Understatement of The Month
Chuck Ponzi October 25th, 2007
This one has some great value to it.
This is perhaps a perfect example of courage in the face of adversity.
Others might call it delusional denial.
From the Marin Independent Journal (Marinite, you make us proud down here in Socal, never have I before seen this kind of lunacy. I think even Gary Watts would concede in the face of these facts)
Local homes sales dropped 77 percent last month, Thayer said. “The housing market has slowed down,” she said.
Gee… ya think?
Mostly, I wonder if the author had to stifle a chuckle while writing that.
If 77 percent of sales evaporated… I’d say it hit a brick wall and it’s brains are splattered on the pavement… we’ll all be lucky if we make it out alive.
People often ask me if I have one regret about blogging on the housing bubble. I do. It’s having missed the opportunity to document more of the amazingly delusional comments people have made over the past 3 years. I would have liked to refer back to them now that the koolaid is running out.
77%? Is that a typo? All I can say is wow! One of my favorite quotes is “the subprime mess is contained.”
Another favorite quote (from multiple sources) is “this is just a dip and home sales will pick up again in 2008″
Why did the Kool-Aid run out so soon? Drinking is Believing!!! http://www.drinkingisbelieving.com (hope it’s OK to post that - it’s a good site)
Hello Chuck,
Been awhile. Hope the fires didn’t give you too many problems.
Saw the Countrywide projection that they will be profitable within the next quarter.
I’m trying to gauge if they are lying or just well shielded from losses.
I imagine they will be “shocked” at the performance of their loans soon and complain when the Feds make them unload all of those properties.
Also seems they managed to raise up a bunch of loss reserves but it would seem to be far too little. 1 Billion in loss reserves.
Hard to tell how much of a bag holder they really are at this point. I figure lots of lawsuits and liability from insurance companies and pensions funds will follow.
The real estate guys will trumpet prices holding firm. Then after prices drop they will trumpet volume is increasing.
Same as always.
Hi Laef2,
Fires were fine… nowhere near where I live, it has been smoky smelling at our place the past 2 days and smoky at work all week.
Here are my thoughts:
1. One can be well shielded from losses and still be a victim of cross-defaults. I doubt this is the last major write down CWide is going to take. Reality will sink in 1st quarter next year. (April 2008)
2. Their servicing arm still has value.
3. As a bank, the suck. If I were a depositor, I would get out. I currently hold emergency funds in 2 different banks just in case so that I can still pay bills if one goes under.
4. It is a bloodbath out there in California real estate. Few can afford their own houses still. If prices want to hold steady, they will be steady for 10 more years. If they want to drop, we can be out of this in 5 to 6. It’s possible to hit bottom in 2 or 3 years (09 or 2010), but that would mean continuing the bloodbath and no letup.
5. Continued inflation in energy, food, and healthcare is sapping the strength of the American consumer. $92/bbl for oil? That’s not going to go over easy with Christmas around the corner. WalMart already sees troubles and started sales early. I understand that they are reducing supply chain pull-through… but this is only “a little birdie told me” right now. We’ll see how well Benton is positioned for the recession.
6. Bernanke and the Fed certainly see the energy, food, and healthcare inflation as transitory based on their movement with the FFR. Let’s hope they’re right. Crappy cheap apples are selling 2.25/lb at Ralphs, and Gas is now 3.50/gal.
Any way you look at it, housing prices cannot hold firm without incomes catching up very swiftly. (remember, Bernanke only cares about incomes increasing, which signals “true” inflation. Rates will quickly rise if that happens without a corresponding output)
Chuck Ponzi
Thanks for the hat tip. I am reciprocating. Yes, denial runs deep here. I have been thinking a lot about why it is that Marinites are so very committed to believing certain myths about here and the Bay Area at large. Is it due to a low self-esteem? Insecurity? Or, as one of my more astute readers says, just plain old massive commitment in one believe (namely, committing to extraordinary levels of housing debt).