

Though he said ``the United States is on top of the situation,'' he left the door open to more government intervention. ``When need be, we'll act decisively,'' he said.

As with the war in Afghanistan, the Iraqi war aftermath, the Hurricane Katrina disaster and current efforts at Mideast peace, investors are concerned that the president is responding too late and with inadequate understanding, resources and creativity.

With 10 months remaining in office for an exhausted administration, problems will probably deepen. Financial leaders doubt that any of the three candidates likely to succeed Bush offers the visionary American and world leadership needed.

Lack of Experience

For all of his experience on defense and security issues, John McCain has described himself as lacking economic expertise. The protectionist tilt of the Democratic election campaign -- and behind it American society -- worries global investors about the leadership prospects of either Hillary Clinton or Barack Obama.

``The current financial crisis in the U.S. is likely to be judged in retrospect as the most wrenching since the end of the Second World War,'' Greenspan wrote in Monday's Financial Times.

Some global financiers go further. They wonder whether Bear Stearns's implosion, the collapse late last week of a $22 billion Carlyle Group investment fund, and the fall of everything from the Dow Jones Industrial Average to the dollar signal a broader U.S. decline. A loss of influence was happening anyway as other powers rose. Bush's mistakes have accelerated the process.

Global Contagion

There's no schadenfreude in this for foreign financial leaders, for they realize that bad U.S. colds lead to global contagion. The U.S. still accounts for 25 percent of the world's gross domestic product and a far larger percentage of its financial transactions. Its consumers spend $9 trillion a year, dwarfing the $1 trillion spent by the Chinese. China's growth and hence its political stability depend, to some extent, on how deeply the mortgage mess hits U.S. consumption.

The question one hears with growing frequency is whether we are living through a brutal correction or a historic shift that will leave the global pecking order altered. The ritual reassurances always follow: that the U.S. is the irreplaceable global economic engine; that no country or currency can replace it or the dollar; and Americans have always proven resilient and world champions at self-correction.

One hears this mantra with less confidence these days, as the world waits for U.S. leadership.

Anonymous said...

The question one hears with growing frequency is whether we are living through a brutal correction or a historic shift that will leave the global pecking order altered. The ritual reassurances always follow: that the U.S. is the irreplaceable global economic engine; that no country or currency can replace it or the dollar; and Americans have always proven resilient and world champions at self-correction.

One hears this mantra with less confidence these days, as the world waits for U.S. leadership

*

It's over, that is why history is so important.

The whole reason that the stock-boyz were able to liquidate everything, and replace with phony paper was to buy italian & spanish villas back in the 1990's.

Everybody knows that the USA is going, down and not coming back. Oh, it will not go away, it took Rome 500 years to debase its currency to the point that it had zero-value. Hell yes, King Bush has accelerated the process by ten-fold.

The USA as the worlds-policeman, the USA is the biggest consumer, its all over it takes money, borrowed money, and lots of it, and nobody is going to loan the USA, until they start paying out 20% interest rates, just like the 1970's. That will of course create terrible pain for all home-owners tied to prime.

People will walk from homes, and home ownership will fall below 50%.

They're in a pickle, they can't raise rates, and soon we'll have zero rates. Japan 1990's is starting to look like the model.

Bewert said...

I'm sure you've all seen the Peter Sachs article in the BULL or other media on Bend's financial problems. Yes it's bad, and yes, it is going to get worse. Much worse.

My own notes from last night's presentation by Sonia, things that the media did not say:

The Building Fund will only have $1.1M in reserves at the end of this Fiscal Year, the General Fund only $5M. BAT will only have $5,500. Yes, you read that right.

We are considering more debt for overlay, i.e. operating costs. This in addition to dipping into reserves and using one-time revenue items, like the sale of the old Bulletin site.

Revenues from sewer and water fees have been declining for over a years, even though costs and services have continued to increase. This is puzzling and something I am going to talk to Sonia about when I get together with her later this week.

Moody's gave Bend an A1 rating in January, 2008.

Pete Gramlich is a big 3rd street makeover booster.

Chris Telfer urged realism on the potential of any revenues from JR.

And in the most stunning news of all:

NONE OF THIS FUCKING FINANCIAL STUFF WE HEARD ALL ABOUT TAKES JR COSTS INTO CONSIDERATION. NONE OF IT!

That was to me a fucking stunning admission by Sonia, near the very end of the question period. No one else seemed to get it. $nd counting not even shown as part of the overal financial picture. Yet potential land sales were definitely part of the picture.

We are fucked. More than you realize.

I've got some angry young men to go deal with. Be back later.

Anonymous said...

Thanks for the report, ace reporter, on the spot on our OWN brucey, covering city-haul.

NOW, for the BIG STUFF, THE END IS NEAR ...

Capitalism laid Bear: gloom over bank collapse Fareed Sahloul
18 Mar 2008

The fall of Bear Stearns and the wider implications of its bargain sale to JP Morgan has set chins wagging the financial world over, with even the most resolute of market optimists finding little to smile about. Financial News has trawled the press and compiled the following list of gloomy quotations...

The Times

• Bear Stearns insider: "As the Reuters screen flashed 'London traders told stop dealing with Bear', we cheered. After a couple of hours drinking, the news the bank I worked for was in so much trouble had finally sunk in."

"None of us could believe it. Banks don't go bust. It is not meant to happen."

The Wall Street Journal

• Hank Paulson, US Treasury Secretary: "It was just clear that this franchise was going to unravel if the deal wasn't done by the end of the weekend."

• Christopher Dodd: senate banking committee chairman of Connecticut: "To allow this to go into bankruptcy, I think, would have [created] some systemic problems that would have been massive."

The Financial Times

• Member of Bear Stearns’ fixed-income division: “Everyone is just stunned. It’s like a funeral in there.”

• Dominic White, fund manager at Morley Fund Management: “The news is very negative. Sentiment is the worst we have seen since the summer. Everyone is very nervous. People are waiting for the next bad headline.”

• TJ Marta, strategist at RBC Capital: “The fate of Lehman and Merrill will be increasingly questioned.”

The Independent

• Fund manager: “We are in panic mode. Bear Stearns went from being in pretty good shape last week, according to the company, to going bust.”

• Tim Steer, manager of New Star Asset Management’s UK Alpha Fund: “Magic wands like those waved by Bernanke are all very well but aren’t a lasting solution…Banks look cheap by historic standards, but until they decide to get real I’d suggest there could be more falls to come.”

The Daily Telegraph

• Alan Greenspan, former US Federal Reserve chairman: “The crisis in the US is likely to be judged in retrospect as the most wrenching since the end of the Second World War.”

Anonymous said...

Watch PRONGHORN, its legs are starting to get SHAKY, there are Barbarians at the gate.

***

For those not familiar with Pronghorn, the best resort in the area.

There are concentric gate system's, the outer for the riff-raff and the inner for the most elite.

The inner & outer both have their own golf courses.

The inner is doing just fine, they have that most important Bend attribute "Exclusivity", the trouble is the outer-zone, its now being compared by owners as to be the next Brasada.

The outer lots and homes can't be sold, the inner lots and homes are doing just fine.

Many Bend area "investors", bought Pronghorn lots, not knowing they were buying into the non-exclusive poverty lots, many assumed that Pronghorn was Pronghorn. NOT SO.

I have friends who are about ready to walk away from the loss on their outer Pronghorn purchase, it looks like the its all beyond hope. Once the outer perimeter ( gate ) collapses, what will protect the inner??

This is all becoming like the Mormon church where the higher up you get, the more exclusive rooms you get into.

So Pronghorn has to make a decision, have one gate, or let the outer perimeter become barbarians!

Anonymous said...

RDC, at BENDBB owns a lot at Pronghorn, and will delete all reference to such, it would be interesting, if someone could start a thread about pronghorn at BENDBB.

Anonymous said...

Revenues from sewer and water fees have been declining for over a years, even though costs and services have continued to increase.

*

You may want to look deeper at this, long before you got here, the talk was they were going to raise water/sewer on everyone to pay for water/sewer at JR, they may be funneling off money even now, thus may want to look at the water/sewer expenses and see what's happening to all the revenue.

Anonymous said...

Bend, Is even more fucked than you thought, besides RDC owning a lot at Pronghorn, he's also said to be a Mormorn.

It's over folks, we're fucked.

Anonymous said...

HOLC-II, it has started, as I have predicted all along here, only a matter of time before the US government steps in to rescue housing prices, it will be 1-2 year before the parachute is put out, but at least the conversation has started.

***
Home Owners' Loan Corporation of the 1930s, HOLC-II 2010
***

Hitting home
Commentary: Retooling a 1930s concept to halt housing's slide
By Irwin Kellner, MarketWatch
Last update: 7:58 a.m. EDT March 18, 2008
PrintPrint EmailE-mail Subscribe to RSSRSS DisableDisable Live Quotes
PORT WASHINGTON, N.Y. (MarketWatch) -- What's plaguing the financial markets these days is not a lack of liquidity but a lack of confidence and this won't be restored unless and until policymakers address its root cause: falling home prices.
As I have said many times before, policymakers are treating the symptoms when instead they should be trying to cure the disease.
The Federal Reserve's offer to swap Treasury securities for certain types of mortgage-backed securities (MBS) is the latest example.
This arrangement may temporarily boost prices of these MBSs by taking some of the supply off the market, but it won't last for two reasons: (1) the central bank plans to hold these securities for only 28 days and (2) the home values that form the basis for these securities are still declining.
Until home prices stop falling, MBS values won't stabilize. And until MBS values do stabilize, lenders will continue to be wary since they will remain unsure of this and just about every other form of collateral save for the safest Treasuries.
To stabilize home prices, I suggested in my column of Feb. 4 that the government step in and split the difference between prices sellers are charging and those that buyers are willing to pay. See related column.
While the notion of stabilizing home prices has been accepted, my suggestion has been criticized for a number of reasons. Either it was misunderstood, was viewed as unattractive politically, or was seen as a bailout for sellers.
To address these issues, I have come up with another idea. Washington should form an agency akin to the Home Owners' Loan Corporation of the 1930s, an agency that refinanced homes during the Great Depression in an effort to prevent foreclosures.
While some people were able to hang onto their homes, many defaulted and the HOLC wound up owning these homes. However, it sold them and by the time this agency closed its doors in the early 1950s, it actually returned a small profit to the government.
I envision HOLC II offering to buy all houses for sale at a price not more than three times the median household income in each market. It would then offer to sell these homes to prospective buyers.
This could not be construed as a bailout, since many sellers would take a loss -- how much depending on when they bought and how overheated their particular market became.
Also, it would not rescue homeowners who bought more house than they should have or took out one home-equity loan too many and are now "upside down" (they owe more than their house is worth).
But by returning home prices to a more normal ratio relative to incomes, it would make housing affordable once again. This would get buyers back into the game, but even more important, it would establish a basis for valuing the plethora of mortgage-backed securities that have permeated the financial markets.
The markets might be able to do this on their own, but as we saw this week, it could be painful -- not to say prolonged -- and it runs the risk of overshooting.
For this gambit to work, HOLC II would not have to buy every house that's up for sale. Indeed, its very offer to buy might be sufficient to end housing's downward spiral -- even with the large number of unsold homes still overhanging the market.
And if the lower price this agency does offer causes demand to exceed supply, HOLC II, like its predecessor, might even be able to make a profit for the government.
Who says history doesn't repeat itself? End of Story

Anonymous said...

What's a MormRON?

Anonymous said...

Hey everybody, look at me, I'm a financial genius and I have anonymous numbered Swiss BANK accounts. Even though I live in a shack I lead an active fantasy life that I want to share with all of you. Have a nice day.

Anonymous said...

Hey everybody, look at me, I'm a full time blog bulletin board administrator at BENDBB. I have a tandem Knife-River dump truck of Euros buried in my backyard. Even though I live at Pronghorn in an exclusive gated community, I still feel the need to rub shit in the noses of the little people in Bend. Have a nice day.

Anonymous said...

Want to see some pictures of California overbuilt desolation?


http://tinyurl.com/2ry4g9

Anonymous said...

Central Mordor's "Shire Pronghorn" under attack.

***

We're now returning the middle ages, or dark ages.

Forget about poor country's.

Pronghorn has a gated village, where the barbarians must be kept out, and then inside the village there is a castle that has a moat to keep out the villagers of Pronghorn. In the castle grounds there is another secret golf-course, where only the most elite are allowed.

Those that originally bought lots and homes at Pronghorn thought they had access to the whole village. Now they learn that only the inner sanctuary has value, what they call 'exclusivity' in Shire Pronghorn.

Many people from Shire Bend, paid dearly to get into Shire Pronghorn, now the word is out in all of Central mOrdor that only those who hold keys to inner sanctum own the one true ring of power at Pronghorn. Many Pronghorn villagers that want to return to Shire Bend, are now finding out that the common's outside of the Pronghorn Castle, has no value.

Anonymous said...

Dunc,

You asked about building permits, on BENDBB, but they deleted my response. So I'll respond here.

Many the permits taken out last year didn't get started, and now they're breaking ground. This is why there's lot of stuff started already this spring, but very few permits taken out.

Up at NWXC there is a dozen new homes that have just started in the last month. Note, now at NWXC anybody can buy, and anyone can build. The average new home now being built is 1000sqft, I walked around many last week when they were pouring the foundation.

These new homes are on the south-east side of NWXC.

The people already there are now going to be surrounded, by inexpensive homes, and thus once again, 'exclusivity' of NWXC is lost.

Why not build now? The best time to build in twenty years, materials is 1/2 the cost, and labor is 1/4 the cost.

Anonymous said...

• TJ Marta, strategist at RBC Capital: “The fate of Lehman and Merrill will be increasingly questioned.”

*

Which gets back to bustfucks assertion yesterday, that any money at any brokerage house, is a game worse than Russian roulette.

Hell the fate of all US brokerage and investment houses is questioned. What is safe? T-Bills, Gold, Euros, Yuan, old-women, and dogs.

It's NOT a good time to be a chipmunk in Bend, Oregon.

Anonymous said...

We live in the best of times in Bend, and just to prove it let's talk life-styles of Bends rich & famous of shire-bend.

*

A few days ago folks were talking about Bledsoe the has been football player. Well his new house is coming along fine in the Highlands at Broken-Top. The city refused to approved his 50,000 sqft sports arena, so they took it underground. If you go up skyline, past summit high, to where the new elementary is going in now ( where the road construction starts on way to tumalo ).

If you look to the left you'll see a mountain of gray ash, bigger than Mount Borgman. This is from the hole they had to dig for the under ground sports arena.

Home 25,000 sqft, 24 baths, 32 bedrooms, 18 car garage, and one of the largest indoor private sports arenas in Bend.

Oh, yea the Bledsoe deal came up because he owns the building biz, next to the D&D where they're doing the new exclusive club. I don't remember the name, across from the old Italian joint, next to D&D.

Sorry there's no pics, perhaps bruce can shoot some on his next journey.

Anonymous said...

I'm a financial genius

[ False, I'm a physics person who has subscribed to the WSJ & FT for almost 40 years, I read them daily. Being a science person forces me to look at Bend in a different way than the typical Bend Grifter. No genius is required to know that Bend is being robbed and pillaged. ]

I live in a shack

[ True, My home is around 1,000 sqft, thus compared to the majority of you its a shack. I prefer living in a small simple home. Keep things simple. ]

Anonymous said...

BusterTheMoron said...
RDCtheMORMRON said...

****

can't we all just be friends?

foz said...

""There are concentric gate system's, the outer for the riff-raff and the inner for the most elite.""
Is that really true?
They should have re-routed the irrigation canal to form an inner moat.

Anonymous said...

A few days ago folks were talking about Bledsoe the has been football player. Well his new house is coming along fine in the Highlands at Broken-Top. The city refused to approved his 50,000 sqft sports arena, so they took it underground.

[ Oops, I forgot Highlands at Broken Top is outside the city limits, sometimes I'm such a moron I can't even believe it myself. ]

If you look to the left you'll see a mountain of gray ash, bigger than Mount Borgman. This is from the hole they had to dig for the under ground sports arena. Home 25,000 sqft, 24 baths, 32 bedrooms, 18 car garage, and one of the largest indoor private sports arenas in Bend.

[ Actually I made all this up and just pulled the numbers out of my ass. That's my favorite thing to do, pull things out of my ASS, especially chipmunks. Well, that and fuck renters. Have I mentioned lately that I'm a slumlord. Hey renters, if you want a shack come see me, I promise I won't give you STD's. ]

foz said...

""So Foz, since you have told us you don't live here, why are you interested in Bend??""

I've been living in Bend or Spring River on and off since the mid-70's. I have kids living in Bend. When my daughter bought a house in Bend she asked my advice and I said she was crazy to pay that much for a little house on the West Side. That was early 2001 and she paid 135K, with 20% down. I thought it was a bubble then that was on the verge of popping. Fortunately she didn't listen to me. Realestate has never been my forte. I've never been able to have the mindset that it is an investment. My pattern has been to buy land, build a nice place, without a mortgage, get divorced and lose half. And repeat.
But to answer your question, will I come back to Bend? Maybe a vacation home but to live I need lots of space and privacy around me, not sure if that is possible in Bend anymore.

Anonymous said...

Maybe a vacation home but to live I need lots of space and privacy around me, not sure if that is possible in Bend anymore.

*
Way out east, but you can say that about anywhere.

Yes, there is NO where close-in that is private.

Anonymous said...

BusterTheMoron said...
RDCtheMORMRON said...
can't we all just be friends?

*

There are two kinds of bloggers in Homer-Ville, smelly-cunts, and Hemorrhoid luv-tube cysts.

The first are OUR kind of people, the latter we send over to BENDBB.

We all get along here just fine.

The fudge packers censor, we don't, you pick your own playground. The only rule here, is there are no rules.

foz said...

""Play the Foz game and you could 'Bend' yourself in a few days.

How do we sign up Foz, do you have a number?""

Sorry I don't do retail. Most 401K's are down pretty hard since last fall. I did mention the GS, USO and AAPL trades were high risk so that certainly would rule out a 401K. I also stated that I believe this is just a tradable bounce, we have a long ways to go before we are out of the woods. At least 6 months into the next administration. I don't get paid to do safe, I get paid to take risks, both long and short and quantitative. Even if this is the end of the world, doesn't mean you shouldn't profit from it. Wealth is constantly being created and destroyed. You only have to look at Lewis' last trade to see that.

Anonymous said...

BendBubble2

Debating the Bend Oregon Real Estate bubble, its implications for Bend residents, businesses, and the economic outlook for this area.

*

Oh, wait there are no rules, but we have goals, above is the goal. Its rarely ever met, but we try. Usually by monday its a lost cause.

Anonymous said...

The only rule here, is there are no rules.

***

Including the fact that newbies aren't welcome -- which some people seem to think is part of the charter of ol' BB2. Funny I don't see thaat written in the masthead. So until Paul D decides to monitor comments -- party on newbie breathren: and ignore the angry old man in the corner!!

Bewert said...

Re: It's NOT a good time to be a chipmunk in Bend, Oregon.

I've been thinking for a long time that the homeless should eat the geese. A wrist rocket could put you in some fine cooked goose. Not like anyone would miss a few.

Anonymous said...

I also stated that I believe this is just a tradable bounce, we have a long ways to go before we are out of the woods. - TheFoz

*

Most people here aren't traders.

I think everyone here dabbled in the stock-market when they were young.

Your definitely are a high risker, every millionaire I know that lost it all, did so on the divorce geometric loss program, 1/2,1/2, .. pretty soon you got nuttin. I'm a big proponent of old trucks and the same old women.

You keep talking about long plays on volatile GS, ... but originally I wanted to 'discuss capital preservation in Bend'.

FYI I'm 90% RE ( many states ), and 10% off-shore cash. I'm just curious how others are playing the depression.

I agree that there are ALWAYS winners/losers, but my #1 rule is to NEVER lose money. Risky trading is just like russian roulette, it just takes that one bad play, and your out, like the big boyz this week that lost it all on Bear.

Besides that shit takes a certain personality. I agree with Ben Graham ( buffets so-said mentor ) that only trade if your a extro-vert, most of us here, are high-tech nerds, 100%, except for perhaps dunc. Graham said that folks that like sports, and aggressive play had the best temperament for such activity, I like to BUY RE low and hold. I like to take off for two month vacations and focus on where my feet are.

***

RE would have to go down 90% and I still wouldn't lose money, thus I can give a shit about the seasonal RE correction, I do find how people react to these 20 year cyclic Oregon events fascinating. That's what keeps me glued to Homers blog, just to know whose is getting fucked in Bend, thats why I started reading the WSJ&FT 40 years ago, I wanted to know who was being fucked, and by whom, on the national level. The Business of the USA has always been business.

Now all FUCKING has become local. It's not a national story anymore.

Don't get me wrong, I'm interested in trading. I just prefer to be a spectator watching others get wiped out.

Like watching BEND and all these big developers going NOD & BK, its all interesting to watch.

Anonymous said...

I've been thinking for a long time that the homeless should eat the geese. A wrist rocket could put you in some fine cooked goose. Not like anyone would miss a few.

*

Generally seagulls are salty, I'm sure the geese eat slugs, worms, what ever they can pick through. My wife loves goose, and we have it a few times a year, to me its all fat. I mention seagull, because its a classic starvation bird, if you enjoy rotten fish, then you would like seagul, I'm sure our geese are the same, Farm grain fed geese are a different story.

Yes, bruce there's lots of food here, crawfish in the river, chipmunk, squirrel, deer, elk, ... juniper-berrys, ... There used to be fish, when the injuns were here.

Anonymous said...

Well BENDBB has had his say today.

"UNTIL HOMER MONITORS COMMENTS"

This is a tired, and OLD demand.

The funny thing, is that BB2 is the most popular and noted blog in Central Oregon for a reason, we don't censor.

It just drives you fucking CUNTS crazy, they we don't censor.

Go over to BENDBB and talk about MLS numbers and your fine, but publish a story about STD's becoming ghettos and BENDBB/RDC will delete your post in a nano-second.

ALL newbies are welcome here, as marge can testify.

Too many people for TOO long have wanted to shut this site down, and its becoming MORE popular everyday.

Its a smart thing that DUNC has declared a moratorium on the bubble, its going to get ugly, just another reason to be anonymous.

The REASON that BULL&SORE suck BENDBB's tailpipe is because they like him censor, cuz they're all beholden to REALTORS, but we aren't.

Anonymous said...

Brucey,

I was quite serious above on the BLEDSOE mansion, you should get some pic's before the largest underground gym in the world gets covered up with topsoil.

I have provided all the essentials for location above.

I think its good to chronicle excess during this bubble, as I have no doubt that Bledsoe, will be noted for his excess, like the private club going in next to the D&D.

Bewert said...

Another builder in trouble:

$1650000 WOW…NEVER THOUGHT WE WOULD SELL!!!
Reply to: bnicol@bendcable.com
Date: 2008-03-17, 2:25PM PDT


Brand new 5000+ square foot Premier Home in Bend’s most desired Awbrey Park development. Views, five minute walk to park, Deschutes River, and only minutes from downtown. 4 mstr suites, 3 car garage with extra large shp, office, wine cellar, gourmet kitchen, on .5 acre lot.

CANNOT DESCRIBE DETAILS IN WORDS!

Builder’s own private home, to be featured this summer in numerous magazines. $1,650,000 Call builder at 541-390-7460


Note phone number here: http://www.branichomes.com/AboutBranic.html

Branic "...is focused on building unique custom homes in the Brooks Resources Awbrey Park, North Rim Developments and surrounding areas. Brandon is a small volume, high-end builder who completes one or two homes a year."

Weren't we told the high end would be fine?

Anonymous said...

So until Paul D decides to monitor comments -- party on newbie breathren: and ignore the angry old man in the corner!!

*

Only one person here spells 'brethren' as BREATH-REN, and that be our marge, sweety are you having a bad day?

If its not marge, remember this site is NOT censored, and if you have a comment about the bend-bubble, NOBODY is stopping you.

*BendBubble2

Debating the Bend Oregon Real Estate bubble, its implications for Bend residents, businesses, and the economic outlook for this area.

Bewert said...

Re: Brucey,

I was quite serious above on the BLEDSOE mansion,

Give me the address or one close so I can google map it.

I went out to Aspen Rim with my camera but my batteries were dead. But I plan to go back. I think I'll do a series on all these little subd's going up with one or a few model homes looking lonely.

enAspen Rim: enjoy your nice little common park right next to unfinished scraped-bare land, with a bankrupt builder no longer in charge.

Bewert said...

Bendbubble2: a blog where cranky old fucks whine anonymousely about the ongoing fucking of the newbie real estate owners of the most special place in the universe--Bend, Oregon.

Anonymous said...

Weren't we told the high end would be fine?

*

During the great depression, the HIGH-END took the biggest hit,
When you don't have cash-flow, you don't want a HIGH burn rate.

Nothing worse than a BLEDSOE mansion during a depression to wreck your nestegg. During the great depression the BIG stuff sat empty, and people walked away as monthly maintenance costs exceed monthly rental revenue.

Another reason that NOW BIG HOMES IN BEND will be cash only.

CACB was the greatest fool that played that game, and do you know where they are now?

Some of these high end homes in Bend, have a $2,000/mo landscape cost, and that is minimalist.

The bigger they were, the HARDER they'll fall.

Its this kind of talk, that is the reason THEY want to CENSOR this site, they used to call this the truth.

*

Disclosure: Buster loves in a 1,000 sqft home, with less than $100/mo utility cost.

Anonymous said...

Bendbubble2: a blog where cranky old fucks whine anonymousely about the ongoing fucking of the newbie real estate owners of the most special place in the universe--Bend, Oregon. - bruce

*

Go to urban-dictionary dot com, and add that to the definition of Bend.

You didn't define BB2 you defined old-timers versus new-comers.

Bewert said...

Boy, I sure got some rather interesting looks from our councilors last night. I was a few minutes late and the only seats left were right up front, so I leaned on the door. Then Patty came over and told me and a couple others the doorway had to remain clear, so I settled in right up front with no cover. Got some long looks...

Sonia did a fine job. She was pretty direct and talked about the systemic problems. All of which were brought on by the bargain basement SDC's during the boom, of course, but that's a subject not even Sonia dares bring up. Any day now they will finally be raised to reasonable levels--just in time for the biggest RE bust in Bend's history.

You old fucks are right: sometimes you just have to shake your head at the level of incompetence and/or corruption of the leadership around here.

Bewert said...

Re: You didn't define BB2 you defined old-timers versus new-comers.

I was hoping to get everyone on a roll so we could come up with some good descriptions of BB2.

BendBubble2: the source of stark fucking reality about the impending implosion of Bend real estate. Not for the faint of heart or those uneasy with profanity or truth.

Bewert said...

This is rather interesting:

Inn of the 7th Mountain Condo Share Wanted
Reply to: hous-609141695@craigslist.org
Date: 2008-03-17, 10:34AM PDT


If you own a 1/6 fractional share at the Inn of the 7th Mountain, and have considered selling it, read on.

Are you tired of the law suits and power struggles at the Inn? Frustrated by the recent assessment? If you want out, I may be a buyer for your fractional share. I previously purchased a 1/6 share from a private party and looking to get a second. Please let me know what unit number you have and if you have already paid the first special assessment.

foz said...

""... but originally I wanted to 'discuss capital preservation in Bend'""

You are absolutely right, divorce is not the path to capital preservation. And I have nothing but respect for those that have stayed in one relationship for life. I'm still friends with the ex's, and I'm blessed that I can help where I can. What I drive I'm sure is older then what you drive.
As far as capital preservation...my own money is in a swiss annuity that I bought years ago, and the rest in a balanced fund at vanguard. I don't trade my own money and I don't do debt. And my house is where I live, nothing more. There is no absolute way to insure against risk. So I guess the best path to capital preservation is to live way below your means, get rid of debt so you aren't beholden to anyone, help others where you can, and focus on what counts most, family and friends. Because in the end, your life and happiness is your only capital worth preserving.

Bewert said...

Sometimes I just feel so sorry for rich snobby people:

New Moguls for Yellowstone Club
Rocky Divorce Spurs
Sale of Elite Enclave;
Where Gates Chills Out


January 4, 2008; Page W2
As business partners, and as husband and wife, Tim and Edra Blixseth built Yellowstone Club and turned it into the nation's most successful playground for the super-rich.

The private golf and ski community, nestled in the Montana Rockies, boasts more than 300 members, including Bill Gates and Steve Burke of Comcast. Membership costs $300,000, not counting the $18,000 in annual dues or the millions of dollars it costs to buy a home there.

Yet now, the Blixseths have decided to sell the exclusive resort, motivated in part by their increasingly contentious divorce.

According to people familiar with the negotiations, the Blixseths are in talks to sell Yellowstone Club for an estimated $400 million to $600 million. The buyer is Boston-based Crossharbor Capital, a real-estate and private-equity firm run by Samuel Byrne, a longtime club member. Mr. Byrne declined to comment. The talks are still ongoing and a deal could be announced in the next month or two.

The sale marks a new chapter for the club, which redefined the luxury, vacation-home business in the past five years and became a Rocky Mountain refuge for the rich and famous. With its exclusive membership requirements (early members had to be worth $3 million or more), tight security and private golf and ski courses (with no waiting lines), Yellowstone Club has the feel of a family-friendly village, albeit one where all of the locals are multimillionaires or billionaires.

The Yellowstone sale also signals the end of the Blixseths' high-profile attempt at a peaceable divorce. As reported in the Wealth Report last year, the Blixseths initially divided up assets worth up to $2 billion, without resorting to dueling attorneys or courts. They divvied up private jets, cars and various homes and properties, and they planned to remain co-owners and partners in Yellowstone.

Yet over the past year, their amicable split turned bitter, as the two started tussling in the California courts over various businesses related to the club. Their working partnership at Yellowstone also started to crack, according to people familiar with the matter.

Mr. Blixseth, while declining to give specifics on the deal, says the divorce was "certainly among the factors" in his decision to sell. But he said the main reason was his desire to focus on several larger business projects he has in the works, including a 5,000-unit real-estate development south of Palm Springs, Calif.

"Sam Byrne and his team are great implementors," he says. "They have the ability to take a project that's already been started and take it to the finish line and maybe make it even better."

The Blixseths are expected to remain as advisers and promoters of the club. For the past two years, CEO Dieter Huckestein, a former hotel executive, has been managing the day-to-day operations.

Mr. Blixseth says he intends to exclude from the Crossharbor sale a large estate he's building called Pinnacle, which, when completed, he plans to put on the market for more than $155 million.

His estranged wife is not saying goodbye to Yellowstone, either. Although Ms. Blixseth says she plans to focus more on her tech start-up, Blxware, she's also keeping property at the club, as well as a family residence.

"Yellowstone is like a baby to me, and it always will be," she says.

The sale comes at a challenging time for the club, with the real-estate market (even at the high end) coming under increasing pressure. Yellowstone expects to add about 500 additional members before it closes to newcomers. Its success has spawned imitators such as the Mount Holly club in Utah, which is also touting skiing and golf, although the development (slated to open in 2008) has been dogged by problems.

Members say the sale is a positive for Yellowstone, since it removes what had become a growing uncertainty over its ownership. Another cloud was lifted recently with the settlement of a lawsuit against the Blixseths filed in 2006 by cycling champion Greg LeMond; the suit alleged that when he and others tried to sell back their interests in the club, the Blixseths offered a price that was a fraction of the shares' value. Terms of the settlement haven't been disclosed.

"We all knew about their divorce and the difficulty they were having with their club partnership," says one member. "It became a distraction for everyone. Now, we'll have a new owner, the suit is settled and we can all get on with the club's future."

Mr. Blixseth, who made his millions in the timber trade, and his wife founded the club in the late 1990s, after they acquired 13,500 acres near Big Sky as part of a complex land swap with the government. The couple originally planned to use the land as a private vacation spot with a personal golf course. But when their friends asked to join them and build homes on the site, the Blixseths decided to add a ski lift and turn the Yellowstone into the first members-only golf and ski community. The club was controversial in Montana, where ranchers and environmentalists objected to public lands being transformed into a walled-off Eden for the well-heeled.

Membership exploded with the wealth boom of the past decade, as more young families with large fortunes were looking for havens to play. Today, Yellowstone members can ski on 2,000 acres of trails (including one called EBITDA), and tee off on a Tom Weiskopf-designed golf course -- all protected by a security team run by a former Secret Service chief.

Still, Mr. Blixseth says he has no regrets about the decision to sell.

"I'm looking forward to going to the club as a guest and not worrying about whether someone's hamburger is medium-well-done or well-done," he says. "I'm going to actually enjoy the place. I plan to ski an awful lot."


Excuse me while I wipe some road grit out of my eye...

tim said...

>>enAspen Rim: enjoy your nice little common park right next to unfinished scraped-bare land, with a bankrupt builder no longer in charge.

Ooo. Tell more. I know some nice people nearby and they are excited by the park. I took a quick look and it seemed good.

But all those houses listed in the preforeclosures--are they really houses or just lots? I'll drive out this weekend and look too. The satellite view in Google Maps looks creepy, but I thought maybe that was aan old snap.

Bewert said...

Re: Ooo. Tell more. I know some nice people nearby and they are excited by the park. I took a quick look and it seemed good.

When you look at the google satellite view, that bare open space just to the right of the entrance is across the street from the park, which is at the Y just inside the entrance.

Bewert said...

Re: What I drive I'm sure is older then what you drive.

1994 Plymouth Voyager, 220,000 miles or so.

Simply won't fucking die. Cost: $1700 several years ago.

Bewert said...

While, actually I don't drive it that much. Bikes are easier around here.

foz said...

Just watched the news. Can NY become more of a soap opera?

Anonymous said...

BendBubble2: the source of stark fucking reality about the impending implosion of Bend real estate. Not for the faint of heart or those uneasy with profanity or truth.

*

Yes, but your first defn of 'Bend' was the best, truth hurts, and we don't want to hurt no one.

I really think your defn of Bend belongs on urban-dictionary.com, did you see their present defn of Bend? Its hilarious.

Homer really can't put your defn on his masthead, albeit the truth. The current goal is right-on, but like all human endeavor in BEND only a goal.

Bewert said...

What a fucking mess.

The latest from Inn 7th:

Status of the Lawsuit
March 17th, 2008

Fellow Association Members:

We wanted to give everyone a status report of where things stand and where we expect things to go.

We have tried numerous times to negotiate an end to the special assessment and repair issues with INNspired and the Papés. There have been numerous phone calls and multiple face-to-face meetings. Also, our lawyers have attempted to scheduled mediation with the AUO, INNspired and Arrowood. See the attached letter of Jim McDermott. Despite all of these efforts, we have not received a response from the Papés or the AUO to any of our proposals. Making things more difficult, INNspired has refused to participate in any negotiations, including mediation (a negotiation session with an impartial person, often a judge, trying to persuade the parties to reach a compromise) unless and until we drop our claim that the December 31, 2007 board removal election was unfairly and improperly conducted.

We will not give up our claims concerning the December 31, 2007 removal of the AUO board. However, despite INNspired’s precondition to participating in mediation, we are nevertheless, prepared to negotiate in good faith concerning this – and all other – issues concerning the Inn. So far, INNspired has refused to meet with us – or our lawyers – to negotiate a fair resolution to all outstanding matters. Consequently, we have no choice but to continue with all the litigation.

A trial is scheduled on the validity of the election results for June 17th and 18th. If the original AUO board loses that trial, we expect them to appeal. Similarly, if we lose at trial, we intend to appeal any adverse decision on the board removal vote. This means it could take as many as 2 to 3 years to answer the question of who controls the AUO bard and who can do certain things on behalf of the AUO (like entering into contracts). This would also create long-term uncertainty over the validity of the November, 2007 special assessment.

At the same time, we are also continuing our separate case challenging the November 2007 special assessment. Even if we were to lose the trial on the board removal vote, we are still able to confront the special assessment head on. While there is not yet a trial date set for that case, there is a pretrial conference set for April 10th, when we expect that the trial and other important dates will be set. We expect that trial to happen sometime this fall. We believe that this is a strong case, since the INNspired and Papé controlled board failed to follow basic guidelines in (1) determining the amount of the special assessment, and (2) passing the special assessment.

Many of you have asked about the payment of the special assessment. Although this was one of the many things we hoped to resolve in settlement discussions, there is still a chance that a deal will be reached to put off the special assessment payment date until later in the summer (after the June 17th trial on the board removal vote). Even if we cannot get the other side to agree to voluntarily hold off on collecting the special assessment, under the bylaws the AUO must give us notice before they can put liens on units. Typically, the AUO policy is to give 30 day notice of non-payment, followed up by another 30 day letter. So we will know if the AUO is going to try to collect the special assessment well ahead of time. If the AUO takes steps to collect the special assessment, our lawyers will seek an injunction against the AUO. We are watching this situation closely, and we are ready to go to court if necessary.

Hopefully this gives you an idea of where things are going and what we are willing to do to prevent INNspired and the Papé controlled board from running roughshod over the Inn. We have fought hard, and we will continue to fight for fair treatment in the renovation of the Inn.


I wanted to get my two cents in while HBM was here defending his slanted article, which ended with a Friedman quote about how some people don't want to pay for shit that needs to be done. So I will now:

HBM, people want to see the fucking books. It's called transparency.

Would you pay towards a $17M assessment if the people assessing it refused to provide details? If they refused to show multiple competing bids?

You should read the lawsuit as well as suck Bill's cock.

Anonymous said...

Only one person here spells 'brethren' as BREATH-REN, and that be our marge, sweety are you having a bad day?
****

No not marge -- and why is it that everyone misspellls words all the tyme, but when some fuk here wants to make someone look like a shit they suddely point out a TYPO -- like their fuckin perphekt.

BTW, I was NOT suggesting that BB2 censor comments -- I was saying that all are welcome and the grumpy old men can't shut up the newbies. And don't say -- then talk about Bend RE -- without first counting how many of the 281 comments above aren't about Bend RE. And I'm not saying don't talk about Bend RE. Read what I write and do not misinterpret it.

foz said...

""While, actually I don't drive it that much. Bikes are easier around here""

That is one thing that I miss about Bend. I could ride my bike downtown, get drunk at the Martini Bar, flirt with cristi and ride back home, without having to worry about the consequenses

Anonymous said...

BendBubble2: the source of stark fucking reality about the impending implosion of Bend real estate. Not for the faint of heart or those uneasy with profanity or truth.
**

Excellent.

Anonymous said...

Foz,

Yes NYC is very BEND, who hasn't gotten a call-girl in NYC as a pol for political favor?, now lets see if they take out a blind black man for getting a little paid-for pussy, or rent-a-organ, as Gloria Steinem calls it. Paterson should go down, if he doesn't then all the NYC pol's will be fucking children in public in a month.

In BEND we have our own REHO's who in the day fucked, sucked, and HO'd to sell condos, who in bend city-haul ( think u-haul ), hasn't gotten fucked by a REHO, and blew coke with same?

NYC is about hypocrisy, like all of USA, and our BEND.

Anonymous said...

Meeeeeeeeeee sooo horny where's marge?

Anonymous said...

Paterson, has a three-way, that included a REHO, Poodle, and his wife. We still have room in Bend, come to Bend, and bring your money.

*

Spitzer successor had affair in Manhattan hotel

By David Usborne in New York
Wednesday, 19 March 2008

It was the moment that dignity would be returned to state government. Eliot Spitzer, felled by his sex-for-cash improprieties, was no longer Governor of New York and David Paterson was taking the reins. A pity then that by yesterday we were hearing of new slap-and-tickle naughtiness – from Mr Paterson no less.

As if Mr Spitzer hadn't shocked us enough. Now we had Mr Paterson's confessions. And what was that other newsbreak? Oh yes, three-way sex and the ex-Governor of New Jersey.

What aphrodisiacs are these folks taking? Mr Paterson, who is blind, sat down with reporters from the New York Daily News within hours of his swearing in to bare his soul. Yes, he said, his wife, Michelle, had gone through a bit of a bad patch and beginning in 1999 he had began his liaisons with a mistress in a Manhattan hotel that lasted two or three years.

Probably, this was a wise strategy. Rumours had been circulating in the corridors of the state legislature in Albany, where the swearing-in took place, for days. Mr Paterson may have lanced the boil before it became truly troublesome.

"This was a marriage that appeared to be going sour at one point," he said. "But I went to counselling and we decided we wanted to make it work. Michelle is well aware of what went on."

It helps that his wife also acknowledged their past problems to the paper.

It is a rival tabloid, the New York Post, that has carried tales of torrid three-ways involving James McGreevey shortly before he became Governor of New Jersey. They came from a former aide and chauffeur. Mr McGreevey confirmed them as true but another of the participants, his soon-to-be ex-wife, Dana Matos, insisted they were not

Mr McGreevey ceased to be New Jersey's governor nearly four years ago with his now famous "I-am-a gay-American" confession. Yet, neither he nor Ms Matos seem able to stay out of the headlines. A bitter divorce is under way and last week, she wrote an article in The New York Times equating her experience with the humiliation suffered by Mr Eliot's wife, Silda Spitzer.

None of what she was saying – particularly her claims that her husband hid his sexuality in the marriage – sat well with the former chauffeur, Teddy Pedersen. She must have known her husband was not entirely straight, he told the Post because of all the "Friday Night Specials" they spent together.

This, he claimed, is what they used to call the evenings when he, Mr McGreevey and Ms Matos would get together for a routine "hard-core consensual sex orgy".

Mr McGreevey had little to lose corroborating Mr Pedersen's tales. Mr Paterson may also have escaped bigger scandal, assuming – and he has insisted it to be so – he used no state money for his mistress misdemeanours.

At some point, meanwhile, the script of state government in New York and New Jersey will presumably become a little less Benny Hill and more about, well, government.

Bewert said...

Re: Excellent.

Thanks.

So let's hear some more, all you grumpy misfits out there. (Counting myself in, of course)

foz said...

""Yes NYC is very BEND""

God I hope not...what is with that. 4500 bucks for a hooker? Have they never been to vegas? Shit marriage is cheaper. Well not in my case, but 4500 bucks? Shit she better be good or maybe Spitzer was pretty desparate. And the new gov and his wife come out and say "yeah we basically have an open marriage. Everything reminds me of mad magazine lately.

Anonymous said...

I'm not saying don't talk about Bend RE. Read what I write and do not misinterpret it.

*

Then talk about it, you have posted about six times today, not said a fucking thing.

You say "read what I write", not a problem, now fucking write something about the bend-bubble in BEND.

Bewert said...

Who the fuck cares about their sexual escapades? As long as their work product is good.

The difference between Duke Cunningham and Paterson is that Duke was screwing around outside his marriage while fucking over US taxpayers. I don't give a shit about the screwing around part. That's his problem. The fucking the taxpayer's part, that's our problem.

Let's get back to being BB2, not the fucking Star.

Anonymous said...

That is one thing that I miss about Bend. I could ride my bike downtown, get drunk .. and ride back home, without having to worry about the consequences

*

Sheeeeeeet talking about calling the kettle black, this is just getting too fucking real.

Hell yes, drinking while biking, or BUII will get you life now.

Anonymous said...

Who the fuck cares about Spitzer's sexual escapades? As long as their work product ( ejaculation ) is good.

*

Brucey, I hope your talking about the wad he shot.

Here's the rub, NYC the world financial capital is burning, and all heads on the media are on spitzers cock, you gotta admit its fucking Roman.

Where's the Shrub ( BUSH )?? It's like he fell of the earth.

This is very Bend, and this gets back to your bruce-pussy side, look away from political hypocrisy, so long as they're shooting a good wad.

Who says Brucey?? You the reporter?? A fucking Hypocrit, is a hypocrit, and Spitzer is a fucking Hypocrit, like the people who run Bend.

If & when you win political office, brucey, and your got fucking REHO's on taxpayer dollar, we'll NOT cut any slack for you, in spite of your good work ( ejaculation ).

What a fucking oxymoron, to say that good work, can even come from a fucking politician.

Bewert said...

Anonymouse, I wasn't talking about Spitzer, I was talking about Paterson. Who did not try to hide his shit.

Big difference.

Anonymous said...

The DEEP is OUT ( think bacon tempura ), Merenda ain't cool, now in Bend you must have 'inner Pronghorn' address, and stars on your belly. Bend's Star-bellied Sneetches

* too fucking funny

Now the Star-bellied Sneetches had bellies with stars.
The Plain-bellied Sneetches had none upon thars.
The stars weren't so big; they were really quite small.
You would think such a thing wouldn't matter at all.
But because they had stars, all the Star-bellied Sneetches
would brag, "We're the best kind of Sneetch on the beaches."

With their snoots in the air, they would sniff and they'd snort, "
We'll have nothing to do with the plain-bellied sort."
And whenever they met some, when they were out walking,
they'd hike right on past them without even talking.

When the Star-bellied children went out to play ball,
could the Plain-bellies join in their game? Not at all!
You could only play ball if your bellies had stars,
and the Plain-bellied children had none upon thars.

When the Star-bellied Sneetches had frankfurter roasts,
or picnics or parties or marshmallow toasts,
they never invited the Plain-bellied Sneetches.
Left them out cold in the dark of the beaches.
Kept them away; never let them come near,
and that's how they treated them year after year.

Then one day, it seems, while the Plain-bellied Sneetches
were moping, just moping alone on the beaches,
sitting there, wishing their bellies had stars,
up zipped a stranger in the strangest of cars.

"My friends, " he announced in a voice clear and keen,
"My name is Sylvester McMonkey McBean.
I've heard of your troubles; I've heard you're unhappy.
But I can fix that; I'm the fix-it-up chappie.
I've come here to help you; I have what you need.
My prices are low, and I work with great speed,
and my work is one hundred per cent guaranteed."

Then quickly, Sylvester McMonkey McBean
put together a very peculiar machine.
Then he said, "You want stars like a Star-bellied Sneetch?
My friends, you can have them . . . . for three dollars each.
Just hand me your money and climb on aboard."

They clambered inside and the big machine roared.
It bonked. It clonked. It jerked. It berked.
It bopped them around, but the thing really worked.
When the Plain-bellied Sneetches popped out, they had stars!
They actually did, they had stars upon thars!

Then they yelled at the ones who had stars from the start,
"We're exactly like you; you can't tell us apart.
We're all just the same now, you snooty old smarties.
Now we can come to your frankfurter parties!"

"Good grief!" groaned the one who had stars from the first.
"We're still the best Sneetches, and they are the worst.
But how in the world will we know," they all frowned,
"if which kind is what or the other way 'round?"

Then up stepped McBean with a very sly wink, and he said,
"Things are not quite as bad as you think.
You don't know who's who, that is perfectly true.
But come with me, friends, do you know what I'll do?
I'll make you again the best Sneetches on beaches,
and all it will cost you is ten dollars eaches.

Belly stars are no longer in style, " said McBean.
"What you need is a trip through my stars-off machine.
This wondrous contraption will take off your stars,
so you won't look like Sneetches who have them on thars."

That handy machine, working very precisely,
removed all the stars from their bellies quite nicely.
Then, with snoots in the air, they paraded about.
They opened their beaks and proceeded to shout,
"We now know who's who, and there isn't a doubt,
the best kind of Sneetches are Sneetches without."

Then, of course those with stars all got frightfully mad.
To be wearing a star now was frightfully bad.
Then, of course old Sylvester McMonkey McBean
invited them into his stars-off machine.
Then, of course from then on, you can probably guess,
things really got into a horrible mess.

All the rest of the day on those wild screaming beaches,
the Fix-it-up-Chappie was fixing up Sneetches.
Off again, on again, in again, out again,
through the machine and back round about again,
still paying money, still running through,
changing their stars every minute or two,
until neither the Plain- nor the Star-bellies knew
whether this one was that one or that one was this one
or which one was what one or what one was who!

Then, when every last cent of their money was spent,
the Fix-It-Up-Chappie packed up and he went.
And he laughed as he drove in his car up the beach,
"They never will learn; no, you can't teach a Sneetch!"

But McBean was quite wrong, I'm quite happy to say,
the Sneetches got quite a bit smarter that day.
That day, they decided that Sneetches are Sneetches,
and no kind of Sneetch is the BEST on the beaches.
That day, all the Sneetches forgot about stars,
and whether they had one or not upon thars.

foz said...

**Who the fuck cares about their sexual escapades? As long as their work product is good.**

That's true to a point. But if you held a public office of trust,(and at this point I would support you because you seem to do good work), I would expect a certain level of morals, and not become what has become the the term of the week, a moral hazard.

Anonymous said...

Big difference.
*
I would rather discuss the sneetches at Pronghorn, those in the inner ring with stars, and those in the outer ring without.

WRT "Big difference" Paterson had been outed by the PRESS, and both had a fucking PRESS-CONFERENCE. NO FUCKING difference. I hope Paterson goes down, because if they let him slide, then anyone can BUY pussy with taxpayer money, and its one thing to rob city-haul, and give all the loot to Hap-Taylor, or Dick 'cock' Borgman, but another thing for our treasure to be spent on pussy.

NO FUCKING DIFFERENCE BRUCEY.

foz said...

""you gotta admit its fucking Roman.""

Well said, all this is strange

Anonymous said...

Foz,

Your a good man, and that is self evident at this point in time.

Our Brucey is called "bruce pussy" for a reason, he abides by the Kennedy School politics, that so long as your doing 'good work', any fucking thing goes.

Of course the problem is WHO gets to define 'good work', and thats our bruce-pussy, with stars.

tim said...

I have a couple friends grooming themselves to be politicians. It makes sense for a certain kind of person (bad or good person) who is comfortable talking white lies all the time. Someone who smiles easy and can shift quickly into stern

If I were a politician, I'd be one of those guys that talks straight. Kinda awkward.

The problem is that only very rarely does the public get a hankering for such a guy. And when they get that guy, they only believe him for two years, then they assume he's talking shit like all the other politicians.

The only way you can win that crummy game is to a) be a dictator and rule until you die. b) serve one term and then have everyone wish you were still around.

And who wants all that anyhow. Spitzer shows that even if your shtick is supermorale Mr. Tough on Crime, when you have power the morales can go easy and the law is something you USE. I don't care that he took a whore. I only care that he was Mr. Critical when others took them.

Screw Spitzer. He's far from Bend. But yeah, he and Bush are great examples of how tyrants act at every level. President, Governor, and Bend politicians. It's a goddamn reflex, like peeing in your sleep when someone dips your hand in water.

tim said...

Oh yeah I typed "morales," like the President of Bolivia, which is a kind of interesting mistake.

foz said...

""Foz, You're a good man, and that is self evident at this point in time.""

Thank you, but I don't know who determines that definition of what is good work or bad, but I'm glad someone is out there doing that work. Anything, is better then what I seem to contribute, I honor the effort and time that anyone puts into making a difference. The debate that follows that always seems to force us into change and I believe good things can't happen without change.

IHateToBurstYourBubble said...

I think I just saw on KTVZ that they found the biggest COCK RING in the US... in Central Oregon!

They may have said cock-fighting ring, but I was too mesmerized by Molly Hendrickson's jugs to listen real good.

IHateToBurstYourBubble said...

I've set you up Buster...

The whole "Bend is the Dick-Implant Capital of the World" ground is fertile & ready for you to spunk forth...

IHateToBurstYourBubble said...

BTW, I was NOT suggesting that BB2 censor comments

The Unofficial Policy on Censoring Comments on this blog:

Won't Do It

The Official Policy?

Don't make me cram a shotgun up your MODERATING smelly cunt & pump you full of rock salt, cuz I will!

I had to adopt the Unofficial Policy, cuz it seems the Official Policy was unclear, and besides, I have to set the rational tone for this thing...

Anonymous said...

Thank you, but I don't know who determines that definition of what is good work or bad, but I'm glad someone is out there doing that work. - The Foz

*

Our Brucey is doing good work, but everyone once and while, seems to think that pols should get a 'get out hypocrisy-free card', cuz of 'good work', and WHO decides whom is doing good work?

Adolf Hitler thought he was doing good work, so did most the Germans of the day.

Today in the Fourth Rheich 1/4 of the USA electorate who voted for BUSH think that killing Iraqis is doing 'good work'.

Thus in the sordid history of mankind, whenever I here the term 'good work' I want to vomit, and hence the tirade on Bruce Pussy.

Just like when my wife hears the slogan "We're here to save the woman & children", every dictator in history, has led his legions with that slogan, and any good feminist knows the party line.

So when Paterson & Spitzer shot their wad's, was it good work or not?

Hell Borgman of Les Schwab probably thinks that paying off Kuratek with $3M of LS cash was doing good work, in the name of the patriarch.

Kuratek probably thought he was doing good work, in making the worthless Juniper Ridge outcropping into the 8th wonder of the world.

Anonymous said...

now fucking write something about the bend-bubble in BEND.
**8
When are you going to follow your own advice?

IHateToBurstYourBubble said...

From KTVZ.com, page 2 of the comments:

No pot of gold: Bend's shortfall soars to $20 million


So is mentioning Chris Telfer's name considered offensive, obscene, or otherwise objectionable? Do you have a personal stake in her reputation, or do you simply pick and choose which comments to publish based on your own opinions....

Administrator comment: Dave, our rules state I can only post an item in its entirety, or not post it, and we do NOT decide whether something is objectionable based on who is targeted, or my opinions. Criticizing a public figure is fair game. Feel free to e-mail me the unpublished post and I'll tell you exactly what ruled it out. There are lots of judgment calls, it's no perfect science, esp. with anonymity and after 830 posted comments (probably 250 max. not posted) I think it's worked pretty well. Those who want to call people idiots or morons, as some have tried here, always have Craigslist's rants and raves or numerous local blogs to air their vents. --Barney Lerten

You been over to KTVZ.com Buster?

Anonymous said...

The whole "Bend is the Dick-Implant Capital of the World" ground is fertile & ready for you to spunk forth...

*

Last Night on the st-paddy pub-crawl, I had an interesting talk with an RN at ST-Charles on that subject, she did agree, with the loss of HELOC's that soon Bend would no longer be a surgical capital for prosthetics. I quickly asked, if she would be out of a job, and she told me there were plenty of 'infections' in Bend, and that she saw no end in work, ever.

I finished my growler of IPA of SilverMoon, opened my second to the last Sierra Nevada Celebration Ale, ...

Cock-Rings in Bend? You haven't been to a BENDBB trailer party? Homer you didn't?

IHateToBurstYourBubble said...

Buster you were that crazy motherfucker arm-wrestling that girl at The Moon?

foz said...

**I have to set the rational tone for this thing...**

rational? I've read your stuff since the start. I'll will go as far as saying it's good but not sure I would go as far as to say it's rational. And the tone seems to vary depending on your medication or wife or whatever. But whatever keep up the good work.

Anonymous said...

You been over to KTVZ.com Buster?

*

A big NO leader, I'm banned at the SORE, the BULL, BENDBB, ...

I guess I could do one post at ktvz and get IP banned.

No, its not me, but judging by the number of people here that imitate me, I feel that my mission is almost accomplished.

Was it WC-Fields or Groucho Marx that said "Never belong to a blog, that would have you as a member" Bend is a small town, and densely packed with liars and buffoons, and lackeys ( bull&sore men ).

There simply is no place here for people that want to tell, or hear the truth.

IHateToBurstYourBubble said...

I'll will go as far as saying it's good but not sure I would go as far as to say it's rational.

Well, let's just say it sucks, and let it go at that.

Anonymous said...

**I have to set the rational tone for this thing...** - Homer, Our Leader

*

Just like Bend has a slut SISTER, called sister's nearby, BB2 has a bastard blog that is irrational 24/7 just to make BB2 look good. www.bendbubble.blogspot.com

I feel it essential to make Bend the laughing stock of the world, when this depression is over, and people are writing books about the Great Depression II, and ... such they'll find these blogs, and laugh their ass off, just like we all do now when reading "Grand Popular Delusions, and Madness of the Crowds", South-Sea-Bubble chapter.

Bart, Tell the Truth and RUN

Anonymous said...

I'll will go as far as saying it's good but not sure I would go as far as to say it's rational.

Well, let's just say it sucks, and let it go at that.


*

How about accurate and factual.

Remember virtually everything in BB2 is blogger fodder fed directly by the BULL or SORE.

foz said...

**Adolf Hitler thought he was doing good work, so did most the Germans of the day.**

sheesh I hope I don't meet you in a bar in bend some night and get into a debate. I'm sure I would lose :-) your arguments are probably unassailable. But I still believe that those that are always out there questioning and debating and pushing are doing all of us a service. Even this blog. The impact might not be obvious but it's there never the less.

Anonymous said...

There's an old saying,

"The road to hell is paved with good intentions"

Again, the idea that a POL can fuck REHO's on taxpayer dollar, and keep his job, because he was doing 'good' work, is BULLSHIT.

Anonymous said...

now fucking write something about the bend-bubble in BEND.
***

Debate this: houses in Bend suck, people live on top of each other, they tore up the views to build those shit holes, and they charge way to much money for that depressing crap, they took a nice place and turned into to an overpopulated, overbuilt nightmare. That's the whole story in a nutshell.

Anonymous said...

KTVZ.com Buster?

*

Ok, I checked it out, holy shit that 'barney' is a shit-packer for city-haul,

Him and bruce pussy should compare notes, if bruce is smart, he could get a job like that.

Bend is fucked, this is just one more fucking example.

Anonymous said...

Debate this: houses in Bend suck, people live on top of each other, they tore up the views to build those shit holes, and they charge way to much money for that depressing crap, they took a nice place and turned into to an overpopulated, overbuilt nightmare. That's the whole story in a nutshell.

*

One more tourist that didn't get his money's worth. Rubes aren't coming any more to Bend.

I think Urban Dictionary sum's up our Bend, the best.

COVA now has money back guarantee for tourists, I suggest you apply for a refund.

http://www.urbandictionary.com/define.php?term=Bend%2C+Oregon

1. Bend, Oregon


A suburb of Los Angeles located in the heart of Oregon, population 70,320.

Average Income: -($240)
Unemployment rate: 65%
Institutions of higher learning: 0
Climate: Cold, harsh winters with short interludes of intense bug activity
Local attractions and culture: Television, numerous Dairy Queen restaurants

Residents consider Bend the perfect place to live, citing the paved roads, lack of meteor strikes, and being only a 4 hour drive from Washington and California.

If I had to live anywhere in California, I would live in Bend, Oregon.

IHateToBurstYourBubble said...

On KTVZ.com, here is a comment from Councilor "Jim Clinton", which as BendBB can attest, must make it ANYONE BUT Jim Clinton :-)

Full comment

The headline "Red ink" sounds like the City is blowing $20 million it doesn't have. Not true. Revenues are less than predicted, so the City is cutting its spending to match--just exactly what it should do. Not a great job of predicting the future recession, but who did better? Good prediction or bad prediction, the City would still need to cut spending to match revenues.

Administrator comment: Good point, sir - headline changed to reflect reality. Thanks for weighing in - first elected official to do so here, hopefully not the last. --Barney Lerten


"Who did better?"

Well, Jim...

In fact MANY, MANY, MANY people did MUCH better! I did better, BEM too, Tim too, and many more.

It's YOUR JOB to plan these things, and you'd think with Telfer & those other embezzlers on the Council, you guys could have gained a sandspeck of fuckin insight!

Here, here's a fuckin lesson for running a city:

1) During GOOD TIMES, Raise fees and SAVE

2) During BAD TIMES, cut fees and SPEND

That's what NORMAL people do in their own lives... work & save, and if you hit a rough patch, you dip into savings.

Life has it's ups and downs.

In Bend? With Our City Council?

NO. Everything is UP, UP & AWAY FOREVER and NEVER ANOTHER DOWN DAY.

That is why we are where we are today. That is why we are fucked.

Face up to this: You & your cohorts are incompetent MORONS. Any fuckin half-wit could have done 100X better job that ANY OF YOU. You are bought & paid for whores. LOOK at all the comments on KTVZ... you have lost ALL CREDIBILITY.

Just resign. Just quit. You & your fellow councilors are an abomination. You have the planning skills of an irritable bowel. You have the policy making skills of prison fags in a jerkoff contest.

You're horrible at your "job"... and let's be straight, you're there for selfish reasons, primarily to peddle influence. ANYONE who was as incompetent as the current councilors would have been summarily dismissed LONG AGO in a "normal" job.

Fuckin quit, FOR ALL OUR SAKES. It's your job to plan, and your response is, "Not a great job of predicting the future recession, but who did better?"...

EVERYONE DID!

YOU HAVE DOOMED THIS CITY YOU DUMBFUCK! QUIT! YOU ARE FUCKIN INCOMPETENT & SO IS EVERY SINGLE ONE OF THE DUMBFUCKS YOU WORK WITH! QUIT!

It's your job to plan, you admit TOTAL FAILURE, and YOU'RE STILL THERE? Have some self-respect & QUIT! AND TELL EVERYONE OF THOSE BOUGHT & PAID FOR WHORES ON CITY COUNCIL THAT THIS TOWNS POPULOUS IS SICK & TIRED OF THEIR INCOMPETENCE!

QUIT YOU FUCKERS!

Anonymous said...

Cock and Ball Torture, Clamps, etc. in Bend, Oregon, United States
Meet local adults from Bend with interest in Cock and Ball Torture, Clamps, etc..
http://www.alt.com/geozones/cockballtorture/United_States/Oregon/Bend/index.html

Anonymous said...

More from Bend, Oregon
http://www.answerbag.com/q_view/114496

Can you do a home spay on a cat?
By littl_foggy Asked Jan 9 2007

Avatar
As soon as you successfully perform a historectomy on yourself, you will know all you need to spay a cat at home. Good luck!

Avatar glamorgirli Jan, 09 2007 at 11:08 PM
god this girl is a moron that literally needs to be drug out on the street and shot!
Avatar Darryl61 Jan, 09 2007 at 11:14 PM
This person is from Bend, Oregon. This is the absolute shithole of the entire state. It is what is expected of people from there, really. Those of us on the other side of the state pity "Benders".

tim said...

Radio and TV news today have been carrying the sad story of The Shepherd's House. Our homeless shelter is somehow running out of money.

Man, two years ago, I was told by a group of people that we only had one homeless guy in town. Now we're overwhelmed.

And no doubt all the sloppy money that people donated to feel good is gone.

How much you want to bet that our "vibrant" arts community is seeing donors close their wallets like clams in a cartoon.

Everyone still has their game face on, but it's all masks mow.

IHateToBurstYourBubble said...

Wells Fargo gives Deschutes housing market soft ranking
Bank may require bigger down payments


By Andrew Moore / The Bulletin
Published: March 19. 2008 4:00AM PST

Deschutes County home buyers seeking a mortgage from Wells Fargo & Co. might have to come up with a bigger down payment because of new rankings Wells Fargo has given Deschutes and other counties across the nation.

The San Francisco-based financial services firm, the nation’s second-largest mortgage lender, recently gave counties one of four rankings: normal, soft, distressed and severely distressed, according to a Feb. 25 document sent to its wholesale mortgage lending customers.

Deschutes County is one of four West Coast counties with a soft housing market, according to the document. The rankings are based on declining property values, an oversupply of homes and a greater than six-month average to sell a listed home.

The soft ranking means potential borrowers might have to put more money down to secure a home loan, said Doug Houser, the bank’s Central Oregon home mortgage branch manager. In normal markets, the bank can lend money to borrowers with as little as 5 percent down for a conforming loan. Now, because of the soft-market ranking, some borrowers may have to put at least 10 percent down, said Houser.

However, Wells Fargo continues to offer other loans that do not require any money down, he added.

Conforming loans are those below $417,000 for single-family homes, the maximum amount Fannie Mae and Freddie Mac can buy from banks and mortgage lenders. Fannie Mae and Freddie Mac are government-chartered private corporations that purchase home loans from banks and mortgage lenders.

Wells Fargo does not sell its loans to Fannie Mae or Freddie Mac, said Houser.

The recently signed federal stimulus package temporarily ups the conforming loan limit in Deschutes County for a single home to $447,500.

The down payment requirements for nonconforming loans, also called jumbo loans, also went up, from at least 10 percent down to 15 percent down, according to the Wells Fargo document. A nonconforming loan is any loan greater than $417,000 for a single-family residence.

Houser said the Wells Fargo housing market rankings are based on home values.

“It isn’t news to anybody that sales prices of homes in Central Oregon aren’t what they were, so if you have sales prices that are less than or are declining, it’s a soft market,” said Houser.

Deschutes County home prices depreciated an average of 2.84 percent in 2007, according to a recent report from the Office of Federal Housing Enterprise Oversight.

Houser said that not all housing in Bend is in decline, saying that some “micro-neighborhoods” are increasing in value or remaining static. In short, from a customer’s point of view, Houser said being in a buyer’s market is good news.

“Basically, the opportunity is ripe,” said Houser. “For a borrower, it’s just a great time. Values are great and interest rates have remained low, which usually don’t happen at the same time.”

The other West Coast markets labeled as soft are Jackson County, where Medford and Ashland are located; Washington’s Pierce County, which is home to Tacoma; and San Luis Obispo County in Central California.

There were no distressed or severely distressed markets listed in Oregon and Washington. All other counties in the two Northwest states were ranked as normal markets.

Worse off are markets ranked as distressed and severely distressed in California and Nevada. Los Angeles, Orange, Riverside and San Diego counties were ranked severely distressed, along with Nevada’s Clark County, where Las Vegas is located, meaning home buyers seeking a nonconforming loan will have to put down at least 25 percent of the home value’s for a down payment. Similar restrictions apply for conforming loans in distressed and severely distressed markets.

Andrew Moore can be reached at 617-7820 or amoore@bendbulletin.com.

IHateToBurstYourBubble said...

However, Wells Fargo continues to offer other loans that do not require any money down, he added.

Right, it has to be a meth shack out in Millican.

The AVG sale price for a home on a lot is $382,407 in Bend, and the "conforming oan" amount is $417,500. THAT means a HUGE number of Bend home loans are UNSALABLE to Fannie Mae. And Wells doesn't even sell their loans to FNM.

You see this "teaser" about NO MONEY DOWN in this piece... and then absolutely NOTHING about the details.

Cuz the Bulletin KNOWS that the devil is in the details, and absolutely NO ONE in Deschutes County could buy a REAL HOME here for nothing down, not at Wells, not anywhere.

Busters' Right: You can offer all sorts of incentives, and teasers & bullshit, but when you MUST HAVE 20-25% down and a FICO of 750, that cuts away 90% of the population. And even then you will get reamed.

IHateToBurstYourBubble said...

Ooops... that is $417,000 on a conforming "loan"....

IHateToBurstYourBubble said...

From BendBB's listing data:

1,624 properties at $417,000 or higher.

2,628 propoerties below $417,000

38% of the properties for sale around here are non-conforming. And that number has been improving for awhile. It was 40% last July.

IHateToBurstYourBubble said...

The average ASK for listings in Feb was $493,071.

We're screwed. NO DOWN loan payments will not fly here. We're too "rich". Maybe in Madras, but not here.

Illegal aliens running a meth shack in Madras will get a loan quicker than anyone here.

Anonymous said...

Those of us on the other side of the state pity "Benders".

***

That explains the inferiority complex that fuels the argry old cusses on this blog.

Anonymous said...

One more tourist ...
***

Aren't we all just tourists on planet earth?

Anonymous said...

HOT OFF the WSJ wire, "LESS is MORE", as in LESS RESERVE is MORE?

* We're Doomed
http://online.wsj.com/article/SB120593069669648325.html?mod=djemalertNEWS
*

Fannie, Freddie Get Reduction In Required Capital Surplus
By Michael R. Crittenden

WASHINGTON -- The regulator for mortgage-finance giants Fannie Mae and Freddie Mac Wednesday reduced the capital the firms must hold in an effort to help boost the ailing housing market.

The Office of Federal Housing Enterprise Oversight, or Ofheo, said it was initially reducing the 30% capital surplus it requires of the firms to 20%.

The regulator said the move could provide up to $200 billion in immediate liquidity to the troubled mortgage-backed securities market.

"We believe they can play an even more positive role in providing the stability and liquidity the markets need right now," Ofheo Director James Lockhart ...

IHateToBurstYourBubble said...

Poor BB2 don't get no respect... NO RESPECT AT ALL! Jesse Felder's Back Pages blog says BendBB got there first...

Renaissance Ridge Falls Into the Abyss

It looks as if we have our first official default by a large-scale builder. Renaissance Ridge is being repossessed:

Props once again to the Bend Economy Bulletin Board for breaking the story.
LIV



Uhhhhhhhh....

Tim on Sunday morning

timothy said...

http://tinyurl.com/2pfdss

Holy cow! Is that a builder going under. Looks like a deluge!

March 16, 2008 10:01 AM



From BendBB on Monday morning:

PostPosted: Mon Mar 17, 2008 8:02 am

Post subject: Who's going under? Reply with quote
Anyone know who the builder was who just got notice of defaults on 30 properties in the SW part of Bend?

I looked at the Bulletin's front page and can't find the story.


I know... easy to overlook.

BUT TIMMY GOT THERE FIRST, DAMMIT!

Bewert said...

Re: good work, et al

Paterson didn't buy ho's, he fucked some other woman, and his wife fucked some other man. They got through it, so big fucking deal.

JFK fucked Marilyn Monroe in the White House, and he got us through the Cuban Missle Crisis without harm.

Good work.

But fuck Paterson. Waaaay too off topic for the best fucking Bend RE blog in the the world. Did anyone notice that the BULL had to acknowledge Wells Fargo's thinking on local RE this morning?

BTW, that Clinton quote is rich. Especially considering this from the "Goals Flyer" that came of their "Retreat" a couple months ago, and will be further discussed this evening at the work session before the "Executive Session pursuant to ORS 192.660(2)(a through o)":

Community Relations
• Focus on a proactive strategy for
communicating with the public,
media, and City partners

...

2008 Objectives and Timelines

...


Hire a Communications Director to improve the level of public awareness of City services & implement Communications Audit recommendations

Summer 2008


Yes, I actually read most of this BS, and just provide the good stuff, so you don't have to.

The good stuff in this case: we are going to lay off policemen so we can hire a fucking PR girl to tell us how great our CC is doing.

Man, it just gets fucking richer every day around here.

Anonymous said...

Community Relations
• Focus on a proactive strategy for
communicating with the public,
media, and City partners
***

I hope Paul D is leading that discussion.

No koolaid on the refreshment table.

Anonymous said...

Homer,

One of the cutest things I read about two weeks ago is that FreddieMac changed rules to become a MTG provider for them. Now you have to have $20,000 in cash, and over $60,000 in NET worth. The requirement is pissing off tons of mtg-brokers, as they don't meet this requirement.

Now to the point about the only loans a person can actually get these days are Fmac or Fmae for HOME PURCHASE, and thus smart brokers are trying to get in to pay the bills. Given there never was an education requirement to be a MTG Broker, we're essentially dealing with bottom feeders.

This $20k cash, $60k net-worth, is brick wall thats keeping people OUT of the biz. Note this is the requirement to start your own business.

Wells Fargo is FUCKED, so is Wamu, like CACB. They all have lots of teasers to get you in the door. The killer right now is appraisal, every appraisal now must originate new, every time on every bid, thus the cost of appraisal is to become $2,000 given the average five are needed to complete a deal at $400/each.

I spent the last 2-3 months "Just for Fun" applying to all the loan companys I could online, and good/bad banks, I think every five 'credit checks' you drop a point, so I lost 10-20 points on my FICO playing the game but I learned a lot.

I didn't need the money, but the only way to learn is to put your feet in the water and swim.

What I learned is that the weak banks, can't loan money, the good banks can loan money, but only do so if you keep your score above 750. I think in my 20+ applications I dropped my score from 790 to 770. What was most surprising was the 'TIME' most all said at the beginning they could close in 24 hours, on average 3-4 weeks later they're were still going through approval. Six weeks later I got two offers, one from USBANK, the other BofA, both are which good banks I knew going into the game.

The online MTG's were basically all sham's, almost all now have a $1,000 up front 'origination' cost, which is non-refundable, and subject to 100's of reasons that they can keep your money.

The WORST is the fucking MTG-brokers, they now want to charge for their time while processing, and they want to charge for ALL the appraisals, even though the appraisal hadn't been ordered. Brokers are going down, most I talked to were desperate just to make $150 cash to 'study' your situation. The new gig seems to be take money upfront cash, as they know that NO deal ever closes, ever.

Banks are the way to go, no cost, and good banks have money, like USBANK Exec that I know says, "We only loan to people with good credit, and good history, we don't have a problem".

In my rental biz, all the renters I have lost in the last five years went to WAMU, and everyone a flake, by that I mean late rent, incapable of caring for a home, ... WAMU to me is right up there with CACB, or I should say down there. Wells Fargo, used to have a good rep, but I think they have gotten themselves into trouble in places like Bend.

My project above was to get a home equity loan, without cost. Stick to banks, avoid brokers, and ONLINE refuse to pay upfront, even though I got dozens of online offers, none met the INT-RATE of the local good banks. Even though my loan inquiry didn't even get to the lock phase, I have several brokers that are trying to bill me for their "TIME", in all my years I have NEVER seen such desperation.

On the subject of REFI, its very hard now, figure LTV less than 50%, and maybe you have a deal.

A new home purchase it would be best to Fmae/Fmac, and go through a honest broker, but again, it has to be under $400k, and 20% own, perfect credit, and good job. That locks out most of Bend, I don't know hardly anyone in this town with a good job.

Appraisals are most interesting. The banks seem to be using a formula, they take county-taxes and apply the OFHEO correction, and then do a drive-by to verify the home isn't a meth-shack. The online folks are doing full appraisals, and THEY OWN the appraisal companys, thus this is how they make their money, I'm suspicious anything closes, this is why they want the $1,000 up-front on origination.

The BROKERS are most fucked, in the old days when they took your app, they went to five banks (investors) on average with ONE appraisal of their choice, now when a broker puts a package forward he must have a unique appraisal selected by the investor for each app, this means that the actual cost will now be $2,000.

Another over-looked fact, if you have listed your home in the last 90-180 NOBODY will touch you, nor loan. If you deal with a broker, and they discover you have listed in the last 180 on MLS they'll go out of their minds. I have seen this a lot lately, and nobody is talking about it, I have tried to get brokers to talk, but as we have discussed they're not very educated people and they feel like victims.

The banks (investors) simply don't want to loan on a home thats been on MLS, its the new criteria, the theory is if you tried to sell, and didn't then your close to walking away, and if your looking for money, after your tried to sell, then your high risk. BROKERS should have a big sign at the door telling people this, I think that's why the trend now is all brokers want to charge for their time, and then late in the process they'll discover you had listed with MLS, then send you a bill, after they show you the door.

I'm just listing all the new rackets, like I always say fascinating.

*

The above is going to piss a lot of people off, but its my report, and my findings. I didn't need the money, but you simply can't learn without going to banks, MTG brokers, and filling out online app's, and then talking to all these folks on the phone, especially the online folks, they're quite chatty.

There are so many changes in the MTG-LOAN biz its hard to keep up.

If you need money, you'll NOT get it.

The house that I was trying to get a home-equity on is-was 100% free, the USbank&BofA appraisal both came in within $10k, about $270k, on a home that would have been called $450k in 2005, thus the banks aren't being stupid. They both offered up 80% of that value.

I think for most people, they are very far under-water unless they bought over 15 years ago, if they took out equity,...

My CPA wanted me to do the equity deal, because of the slow-down 'tax free money' issue, not going to into my cash during the CRASH, and have a line of credit available, while they were still available. I'm still not sure if I'll do it, but it was an interesting project.

tim said...

>>38% of the properties for sale around here are non-conforming.

That's not 100% right. It's not the selling price that determines whether a loan will be conforming.

It's the loan amount. And since they are requiring more down, you can buy a $450k house and have it work out to be conforming after the down payment.

Your point is well-taken, though. I think we still have a lot of people who can afford a $200k-$250k house, but they might not like the choices in that range yet. We'll probably see more sales down low as good houses hit that mark this summer and fall.

I don't know how the expensive houses ($400k+) are supposed to sell at all any more. The whole rationale behind them is that they were supposed to pay for themselves with appreciation. That business plan went bust about two years ago.

We don't have the employment base for those houses, especially with Real Estate and Building down the tubes.

Great commercial on the radio this morning. Some plant/garden/nursery place is having a clearance sale. Why a clearance in the spring, when the owner has just recently placed all the orders? The explanation given in the commercial: the owner bought twice as much as he should have. I'd guess the real story is that we've lost at least half our desire to landscape, and the owner didn't believe it until he saw his inventory wilting in front of his eyes.

Anonymous said...

That's not 100% right. It's not the selling price that determines whether a loan will be conforming.

*

That's right, its 80% of the appraised value, and the BANK gets to approve the appraiser.

Let's take a (2005 prices) Shevlin at $600k, today what would it appraise at? My guess is $360k, so you can borrow 80% of that and still NOT be jumbo. ( assuming 40% appraisal correction using OFHEO&NACC corrections )

Ok, lets move up a Broken-Top there's the $800k mcMansion, and it appraises today ( I'm assuming 40% haircut ) $480k, ok now with 80% that's $380k, we're still NOT jumbo.

The PROBLEM here is that SELL (ASK) price doesn't mean shit, what matters is appraisal,

Ok, let go to the Broken-Top $800k, and say you find an appraiser selected by the bank, and they trust that appraiser, they selected him, an he comes in at -20% of 2005, $640k, and 80% of that is $512k, now we're in FUCKING JUMBO land, what does it mean? It means if you borrow that amount, and can pay the $160k down, and the SELLER drops to $640k ( remember the bitch is asking $799k, and still thinks its 2005 ).

Anybody that wants to pursue this all you have to do is use willow, and find what has been selling in Jumbo-Land, say Broken-Top very recently, and then go back to DIAL and see who the bank ( or no bank ) is, and then you know whether they paid cash on a recent sale, or a loan, and again, DIAL will tell you how much the bank loaned, and you subtract the difference, a few comparisons like this and you can see what is going on in JUMBO-LAND.

What I note, on willow, is the simple fact of HOW FEW that are selling, the samples are SO fucking small that the inferences become meaningless.

I mean you might have 2-3 homes sell in a mile radius of anywhere in Bend, in the last 6 months, at very low prices compared to the ASK median of that area.

The whole jumbo debate is quite meaningless, you have to be hardup moron to pay +8% for a jumbo-loan, and there aren't that many morons.

The number of homes closing above $500k is so few, that they can all be studied during the last three months closings, but so few in each comparable hood that it means nothing. You can average all JUMBOS for all of Bend, in the past three months, and you might get a dozen.

The big stuff ain't selling, the real issue is the 20-30% DOWN, and the APPRAISAL is even a bigger issue, when the home appraises way less than the ASK or OFFER, then the BUYER has to ante up MORE down, or the SELLER has to drop the price. Usually the deal collapses, which is why MOST deals now collapse, because of appraisal, and its only going to get worse.

tim said...

Hey, I drove along Newport yesterday and I couldn't spot the "Pending" sign on the Newport Modern any more. Did that sale fail?

Also, one of them has a For Rent sign in front of it. Weird. Wife said it might be fun for a young couple to live in one of those if they were all full, but it would be scary to be there if all the others were empty.

Anonymous said...

Hey, I drove along Newport yesterday and I couldn't spot the "Pending" sign on the Newport Modern any more. Did that sale fail?

This morning the status in the MLS is
"Off-Market, Reason Unknown," while yesterday it was "Active."

I'm paying attention because there are two others with offers that are pending bank approval. One is mine.

Bewert said...

Re: Hey, I drove along Newport yesterday and I couldn't spot the "Pending" sign on the Newport Modern any more. Did that sale fail?

Same thing happened to me yesterday on a house on Brookswood just above the Reed Market/Brookswood roundabout. Had a "SOLD" sign hanging on it last week. It's gone this week.

Duncan McGeary said...

"The regulator for mortgage-finance giants Fannie Mae and Freddie Mac Wednesday reduced the capital the firms must hold in an effort to help boost the ailing housing market.

The Office of Federal Housing Enterprise Oversight, or Ofheo, said it was initially reducing the 30% capital surplus it requires of the firms to 20%."

So with the danger increasing, the DECREASE the surplus?

The ship is sinking, honey, I think I'll get rid of this heavy life-preserver...

tim said...

>>I'm paying attention because there are two others with offers that are pending bank approval. One is mine.

Clarify? There are two others in the MLS with that status, you mean? Deschutes? Bend?

Surely you don't mean two other offers on the Newport Market.

tim said...

>>So with the danger increasing, the DECREASE the surplus?

Yeah, funny how that works. House prices dropping...so...

Raise the conforming loan limit and decrease the capital.

It's wonderful how simply these little problems we have can be fixed.

Anonymous said...

Hire a Communications Director to improve the level of public awareness of City services & implement Communications Audit recommendations

*

Bruce PDX spends $60M/yr on "Imaging & Visioning Consulants", they have 10X pop, which means Bend should be spending about $6M/yr on "Imaging & Visioning", non-bid consulting. It must be the koolaid, I always say that modern welfare is only for people with liberal-arts degrees.

All these city-haul folks create their own jobs when in power, and upon exit, they become consultants forever.

Bruce Abernethy, has never had a real job in his working life.

Anonymous said...

Thoughts for the day, by Mike Hunt...


"Not a great job of predicting the future recession, but who did better?"
Jim Clinton on KTVZ.com, March 18, 2008


"...no one predicted the severity and force of the housing downturn that followed."
Angelo Mozilo, head of Countrywide


"Few, if any people anticipated the sort of meltdown that we are seeing in the credit markets at present"
Robert Rubin, speaking at the Brookings Institution, March 14, 2008


"Even now, those who saw the risks are somewhat marginalized in public discussion, while those who airily dismissed all the warnings are still treated as men of good judgment."
Paul Krugman, March 15, 2008

THE FEW, THE PROUD, THE IGNORED....



*

Duncan McGeary said...

timothy said...

>>So with the danger increasing, the DECREASE the surplus?

"Yeah, funny how that works. House prices dropping...so...

Raise the conforming loan limit and decrease the capital.

It's wonderful how simply these little problems we have can be fixed."

Especially since the surplus was probably created for just such an eventuality. Ironically, it's the first thing they jettison.

Anonymous said...

Here's what I don't get : why are the rents for homes in Bend so reasonable, but the cost to purchase a house is so high?

Case in point (this rental):

http://bend.craigslist.org/apa/611653370.html

Anonymous said...


Bend is #1, we got the cnnfn.com most over-valued for 04,05,06,07, and it looks like we're going to get it for 08.

...

Not true. Bend was the most overvalued in the third and fourth quarters of 2007 only. Check out the full report at https://www.nationalcity.com/main/micro-site/economics/commentary-analysis/pages/housing-valuation-analysis.asp


The First comment says cnnfn.com report, and second says national-city, these are two different reports, from two different organizations.

National-City is a bank,

CNNFN.com is the media,

They both used similar methods in ranking Bend, as the #1 over-valued RE in the USA.

Anonymous said...

The First comment says cnnfn.com report, and second says national-city, these are two different reports, from two different organizations.

National-City is a bank,

CNNFN.com is the media,

They both used similar methods in ranking Bend, as the #1 over-valued RE in the USA.

*

Dude, cnnfn.com doesn't do an overvaluation report, all they do is write about the National City report. One report from one organization. Doh!

Anonymous said...

http://news.opb.org/article/bend-media-feel-pressure-from-declining-real-estate-industry/

just heard this on the radio:

Bend Media Feel Pressure From Declining Real Estate Industry

By Ethan Lindsey

Bend, OR March 19, 2008 4:24 p.m.

Bend is $20 million in the red. For years, the city relied on huge increases in building permits and fees to pay its bills, but now, Bend's housing market is collapsing. And one local journalist is questioning whether the hometown newspaper was too much of a booster. Ethan Lindsey reports.


Realtors and builders in this town are looking for any way to start selling homes again.

David Fisher covered the industry for the Bend Bulletin as it went from boom to bust.

David Fisher: "Having said that, you gotta realize that every editor in a market like this, is well aware that real estate and development is the 800 pound gorilla. A great deal of the newspaper's wealth flows from the health of the real estate and development industry. And in the past year that has started, first slowly, and now more rapidly, to go away."

Industry leaders wanted to change peoples' perceptions, so at an annual real estate summit last month, they rolled out a turnaround ad campaign.

Tim Knopp is the executive vice president of the Central Oregon Builders' Association.

Tim Knopp: “Day after day, if people are reading negative national stories, it makes them think maybe this isn't a good time to buy, maybe I should wait. And in 30 years, this is the best buyer's market I've seen.”

At that real estate conference, the city's most prominent property appraiser made a big speech where he predicted things would turn around in 60 days.

David Fisher covered the speech and says his experience made him skeptical of that upbeat forecast.

So, he contacted several local experts who didn't see the glass as quite that full.

He wrote his story and went home.

The next morning he woke up, got the day's paper, and almost spit out his coffee.

The headline? “Housing forecast: It'll only get better”

Missing? Two of three critical voices in Fisher's story.

Bill Valentine, a Bend investor, was one of the people dropped from Fisher's story.

Bill Valentine: “Mr. Fisher has interviewed me over a half-dozen times over the past two years and every time that we've spoken he's used my information in the resulting piece that followed, in a day or two, usually.”

Fisher says he was so angered by the changes that he called in sick to work for two days.

He'd been unhappy with editorial changes and overly-optimistic headlines in the past, but had never seen one side mostly cut out of his stories.

David Fisher: “And the only thing I could conclude is that was something that was going to happen with regularity. To me, that was a harbinger of worse things to come and I really didn't want to put my name on it anymore.”

When he returned to work, he met with his editor and expressed his concerns.

He admitted to his boss that he wasn't really sick for the past few days - and said he wanted to be switched off the real estate beat.

In an email Fisher later sent to the paper's human resources department, he detailed the conversation.

Fisher was subsequently fired.

At this point, the story becomes he said, he said.

Fisher says he was told he was fired was for lying about being sick.

John Costa is the editor-in-chief of the Bulletin. He will not comment on Fisher's firing. But he denies altering Fisher's story to suit the city's real estate interests.

John Costa: “Frankly, in the grand scheme of real estate stories, it ranks, I don't even think it achieves the middle. It's basically one of those stories that we all do, you do them too, in which an editor says go to the luncheon, cover what is said at the luncheon, and that's what came back.”

Costa points to positive and negative real estate stories the newspaper has run before, during, and after the housing bubble.

Central Oregon clearly relies on real estate development. Oregon job statistics show real estate and construction employment made up 17 percent of local jobs last year. That's noticeably higher than the state average.

Real estate and construction are two of the biggest advertisers in Bend says builders' association executive Tim Knopp.

Tim Knopp: “We want to make sure that the media knows that if things are going bad for the entire industry, its going to affect them as well. And it has. We just need balance. We'd have discussions with any media outlet about that and I think they want to do that.”

It's not just the Bend Bulletin. Other local outlets, including the Sisters Nugget newspaper and Bend Living magazine, also say they have heard criticism from advertisers that negative media is hurting the housing market.

Bulletin editor Costa says part of his job is talking to realtors and builders, and every other sort of business leader in town.

John Costa: “A lot of the people who are our advertisers, I know them. We all know them. I've been around here, myself, my family, my kids, my boss. We play golf. We go to charity events, we raise money together for causes. So I know them. If they want to talk to me, I am perfectly happy to take calls from them.”

But Costa denies that any of those relationships affect his newspaper's business coverage.

John Costa: “Most of the people that I've talked to in the industry understand fundamentally that we keep the trust of our readers. That everything they do or say in our newspaper, either when they are quoted in stories or taking out ads, that information is believable if people trust the newspaper.”

Fisher says now that he's unemployed, he's going to be house-dad to his 2 young kids. He says he doesn't plan on pursuing any legal action against the Bulletin.

Anonymous said...

>>> John Costa: “It's basically one of those stories that we all do, you do them too, in which an editor says go to the luncheon, cover what is said at the luncheon, and that's what came back.” <<<

Make sure you don't add any useful information--that's not what reporting is about.

tim said...

Fisher sounds like the decent guy in that article, despite having written silly articles for two years. Costa sounds like...well, a newspaperman who golfs with advertisers.

Bewert said...

I just sent a link to that article and a couple others about the Fisher issue to patrick.net, the Housing Crash Blog.

Bewert said...

Re: "...everything they do or say in our newspaper, either when they are quoted in stories or taking out ads, that information is believable if people trust the newspaper.”

That's the problem, John. They don't anymore. You've written too much fluff and to little truth.

Bewert said...

As I've been working on stuff here, I've had CSPAN on and been listening to Bush and Cheney talk about...oh that's right, I shouldn't go there. Who cares how much we spend in Iraq, anyway. It doesn't affect anything...certainly nothing like the value of the dollar.

Bewert said...

Bloomberg: Bush Says Success in Iraq Shows War Worth `High Cost'

How the fuck did we re-elect this guy?

Looking at the cost of Iraq and the cost of pumping the RE market for the last several years, he has put our country back by decades. Clinton wasn't that great, but fuck...

OK, no more national BS. Back to the local crap. JR agreements are being finalized later, so I'll bring back a report. Somehow I think we probably could have gotten a master plan for a little less than $2.5M.

Anonymous said...

Bruce-pussy cunt at large, we already had the OTAK master plan for $70k, from 2004.

The actual cost of the KURATEK plan was over $15M,

$12M to knife-river, to get Les Schwab to pass $3M to Kuratek.

Quit fucking posting shit on BUSH, and then apologizing thus,

This the trouble, Bruce-Pussy just showed up in DODGE like a week ago, and has made himself into the 'Juniper Ridge' expert which is fine, but doesn't know a fucking thing about the story prior to yesterday,

Brucey, Please fucking focus on what city-haul is doing today, and change you website from Juniper-Ridge-Info, the Bend-City-Hall-Watch, and keep your eye on the fucking BALL, the future, not the fucking past, you weren't even fucking here.

Anonymous said...

Dude, cnnfn.com doesn't do an overvaluation report, all they do is write about the National City report. One report from one organization.

*

Every year, for the past four years CNNFN.COM, has done a ranking of most over-valued RE in the USA, and Bend has won every year since 2004,

The rhetorical question ( RDC ) you fucking MORON was, Will Bend get #1 from CNNFN.COM for 2008?

Anonymous said...

Every year, for the past four years CNNFN.COM, has done a ranking of most over-valued RE in the USA, and Bend has won every year since 2004,

*

National City, uses their own methodology and a third party to do the ranking.

CNNFN.com uses the OFHEO data,

The two study's are completely different, almost every bank does its own ranking, its just the for some strange reason National City went public, every bank internally keeps a deadbeat list.

Anonymous said...

The study, by National City, a Cleveland-based bank, and financial information provider Global Insight, examined 299 metro areas that account for 80% of the single-family home market.

*

The National City, uses 'Global Insight' for their ranking. Many banks buy this research.

The ANNUAL CNNFN.COM ranking is derived from the public OFHEO data.

Two different birds, like Homer says we don't do 'stupid', but until homers blocks stupid ( no censorship ) we're stuck with stupid.

Anonymous said...

Every year, for the past four years CNNFN.COM, has done a ranking

*

Dude, that's some truly impressive shit you make up, you're sharp as a marble!

Anonymous said...

Fisher sounds like the decent guy in that article, despite having written silly articles for two years. Costa sounds like...well, a newspaperman who golfs with advertisers.

*

Good guys lose, bad guys win.

In this case its lose-lose for all, Fisher gets to stay home, I hope the wife has a good job.

Any lawyers on this blog want to help Fisher out?

I concur, that Fisher went along with the program for two years, it wasn't until they didn't quote valentine that his heart was broken, makes you think there's more going on here than we're told.

Poor Valentine, to have talked with Fisher on the phone, and not seen his quote two days later in the BULL, must have been devastating, the kind of stuff that cause small town to implode.

Anonymous said...

By Les Christie, CNNMoney.com staff writer

Home prices have dropped so quickly and so far that valuations - the difference between what a home should cost and its actual price - are the lowest they've been since 2004, according to a report.

The Cleveland-based bank National City Corp. (NCC, Fortune 500)
, together with financial analysis firm Global Insight, revealed Tuesday that more than 88% of the 330 housing markets surveyed showed price declines and improved affordability during the last three months of 2007.

Bend, Ore. currently tops the overvaluation list. Home prices there were judged to be about 59% higher than their fair-market value. Miami, despite a median home price decline of 5.7% last year, is the most overvalued big city, by 44%.

Anonymous said...

The ANNUAL CNNFN.COM ranking is derived from the public OFHEO data.

Two different birds, like Homer says we don't do 'stupid', but until homers blocks stupid ( no censorship ) we're stuck with stupid.

*

Dude, be a man, just admit that cnnfn.com doesn't do it's own overvaluation report like you claimed. That's BS and you know it, so fess up. Or do you have a secret link to a cnnfn.com report that nobody else knows about? Maybe it's all a conspiracy to try to silence you.

Anonymous said...

>>> Poor Valentine, to have talked with Fisher on the phone, and not seen his quote two days later in the BULL, must have been devastating, the kind of stuff that cause small town to implode. <<<

Huh??!! It's not about Valentine, its about the READERS! Readers deserve balanced reporting, not cheerleading. This is quite obvious.

Bewert said...

Wednesday, March 19, 2008
Bend CC Spends $2.5M w/NO COMMENT

I just returned from the Bend City Council meeting. They all voted for the settlement with Juniper Ridge Partners, in an amount over $2.5 million dollars and giving JRP the right to purchase the first 50 acres of Juniper Ridge land, with absolutely no public comment or questioning or anything.

$2.5+ million fucking dollars from Bend taxpayers without even a cursory debate. Whatever debate was held was in secret, in Executive Session. Not to be heard be the people actually fucking paying this bill.

This is not only disgusting, but also may be illegal. The State Ethics Commission will weigh in on this.

How the hell can you call yourself a responsible representative of the citizen's of Bend and sign off on this without any debate. Absolutely no debate.

IHateToBurstYourBubble said...

Real estate and construction are two of the biggest advertisers in Bend says builders' association executive Tim Knopp.

Tim Knopp: “We want to make sure that the media knows that if things are going bad for the entire industry, its going to affect them as well. And it has. We just need balance. We'd have discussions with any media outlet about that and I think they want to do that.”

It's not just the Bend Bulletin. Other local outlets, including the Sisters Nugget newspaper and Bend Living magazine, also say they have heard criticism from advertisers that negative media is hurting the housing market.


Basically an admission by Knopp that they were financially strong-arming the Bulletin, and that they'd do it to advertising outlet they deal with.

We just need balance.

Basically saying print this good news bullshit, so I can pump-N-dump on some dumbfucks & THEY LOSE, not me.

COBA & it's members are so crooked, they don't even know how to conduct business any other way.

This place really is unbelievable.

Luckily, Bend will be so utterly decimated in the bust, losers like these dumbshits will go extinct.

IHateToBurstYourBubble said...

Bend CC Spends $2.5M w/NO COMMENT

Fuckin' crooked town.

This ship is going down.

Anonymous said...

The ANNUAL CNNFN.COM ranking is derived from the public OFHEO data.

*

What part of this don't you understand RDC?

Anonymous said...

Excuse me BRUCE-PUSSY fucking CUNT, but Les Schwab passed the $2.5M to KURATEK back near Dec 7, 2007.

Why are we now even making it public record??

Oct 15, 2007 the city-council approved payment. Les Schwab bought JR on Dec 12, 2006, and Paid on Dec 7, 2007, and within a week $2.5M was passed to Kuratek.

What the fuck was tonight really? Given that this deal went down a long fucking time ago?

The only change I can see is the optionally 50 acres that KURATEK can develop which is a pile of crap, given it cost us $12M to develop 20 acres, on that pile of rock. Nobody is ever again, going to spend this kind of money blowing rock at JR.

It's over bruce.

It's over.

Anonymous said...

Huh??!! It's not about Valentine, its about the READERS! Readers deserve balanced reporting, not cheer leading.

<<

It's all about Valentine, him and Fisher were having a BULL, and when Valentine didn't get mentioned within two days, he cut off Fisher, and their relationship went to hell.

Now Fisher is stuck home with the kids, and Valentine, he'll probably hookup with another Bull reporter.

It's quite obvious that all of the material that Fisher was writing was coming from Valentine all along.

Readers don't pay the bills, realtor's pay the bills.

Anonymous said...

CNNFN.com a news source, reports both National-City, and OFHEO, in every year since 2004 BEND has been #1 for OFHEO. The rhetorical question is WILL it be #1 for 2008??

***
http://money.cnn.com/2007/03/01/real_estate/March_ofheo_prices/index.htm
***

OFHEO & National-City are two different methods. OFHEO is what CNNFN uses for annual ranking, and when National City issues a new report, cnnfn.com reports that fact.

*

Home prices showed modest gains in 2006
But year-over-year price increases of 5.9% were the lowest recorded since 1999.
By Les Christie, CNNMoney.com staff writer
March 1 2007: 5:09 PM EST

NEW YORK (CNNMoney.com) -- Housing prices continued to fall in some housing markets around the nation, according to a government agency report covering price changes during the fourth quarter of 2006, but overall showed modest growth.

Nationally, home prices rose 5.9 percent, compared to the fourth quarter of 2005, reported the Office of Federal Housing Enterprise Oversight (OFHEO), and 1.1 percent from the third quarter of 2006. Year-over-year price increases were the lowest recorded since 1999.
10 Hot markets
Metro areas that recorded the highest price gains in 2006
City State Percent gain 2006
Bend OR 21.4%

Anonymous said...

Will Bend be #1 in 2008 for Over-Valued RE??

Anonymous said...

We have a definition problem here that was brought up yesterday.

1.) Newbie - someone new to this blog

2.) Sucker - someone NEW to Bend that bought RE since 2000

3.) Visitor - a fucking renter that's been here for less than ten years, that's +90% of this pathetic blog

4.) Old-Timer - Someone that has been in Bend for over ten years, and own their fucking house.

5.) Crooks - People that came here in the last ten years to sell RE, or MTG, or what the fuck they sell, cars, ....

There are only TWO fucking old-timers here that I know of buster & duncan, even BEM was gone for quite awhile and then came back.

HOMER our fucking god, leader, father-figure, and penis-icon, is a fucking visitor-renter like 90% of the people on this fucking blog.

Someone last night made an assertion that it was hard for 'newbies' to get established, or that this board was about old-timers condemning new-bies? What I'm defining as SUCKERS.

A newbie is someone NEW to this pathetic board. Brucey-Pussy is a visitor-renter, if he had bought since he arrive ( two years ago ) he would be a sucker, we have no suckers that hang out here.

90% of this blog are visitor-renters, 5% old-timers, and the rest are liars. I'm also including Marge in the 5% old-timers, as she owns her home, and has been here in Bend awhile.

The 'CROOKS' are all over at BENDBB/RDC, they also RUN the BULL&SORE.

Keep the above, and print it, for future referral.

Welcome to Bend.

Tim doesn't own his home either so that makes him a visitor-renter.

There has NEVER been a single person here ever that has admitted to being a visitor-sucker.

NEWBIES, your quite welcome, because MOST likely your fucking renters, or living in your car, and thus you have MUCH in common with everyone here.

The fact is that old-timers that knew Bend back prior to the 1990's are a tiny minority here. Make NO fucking assumption that this blog is about old-timers condemning suckers.

It's mostly about jealous renters condemning crooks.

Did I miss anyone you fucking slimey cunts??

IHateToBurstYourBubble said...

Did I miss anyone you fucking slimey cunts??

I don't think so.

Whoop! Did you call me a penis-icon?

Yup, you did, my bad. Yeah, you covered all of us.

IHateToBurstYourBubble said...

But Costa denies that any of those relationships affect his newspaper's business coverage.

John Costa: “Most of the people that I've talked to in the industry understand fundamentally that we keep the trust of our readers. That everything they do or say in our newspaper, either when they are quoted in stories or taking out ads, that information is believable if people trust the newspaper.”


Costa, you, like our City's Councilors are a fucking abomination.

Go put on your cock ring, and squirt some STD-laden advertising love juice onto the backs of COBA's Best Buttbangers in 20 Years, you editorial motherfuckin sellout cum sponge.

Anonymous said...

Did I miss anyone you fucking slimey cunts??

*

Buster, You have made me feel like I have come home to my own people.

Anonymous said...

That everything they do or say in our newspaper, either when they are quoted in stories or taking out ads, that information is believable if people trust the newspaper. - costa

*

A while back they did a trust survey on the BULL, and it came back so bad, that COSTA hid the results.

Eventually the WSJ is gong to do a story on Bend, then Costa will be home taking care of the Gerbils, for a long, long time.

Anonymous said...

People wouldn't read us if they didn't believe us.

People believe us because we're the Bulletin.

Americans don't torture, therefore what we're doing isn't torture.

Same school of sophistry.

Sure I go golf, and have dinner and belong to the same clubs and hang out with these guys -- but they have no influence on me.

Sure all my revenue comes from these guys -- but they have no influence on me.

An article which only quotes real estate agents and appraisers is fair and balanced.

A reporter who tries to do his job is fired.

Anyone who is against the southern bridge is a loony. Anyone who thinks that just because our new Bulletin building is reached by the southern crossing, and just because we are allied with developers --- doesn't mean we are influence by them.

tim said...

>>There has NEVER been a single person here ever that has admitted to being a visitor-sucker.

Can I please admit it now? I am a visitor-sucker. OK?

Bewert said...

Anger.

It's palpable here tonight.

I sure as fuck can feel it. I was fucking quaking with anger a couple hours ago. I spoke briefly with Dave Adams of KBND on the way out, just said can you believe we just spent over $2.5M with absolutely no discussion? And he just shook his head, too.

Pete Sachs was already toadying up to the designated city talking head, whom I didn't even recognize. I was too pissed to stop and see who it was. I just said "Hi, Pete" and thought "...and make sure you toe the city/company line tomorrow."

We are fucked. We know we have no money, the checkbook is running dry, and we just fucking throw away a huge chunk of money without even fucking talking about it out loud.

Bend City Council, you need to fucking grow up. Let alone man up, and talk about shit out loud, other than the fucking Boy Scouts.

Fuck.

IHateToBurstYourBubble said...

Bend subdivision faces foreclosure
Renaissance Ridge owner says he plans to refinance with local lender


By Andrew Moore / The Bulletin
Published: March 20. 2008 4:00AM PST

Renaissance Ridge, a partially-developed, 210-lot subdivision in southwest Bend might be headed for foreclosure, according to documents filed with the Deschutes County Clerk’s office, but developer Randy Sebastian said he’s working hard to prevent it.

The number of homes going into foreclosure continues to rise in Deschutes County, and Renaissance Ridge would be among the largest casualties to date of the local real estate downturn.

The default notices filed March 7 against Aspen Landing, LLC, a holding company for the subdivision’s developer, Renaissance Homes, say Cleveland-based KeyBank is owed approximately $13.1 million plus interest by Aspen Landing. The Renaissance Ridge subdivision property owned by Aspen Landing is to be put up for auction July 25 in lieu of payment.

Sebastian, the owner of Renaissance Homes, said he is committed to the development located off of Brookswood Boulevard and plans to refinance it with a local lender within 60 days. The Portland resident, who was in Bend on Wednesday for the opening of his company’s design center at 55 N.W. Wall St., said he is not walking way from the development; rather, KeyBank is getting out of the housing market.

“It’s not a Bend issue, not a Renaissance Homes issue; it’s a lender that wants out of the builder/developer market, and they don’t want to extend their loans,” said Sebastian. “I’ve got my life savings out there.”

In a statement sent to The Bulletin by KeyBank and attributed to Roberta Fuhr, a senior vice president and manager of the Homebuilder Group, the bank confirmed it has initiated foreclosure proceedings on Renaissance Ridge in accordance with Oregon law, adding: “This is an unfortunate situation for all involved. It is never a lender’s preference to foreclose in order to enforce its creditor rights.”

The statement also said that although KeyBank has discontinued lending to builders outside of the 13 states in which it has branches, it will continue to originate loans for home builders in Oregon and other states within its branch banking market.

Sixty-four homes in the subdivision have been built or are under construction. Deschutes County land records — in which the subdivision is legally recorded as Aspen Rim — show that 36 homes have been purchased.

Homes in the development currently range from $369,000 to $590,000. The rest of the development has been subdivided, paved with streets and strung with utilities, but the individual lots are unimproved.

The development has dangled some incentives for prospective home buyers in recent months, including offers to buy down interest rates on home buyers’ loans for up to $14,000, and in February 2007, offering a free Mercedes Smart Car.

It also shaved prices on its homes in February by 11 percent to 20 percent, according to The Bulletin’s archives.

Renaissance Ridge homeowner Bill Ormsby, a Southern California retiree who has lived in the development for a year, said he has wondered about the profusion of empty lots in the development but said he feels confident he and his wife won’t be leaving.

“We’re gonna stay put,” said Ormsby. “It shouldn’t affect us too much.”

Renaissance Homes is also developing a 60-home subdivision near Shevlin Park and a 30-unit townhome development in Bend’s NorthWest Crossing. Sebastian said he has sold units in each of his three Bend developments within the past week and that activity is “still strong.”

“There are some positive things happening,” Sebastian said. “We’re not leaving Bend.”

Not the first

Renaissance Ridge is not the first subdivision in Bend to receive a notice of default, a legal device used to notify potential creditors that an entity is behind in the payment of a loan.

In May 2007, Umpqua Bank filed a notice of default on a 38-acre plot of land approved for 265 homes in northeast Bend then owned by Proterra Development Ventures, according to The Bulletin’s archives. The bank sold the land in October 2007 for $10 million to the Edge Development Group, which is in the process of developing a subdivision on the property — titled Mirada — with homes ranging from $189,900 to $249,000.

A notice of default is not a guarantee of foreclosure, said Tom Greene, the president of the Central Oregon Association of Realtors. Greene said the vast majority of defaults are remedied before foreclosure proceedings — usually held six months after a notice of default — ever begin.

“Under Oregon law, the occupant of a home has up until five days before (a property) goes to court to make a deal with the bank, to sell to someone else or buy it (outright),” Greene said.

Greene added that should Renaissance Ridge go to foreclosure, homeowners in the subdivision would be legally unaffected.

Softening market

Home sales in the region slowed down during the past couple months, compared with last year.

Combined single-family home sales in Bend, Redmond and Sisters dropped from 470 in the first two months of 2007 to 263 in the first two months of 2008, according to data provided by the Central Oregon Association of Realtors, and housing supplies in those three cities remain at 11, 12 and seven months, respectively, according to the association.

In addition, through March 17, Deschutes County has recorded 265 notices of default, according to county records, which is an increase from the 75 notices recorded in the same period last year. For all of 2007, the county recorded 591 properties that had entered the earliest stages of foreclosure.

Market fears

Elsewhere in Bend, Buena Vista Custom Homes has rented 18 of the 29 homes in its Forum Meadows development near St. Charles Bend since efforts to sell the homes in mid-December at auction failed to produce a single sale, said Mike Higgins, a spokesman for the Lake Oswego-based builder.

“It was done in a loss position, but it was better than the alternative,” Higgins said. “If we can’t sell them, we’ve got to do something. We looked to auction the homes, but it didn’t work. Builders right now are just trying to make the mess go away.”

Homebuyers and builders have moved from overconfidence to fear of a sluggish market that won’t recover, said Peter Storton, the owner and broker of RE/MAX Town & Country Realty in Sisters.

“The next 12 to 18 months will be a reverse of what we have seen,” Storton said. “We have to hang on to the customers that we have and convince people that it’s a good time to buy.”

Greene wondered if all the recent housing turmoil is ultimately a good thing for homebuyers. He said he hates to see people get into financial trouble, but “land prices in Deschutes County got so high, and this is one of those steps in this correction,” said Greene. “It’s like the stock market; that’s basically what’s happening here.”


Jeff McDonald contributed to this report.
Andrew Moore can be reached at 617-7820 or amoore@bendbulletin.com

IHateToBurstYourBubble said...

These 2 statements seem totally at odds:

“It’s not a Bend issue, not a Renaissance Homes issue; it’s a lender that wants out of the builder/developer market, and they don’t want to extend their loans,” said Sebastian. “I’ve got my life savings out there.”

The statement also said that although KeyBank has discontinued lending to builders outside of the 13 states in which it has branches, it will continue to originate loans for home builders in Oregon and other states within its branch banking market.

Sebastian says Key Bank wants OUT of the builder/developer market & Key says it will continue to lend to them IN OREGON.

It IS a Bend problem, it IS a Renaissance PROBLEM, Sebastian, you lying fucker.

If it ain't a Bend problem, and it ain't a Renaissance problem, THEN WHO DA FUCK PROBLEM IS IT? Tim's? Mine? Sebastian, you are a fuckin moron.

I hope you done finally caught the flesh-eating AIDS from some STD-squirting homo-erotic maga-fag.

IHateToBurstYourBubble said...

Homes in the development currently range from $369,000 to $590,000.

Not true.

They're also selling their Model Home for $750K!

IHateToBurstYourBubble said...

Renaissance Homes is also developing a 60-home subdivision near Shevlin Park and a 30-unit townhome development in Bend’s NorthWest Crossing. Sebastian said he has sold units in each of his three Bend developments within the past week and that activity is “still strong.”

“There are some positive things happening,” Sebastian said. “We’re not leaving Bend.”


I hope this Kool-Aid sucking cunt goes down, and loses his ass.

"There are some positive things happening.."

Really? REALLY? Is Aspen Rim getting foreclosed on a POSITIVE THING, Sebastian?

Quimby said...

Damage Control Mode:

A notice of default is not a guarantee of foreclosure, said Tom Greene, the president of the Central Oregon Association of Realtors. Greene said the vast majority of defaults are remedied before foreclosure proceedings — usually held six months after a notice of default — ever begin.

Nothing to see here folks....move along...move along

Then he says:

Greene wondered if all the recent housing turmoil is ultimately a good thing for homebuyers. He said he hates to see people get into financial trouble, but “land prices in Deschutes County got so high, and this is one of those steps in this correction,” said Greene. “It’s like the stock market; that’s basically what’s happening here.”


I bet he smokes a turd at the next COAR meeting for that one....must have been a slip up.

Kudos to the BULL for jumping on this story a full three days after the event. Earth to BULL: Three Days is an ETERNITY in news.

I get news hot off the press reading BB2 & Dunc's blogs...why wait three whole days for a whitewashed story?????

And of course Storton has to weigh in with his intelligence insulting blather:

“The next 12 to 18 months will be a reverse of what we have seen,” Storton said. “We have to hang on to the customers that we have and convince people that it’s a good time to buy.”

If my Realtor tries to "convince" me its a good time to buy, he is taking me for nothing but a sucker and I will write him off soooo fast. That is NOT how to "hang on to THIS customer". Don't lay that bullshit on me MF. Asking a Realtor if its a good time to buy is like asking a car salesman if I need a new car, and Storton is the classic soulless "Sales Manager" at the dealership who will sell his own mother a lemon for a bonus.

Think for yourselves peoples!

IHateToBurstYourBubble said...

Elsewhere in Bend, Buena Vista Custom Homes has rented 18 of the 29 homes in its Forum Meadows development near St. Charles Bend since efforts to sell the homes in mid-December at auction failed to produce a single sale, said Mike Higgins, a spokesman for the Lake Oswego-based builder.

“It was done in a loss position, but it was better than the alternative,” Higgins said. “If we can’t sell them, we’ve got to do something. We looked to auction the homes, but it didn’t work. Builders right now are just trying to make the mess go away.”


Renting! Yes, there's the magic bullet for increasing a homes value.

Ayyy, yes, turn it into a rental haven. That'll do the trick.

IHateToBurstYourBubble said...

I get news hot off the press reading BB2 & Dunc's blogs..

Kudo's to Timmy who noticed this before anyone else....

IHateToBurstYourBubble said...

“We have to hang on to the customers that we have and convince people that it’s a good time to buy.”

Translation:

I will grease up my man-twat, and lie, steal, cheat, and promote the Best Buttbanger Market in 20 Years if I can make even $5 off some poor sucker. I love to fuck over my customers.

IHateToBurstYourBubble said...

Fannie Mae $200 billion closer to default:

$200B added to mortgage pipeline
Regulators are lowering capital requirements for mortgage finance firms - a move that could pump hundreds of billions more into mortgage market but raises risks.


By Chris Isidore, CNNMoney.com senior writer
Last Updated: March 19, 2008: 1:53 PM EDT

NEW YORK (CNNMoney.com) -- An additional $200 billion in financing is headed to the battered mortgage markets after federal regulators Wednesday said they would allow finance giants Fannie Mae and Freddie Mac to reduce the capital they keep on hand.

The move is the latest attempt by policymakers to ease the housing crisis, although it raises risks faced by two government-sponsored firms that are crucial to the functioning of global financial markets.

The rule change was announced by the Office of Federal Housing Enterprise Oversight, (OFHEO), a normally low-profile agency that sets rules for the two government sponsored companies that between them hold or guarantee nearly $5 trillion in mortgages.

Fannie (FNM) and Freddie (FRE, Fortune 500) are two publicly-traded companies set up by the federal government nearly 40 years ago to help provide financing needed by lenders looking to make home loans. With the change, they are expected to buy or guarantee $2 trillion in mortgages. That is about $200 billion more than they would have without the rule changes announced Wednesday.

Kieran Quinn, the chairman of the Mortgage Bankers Association, said the new rules are a crucial step in reestablishing the pipeline of funds that flow from investors through lenders to those buying a home or refinancing a mortgage.

"This will enhance lenders' ability to offer financing to a wide variety of borrowers," said Quinn. "This should help keep some at-risk borrowers in their homes which will help stabilize the real estate market."

Relief for troubled markets

Both firms have been working in recent years to clean up accounting problems. During that process, OFHEO has been requiring them to keep 30% extra capital in reserve. The rule change allows them to reduce that excess capital to only 20%.

Even as the market for mortgage-backed securities has melted down over the past year, the securities backed by the so-called conforming loans that met Freddie and Fannie criteria were considered the gold standard.

By the fourth quarter of 2007, the two firms between them were responsible for nearly three-quarters of mortgage backed securities on the market.

But the loans that backed those securities could not be made to borrowers who had less than top credit scores, did not have significant equity in their home or needed loans for more than $417,000.

Congress recently raised the limits for the loans that Fannie and Freddie can buy or insure up to $729,750, increasing the risks for the firm and the demands on their capital.

The new loan rules were seen as a necessary step to end the credit squeeze that has hammered home values across the nation and caused billions in losses and writedowns on Wall Street, raising the risk of a recession.

Change in thinking

The lower capital limits are important, not just for the additional $200 billion they make available, but for the change of thinking it signals in the Bush administration, said Jaret Seiberg, financial services analyst for policy research firm Stanford Group.

"The psychology is quite critical here," said Seiberg. "There is now an increasing view in the market that the administration understands the seriousness of the crisis and is willing to take steps it previously dismissed."

In recent weeks, Wall Street's appetite for mortgage-backed securities insured by Fannie and Freddie started to wane. That weakening demand helped force mortgage rates higher than they would have been.

"That showed that investors were starting to get nervous," said Seiberg. "That could have had a devastating impact on not just the mortgage market but the economy. Any step to make sure that market remains liquid is an important one."

But there are risks involved in Fannie and Freddie lowering their capital reserves and in buying larger loans. If problems in the housing and mortgage markets continue to deepen, it could in the worst case scenario lead to a federal government bailout of Fannie and Freddie. Seiberg believes that's a risk worth taking given the need to inject more cash into the market.

"There's a trade off when you lower capital levels, you take on more risk," said Seiberg. "That's unavoidable. The question going forward is whether Freddie and Fannie can manage that risk."

But some argued the risks are not worth it and this was the wrong move. "In truth, both Fannie and Freddie are already in a more precarious position than politicians or investors would like to admit," said Peter Schiff, president of Euro Pacific Capital, a brokerage firm focusing on overseas investments.

"Lowering reserve requirements is simply an irresponsible attempt to postpone the pain of falling home prices, but it will simply result in greater indebtedness and a deeper recession."

OFHEO Director James Lockhart said in a statement he was confident that both firms have resolved their accounting issues enough to allow the agency to lower its previous capital requirements. He pointed out that as part of this initiative, both companies announced that they will begin the process to raise significant additional capital.

"Let me be clear - both companies have prudent cushions above the OFHEO-directed capital requirements and have increased their reserves," he said. "We believe they can play an even more positive role in providing the stability and liquidity the markets need right now."

Fannie Mae CEO Daniel Mudd said while the rules changes are not a complete solution for the embattled housing and home loan markets, he believes it will help, even though the two firms will continue to focus on prime loans to borrowers with good credit and a large amount of equity in their homes.

"We hope it will help restart the housing engine that powers our economy," he said.

IHateToBurstYourBubble said...

How This Crisis Is Different

By Robert J. Samuelson
Tuesday, March 18, 2008; Page A19

It's said that we're in the worst financial crisis since the Great Depression. Maybe. But remember the S&L crisis of the mid-1980s? Or the commercial banking crisis of the late 1980s (from 1988 to 1992, 905 banks failed). Or the 1997-98 Asian financial crisis, which sent South Korea, Indonesia and other countries on a boom-bust rollercoaster? All were frightening. What distinguishes this crisis -- which brought down Bear Sterns over the weekend -- is that it involves the entire financial system, not just depository institutions, and it's more mystifying than any of its predecessors.

Previous financial crises so weakened the banks and savings and loans that they lost their primacy. As recently as 1980, they supplied almost half of all lending -- to companies, consumers and home buyers. Now their share is less than 30 percent. The gap has been filled by "securitization": the bundling of mortgages, credit card debt and other loans into bond-like instruments that are sold to all manner of investors (banks themselves, pension funds, hedge funds, insurance companies).

As a result, the nature of financial crises changed. With a traditional "bank run," the object was to reassure the public. The central bank -- the Federal Reserve in the United States -- lent cash to solvent banks so that they could repay worried depositors and preempt a panic that would spread to more and more banks and would ultimately deprive the economy of credit. But now the fear and uncertainty center on the value of highly complex, opaque securities and the myriad financial institutions that hold them.

At the center of the crisis are the now-notorious "subprime" mortgages made to weaker borrowers and subsequently "securitized." On paper, the financial system seems to have ample resources to absorb losses. Commercial banks have $1.3 trillion in capital; U.S. investment banks in 2006 had an estimated $280 billion in capital -- and other investors, including foreigners, may hold half or more of subprime loans. But no one knows who or how much. Recent estimates of subprime losses range from $285 billion to $400 billion. They might go higher. Ignorance breeds caution and fear.

The stunning fall of Bear Stearns reflects these realities. It was not a traditional commercial bank that took deposits from the public but America's fifth-largest investment bank, which funded most of its operations with borrowed money ("leverage"). On average, the ratio of borrowed money to underlying capital for investment banks and hedge funds is about 32 to 1, according to a recent study. Many of these loans -- commercial paper, "repurchase agreements," bank credits -- are backed by the securities owned by the borrowing financial institutions.

What this means is that if lenders became worried about the worth of these securities, they might ask for more collateral or pull their loans. In effect, that's what happened to Bear Stearns. Deprived of its credit lifeblood, Bear Stearns either had to collapse or be purchased by someone with credit. J.P. Morgan Chase bought Bear for almost nothing: $236 million for a firm valued at $20 billion in January 2007.

Whether Bear Stearns was the victim of unfounded rumor or of genuine rot in its securities portfolio is unclear. But the very uncertainty defines the nature of the modern financial crisis -- and the difficulties the Fed faces in trying to contain it. Financial institutions (banks, investment banks, hedge funds and others) are interconnected through networks of buying, selling, borrowing and lending. These require confidence that commitments made will be commitments honored. If confidence collapses, the processes of extending credit for the economy and of trading -- for stocks, bonds, foreign exchange -- may also collapse.

The Fed can no longer instill confidence by lending to besieged but sound banks. Somehow it must reassure the broader market that there are backup sources of credit and that the failure of any major financial institution won't trigger a chain reaction, as firms refuse to deal with each other and dump stocks, bonds and other securities onto the market. That's why the Fed was eager to see Bear Stearns continue operations by being purchased and why it has, in the past six months, introduced more and more ways for financial institutions to borrow from the Fed itself.

So far, panic has been avoided, though some observers think the Fed's frantic efforts have actually undermined confidence. Meanwhile, the real economy of production and jobs, though weakening, is not yet in dire straits. In February, manufacturing output dropped 0.2 percent -- bad news but hardly a calamity. But in trying to calm financial markets, the Fed has spewed out enormous amounts of money and credit that have depressed the dollar's exchange rate and could aggravate inflation. The effort to fix one problem may lead to others.

IHateToBurstYourBubble said...

Fed aside, ‘08 housing rebound ‘will take a miracle’

March 19th, 2008 · 26 Comments · posted by Jon Lansner/O.C. Register columnist

Us: Is this rate cut, and other measures, enough to get housing going again? Will we reach bottom — here or nationwide — this year? Next?
Burns: It will take a miracle for home prices to stabilize this year. How can prices stabilize when the number of adults with jobs is declining, the number of home buyers is at historic lows, and the number of sellers is more than twice the norm? The Fed’s interest rate declines are designed to stop the bleeding and to shore up the banking system, and have had very little impact on home sales and prices other than conditions would be even worse if they had not been dropping rates.

Us: Your general thoughts on how Fed’s acted in past week’s crisis?
Burns: The Fed did exactly what they needed to do to avoid a run on the entire banking system.

Us: Does Bear Stearns bailout set bad precedent? Sure, $2 a share is low, but they only got that due to Fed guarantees …
Burns: How was a financial institution allowed to take so much risk? Isn’t that why we have regulators? The government is setting terrible precedent, but they had no choice.

Us: And does this kind of bailout send bad message to homeowner who made a bad house bet and lost a home to foreclosure? Why little help for them …
Burns: Those who believe this was a bailout of risk takers have not studied the facts. All equity owners of Bear Stearns are essentially being wiped out and have been allowed to keep $2 per share in order to agree to the terms of the deal, which is better than zero dollars per share if the deal had not been consummated.

IHateToBurstYourBubble said...

Seeing this, outsiders see a growing possibility that America—like Bear Stearns and Northern Rock—will not be able to pay all its bills. Investors are beginning to wonder where America will get the money from to pay back all its debt when the margin calls come in. Some wonder if America’s answer will be to just print up the money to pay the bills. If so, that is the quickest way America could irrevocably and catastrophically lose the trust of the world. Confidence in the dollar is already breaking.

Remember Paul-doh saying that this housing bust will ultimately BUST this country down to Second Rate Status, and you laugh at Paul-doh and his ranting & clap-board?

Paul-doh hate saying he told you so...

It's more than housing that is crashing.. it's us.

IHateToBurstYourBubble said...

Jim Rogers: Bernanke is destroying the US.

http://www.youtube.com/watch?v=wXUU_lyb0Lc

http://www.youtube.com/watch?v=lTXEWh2yT_g

IHateToBurstYourBubble said...

Economy 'grinding to halt,' leading data say
Leading indicators fall 0.3%, fifth straight decline


WASHINGTON (MarketWatch) -- The U.S. economy may be "grinding to a halt," the Conference Board said Thursday, reporting that the index of leading economic indicators fell 0.3% in February for a fifth-straight decline.

The coincident indicators -- the best overview of the current economy -- have been flat for three straight months, the private research group said. Read the full report.
"Growth will be weak this spring," said Ken Goldstein, labor economist for the Conference Board. "A small contraction in economic activity cannot be ruled out."
The leading indicators are designed to forecast economic activity six to nine months ahead. The last time the leading index fell for five straight months was in early 2001, at the beginning of the last recession.
The January leading index was revised lower to a 0.4% decline from a 0.1% decline.
The coincident indicators are the same four indicators used by the business-cycle dating committee of the National Bureau of Economic Research to judge whether the economy is in a recession or is expanding. See the latest story on the recession indicators.
Five of the 10 leading indicators fell in February: jobless claims, building permits, delivery times, consumer expectations, and stock prices. Four indicators rose: Real money supply, interest rate spreads, orders for capital goods and orders for consumer goods. The factory workweek was unchanged.
Several of the indicators -- such as real money supply and the orders data -- are estimated because they have not yet been officially reported.
In a separate report Thursday, the Labor Department said initial jobless claims -- one of the 10 leading indicators -- rose to 378,000 last week, a sign of a weaker labor market. See full story.
In another report, the Philadelphia Federal Reserve Bank said sentiment among manufacturing firms in its region improved in March but remained at a very low level. The Philly Fed index improved to negative 17.4 from negative 24. Negative readings show that more firms think business conditions are bad than think they are good.
Over the past six months, the leading index was down 1.5%, a slight improvement from the 2.3% decline from July through January. Just two of the 10 indicators are up in the past six months.
The coincident index was flat over the past six months, with two of the four coincident indicators rising.
The lagging index rose 0.2% in February and is up 1.7% in the past six months.


Rex Nutting is Washington bureau chief of MarketWatch.

Bewert said...

Re: Oct 15, 2007 the city-council approved payment. Les Schwab bought JR on Dec 12, 2006, and Paid on Dec 7, 2007, and within a week $2.5M was passed to Kuratek.


You got any proof? According to the Budget Detail from February it's still sitting in the BURA Juniper Ridge Construction Fund. See page 21.

IHateToBurstYourBubble said...

Comment #400 ---

So whatever you're doing, do it twice...

IHateToBurstYourBubble said...

Wall Street rallies to aid Lehman

By Helen Power in London and James Quinn in New York
Last Updated: 12:10am GMT 19/03/2008

Wall Street's leading investment banks have rallied around ailing rival Lehman Brothers after the Federal Reserve Bank of New York urged them to support the institution in order to try and preserve financial stability.
# News from the banking and financial services sector

It is understood the New York Fed contacted key executives at a number of leading banks, including Goldman Sachs, Citigroup and Morgan Stanley, to discuss Lehman's situation over the weekend.

By yesterday morning, the banks' prime brokerage departments - which service hedge fund clients - were under strict instructions not to do or say anything in the market that could damage Lehman.

The intervention is important because Wall Street fears a repeat of the events which led to the weekend's rescue of Bear Stearns. The bank was fatally damaged when hedge funds closed out their positions, demanding immediate repayment of the cash.

One American banker said: "[We heard] from the top, 'Do not encourage calls to Lehman clients. We want to run that up the flagpole. We don't want another run on a bank.' "

As a result, it is believed that bankers were told not to solicit Lehman's clients for business or to give the impression the bank is uncreditworthy.

Lehman's business model is closest to that of Bear Stearns, and there has been considerable speculation surrounding the state of its balance sheet. A spokesman from Lehman Bros declined to comment. The other banks involved in the calls also declined to comment.

A spokesman for the New York Fed said: "We never talk about private discussions between the Federal Reserve and commercial banks."

According to a source close to one of the banks, the Wall Street club remains very supportive of Lehman and is wary of doing something that might harm the bank's financial position.

Lehman chief executive Dick Fuld yesterday moved to calm concerns in the market, saying that the Federal Reserve's decision on Sunday to make secured loans to investment banks should ease fears. He said that from his perspective the creation of a liquidity facility for primary dealers "takes the liquidity issue for the entire industry off the table".

In addition to the liquidity facility, the Fed also reduced the discount rate at which banks borrow money from 3.5pc to 3.25pc, ahead of today's Federal Open Markets Committee meeting at which the main base rate is expected to be cut by at least 0.75pc.

In spite of his reassurances, Lehman's shares, which are now trading at their lowest level since 2003, fell as much as 46pc at one stage to recover to close down $8.82, or 22.5pc, at $30.44.

Lehman is due to report first-quarter results this morning during which it is expected to attempt to allay investor concerns.

Other banks to be hit included Citi, whose shares were off 9pc at one stage, and Merrill, which fell as much as 14pc.

Respected banking analyst Meredith Whitney, of Oppenheimer & Co, predicted that shares in banks and other financial institutions would fall as much as 50pc in the wake of Bear's rock-bottom sale to JP Morgan Chase.

Volatile trading was endemic across financial markets, with the New York Stock Exchange seeking to calm its floor traders by invoking a little-used rule that suspends the need to disseminate price indications and to obtain approval for prices prior to opening.

US Treasury Secretary Henry "Hank" Paulson said he supported the Fed's actions over the weekend.

«Oldest ‹Older   201 – 400 of 625   Newer› Newest»