This one has kind of a Saturday Night Live feel, but serious message.

Click here to view the embedded video.

If, after that, you’re not sure if you should laugh or cry, this should lift your spirits.

Click here to view the embedded video.

Imagine all of our surprise when not only did nothing happen, but we heard nothing of the matter whatsoever.  What ever happened to financial fraud?

Well, at least the SEC had enough presence of mind to fine the crap out of him and get a settlement check.  Hurry, quick, I would cash it right away, but don’t spend it all in one place, you might need to hire some people to investigate all of the other financial frauds you’re responsible for finding.  (Madoff, Stanford, etc)

Actually, I just hope they don’t blow it all on gold-plated toilets and Porn Parties.

Either way, I’m glad to see SOMETHING happen.  Couldn’t happen to a nicer guy, too.

Part of that is because my professional life has come to the forefront since it is firing on all cylinders; advancements in that area come with a price tag, and the other part is because I have been diligently seeking a home for my family.  With a third addition to our family, we have decided that while there is still a great deal of danger in the housing market, we have decided to purchase a home.  Make no mistake, I am not advocating buying a house at the present time for financial reasons, I think we have a lot of malaise at the present time, but after all is told, it is about the same price as renting, since interest rates are very low.  I intend to occupy the house for a long period of time, making my entry point less important to my longer-term emotional and psychological well being of my family.

If anyone wondered, yes the house is a foreclosure, and yes it requires a lot of work.  I highly recommend having a good agent in your corner, since negotiating without one doesn’t strengthen your position, and my agent, Brad Davidson offers a rebate of a portion of his commission to offset your efforts in finding the house.  If you’re in the market, I recommend contacting him at WeHelpUBuy Realty.  He’s a good friend and excellent agent.

In the end, we waited over 6 years before becoming homeowners again, we found that the emotional decision to buy a home is quite powerful for people that have already owned; it was for us.

Feel free to ask any questions that you might have in the comments; I will be as honest as I can, keeping my identity private.

Any thoughts?

Source: here

SCREBC has donated all earnings for the past year to relief efforts in Haiti. I recommend you take a serious look at your lives and how you might help others with a little less in yours.

Visit msnbc.com for breaking news, world news, and news about the economy

Do you agree with Davidowitz?

Seems pretty bleak to me too. I’m trying hard to be an optimist, but it doesn’t seem like anything has improved, only gotten worse. In fact, California is now showing a 11.9% unemployment rate.

Even the supposed venerable and indestructible Los Angeles has an 11.6% rate and bulletproof Orange County has 9.2%. Those are all depression-era numbers when factoring in the

I’m ready to get back into the swing of things. Tell me what I missed. Anything new, or useful?

Therefore, I ask the most difficult question regarding the property that OCR dragged up in San Diego:

San Diego Shack

In this corner, we have the lightweight contender.  Weighing in at just 570 square feet, and surrounded by squalor, you can bask in the beauty of your red front door that leaves nothing to the imagination and your K-mart clearance special patio set.  Luckily for you, you can now dry your clothes directly outside your front door with the convenient ledger board that is stapled to the outside of your quaint demi-cottage.  Only you and your neighbor will know when you pass gas in this  beautiful little near-beach house.  IT HAS PRACTIALLY EVERYTHING YOU NEED TO SURVIVE.

Similarly, I’ll compare it to this:

Laguna Niguel Shack

This quaint beach cottage has a measly 10,000 square feet, but who can be sure?  It features subterranean parking, wine cellars, an opulent entry, is centrally located in Laguna Niguel near Monarch Beach and boasts a true 180 degree view of the ocean.  Luckily, you won’t need to hang your clothes out to dry, you actually have a laundry room and servants quarters to ensure your underwear is neatly pressed day or night.

However, there’s something this house lacks that the San Diego house has.  It’s a critical component in today’s current economy.

No, it’s not irrational exuberance… but you’re getting close.

Figured it out yet?

OK

Here

it

is.

The shack in San Diego boasts a higher price tag per square foot, exceeding $1000/ square foot while the opulent mansion with views to the ends of the earth weighs in at a measly $975/ sqft.

Now that’s amore.

What does he blame it on?  Banks.  Duh.  Isn’t that what everyone else is blaming it on?

OK, even in a way, I blame the banks too, but that doesn’t excuse the absolute unbelievable disregard for history, facts, trends, or truth.  However, I will extend an olive branch to Gary:  on one condition.  The condition is that I can get some of his speaking engagements (or at least as a ride along).  I figure that if the real estate industry is so brain dead that it can not only believe his past published crap, but buy it hook line and sinker, I have nothing to lose, and a whole lot of speaking fees to gain.

Some choice quotes from Lansner’s bag:

“I apologize for not knowing what Wall Street did to our mortgages,” Watts told about 360 attendees during the associations annual membership meeting at the Irvine Marriott. “I had no idea how Wall Street restructured these loans.”

No accounting for affordability?  No accounting for sales volume preceding price?   No memory of the written lashings he received publicly on blogs?  Does he have no memory of this?

Didn’t I write some verbal poundings here on this blog?  If searching Gary Watts on Google, my articles and sites linking to my articles were consistently on page 1 in the searches.  Did he really not know what was said about him?

What else?

Watts said today, however, that the tide of foreclosures likely will mean that the housing market will remain soft into 2009. He noted that short sales, or sales with asking prices below the owner’s mortgage balance, are taking at least six weeks to gain approval from lenders, forcing even more homeowners into foreclosure.

“It’s just inevitable that (foreclosures are) going to spill into the 2009 market,” he said. While a rebound still is possible this year, Watts said, he called the market too difficult to predict.

This is one thing that I am agreeing with him on.  The market is in such a disarray that it’s nearly impossible to predict what will happen through 2009.

Despite what the bottom callers are now saying, they are forgetting the achilles heel of housing.  It goes like this:

1.  Banks cannot hold nonperforming assets on their balance sheet.  Regulators will not allow it.  Bond covenants of RMBSs will not allow it.  Noone can hold onto REO property for very long.  They will price it to move, and if it doesn’t move, they’ll cut until it does.
2.  A  recession is a terrible time to sell houses, especially in bulk, or if you have to as above.  Buyers need to be assured they are getting a good deal before they are sure.

3.  Increasing numbers of NODs and NOTs ensures a parabolic supply of future REOs coming on the market for at least another 10 months, possibly as much as 36 months for Orange County because of the impending neg-am crisis about to unfold in 2009 and 2010.

4.  Whatever buyers there are today are still just setting bargaining points for future buyers.  The demographics of the situation does not allow it to be the bottom at this point.

5.  Voila!  The longer to wait will ensure lower prices.  This will likely be the case for the rest of the decade.  We’ll refresh predictions in 6 months.

I’ll part with an analysis of Gary’s assessment:

He also believes that subprime lending gets a bum rap for causing the housing slump. Rising subprime delinquencies merely acted as a catalyst, tipping a range of bundled “structured investment vehicles” into increasing trouble that alarmed Wall Street investors.

“It was so complicated. It’s a nightmare. A real estate credit crunch usually lasts six months, and this one, we’re in it almost a year, and it’s still not straightened out,” Watts said.

Jeebus, this guy is just reams of material.  It wasn’t, and isn’t just subprime.  It’s everything and I’m pretty sure he’s referring to MBS, not SIVs.  Credit crunches have been fairly uncommon, the last one of a similar magnitude in US history might have been the one directly preceding the 1930′s Great Depression.  And, those kinds of credit crunches take years to recover from the immediate effects, but the long-term effects were felt for more than a generation.  It’s likely that Gary Watts will be worm food before we see reckless abandon in lending like that again.  (at least I hope for the sake of all fiat currencies everywhere).

1. It seems that Bank of America essentially wrote the Dodd Bailout Bill along with Countrywide (merger expected soon). They have probably the most to gain with a generous bailout bill. It helps noone since it doesn’t resolve the fundamental problem of affordability in house, in fact it makes the problem worse. Ever wonder why the 90′s in Japan were referred to as the “lost decade”? It’s because their banking system did the same thing we’re trying to do here. Anyone else see the problem with not punishing gambling banks and housing speculators?

2. The “Subprime Six” were a group of lawmakers given special treatment in exchange for what? What exactly did Senator Dodd besides favorable treatment in his housing financing? What else could be lurking in his past? If you haven’t read about the “Subprime Six”, follow the link. Investor Business Daily, the Wall Street Journal, and the LA times have picked up the story. It’s a story of insider grift and political pandering. If it weren’t so real and true, it might remind me of one of my favorite film lines:

Stuart: Well, it’s a well-known fact, Sunny Jim, that there’s a secret society of the five wealthiest people in the world, known as “The Pentavret.” Who run everything in the world, including the newspapers, and meet tri-annually at a secret country mansion in Colorado known as “The Meadows.”
Tony: So, who’s in this “Pentavret?”
Stuart: The Queen, the Vatican, the Gettys, the Rothschilds, and Colonel Sanders before he went tits up. Oooh, I hated the Colonel, with his wee beady eyes and that smug look on his face. “Oooh you’re gonna buy my chicken, oooh…”
Charlie: Dad? How can you hate the Colonel?
Stuart: Because he puts an addictive chemical in his chicken that makes you crave it fortnightly, smartass.

3. For all of the crap that our President Bush gets, at least he has the foresight to threaten a veto to said bill. There should be no bailout, not just because it’s not fair and would embolden speculators, but because it’s destined to put our banking system in jeapordy for the forseeable future with taxpayers footing the bill. It’s generally understood that this bill has to be done and voted on by July 4th if it is to carry. Any senator that signs this (if it passes) is hopefully going to be thoroughly trounced in the upcoming elections. This is not only unreasonable, it’s unamerican. This place is going to hell in a handbasket. If something like that goes through, I’ll be posting a list of every person that voted for it and their political affiliation here as a feature story.

So, what do I recommend? I’d say get a year’s worth of food and 6 month’s worth of remaining expenses together, if our politicians have any say in it, this is going to be one whopper of a crash and accompanying recession. On the lighter side of things, our grandchildren will be still paying so that people like this can “keep” their homes (and by homes, I mean plural, because, isn’t every good American not just entitled, but guaranteed to own more than one house?).

If I had followed conventional wisdom and sold in may, I’d be a bit behind where I am now.  It’s not bad that I’m outpacing the S&P500 by 30% this year.  I’m happy with the results so far.

Investing takes a lot of time to get it right, and frankly, I’m just now reaping the rewards of investments made more than 1 year ago.

Thanks for all of you sticking around, and most of all listening to my jack-assed comments about how great I am at market timing.

There’s still room for a fund in the future!

As such, I have asked a friend of mine, Brad Davidson of Help-U-Buy realty to join me as a blogger on the site.

Bear in mind that this was no easy decision.  Brad and I don’t share the same opinions, not in the least.  In fact, we have had very different opinions about what is going on in the local real estate market.  This, I think, however will allow you to have a different opinion about what is going on the local markets.  However, Brad brings a lot of depth to the discussion about what is going on in the immediate market.  He is a licensed real estate professional, and has what I think is a model of the future of real estate sales.

Please be sure to read his analysis when it is presented, since it is a boots-on-the ground reference to the local goings-on in the OC real estate world.

Besides, if he really sucks, I can just revoke his blogging privelidges.  Welcome Brad when he makes his first post.

Ralph Cioffi

Matthew Tannin:

The NYT has a great piece on the indictments of former Bear Stearns Fund managers.

In an April 22 e-mail from Mr. Tannin — which the indictment said was sent not from Mr. Tannin’s account at Bear Stearns, but from his personal account to the personal e-mail account of Mr. Cioffi’s wife — Mr. Tannin wrote:

the subprime market looks pretty damn ugly… If we believe the [CDOs report is] ANYWHERE CLOSE to accurate I think we should close the funds now. The reason for this is that if [the CDO report] is correct then the entire supbrime market is toast… If AAA bonds are systematically downgraded then there is simply now way for us to make money — ever.

Three days later, Mr. Cioffi and Mr. Tannin hosted a conference call for investors in the funds. This time, his tone was very different.

Lying openly like that to garner more money needs to be treated pretty harshly.  Maybe some in the securitization business can get some religion.  If not, they can always find Jesus in the clink.

1. Family – My girls are the best in the world. I am lucky

2. Wife’s business – taking off, and has needed my attention.

3. I have a day job – really?

4. I invest as my “side job” – the market has been difficult to keep up with.

5. The market is crashing whether I watch it or not… it’s like watching grass grow in Iowa.

BTW, here’s the latest message for Gary Watts:

Any interesting listings, thoughts, etc?

Anyone want to be a cob logger like James over at Bubble Meter?

However, if you know someone who tried to flip in Orange County and couldn’t pull it off, or just is having a hard time, Brandy from Flip This House wants to hear from you. Write to her at the following address: realestatenightmares(at)gmail.com Of course, I get no part of this other than the sick satisfaction of seeing the final product like other train-wreck watchers out there. Besides, the way I feel about it is that I warned people publicly as early as April 2005 that flipping was a dangerous sport, so if you falldowngetbooboo, I don’t have any sympathy for you. Pound sand.

On the other hand, if you get some kind of sick pleasure out of watching other people financially crash and burn after they’ve been warned that they’re playing with fire… well, you’re my kind of people.

1. Calculated Risk has a great visual of projected 2008 foreclosures in “1000 Foreclosures per Day in California”

2008 is off the charts. Anyone calling a bottom at this point doesn’t have the facts straight. Notice of Defaults are projected at over 450K based on Q1 data. You may start to see some houses make sense in pricing, but there’s no doubt we’re going to overshoot fair valuation on the way down this time. No doubt at all.

2. The second one is Mr. Mortgage’s videolog and blog where he recieved California Foreclosure stats from Foreclosure Radar 2 days early. You can alternatively read it here
if you cannot access youtube. (at work, anyone?)

Some great excerpts:

we will have approx 122,000 units slamming the CA auctions over the next 4 months.

That’s over 1000 per day. That’s making the 90′s bust look like a walk in the park. However, when one considers that it is likely that more than half of all purchases within the last 3 years were speculative, the toll is likely largely hitting only those who took excessive risk. Boo Hoo.

Remember to visit Angry Renter. Please be sure to check out ways to contact your local representative to voice your opinion against any kind of government intervention. The invisible hand of the market is in the process of sifting the wheat from the chaff.

In California, renters and homeowners with no mortgage outnumber by a wide margin the number of reckless individuals who overextended themselves. Don’t let yourself be duped into inaction. I’ll post more on specifics later.