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A financial bubble. I will use the familiar term “bubble” as a shorthand, but note that it confuses cause with effect. A better, if ungainly, descriptor would be “asset-price hyperinflation”—the huge spike in asset prices that results from a perverse self-reinforcing belief system, a fog that clouds the judgment of all but the most aware participants in the market. Asset hyperinflation starts at a certain stage of market development under just the right conditions. The bubble is the result of that financial madness, seen only when the fog rolls away. is a market aberration manufactured by government, finance, and industry,...

Housing prices across Southern California plunged a record 27% in May, signaling that more trouble lies ahead for builders and lenders exposed to the region. Sales volume in the market fell 15% from a year ago, marking the slowest May in more than 20 years, according to DataQuick Information Systems. The median price fell to $370,000 from $505,000 in the counties of Los Angeles, Orange, Riverside, San Bernardino, San Diego and Ventura.Sales of foreclosed homes repossessed by lenders continue to dominate many of the inland markets, such as Riverside County, where foreclosure sales totaled 57% of all home sales volume,...

Alan Greenspan may be correct that a glut of global saving pumped up the housing bubble by keeping long-term interest rates low. If so, then watch out, because the situation has gotten worse: Foreign stockpiles of U.S. dollars are fatter and interest rates lower than at housing's zenith in 2005. Global central-bank reserves surged to a record $6.4 trillion in the fourth quarter of 2007, according to the International Monetary Fund, up from about $4 trillion in 2005. Those reserves are pouring into U.S. Treasury bonds for safekeeping. Foreigners held $2.32 trillion in Treasurys in the fourth quarter, compared with...

I ran out of dishwasher powder recently and thought I could substitute liquid Dawn instead. Well, now I've got massive bubbles and suds seeping out from underneath the dishwasher. I googled my idiocy and found the solution: run a COLD cycle with no soap. The problem is that this dishwasher can't run a cold water cycle. Any ideas how to solve this problem? Every time I start the dishwasher the suds return more vicious than before. And this all happened about a week ago. I've been washing all dishes by hand since then. Rip the dishwasher out and throw...

My blogs attract some very interesting readers due to their lack of real estate cheerleading. It has always been my intent to be direct, straightforward, present the facts, and let my readers make up their own minds about current Boise real estate market conditions and activity. I was recently asked by a major lender investigating loan fraud in the Boise real estate market to help analyze the number of vacant home listings in our market. This was the second time I have been contacted by a lender who subscribes to my blog who was looking into suspicious loans in the...

NEW YORK (Reuters) - For a man who insists he is not running for president, New York Mayor Michael Bloomberg is the subject of much recent speculation. Newsweek's latest issue carries a cover story on the businessman-turned-mayor in which a top aide, Kevin Sheekey, refers to an independent Bloomberg presidential run: "If it happens, it's a billion-dollar campaign." The fact that Bloomberg is quoted in the same piece saying "I am not running for president" seemed to do little to calm the waters. Another news report analyzed his shifting answers -- moving from "I'm not running" to "I'm not a...

LONDON – The fate of the world economy hinges on what happens to house prices in America and that may not be a good thing, former Federal Reserve chairman Alan Greenspan said on Monday. Speaking at the Reuters headquarters in London, the former Fed chair delivered a gloomy prognosis on the state of the global economy – U.S. house prices are likely to fall further and they could drag the rest of the world with them. * * * “The critical variable in this judgement is the price of homes in the United States,” said Greenspan, who ran the U.S....

Fifty-three condominiums -- most of them in the 3900 block of Ohio Street in North Park-- will be on the block. The units are not foreclosures; they are brand-new units. They are being offered by REDC. The units were built by developer D.R. Horton. According to the company's Web site, the condos are anywhere from one-bedroom, one-bath, 694-square-foot units to two-bedroom, two-bath, 1,148-square-foot units. The homes have previously been valued at $309,990 will have starting bids of $149,000. Bidding for units previously valued at $546,900 will start at $249,000.

Back in the 17th century in the Netherlands, there was a mass rage for, of all things, tulip bulbs. Prices got bid way up, and speculators jumped in to bid them up higher still. By the peak of the tulip fever, a single bulb was going for the equivalent of thousands of dollars. But eventually the market fizzled and prices plunged. If I had been one of the people who invested in flowers during the frenzy, I would have felt bad to lose my money. But I like to imagine I would also have taken great comfort in seeing the...

Metro housing slide keeps repo man busy 'Snowball effect' from mortgage woes, easy credit keeps lot overflowing By TAMMY JOYNER The Atlanta Journal-Constitution Published on: 09/03/07 Swing by Richard Grosvenor's business for a closeup of how quickly the nation's housing market is unraveling. In the last six months, Grosvenor and his repo drivers have hauled in hundreds of vehicles in the course of normal business. Richard Grosvenor stands amongst repossessed vehicles, including a Corvette taken from a plumber (left), on his 3-acre lot at Speedy Recovery in Lithonia on August 29, 2007. With credit and mortgage problems rising, Grosvenor has...

NEW YORK - Bad credit has supplanted terrorism as the gravest immediate risk threatening the economy, a key national research group reported Monday. Borrowers' withering ability to pay their bills and the subsequent fallout in the credit markets this summer topped the list of short-term risks on peoples' minds, according to a survey of 258 members conducted by the National Association of Business Economics. NABE, a Washington-based association, said 32 percent of its surveyed members cited loan defaults and excessive debt as their biggest near-term concern. Only 20 percent of members cited defense and terrorism as their biggest immediate worry,...

Often, a big financial house will create its own hedge funds, specifically for the purpose of digesting risky tranches of mortgage debt. The hedge fund raises some capital…and then typically borrows additional money in order to leverage its returns... Anyone who would lend money to something called the High-Grade Structured Credit Strategies Enhanced Leverage Fund deserves the indigestion he gets. No nation should know what goes into its laws, its sausages or its CDO's. Indeed, most of the time, the contents are of no interest to anyone. But once in a while, a little curiosity pays off. Here, we poke...

Beverly Sills, the Brooklyn-born opera diva who was a global icon of can-do American culture with her dazzling voice, bubbly personality and management moxie in the arts world, died Monday of cancer, her manager said. She was 78. It had been revealed just last month that Sills was gravely ill with inoperable lung cancer. Beyond the music world, Sills gained fans worldwide with a style that matched her childhood nickname, Bubbles. The relaxed, red-haired diva appeared frequently on TV talk shows, on "The Tonight Show," "The Muppet Show" and in televised performances with her friend Carol Burnett. Together, they did...

KABUL, Afghanistan, June 5 — The Afghan Defense Ministry said Tuesday that a boat full of fleeing Taliban fighters had been fired upon by NATO helicopters and sunk in the Helmand River, in southern Afghanistan. All on board, between 20 and 30 guerrillas, drowned, said Gen. Zaher Azimi, a ministry spokesman. It was the second sinking on the river reported in recent days. Another boat, carrying about 60 people, sank Saturday in the same area, although there were conflicting reports as to whether those aboard had been civilians or Taliban fighters. General Azimi said that in Tuesday’s episode, NATO helicopters...

MORTGAGE DELINQUENCIES RISING SHARPLY; EAST SIDE OF SAN JOSE IS A TROUBLE SPOT Sarah Portales wants to keep paying her mortgage on time, but she's got a problem. Her monthly payments are $3,500 and her income is slightly less than that. All the efforts this San Jose custodial supervisor has made to find a way to refinance her loan into something she can afford have so far led nowhere. Portales is the face of a problem that is troubling the real estate market in San Jose and across the country: As the residential market flattens and lending standards grow tougher,...

Buyers looking for quick turnover, fast profit losing gamble in Nevada LAS VEGAS — In the rampant real estate speculation of the Las Vegas valley three years ago, people lined up outside Pulte Homes sales offices overnight as if they were waiting for the release of the latest video game console or hot new movie. Having seen his house in an upscale part of suburban Henderson, Nev., jump $200,000 in value in 18 months, Sam Schwartz felt he couldn't miss any part of the boom. He spent the night in the parking lot with TV, snacks and drinks, along with...

A man arrested in December at the Kansas City airport with $70,000 in his bulging pockets while trying to board a Southwest Airlines flight claiming the money was actually Muslim prayer books, a San Francisco mortgage company executive who went on the run from the FBI in November, seven people arrested in September in Salt Lake City with ties to al-Qaeda, and a co-defendant in the Sami al-Arian/Palestinian Islamic Jihad trial all have one thing in common – the growing trend of terrorist associations with mortgage fraud rings in the US. Financial experts say that mortgage fraud has become the...

A white-collar crime wave is raking Chicago's poorest communities, robbing vulnerable families of their homes and draining billions of dollars from the U.S. economy. During the last five years, as home loans became easier than ever to get and identity theft blossomed, mortgage fraud surged. FBI officials say it now threatens to become a national financial epidemic. Gang members call it "the new street hustle." "If you are still making money selling drugs, you are an informant or about to be busted. Mortgage fraud is the thing to do now," said convicted identity thief Christopher Scott in a prison interview....

A mortgage broker recently left a message on Jennifer Richardson's home answering machine suggesting it was time to refinance again. This time, she didn't call back. Since she bought her one-level ranch in Lewiston six years ago for $73,000, she has refinanced five times and has incurred $58,000 in fees and penalties. She said she now understands that brokers sometimes give people advice that is not in their best interest. "I have been misled and taken advantage of," said Richardson, 36, who works seasonally at L.L. Bean and also as a substitute teacher. "They know it. It's almost like they...

With rates on many homeowners' adjustable-rate mortgages rising, some who would like to refinance into a new loan are finding they can't. In some cases, that is because their loan carries a prepayment penalty, which would force them to come up with thousands of dollars if they refinance in the first few years. Such penalties are common with so-called option adjustable-rate mortgages, which typically carry a low teaser rate that rises sharply after an introductory period. * * * The challenges are greatest for homeowners whose credit has declined since they took out their last loan and for those who...

Former Washington Huskies football player Scott Greenlaw led the mortgage company he founded to dizzying heights — 400 employees, a sprawling new headquarters and kegs of beer at staff meetings. Now he's selling his house to avoid bankruptcy as creditors line up with lawsuits. Merit Financial was barely shut this spring before founder Scott Greenlaw and his top executives opened new mortgage businesses. But vowing to put the past behind them has turned out to be not so easy. The sudden demise in May of one of Washington's largest mortgage brokerages has left a trail of angry ex-employees, expensive lawsuits,...

Prices remain the story in home sales, with Sarasota-Bradenton prices falling 18 percent in October, the second biggest drop in the state. The median sales price in the Sarasota-Bradenton market was $277,900 last month, compared with $340,700 during the same month in booming 2005. The Charlotte County-North Port market was not far behind, with a drop of 17 percent, from $243,900 to $202,800. Only Fort Myers-Cape Coral took a bigger fall, posting a 44 percent decline in median sales price, from $445,100 to $249,200, the Florida Association of Realtors reported on Tuesday. The median is the point where half the...

BANKS in the UK have been ordered by financial regulators to assess how they would cope in the event of house prices crashing by 40 per cent. The instruction to include a housing slump scenario in their stress-testing models comes after the Financial Services Authority found that some banks were failing to include gloomy enough assumptions in their modelling. The FSA said yesterday that an “appropriate” benchmark was to assume property prices fell by 40 per cent and that 35 per cent of mortgages in default ended with homes being re-possessed. It stressed that this was not a forecast but...

Young people are being offered home loans which can take almost 60 years to pay off. The 'life-long mortgages' from Britain's biggest lenders are aimed at first-time buyers who are desperate to get on the property ladder. But last night the deals were described as 'madness' by experts, who warned that while they initially appear attractive due to lower monthly repayments, the borrower can end up paying more than ?100,000 extra in interest. Soaring house prices have forced would-be home-buyers to resort to extreme measures. Young couples are borrowing up to five times their joint salary in the hope of...

In an apparent and rare in-house critique, the president of the Federal Reserve Bank of Dallas said that because of faulty inflation data, the Fed kept interest rates too low for too long earlier this decade, fueling speculative housing activity. A number of critics have said the Fed under former chairman Alan Greenspan kept monetary policy too easy from 2003 to 2004. But Richard Fisher's remarks to the New York Association for Business Economics yesterday mark the first time some Fed watchers could recall a sitting Fed policy maker making such comments. Mr. Fisher said from 2002 to early 2003,...

The real estate market continues to go bust as I had predicted in my first major article on the subject in December of 2005. As it continues to rapidly barrel south, don’t tell the Bush Administration, the Federal Reserve, International Bankers, Mortgage Bankers, Mortgage Brokers, Realtors, home builders or even home sellers. Let’s keep it our little secret. Still, none of them want to hear anything about it. They are, the majority of them, extremely myopic to the truth and material facts of what is really going on in the American economy. SEC regulators should take note if they are...

Physicists at the University of Chicago have discovered that air bubbles retain a "memory" of how they are formed (Phys Rev Lett 97 144503). Their study revealed that the initial conditions of bubble formation can affect the dynamics of the singularity that occurs when a bubble pinches off a nozzle. This could have profound implications for our understanding of other phenomena that involve singularities including the formation of black holes or supernovae. A singularity occurs when one or more of the physical parameters in a system approaches infinity. In bubble formation, this occurs at the moment of pinch-off, when the...

Report Predicts Price Declines In 100 U.S. Cities Over Next Few Years . . . Home buyers have another reason to sit on their hands. In the latest news from the slumping U.S. housing market, a report released this week says that median house prices are likely to decline more than 10% over the next few years in 20 metro areas, including Las Vegas, Tucson, Ariz., and Washington, D.C. The report, by Moody's Economy.com Inc., a research firm in West Chester, Pa., also says that the slump won't end quickly. Indeed, according to the report, prices may keep falling until...

Just how weak is the Boston real estate market? We got an idea yesterday. And if you’re looking to sell your home in the near future, the news isn’t good. Brand-new luxury condos downtown saw hundreds of thousands of dollars wiped off their value in the Hub’s first public real estate auction in a decade. The 31 condos up for sale in the Folio building on Broad Street sold on average for 30 percent below their asking prices. Some barely fetched their minimums. Even the building’s marketing boss couldn’t hide what happened. “I think the buyers got a better value...

Lenders must consider borrowers' ability to pay the full cost of the loan WASHINGTON (MarketWatch) -- Cracking down on exotic mortgages that have exploded in popularity in recent years, U.S. regulators told banks Friday that they've got to make sure that borrowers can actually pay back the full amount of the mortgage. Exotic products, such as interest-only or payment option adjustable rate mortgages, allow borrowers to trade lower initial payments for higher payments later. But such products have raised red flags at the Federal Reserve and other banking regulators as more institutions offer them and they become available to a...

It seems like every month, I'm running into people passing out a slick new business card that announces them as a real estate agent or mortgage broker. Who wouldn't want to get a piece of the action? On certain Portland streets, housing prices are doubling in a matter of months. And when there's this kind of temptation to make quick money, greed can't be far behind.Insiders call it land flipping. Silent second. Straw buyers. Foreclosure fraud. Equity skimming. Air loans. If there's a thought to do it, there's a scheme attached to it."It's the fastest-growing white collar crime in the...

Gerard Herard was able to finally purchase a home in 2003 through a $225,070 mortgage from Security Atlantic Mortgage. His payments on the quaint Totowa Avenue house in Paterson were a reasonable $1,300 a month. But Herard's payments have since increased to $2,200 a month and the mortgage has grown, not shrunk, to roughly $300,000. Herard is not entirely sure why his situation changed so dramatically and is struggling to deal with the increase. "I'm trying to climb a steep ladder," said Herard, 53. In recent years, lenders have lured scores of homeowners to untraditional mortgages with changing terms. Many...

As rates creep up, borrowers with interest-only loans face sharply higher mortgage payments: Tina Gren Clarence saves $600 a month with an interest-only loan she took out about a year ago for a Petaluma home, yet already is considering heading off the financial hit when her monthly payments could jump. And Peter Shidler, whose low-payment-option loan could turn from a sweet deal into a potentially bitter one, is refinancing and still will pay $500 more monthly on his Santa Rosa home. Gren Clarence and Shidler, like two out of three Sonoma County home buyers and owners, joined the fast-growing club...

Even if the housing numbers get no worse, the economy still may take a big hit. Consumers might run out of home equity to borrow against.The bad news keeps coming from the home front. Buyers are holding back, enough to send median sales prices down 2% or more in Cleveland and Minneapolis. KB Home recently slashed earnings estimates for the second time since June. Shares of home builders have fallen 40% in the past year. The head of Toll Brothers, a big luxury-home builder, says the downturn is the most troubling, and perplexing, in decades: The economy, after all, is...

NEW YORK (Reuters) - They are jumping ship or receiving the pink slip. America's real estate agents and mortgage lenders, that is. ADVERTISEMENT Now that the glory days of the most recent U.S. housing market are over, its deterioration is taking a toll on employees who profited from its record-breaking five-year run. With home sales slumping and loan demand diminishing, layoff announcements and resignations have become increasingly common, evidence that the sector's slump is broad. Carmen Cook, a veteran real estate broker, saw the writing on the wall and decided to retire earlier this year. "The market changed and my...

Get used to it ¡ª the seller's market is closing up shop. The days of fat, fast home value increases are gone. Pack away those flipping fantasies. "The boom is definitely over, there's no debate about that," said Mark Zandi, chief economist of West Chester, Pa.-based research firm Moody's Economy.com. "Now the question is more how hard is it going to land, if it lands at all." The answer? Depends who you ask ¡ª and what location you're talking about. How to feel about it? Depends which side of the market you're on ¡ª and what location you're talking about....

He, of all people, should have known better. The president of the National Association of Realtors, Thomas M. Stevens of Vienna, admits he didn't follow his agents' advice when the real estate market started to cool. That, he says, is why his old house in Great Falls has now been on the market for a year at the price of $1.45 million. "What I should have done," confessed the senior vice president of NRT Inc., parent of Coldwell Banker Residential Brokerage, "was listened to my agent and cut the price by $50,000 to $100,000 early on, and the property would...

Falling prices have created a new twist in the suburban Boston real estate market: More homes are selling for less than their assessed values. Massachusetts house prices slumped 3.5 percent in July, the biggest monthly drop since 1993, as a slowdown in sales brought about by rising interest rates created a glut of homes on the market. which are the estimated values communities place on homes to determine property taxes, their primary source of revenue. State law requires communities to assess properties at ``full and fair cash value." * * * But for the past five years, most homes sold...

Commercial property contracts based on indexes; 10 planned The Chicago Mercantile Exchange said Wednesday that it will offer futures and options on commercial real estate, allowing investors to bet on swings in the value of the $5.3 trillion U.S. market. The contracts, based on indexes developed by San Francisco-based Global Real Analytics LLC, will begin trading in the first quarter of 2007, the Merc said. The exchange will list 10 cash-settled contracts: a composite index, five regional indexes and contracts based on retail, office, apartments and warehouse properties. "There's quite a bit of risk out there," said Felix Carabello, the...

With millions of adjustable-rate mortgages about to reset this fall, experts expect a wave of foreclosures by Americans in every income bracket. Here's why they could soar in late 2006 and beyond: Those easy-mortgage chickens are coming home to roost. This fall the adjustable-rate mortgages (ARMs) that millions of Americans took out during the recent housing boom will be reset, and many homeowners will see their monthly mortgage payments shoot up by as much as 20%. According to the Mortgage Bankers Association, of all mortgages financed in 2005, 36% were ARMs -- the highest ever. This is a matter of...

They promise the American Dream: A home of your own -- with ultra-low rates and payments anyone can afford. Now, the trap has sprung For cash-strapped homeowners, it was a pitch they couldn't refuse: Refinance your mortgage at a bargain rate and cut your payments in half. New home buyers, stretching to afford something in a super-heated market, didn't even need to produce documentation, much less a downpayment. Those who took the bait are in for a nasty surprise. While many Americans have started to worry about falling home prices, borrowers who jumped into so-called option ARM loans have another,...

40% chance of 'U.S. Hard Landing,' National Bank says. OTTAWA - The odds of a U.S. recession have increased dramatically, economists at a Canadian bank are warning. And if the United States were to go under, it would require a shift in policies here by governments and the Bank of Canada to keep the Canadian economy from going under too, the National Bank of Canada's chief economist said yesterday. That would require income-tax cuts by the federal and other levels of government and interest-rate cuts by the Bank of Canada, Clement Gignac said after the bank announced that the odds...

• Q2 jumps by 67 percent year over year • Buyers done in by ‘creative mortgages’ according to figures released Monday by Foreclosures.com, a Central Valley-based real estate investment advisory firm and publisher of foreclosure property information. "Year over year at the end of the second quarter of 2006, foreclosure activity in California has increased more than 67 percent," says Alexis McGee, president of Fair Oaks-based ForeclosureS.com. The once hot housing markets in Las Vegas and Phoenix are cooling off rapidly and defaults there are on the rise as well, she says. "Both Las Vegas and Phoenix were impacted by...

The economy's growth has never before been so driven by real estate. Now that engine is sputtering. Jiany Massad isn't quite ready to throw in the towel on his fledgling career as a Miami real-estate tycoon. But if the local housing market continues to head south, the 30-year-old real-estate broker is already making alternate plans. "I might restart my old business," he says of a home decorating company that specialized in high-end window treatments. "At least it's real-estate-related." With home sales down by nearly a third in Florida last quarter, thousands of those who hoped to cash in on the...

WASHINGTON - US housing starts fell 2,5% last month to an annual pace of 1,795-million units, dropping to the lowest level in almost two years, the commerce department said today. Housing starts have fallen steadily since the start of the year, apart from May, and July’s report offered fresh evidence of the US property market’s downturn as starts hit their lowest level since November 2004. The report was weaker than the average forecast of Wall Street economists who had anticipated a pace of 1,810-million units last month. The government revised down its estimate of June housing starts to 1,841-million units,...

Instead of building a nest egg for retirement, a growing number of homeowners are putting themselves in a debt trap. Economists and investment advisers say that more Americans are relying on their homes as their primary asset for retirement. These retirees-to-be reckon they can always tap the expanding wealth in their residence to cover their leisure years.The reasoning goes something like this: Need some cash? No problem, just get a home-equity line of credit. And because home values have skyrocketed in recent years in places such as the East Bay, homeowners figure they can replace the equity lost from taking...

NEW YORK (Reuters) - Americans are carrying a lot of excess weight and desperately want to slim down. No, not their waistlines -- in the size of their homes. "Steeply deteriorating." "Hard landing." "Kaput." These are some of the terms used by analysts to describe the slowing of the U.S. housing market. And with the glory days of home-price appreciation now over, some homeowners are declaring, "Downsize Me!"A huge gap between the supply of homes for sale and demand for housing means prices are leveling off -- and could tumble. David Horwitz and his wife, Diane, are the type of...

Mortgage trouble is creating some of the biggest bargains this side of eBay, allowing buyers to snap up homes for tens of thousands of dollars less than what they might have paid just a few months ago. "People are doing whatever they can to sell" in order to avoid foreclosure, said Brad Geisen, president and chief executive of Boca Raton-based Foreclosure.com. Notices of pending foreclosures are piling up, in what many believe to be the first wave of a trillion-dollar tsunami: The dollar volume of home loans with interest rates that will be ratcheted upward over the next several months....

BOSTON (MarketWatch) -- It is becoming increasingly obvious that financial advisers, real estate experts and parents will someday point to what is happening in the mortgage market today and use it as a cautionary tale of what can go wrong when a buyer stretches to get too much house during a market that seems invincible. Real estate has been booming in most markets over the last five years or longer, fueled by interest rates that reached four-decade lows and by consumers who used new mortgage products to extend their buying power. Many home buyers stopped worrying about buying a home...

Dulce Suarez-Resnick: Some colleagues in my office are leaving, some of my customers and even some family and friends.In 2006, friends, who were also my customers, went from $8,000 on their windstorm policy to $17,000. They have every mitigation credit available for an older home. They are selling their home and moving to Central Florida because they can afford to live there on their fixed income.State Sen. Steven Geller: They're moving to North Carolina, they're moving to Georgia. They're getting out of Dodge . . . . I think the single most important issue facing the state is windstorm [insurance]....