The Slow Burn

Discussion in 'Financial Cents' started by melbo, May 13, 2007.

  1. melbo

    melbo Hunter Gatherer Administrator Founding Member

    Necro bump from 7 yrs ago page 10 post #92
    The Slow Burn | Page 10

    Or death from 10,000 paper cuts.

    I believe that the current cracks in the already stressed global economic machine are going to enlarge in the coming months. In conversations with friends lately, I find us talking about a condition we have called the Slow Burn.

    It would be so easy if my morning paper gave me a headline of "Duck, TSHTF!"
    Flip the switch from normal living to grubby living. Block off a few roads, dust off the stored foods and wait for the Zombies. etc.

    The bigger problem is when we find ourselves in the middle. Not quite a SHTF yet not business as usual. Somethings up and life is getting tougher but you can't decide to close your doors and lay back in your retreat yet because there still are normal services running.

    That's the SB. It starts to hurt you little by little and you don't realize it until you are in it and have already lost a lot of your former position. I'm already in the beginning of the SB as I'm in Real Estate and am feeling the effects of both a sluggish market and mortgage revamping. But, it's not so bad as to cause me to cancel my daughters flute lessons...yet. If I/we knew that the crash would occur on such and such date, 27 days from now, it would be a lot easier. Divert all extra and stored funds to the last stages of preparation and finalize the rest of the plans.

    It won't be that easy and I think the smart ones will realize whats happening before the masses. Bear likes to say: "Don't be the last one to the exit" Or "Be in the first wave that exits" Increases your chances of survival all around. Came across this today and thought of the SB...

    Even though it is possible for a quick death in an economic collapse, (Look at the market crashes a few months ago. Shanghai stock market has gone parabolic and risen 300% in the last year. He feels that it could crash any time and the repercussions could be far worse than what happened a few months ago. All parabolics end in a crash so it is reasonable to say that something wicked this way comes. Of course, there are several other dominoes teetering; I don’t have to list them all.), it's also possible to creep up on us and slowly bite us in our respective arses.

    I think it prudent to set 'stops' for yourself and when/if the factors you have decided to watch are getting close to your line in the sand, don your helmut. or even your helmet
    Last edited: Apr 4, 2014
  2. Tango3

    Tango3 Aimless wanderer

    "slow burn" brings to mind one of the most important points of the post on the argentina collapse: life goes on, rolling blackouts, food and water shortages appearance of police and governmental control, and you won't be carrying your assault rifle down the street to work. Katie Couric will not be reporting:"Well its been agreat 200 years but at 6pm est the effluent officially hits the impellor." feel free to rob, kill, maim and generally run amok like somebad mad max sequel...
    That's Why I question the "percieved need " for an arsenal,I don't forsee any realistic need to "shoot up a convoy" ( red dawn style); rather protection will be cqb, up close and personal, but anything outside25 yards probably won't present justification to engage. but cross my driveway, try to beat in the door or window .and we'll be discussing your dinner and logdging plans under rule.303. or 12ga. or even .38, if you manage to get the drop. Like Argentina; peole won't be eager to attack fortified or well defended positions "zombie-style"...
  3. oldteacher

    oldteacher Monkey+++

    Right. A slow collapse means that a grandmother carries a revolver when she travels, cans from a garden that was planted for the first time in 40 years, and keeps some cash on hand in a safe place. The crop money was in the bank when it closed around Christmas in l966. I had $.75 in my pocket. I have never forgotten that.No mortgage today, thank goodness. The offspring rolled their eyes when I sold the brick ranch in town and bought the doublewide on two acres. It's paid for and they have a place to come when they can't pay their mortgages.
    I read the papers from the surrounding rural counties. They report break-ins and robberies on a regular basis. I think the Argentina effect has already begun.
  4. Bear

    Bear Monkey+++ Founding Member Iron Monkey

    Interesting Read...

    Fair Use

    U.S. Homebuilder Sentiment Index Falls to 8-Month Low (Update1)

    By Bob Willis
    May 15 (Bloomberg) -- Confidence among U.S. homebuilders this month unexpectedly fell to the lowest in eight months as a wave of mortgage defaults sapped the housing market.
    The National Association of Home Builders/Wells Fargo index of sentiment fell to 30 this month from 33 in April, the Washington-based association said today. The reading matched the figure for last September, which was the lowest since February 1991. Readings below 50 means most respondents view conditions as poor.
    Developers including Beazer Homes USA Inc. say they see few signs of an end to the housing slump that helped reduce the pace of economic growth to the slowest in more than four years last quarter. Subprime mortgage defaults are further increasing the inventory of unsold homes and prompting banks to tighten lending standards.
    ``The decline in homebuilder sentiment is largely due to fears of subprime mortgage fallout,'' said Michelle Meyer, an economist at Lehman Brothers Holdings Inc. in New York. ``We could see a decline in demand going forward.''
    Economists had forecast the sentiment index would be unchanged at 33, according to the median of 37 estimates in a Bloomberg News survey. Forecasts ranged from 31 to 35.
    Separately, the Commerce Department reported earlier today that consumer prices rose 0.4 percent in April from the prior month, less than forecast and a sign that inflation is abating as the economy cools. Prices excluding energy and food rose 0.2 percent.
    The homebuilder confidence survey asks builders to say whether sales are ``good,'' ``fair'' or ``poor'' and to gauge prospective buyers' traffic.
    Single-Family Homes
    The measure of single-family home sales declined to 31, the lowest since February 1991, from 33. The index of traffic of prospective buyers fell to 23 from 27. A gauge of sales expectations for the next six months declined to 41 from 44.
    Builders are scaling back new projects to work off new-home inventories that in March equaled 7.8 months' worth of sales, the second highest since March 1991.
    Housing starts rose in February and March from January's annual pace of 1.399 million, which was the slowest since August 1997. The January pace represented a 38 percent drop from the record rate of 2.265 million in January 2006.
    The National Association of Realtors on May 10 lowered its forecasts for home construction and sales for a third time this year, saying stricter lending standards and a squeeze on subprime lending is making homes less affordable. It forecast housing starts will fall 19 percent this year after a 12.9 drop in 2006.
    ``It's going to take more time'' than previously expected to shake off the housing recession, David Seiders, chief economist at the National Association of Homebuilders, said last month. Subprime woes are costing builders ``a lot of sales and also increasing cancellations.''
    Pulte Homes Inc., Beazer Homes and Ryland Group Inc. last month reported quarterly losses as they wrote down the value of property and abandoned land purchases. Beazer and Ryland withdrew their earnings forecasts for 2007, and Pulte declined to provide an outlook for the rest of the year.
    Ian McCarthy, chief executive of Atlanta-based Beazer, said the housing market was ``extremely challenging'' and he doesn't see any signs of a recovery.
    Toll Brothers Inc., the largest U.S. luxury home builder, on May 9 said sales slid 19 percent in the latest quarter.
    ``Twenty months into this housing downturn, we continue to face difficult conditions in most of our markets,'' Chief Executive Officer Robert Toll said in a statement. Toll said stricter lending standards for low-end borrowers were making houses at all price levels less affordable.
    `Lack of Confidence'
    ``This, coupled with a lack of buyer confidence, may have served to impede the glimmers of a rebound we had started to see in early February,'' he said.
    More than half of lenders tightened standards for subprime and non-traditional mortgages in the first quarter, while a ``relatively small'' number of banks tightened lending standards for prime mortgages, the Federal Reserve said yesterday in its quarterly survey of senior loan officers.
    Foreclosures of homes rose 62 percent in April from a year earlier, according today to RealtyTrac, which monitors foreclosure filings.
    Today's report showed confidence fell in three of four U.S. regions. The index fell to 32 from 38 in the Northeast, to 33 from 37 in the South and to 32 from 35 in the West. It rose to 23 from 22 in the Midwest.
    To contact the reporter on this story: Bob Willis in Washington .
    Last Updated: May 15, 2007 13:20 EDT
  5. Bear

    Bear Monkey+++ Founding Member Iron Monkey

    Another Interesting View from outside the US...

    Fair Use

    Fidelity's Bolton Says Stock Markets Ready to Fall (Update2)

    By David Clarke
    May 15 (Bloomberg) -- Fidelity International Ltd.'s Anthony Bolton, the fund manager who helped turn the company into the U.K.'s largest mutual fund company, said shares may be about to fall because there's too much risk in financial markets.
    Too much money is being spent on mergers and acquisitions, Bolton said at a dinner in London last night. Specifically, buyout companies are overspending on takeovers and are getting loans with few safeguards from banks, he said.
    Mergers and acquisitions for 2007 reached the $2 trillion mark today, 60 percent ahead of last year's record pace, according to data compiled by Bloomberg. Buyout firms have led a record $367 billion of takeovers so far this year, almost double the $187 billion of deals announced in the same period a year earlier.
    ``You are seeing mergers and acquisitions tittle tattle that makes me concerned,'' Bolton said. ``I can't tell you when it's coming but I can tell you the precursors are there'' for a stock market slump.
    As a result, Bolton said he has taken out short positions in the 3.2 billion-pound ($6.3 billion) Special Situations Fund, which means he's betting on the declines of some shares.
    ``My views are based on behavior and sentiment,'' Bolton said. ``You can draw conclusions about what I am doing.''
    Bolton's Successor
    Bolton also said last night he'd picked Sanjeev Shah to take over the Special Situations Fund, as he's stepping down from overseeing funds directly. Shah said he has also taken what he called a ``defensive'' position with his investments.
    Bolton, Fidelity's first fund manager in Europe, has previously anticipated stock-market declines. The 57-year-old dumped his holdings of telecommunications stocks, including Vodafone Group Plc, in the first quarter of 2000 at the height of the bull market for technology shares. Vodafone, the world's biggest mobile-phone company, fell 80 percent between March 2000 and August 2002.
    Bolton's closed-end Special Values Plc fund in March last year bought options to provide protection in the event of a drop in stock markets and also reduced borrowing in the fund to cut back on the risk of shares falling. Between April 21 and June 14 last year the U.K.'s FTSE 100 Index fell 10 percent.
    Bolton is Fidelity's longest-serving manager in Europe. An investment of 1,000 pounds in his fund in 1979 would have grown to about 163,000 pounds today, according to data from Morningstar Inc. The average performance of 30 rival funds over the period would have given 30,000 pounds from the same investment, according to Morningstar.
    To contact the reporter on this story: David Clarke in London at .
    Last Updated: May 15, 2007 12:42 EDT
  6. Clyde

    Clyde Jet Set Tourer Administrator Founding Member

    Last edited by a moderator: Apr 4, 2014
  7. Clyde

    Clyde Jet Set Tourer Administrator Founding Member

    Samuelson: Paying for Aging Baby Boomers


    Aug. 6, 2007 issue - If you haven't noticed, the major presidential candidates—Republican and Democratic—are dodging one of the thorniest problems they'd face if elected: the huge budget costs of aging baby boomers. In last week's CNN/YouTube debate, New Mexico Gov. Bill Richardson cleverly deflected the issue. "The best solution," he said, "is a bipartisan effort to fix it." Brilliant. There's already a bipartisan consensus: do nothing. No one plugs cutting retirement benefits or raising taxes, the obvious choices.
    End of story? Not exactly. There's also a less-noticed cause for the neglect. Washington's vaunted think tanks—citadels for public intellectuals both liberal and conservative—have tiptoed around the problem. Ideally, think tanks expand the public conversation by saying things too controversial for politicians to say on their own. Here, they've abdicated that role.
    The aging of America is not just a population change or, as a budget problem, an accounting exercise. It involves a profound transformation of the nature of government: commitments to the older population are slowly overwhelming other public goals; the national government is becoming mainly an income-transfer mechanism from younger workers to older retirees.
    Consider the outlook. From 2005 to 2030, the 65-and-over population will nearly double to 71 million; its share of the population will rise to 20 percent from 12 percent. Social Security, Medicare and Medicaid—programs that serve older people—already exceed 40 percent of the $2.7 trillion federal budget. By 2030, their share could hit 75 percent of the present budget, projects the Congressional Budget Office. The result: a political impasse.
    The 2030 projections are daunting. To keep federal spending stable as a share of the economy would mean eliminating all defense spending and most other domestic programs (for research, homeland security, the environment, etc.). To balance the budget with existing programs at their present economic shares would require, depending on assumptions, tax increases of 30 percent to 50 percent—or budget deficits could quadruple. A final possibility: cut retirement benefits by increasing eligibility ages, being less generous to wealthier retirees or trimming all payments.
    Little wonder politicians stay silent. But think tanks ought to be thrilled, because these changes pose basic questions about government. What should it do? For whom? Why? How big can it grow without weakening the economy? Does that matter? Is social justice more important than economic growth? Do gains in life expectancy and the well-being of the elderly justify significant changes in Social Security and Medicare?
    Over the years, the major think tanks have published tens of thousands of words on Social Security and Medicare. Most of the reports are technical, though some propose major (even radical) changes. But the two programs are usually treated separately, and the larger questions of adjusting to an aging society are mostly evaded. I think I know why: wrenching honesty might be deeply embarrassing.
    Liberals might have to concede that government could grow too large and that spending and benefit cuts are needed. Conservatives might have to concede that, even with plausible benefit and spending cuts, tomorrow's government would be bigger than today's. For think-tank scholars, brutal candor might offend friends and political mentors. For the ambitious, it might jeopardize future appointments to top government jobs.
    As an antidote to this timidity, I propose that some public-spirited sugar daddy (the MacArthur Foundation? Warren Buffett?) sponsor a short book. A possible title: "Facing Up to an Aging America." Six leading think tanks would be invited to participate: three liberal—the Brookings Institution, the Center on Budget and Policy Priorities and the Urban Institute—and three conservative—the American Enterprise Institute, the Cato Institute and the Heritage Foundation.
    After an introduction describing America's aging, each think tank would receive 35 pages to respond to questions and to present its vision. Are the looming budget changes good for America? If so, how would they be financed? If not, why not? How could adverse consequences be avoided? The think tanks would be expected to be specific. Higher eligibility ages? Well, how much and when? Higher taxes? Which ones and how much? If think tanks rejected the invitation, the publisher would run 35 blank pages and an explanation: "The Heritage Foundation [or Urban Institute] declined to participate."
    This approach would force think tanks to compete. They'd have to make their vision of the future explicit within the untidy framework of government's past commitments. It would illuminate the connections between defense spending, retirement benefits, health care, economic growth and much more. Writing for a general audience, it would favor plain English, not the usual technobabble. If published in April, the book might prod the presidential candidates to address the future. If they didn't, it would measure the enormity of their evasion.
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  8. Clyde

    Clyde Jet Set Tourer Administrator Founding Member

    [ditto] Post definition: If a article, linky lacks Clyde's wonderful and insightful commentary = non-post)
  9. Bear

    Bear Monkey+++ Founding Member Iron Monkey

    The market was up today...
    Lots of spin to keep you in the market.... like everything is on sale so jump on in....
    But there's still alot of news about mortgage market and the "hurt" its starting to inflict and the "spider webbing" that's starting to occur....
    Do your "homework" and be careful out there....
    Hate for lots of folks to suddenly realize that the solid ground they thought they were standing on has suddenly turned to "quicksand" and they are already up to their waists in it.....
    JMHO... this "Slow Burn" has me worried....
  10. Clyde

    Clyde Jet Set Tourer Administrator Founding Member

    Paulson: US should boost debt limit

    <!-- END HEADLINE --> <!-- BEGIN STORY BODY --> By JEANNINE AVERSA, AP Economics WriterMon Jul 30, 4:46 PM ET

    Treasury Secretary Henry Paulson on Monday said the United States may be unable to pay its bills this fall unless Congress raises the government's borrowing authority, now capped at $8.965 trillion.
    Paulson, in a letter to lawmakers, estimated the government is likely to bump into the statutory debt limit in early October.
    "Accordingly, I am writing to request that Congress raise the statutory debt limit as soon as possible," Paulson wrote. He did not say how much more borrowing authority the Bush administration needs.
    Congress has already boosted the statutory debt limit several times during President Bush's tenure. The last time Congress upped the government's borrowing authority was in March 2006 when it agreed to raise the debt ceiling by $781 billion.
    Boosting the debt limit is more a matter of politics than economics.
    Economists doubt Congress will refuse to raise the limit. A federal default is considered unimaginable because it would rattle bond markets, force interest rates higher and shake the economy.[winkthumb]
    Democrats have blasted the administration for ratcheting up the government's borrowing needs, while they deal with bloated budget deficits; they contend the greater borrowing needs show Bush's fiscal mismanagement.
    The administration, however, has defended the increases as essential to pay for wars in Iraq and Afghanistan and to cover other costs to keep the United States secure.
    In the past, Treasury has resorted to numerous accounting maneuvers to pay its bills while the government waited for Congress to expand its borrowing authority. Paulson argued against being forced to use such measures, saying they "would create unnecessary uncertainty for the financial markets and result in costs to the government." Such actions, he said. "should be reserved only for extraordinary circumstances, and should be avoided."
    Separately, the government expects to borrow $73 billion in the July-to-September quarter, which would be more than previously forecast, the Treasury Department said.
    The new estimate is $31 billion higher than a projection made in April. The department partly blamed increased government spending for the new, larger quarterly borrowing projection. It comes as the department considers the government's financing needs, which it does on a quarterly basis.
  11. TnAndy

    TnAndy Senior Member Founding Member

    I keep saying "Why is Congress pussyfooting around ?.....why not just raise the debt ceiling to 100 trillion and be done with it for a couple years.....after that, it won't matter anyway....."
  12. duanet

    duanet Monkey+++

    As a 69 year old I find it interesting that all of our problems are with the elderly and our social security and medicare and how we can't afford to pay it. I am still working and still paying into the system. I started to pay when I go my first job at a hatchery at 16, continued through 4 years in the Airforce and have paid ever since. Now after over 50 years of paying, they say that they never promised me anything and that I should have put more money away. Well in the last 40 years I have lost retirement money in the following sure things. Real estate equity trusts, 100 % gone in the 1970's, most of the stuff in th Nixon era due to inflation, my new 401K's lost 40 % of their value and more due to the effects of inflation

    and the stock market crash in 2000, my cd's paying 3 % the last few years and inflation being at lest 5 to 10 %. They now tell me that I will need more for my medical expenses with Medicare than they said I would need to retire on 10 years ago. How can you retire when you are always chasing a moving target? The last survy I saw said that over 1/3 of the people in the 51 to 60 age bracket had nothing put away and no pension. I guess we will need a designated street corner for the retired in the near future. The slow burn is here for most of the people I know and it is a fast burn for most of the younger people. The only hope I see for the nest 10 years is to be as self sufficient as possible and stay low in a community of like minded people. The New York Times has articles almost every day about another hedge fund going under and the people holding the funds, or the bag as I put it, are lucky to get 25 to 50 % back at the moment and it is escalating. I saw an interesting comment on values of things. If you were 75 miles from the nearest water and on foot in the desert, trading 16 ounces of gold for 10 gallons of water would be a very logical thing to do.

    Oil, inflation, outsourceing of jobs and production, population growth, wars, political instability, aging population, failing resources and infrastructure, and on and on. It all seems like the beginning of a perfect storm.
    Last edited by a moderator: Apr 4, 2014
  13. Bear

    Bear Monkey+++ Founding Member Iron Monkey

    This "burn" is spreading... American Home Mortgage went under is just over a week.... watch for more "cascading" effects .... alot of good folks are going to get caught in the "squeeze"... and I'm not talking about the brokers, bankers, managers and executives who made billions on the way here.....

    About American Home Mortgage

    American Home Mortgage is one of the largest mortgage bankers in America, licensed to provide mortgages in all 50 states and the District of Columbia. We are a publicly held institution, traded on the New York Stock Exchange under the ticker symbol AHM.

    American Home Mortgage was founded in 1988, and has since grown to more than 7,000 employees nationwide. In 2006 American Home Mortgage funded $58.9 billion dollars in loans.

    In 2006, for the second year running, Forbes magazine has ranked American Home Mortgage among the top 2000 public companies in the world, based on a composite score for sales, profits, assets and market value.

    Fortune magazine lists AHM 7th on its list of "50 Small Stocks that Rock" in the June 2006 issue.
    Corporate Headquarters
    American Home Mortgage Corp.
    538 Broadhollow Road
    Melville, NY 11747
  14. Bear

    Bear Monkey+++ Founding Member Iron Monkey

    Some interesting information about the potential effects of the current home lending events .... there may be alot of folks directly impacted by the drying up of credit... not just those whose money is tied up in markets.... JMHO....

    Real Estate Careers, Jobs, Training and Employment Information - |

    Real Estate Careers,
    Jobs, Training and Information

    Real Estate Career and Job Overview

    In the United States Alone there are currently 5 million plus individuals working in the various parts of the real estate industry, including mortgage banking, construction, title insurance, appraising, property management, brokerage and leasing, and real estate development. In addition to that number are the thousands of people working as commercial banking lenders, corporate real estate agents, savings and loan officers, and insurance companies who aren’t officially part of the real estate industry. Because real estate serves as a guarantee for mortgages and the foundation for mass amounts of capital, more than 33% of global financial assets are connected to real estate. Real estate is an exciting and essential part of the global society. Those who work in real estate provide a service that affects each of our lives, and they contribute to development that will impact society for generations. A career in the dynamic field of real estate will provide fulfilling opportunities to stretch your abilities and expand your experience. Continue reading to find out how a career in real estate can change your life.

    Necessary Skills

    Real estate employers are looking for people with a combination of strong deal-making and interpersonal skills. The skills involved include:

    • <LI class=newone>People skills: High <LI class=newone>Sales skills: Very High <LI class=newone>Communication skills: High <LI class=newone>Analytical skills: Medium <LI class=newone>Ability to synthesize: Low <LI class=newone>Creative ability: Medium <LI class=newone>Initiative: High
    • Work hours: 20-70/week
    Industry Info
    • Great Career Opportunities

      Those who work in real estate handle property management, as well as sales and assessment. There are plenty of career options in this ubiquitous industry.

      Calling all Entrepreneurs

      For those with a good balance of industry knowledge and entrepreneurial spirit, real estate can be a very profitable career.

      Few industries have more job variety than real estate!

      There are dozens of different ways to become involved in the real estate business. There are financial analyst positions for those who like to crunch numbers, there are customer service positions for socialites, and there are real estate investment opportunities for aspiring investors.
    • No Wrong Way to Get into the Business

      If you want to get into real estate, there are a lot of ways to do it. If you want to become a real estate agent, you first have to earn your real estate license, and then you have to sign on with a brokerage. But if you’re more interested in analysis and property acquisition, you’ll need a graduate degree focused in real estate. Then you can put your skills to use at a large property management firm. Corporate real estate departments, governments, and banks also employ real estate specialists.
    Job Options
    • Real Estate Broker / Residential

      Real estate agents serve both buyers and sellers in the real estate transaction process. In exchange for representation, both the buying agent and the selling agent charge a commission of around 3 percent of the properties selling price. More than 400,000 agents and brokers work in the United States. Anyone over the age of 18 with a high school diploma who can successfully finish a training course and pass a licensing exam can become a real estate agent. The website for the National Association of Realtors has detailed information about local requirements. Go to Find Real Estate, Homes for Sale, Apartments & Houses for Rent -®.

      Real Estate Broker / Commercial

      Real Estate firms that specialize in commercial property rely on agents to sell hotels, office space, and other types of commercial real estate. Often commercial agents work in a specific area like retail office space, apartments, shopping centers, industrial real estate, or hospitality property. The best commercial real estate companies research and analyze regional market conditions in order to give big time investors the best information possible in choosing real estate. There are many professional organizations that cater to many different specific facets of commercial real estate. Some of these organizations include The American Industrial Real Estate Association, the National Association of Industrial and Office Properties, the Hotel and Motel Brokers of America, and the International Council of Shopping centers. The Real Estate Exchange is an organization specifically for women in commercial real estate. Since 1969 the Commercial Investment Real Estate Institute (CIREI) has provided the Certified Commercial Investment Member (CCIM) credential to qualifying professionals.

      Real Estate Appraisal

      Appraisers are responsible for giving fair property value assessments. Most appraisers work for an appraisal company or bank and use comparative market data or estimated property cash flow to determine value. Because appraisers are needed for refinancing as well as new sales, even when the real estate market is slow, appraisers tend to stay busy. For local information contact the Appraisal Foundation.

      Property Management

      Owners of investment properties often hire professional property managers to look after their investments. Managers take care of customers, find renters, establish rental prices, and coordinate leases. Property managers must be good with people, have strong negotiation skills, and an ability to analyze the market. This is a good place to start for people who are thinking of becoming involved in real estate themselves. The trade organization that supports property managers is the Institute of Real Estate management. The designations they offer are Certified Property Manager (CPM) and Accredited Residential Manager.

      Real Estate Advisory

      Real estate is becoming more popular among institutional investors. However, real estate cannot be tucked under a mattress, or placed in a bank, like other investments. Real estate advisors use their knowledge of the market to assist investors in choosing properties that are likely to increase in value. Advisors also make management recommendations and suggestions once the property has been purchased. Outgoing Individuals with an understanding of real estate investing and statistical analysis can be very successful in this exciting career.

      Investment Banking

      Investment banks like Goldman Sachs, CSFB, Lehman Brothers, PaineWebber, and Deutsche Bank have a real estate department that specialize in consolidating mortgages to create collateralized mortgage obligations (CMOs), commercial mortgage-backed securities (CMBS), and residential mortgage backed-securities (MBS). In addition these banks also handle the banking end of bond, preferred stock, and synthetic lease origination, REIT stock, principle investment, and lodging investment. This is the perfect career for individuals wishing to mix their love of real estate with their investment banking.

      Construction and Development

      Real estate developers and construction managers must love hard work and substantial risk taking. You can get your foot in the door by climbing the ranks of an established development firm, or if you have the training you can start your own business handling small jobs. Successful construction managers are multi-tasking goal-driven individuals who are able to write up work estimates and time schedules, and coordinate labor and equipment needs.
    • Real Estate Entrepreneur

      Real estate has always been a good investment and continues to be fairly stable place for individuals increase the value of their assets. Some of the greatest fortunes of the past fifty years have been built good real estate investments. Success as a real estate investor depends on your diligence, your business skill, your ability to manage risk, and a little bit on your luck. Since there are many other people out their trying to find the best real estate deals you must rely heavily on your negotiation and management skills.
    Last edited by a moderator: Apr 4, 2014
  15. Clyde

    Clyde Jet Set Tourer Administrator Founding Member

  16. Bear

    Bear Monkey+++ Founding Member Iron Monkey

    200 Billion in assets
    54,655 Full Time Employees....

    "Countrywide is a diversified financial services company focused primarily on real estate finance and related activities. Since our founding in 1969, our mission has been to help individuals and families achieve and preserve the dream of home ownership. Today, this cornerstone principle continues to guide and drive all of our business decisions. It has also produced a high-performance, high-integrity culture that's unique to Countrywide and draws many of the best and brightest in the industry to work here.

    Leadership: Countrywide is America's #1 home loan lender.* In fact, we're a leader in nearly every aspect of real estate finance. We offer our customers a level of expertise, product selection, and service that's unmatched in the industry.
    Diversity: Countrywide is America's #1 Lender to Minorities.** We are commited to the Hispanic, Asian, and African American markets and we continue to build a diverse workforce and management team. Performance: Countywide has been one of the best performing financial services companies in the past 25 years and is ranked #91 in the Fortune 500.

    Countrywide Says `Unprecedented Disruptions' May Hurt Profit

    By Steve Dickson

    Aug. 10 (Bloomberg) -- Countrywide Financial Corp., the biggest U.S. mortgage lender, said it faces ``unprecedented disruptions'' that may crimp profit, suggesting a credit crunch that started with the U.S. subprime market will spread.
    Countrywide won't be able to sell as many of its loans as expected because investor demand has dried
    up, the Calabasas, California-based company said in a filing with the U.S. Securities and Exchange Commission. It also said it may have difficulty obtaining financing from creditors. Shares of the company fell as much as 13 percent in after-hours trading.
    ``The secondary market and funding liquidity situation is rapidly evolving, and the potential impact on the company is unknown,'' Countrywide said. ``These conditions may continue or worsen in the future.''
    Investors have stopped buying loans made to the riskiest borrowers, leaving hedge funds, banks and securities firms unable to find accurate prices for their holdings. BNP Paribas SA, France's biggest bank, halted withdrawals from three investment funds yesterday because it couldn't ``fairly'' assess the value of subprime mortgage holdings. Banks roiled by the crisis are shifting assets into cash, prompting the European Central Bank to loan them an unprecedented 94.8 billion euros ($130 billion) yesterday.
    Washington Mutual Inc., the biggest U.S. savings and loan, said yesterday in its own filing that liquidity in the market for mortgages made to borrowers below the top credit grade had ``diminished significantly.''
    Earnings Forecast
    Last month, Countrywide cut its 2007 earnings forecast after net income tumbled 33 percent as an increasing number of borrowers fell behind on home-equity loan payments. At least 70 mortgage companies have halted operations or sought buyers since the start of 2006, according to data compiled by Bloomberg.
    Shares of Countrywide, which have lost a third of their value this year, fell to $25 in late trading from $28.66 at yesterday's close in New York Stock Exchange composite trading.
    ``We are experiencing home price depreciation almost like never before, with the exception of the Great Depression,'' Countrywide Chief Executive Officer Angelo Mozilo said during a conference call with investors last month. He said it would take all of next year for the mortgage market to ``turn this battleship around'' before demand rebounds in 2009.
    Amber Cousins, a spokeswoman for Countrywide, didn't return a call seeking additional comment on the filing.
    Countrywide's allowance for credit losses was $531.1 million as of June 30, almost double the amount on Dec. 31, it said in the filing.
    More Consolidation
    Countrywide again assured investors that it has enough cash to cope with a credit crunch and said it may benefit as the industry's capacity shrinks. The company said earlier this week that it had access to $186.5 billion at mid-year.
    ``The challenges facing the industry should ultimately benefit Countrywide as the mortgage lending industry continues to consolidate,'' the company said in the filing.
    Still, Countrywide said it was no longer trying to sell $1 billion of subprime mortgage loans and would instead hold them as investments ``for the foreseeable future.'' The loans now have a value of about $800 million, Countrywide said.
    Bids for subprime mortgages, rated as the most likely to default, became scarce in March as overdue payments headed for their highest level since 2002. Now buyers are shunning Alt-A loans, an alternative for people with good levels of credit who don't otherwise meet all the standards for prime loans.
    Loan Losses
    Mozilo, 68, has tightened standards for approving loans to Countrywide's riskiest borrowers as part of a plan to cut subprime lending to as little as 4 percent of total mortgages, half the level at the end of last year.
    Now he must address an increase in missed payments for prime loans, or those granted to borrowers with good credit histories. The company set aside $292.9 million for loan losses in the second quarter, compared with $61.9 million a year earlier, as it earmarked $181 million for prime home-equity loans.
    Countrywide accounts for almost a fifth of all mortgages made in the U.S. The company revised its forecast of new loans to $420 billion to $500 billion this year, from $450 billion to $550 billion predicted in April. It extended $123.1 billion in new loans during the second quarter, 15 percent more than a year earlier.
    Profit fell for a third straight quarter in the three months ended June 30. Net income in the second quarter dropped to $485.1 million, or 81 cents a share, from $722.2 million, or $1.15, a year earlier.
    To contact the reporter on this story: Steve Dickson in New York at .
    Last Updated: August 10, 2007 00:13 EDT
  17. Bear

    Bear Monkey+++ Founding Member Iron Monkey

    Bernanke, Paulson Were Wrong: Subprime Contagion Is Spreading

    By Bob Ivry
    [​IMG][​IMG] Federal Reserve Chairman Ben S. Bernanke

    Aug. 10 (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke was wrong.
    So were U.S. Treasury Secretary Henry Paulson and Merrill Lynch & Co. Chief Executive Officer Stanley O'Neal.
    The subprime mortgage industry's problems were contained, they all said. It turns out that the turmoil was contagious.
    The $2 trillion market for mortgages not backed by government-sponsored agencies is at a standstill. That's just the beginning. Other types of mortgages are suffering. So are firms and banks that package the debt for investors. The ripples were felt in Europe and Asia, where central banks offered cash to banks amid a credit crunch. And some corporations, from countertop makers to railroads, are blaming the mortgage meltdown and housing slump for earnings shortfalls.
    Even a mobile-phone company, Dallas-based MetroPCS Communications Inc., says it's feeling the pinch from customers facing foreclosure. And experts such as William Ford, former president of the Federal Reserve Bank of Atlanta, say the chance of a recession is growing.
    ``Housing created a lot of ancillary economic activity and jobs, and now we are in the reverse process,'' says Paul Kasriel, chief economist at Northern Trust Corp. in Chicago and a former Fed economist.
    The European Central Bank yesterday loaned 94.8 billion euros ($130.2 billion) to banks to alleviate a money shortage sparked by concerns over investments in U.S. mortgages.
    The unprecedented move followed the freezing of three funds managed by BNP Paribas, France's largest bank, because the bank couldn't calculate how much the funds' holdings were worth due to a lack of buyers.
    Today, the Bank of Japan made similar moves to supply cash.
    `Spreading to Banks'
    ``The subprime mess is now spreading to banks,'' says Nariman Behravesh, chief economist at Global Insight Inc. in Lexington, Massachusetts. ``A lot of international banks, especially those in Europe, did invest a lot in the collateralized debt markets, especially the subprime situation here in the U.S., so they're suffering.''
    Peter Lynch, chairman of private equity fund Prime Active Capital Plc in Dublin, said the ECB was ``treating this like an emergency.''
    Bernanke told Congress on March 28 that subprime defaults were ``likely to be contained.'' The Fed chief, who declined to comment for this story, changed his assessment last month.
    On July 18, he told Congress that ``rising delinquencies and foreclosures are creating personal, economic and social distress for many homeowners and communities -- problems that likely will get worse before they get better.''
    Paulson Comment
    Paulson said June 20 that subprime fallout ``will not affect the economy overall.''
    This week on CNBC, he provided a less definitive assessment, saying that markets have been ``unsettled largely because of disruption in the subprime space.''
    ``We've had a major correction in that housing sector,'' Paulson said. ``It will take a while for the impact of that to ripple through the economy as mortgages reset.''
    O'Neal on June 27 called subprime defaults ``reasonably well contained.'' Merrill spokeswoman Jessica Oppenheim said this week that the company is confident his words accurately reflected the market at the time. O'Neal declined to comment.
    Among the other executives joining the chorus was Bank of America Corp. CEO Kenneth Lewis, who said June 20 that the housing slump was just about over.
    ``We're seeing the worst of it,'' Lewis said.
    `Broader Fallout'
    Within the week, he was contradicted by a team of Bank of America analysts, who called losses in the mortgage market the ``tip of the iceberg'' and predicted ``broader fallout'' from adjustable-rate loans resetting at higher interest rates.
    David Olson, president of Wholesale Access Mortgage Research & Consulting Inc. in Columbia, Maryland, is blunt about his current outlook. He says a third of the U.S. home-loan industry will disappear.
    With last week's collapse of American Home Mortgage Investment Corp., which sold $58.9 billion of loans to borrowers in 2006, the subprime contagion spread to so-called Alt-A mortgages, which are available to borrowers with good credit who don't want to verify their income with tax forms or pay stubs.
    American Home couldn't find Wall Street firms willing to buy these mortgages and package them into securities because of rising defaults. The Melville, New York-based company filed for bankruptcy Aug. 6.
    ``This is just the first, because all the Alt-A guys are going to go,'' Olson says. ``This is the most difficult mortgage environment I've seen in my 40 years in the business.''
    This grade of loan made up 13 percent of all mortgages last year, according to Inside Mortgage Finance. Combined with subprime, they account for a third of the market. Both types of loan are rapidly disappearing.
    Housing Prices
    U.S. housing prices will fall this year, the first annual decline since the Great Depression of the 1930s, according to the National Association of Realtors, based in Chicago.
    The inventory of unsold U.S. homes in May was the largest since the realtors group started counting them in 1999. Defaults and foreclosures may increase because about $1 trillion of payments on adjustable-rate mortgages are scheduled to rise this year, hitting a peak in October, according to Credit Suisse.
    Housing and related industries generate almost a quarter of U.S. gross domestic product, according to the Joint Center for Housing Studies at Harvard University in Cambridge, Massachusetts.
    The mortgage fallout ``ensures the economy will grow well below its potential through the remainder of the year and next,'' says Mark Zandi, chief economist for Moody's in West Chester, Pennsylvania, who predicts GDP growth of 2.5 percent this quarter and next. Second-quarter growth was 3.4 percent.
    Lowered Forecast
    Demand for loans to bundle into mortgage-backed securities came to a halt, crippling the subprime and Alt-A lending businesses. The exception was prime loans conforming to rules set by the biggest government-chartered agencies, Fannie Mae in Washington and Freddie Mac in McLean, Virginia.
    Doug Duncan, the Mortgage Bankers Association's chief economist, says he's lowering the group's forecast on the total dollar value of new U.S. mortgages.
    The association said July 12 that the value of mortgages sold would decline 7 percent this year to $2.6 trillion and 18 percent in 2008 to $2.3 trillion, from $2.8 trillion last year.
    ``Most of the market has shut down,'' Duncan says. ``This is not a normal event.''
    Peter Hebert, a broker with Houston-based Allied Home Mortgage Capital Corp. in Ellicott City, Maryland, says it's getting tougher to find mortgages for his clients.
    `Use a Credit Card'
    For one self-employed borrower in Pennsylvania, with a 626 credit score, just above what's considered subprime, Hebert says he contacted three lenders. Last year, the borrower would have qualified for a 7.99 percent loan, Hebert says. This week, he received one offer for a 10.5 percent loan with a three-year prepayment penalty, meaning that if the borrower refinanced during that time he would be required to make six months of payments to the original lender.
    ``It would have been cheaper to use a credit card to pay for his house,'' Hebert says.
    When it came time to lock in the rate, the lender pulled out, Hebert says.
    ``It was a hard thing to do, an emotional thing, to tell my borrower he was turned down for a rate that was high to begin with,'' he says.
    Margin Calls
    The market is shifting, too, for firms that package loans into securities and sell them to investors. About $11.2 billion of private-label, or ``non-agency'' mortgage bonds -- those not guaranteed by Fannie Mae, Freddie Mac or Washington-based Ginnie Mae -- were sold in July, according to Michael D. Youngblood, portfolio manager and analyst at Friedman Billings Ramsey Group Inc. in Arlington, Virginia. That's down from $41.6 billion in June and from a monthly average of $86.6 billion this year.
    Luminent Mortgage Capital Inc., a San Francisco-based firm that packages mortgages for investors, cited ``a significant increase in margin calls'' for canceling its dividend.
    Such firms borrowed money from banks to buy loans to create securities. When investors stopped buying the securities, the banks that made the original loan demanded their money back.
    Many such firms that package securities will leave the business this year, says Guy Cecala, publisher of Inside Mortgage Finance.
    ``If you're an investment bank and you're losing stock value every week because of your connection to the mortgage industry, isn't it easier to cut ties?'' Cecala says.
    Bank Stocks
    Shares of the top 12 U.S. banks have declined 17 percent since June 1.
    Yesterday, Countrywide Financial Corp., the biggest U.S. mortgage lender, said in a filing that ``unprecedented disruptions'' in the U.S. home-loan market may crimp its ability to lend. The company said it may be forced to retain more of the loans it makes to homeowners rather than selling them to investors and that it may have difficulty obtaining financing from its creditors.
    Corporations outside the mortgage industry are taking a hit, too, as housing slumps. Burlington Northern Santa Fe Corp., the second-biggest U.S. railroad, said it shipped less lumber for homebuilding in the second quarter. DuPont Chief Executive Officer Charles O. Holliday Jr. said July 24 that the housing recession eroded demand for Tyvek weather barriers, used in 40 percent of new homes, and Corian countertops.
    Steak n Shake
    Steak n Shake Co., an Indianapolis-based fast-food chain, blamed a 4.3 percent decline in same-store sales in the third quarter partly on credit markets. ``Some segments of Steak n Shake consumers continue to be sensitive to high gasoline prices and mortgage interest rates,'' the company said in a statement yesterday.
    Shares of MetroPCS, a prepaid mobile-phone service, fell 20 percent Aug. 3 after second-quarter sales missed analyst estimates. Chief Financial Officer J. Braxton Carter blamed customers' ``short-term economic disruptions,'' such as defaulting on their subprime loans.
    As for the faulty initial predictions by Bernanke and others, go easy on them, says Josh Rosner, managing director at the New York investment research firm Graham Fisher & Co.
    ``There's no model for what's happening now in the housing and mortgage industries,'' Rosner says. ``We have to give Bernanke a chance. He is a reasoned and traditional central banker. He knows how to manage crazies.''
  18. Clyde

    Clyde Jet Set Tourer Administrator Founding Member

  19. Clyde

    Clyde Jet Set Tourer Administrator Founding Member

    "Blood in the water" in Florida property market

    Tue Aug 14, 2007 10:10AM EDT
    By Tom Brown
    CAPE CORAL, Florida (Reuters) - Phone books that were delivered but never opened rot away next to empty driveways and overgrown lawns, telltale signs that once-booming southwest Florida is now the center of the U.S. housing storm.
    Until two years ago, middle-class retirees vied with property speculators for houses and apartments in Cape Coral, a town near Fort Myers on Florida's sun-drenched Gulf Coast. Now almost every other house on some of its streets has a for-sale sign outside.
    With a bloated inventory of unsold homes and a growing number of homeowners forced by mortgage delinquencies to sell -- thanks to the subprime crisis and ensuing credit crunch -- southwest Florida's once warm clime for property has turned stone-cold.
    Linda Setterlund, 61, owns a pristine three-bedroom, two-bath, Cape Coral house that has been on the market for about a year.
    At a reduced asking price of $183,900, she said the house had been priced to match what she and her husband owed on it, after moving in three years ago with a 30-year fixed mortgage.
    Setterlund said she and her husband had decided to leave the area to join family in Tennessee, but their decision was also prompted by growing real estate taxes and skyrocketing homeowner insurance rates after an active 2005 hurricane season.
    "They're saying that we're heading for a recession but I think we're past that," said Setterlund, referring to the housing glut and its effect across much of south Florida. "I think we're headed more into a depression."
    Setterlund and other local residents, many of them retirees from the Midwest, complained of low wages in the Fort Myers area, where leading employers include the Publix supermarket chain and the school board.
    There was a nearly 27-month supply of existing single-family homes on the Fort Myers market last month compared to a three-month supply at the height of the local boom in housing in August 2005, according to Denny Grimes, a top real estate agent in Fort Myers.
    At the same time, more than 40 percent of single-family homes were listed at prices below $250,000 versus just 18 percent at the market peak.
    "There's a lot of blood in the water and there's a lot more to come," Grimes said.
    Making things worse, Grimes said builders were still churning out new housing units at big discounts in and around Fort Myers, where many investors bought houses during the recent boom market without ever considering the long-term cost of holding properties.
    Fort Myers "is by far the worst housing market that we're in," J. Larry Sorsby, executive vice president and chief financial officer of home builder Hovnanian Enterprises Inc., told Reuters.
    Hovnanian bought the largest home builder in the Fort Myers in August 2005 just as sales in the city were starting to dry up.
    "They were the last one aboard the Titanic," Grimes said.
    Ever the realtor, Grimes said now may be the time for buyers to seek opportunity in adversity, since Fort Myers housing prices have fallen back to levels where they could already offer buyers the potential deal of a "lifetime."
    "The best time to buy is when the sellers fear tomorrow is worse than today," said Grimes.
    While business is slow for Grimes and other real estate agents, it has been booming lately for Jonas Elliott, a so-called "short sell" specialist at Southwest Florida Home Buyer Services in Fort Myers.
    Elliott specializes in buying properties from banks or other lenders that are at a risk of foreclosure, usually at a large discount, and then "flipping" them at a profit.
    "In this particular county I have about five years of good business," Elliott said.
    "I'm so inundated with properties I couldn't tell you," he added. "We have a ton of inventory, a ton of new properties coming into inventory."
    Noting that losses on local properties had hardly been limited to medium-income retirees or "snowbirds," traditional residents of towns like Fort Myers escaping the harsh winters of the U.S. Midwest and Northeast, Elliott said one current customer of his was about to swallow a $1.5 million loss on four properties he could no longer afford to finance.
    "That's a hefty sum of change," said Elliott.
  20. Clyde

    Clyde Jet Set Tourer Administrator Founding Member

    <!-- TEXT HEADER LA Land: Peter Viles on the rapidly changing landscape of the real estate market in Los Angeles and beyond

    --><!-- END HEADER --><!--BLOG POSTS BEGIN HERE--><!-- entries --><!-- begin custom individual entry --> <!-- content nav --> « July home sales down 23% in LA | Main | Another lender on the ropes »
    <!-- entry --> SoCal home sales now 54% below peak

    [​IMG]Southern California home sales continued to slump in July, falling 27% from year-ago levels, and are now running 54% below peak levels reached in July 2003, DataQuick reported today. Some industry experts have warned that August sales may be even weaker, given the widening credit squeeze that has spread to non-subprime mortgages.

    The only area of sales growth: foreclosed houses
    , which now make up 8.3% of the Southern California home sale market, up from 7.7% in June and just 2.0% last July, DataQuick reports.
    "The last time we had sales this slow, Southern California had been in recession for a few years. Jobs were being lost in droves, people were leaving the area and home prices fell significantly. This time around we haven't seen that, sellers are holding out and we can only assume demand is building up," said Marshall Prentice, DataQuick president.[LMAO][LMAO][LMAO][LMAO][LMAO][LMAO][LMAO][LMAO][LMAO][LMAO][LMAO][LMAO][LMAO][LMAO][LMAO][LMAO][LMAO]
    For the Southern California region, sales were the slowest since July of 1995. Sales were particularly weak in the Inland Empire, where sales are down 42% from year-ago levels.
    The DataQuick numbers show continued price increases in parts of the region -- median selling price in LA, for example, inched up from $545,000 in June to $547,500 in July. But DataQuick has said for some time now that those numbers are misleading, because lower-priced homes are not selling, creating the illusion that overall prices are rising.
    "When adjusted for shifts in market mix (i.e. fewer lower-cost homes selling now), year-over-year price changes went negative in January and are now roughly three percent below year-ago levels. The declines are in the lower half of the market, while prices are flat or even increasing in the upper half of the market," DataQuick said.
    That said, the DataQuick numbers show declining median sales prices in the Inland Empire, and many analysts expect further price declines across the region: "A decline in prices, like increases, tends to be self-fulling," Michael Carney, head of Cal Poly Pomona's Real Estate Research Council, tells the LATimes here. "If buyers see prices falling, they hold off and don't buy and cause prices to fall even further. But it takes a while.
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