Joe Spressa

My Housing Combusto..Manifesto!

Ok, so I know that I most often run my mouth for infinite numbers of hours and all those around me start to stare, grumble and look completely lifeless upon my verbal oxycodone haze begins to lift from my listeners lifeless faces.... at about that time my wife , pulls me aside and say "Okay Chris.. they've heard enough" At that point I have successfully translated a bunch of superfluous ramble which has produced no meaning or sustenance to my topic.

Two lessons of the day Chris: 1. STAY FOCUSED 2. STAY ON TOPIC ...... well here it goes!

HOWEVER! The Maddest Hatter, Mad Moooola's Jimmy Cramer is the ringmaster in this arena and thou shall NOT step into his infinite numbers, stock picks and wisdom and challenge his remarks.....unless however I see an inconsistency. then I'm going to call him on it...and try to shed the LIGHT of truth upon my fellow Americans!

Let me touch on Jim's info from the past few days regarding housing ... Let you the out there in Naked-Short-light (not to be confused with Twilight) Zone, absorb and take what you must... Then Allow ME to step in and bring some true, from-the- street level perspective. For your ears!

and we begin...

12/4 - IN CRAMERICA.........A town far east (and a bit chilly this time of year)

"THERE IS NO SUCH THING AS THIS "SHADOW INVENTORY!!!!!"

As Jim Speaks Cramerica listens..

Cramer says it's time to dispel misinformation spread by those who have a vested interest in keeping stocks down.

Cramer notes how the bears have been relentless in their negative spin on housing and have been scaring the public with the theory of "shadow inventory" which Cramer thinks is fiction.

In fact, the Mad Money host predicts a shortage rather than an excess of houses; Vornado Realty (VNO) and Simon Property Group (SPG) show that inventory is under control [Cramer said he actually prefers Boston Properties (BXP) and Federal Realty Trust (FRT) over Vornado and Simon Property.]
So why all the nasty rumors? Money managers need stocks to come down in the last days of trading before 2010, and they are looking for a cheap entry point. "The people pushing these negative stories in the face of positive facts," Cramer said, "they are not your friends."
AIG (AIG), Royal Bank of Scotland (RBS), Barclays (BCS), Lloyds (LYG), HSBC (HBC), ING (ISP), AED (AED)

THE Ha! Ha! Abu Dhabi ..Dubai World "SITUATION"

According to Dali-Cramer-Lama:

Although the Dubai World fiasco enjoyed much press attention, the story of the European Banks' involvement in the crisis has not been fully told. British banks in particular committed "financial idiocy" by investing in Dubai World's fictitious islands.

European banks also blundered copiously by buying bad U.S. mortgage paper and creating housing bubbles in their own countries. These banks also used AIG derivatives to mask their leverage, while the U.S. taxpayer is "paying for the sins" of these European banks.

Cramer advised viewers to avoid buying any European banks and cited Royal Bank of Scotland (RBS) and Lloyds (LYG) as "the worst," joined by Barclays (BCS) and HSBC (HBC) which are almost as bad as Lloyds and RBS, but showed "a bit more savvy" in their non-Dubai businesses.

SO! now MY WORLD (as super disfunctionalistic, backwards, psychedelic, barefoot, up a lending tree branch chewing on some freshly picked CDO Berries... Here's my spin on this gin!

SO OF course you ask.. where does this monkey fit in?????? I'm jumping straight down from the lending tree to blast some good smelly ones at ya.

Yes, childish as it may seem, I'm going to shoot straight from the hip and tell you what I feel is going on from the beautiful warm soft pink speckled underbelly of this mess.

Cramer is calling the housing market bottom! He's said the US Federal Bank Regulators are not looking at the banks to get the stuff off of their balance sheets. This was posted on his last commentary on the 4th I believe..

NO NO NO.. I know this was a feel good, taste good, delusionary vision of "Green Shute's" .. Its a SHAM.. a SHAM I say! No way. and not today! They are pulling the Shenanigans and Tomfoolery that was thrown out during the elections of false promises.

Hard facts today are: The U.S. Federal Reserve is now (or one hour after Jimmy's predictions of fed lassier faire ."

All of the happy-go lucky- was dispelled an snipped in the bud by the big O himself (president Obama).I saw him with my own eyes on the boob tube saying "That better efforts were underway to PRESSURE U.S. lenders to RID THEIR BALANCE SHEETS of distressed debt. AKA... MAKE THE PROBLEM GO AWAY. and essentially come back another day. They have now placed insurmountable pressure on our financial institutions to MAKE these modifications work. However, two problems I see here from a fellow wall street analyst. A bottom was called, inventories are low (oh hogwash! ignore the SHADOW INVENTORY)

If the banks do and they are beginning to push the help for homeowners initiatives, The current modifications are being pushed upon an average partially unemployed households. CITI Group released their mortgage modification numbers along with Wells Fargo, BofA and sadly to say the winner of that day was CITI !

Congratulations you have been tied up in some of the biggest non-performing unsecured debt markets. but you are the largest of the bunch and still standing... Now here comes the clincher.. Best brought to us by the lovely and talented Diana Olick ...

According to Olick "Citigroup released its eighth quarterly mortgage data report today, touting the fact that it had helped "approximately 130,000 distressed homeowners with loans it owns or services remain in their homes and avoid foreclosure on mortgages valued at more than $20 billion." CITI stands up and says.. we have done Citigroup released its eighth quarterly mortgage data report today, touting the fact that it had helped "approximately 130,000 distressed homeowners with loans it owns or services remain in their homes and avoid foreclosure on mortgages valued at more than $20 billion." Other banks, like Bank of America, issue similar monthly reports, but what makes Citi's unique is that it is not being shy about disclosing re-default rates.

Take A Look For Yourself! (see chart below)

Getting back to the Citi report, redefault rates are still running high, even in the second quarter, which would have been when at least some of the bank's modifications fell under the HAMP program. In any case, in the first part of this year, banks supposedly got away from offering just repayment plans, which can often raise a monthly payment, to real modifications that either reduce principal or reduce mortgage interest rates. Re-defaults now are likely less to do with a poor modification and more to do with unemployment and loss of home equity.
Kudos to Citi for releasing the data.

Kudos indeed to Citi for their upfront, non-fluff analysis on the re-default on mortgage modifications.. I have 4 different friends who have been unable to modify at all. Additionally another 3 who were modified but have re-defaulted due to income reduction or job loss. Wowzers... This isn't over.. Oh no people this is not over. or anywhere near it....What does this do? Well it DEFINITELY doesn't place the housing market in recovery and allow for a current position in early to mid 2010 of housing shortages. What I do see, is the DOUBLE - DIP or what I like to call a "fun dip" (a powdered sugar like substance with a candy stick that you can eat. most often came from the ice cream man in my old neighborhood) or
that reference to "fun dip" actually reminds me of some naughty dirty dancing position that was circa 1996 at club Giant in good old Downtown L.A...

This brings me to my next topic of "looming debt obligations" which swiftly changes our directions to the LOOMING commercial paper collapse. Oh, well it's being written off by Cramer as "there's nothing wrong on that end either.. However, I'm not an anti-Jim Cramer person as he's great at what he does. What I do think is that he has an influential effect on middle America and somehow has to not come to the screen with "Doom and Gloom" each day. So this would sum up my rants on why he's ignoring the perplexing issues of the residential and commercial housing bubbles.

So... enough of my hot air and fluff, but I call it as I see it America.

CLICK TO VIEW LISTING WEBSITE
Description and Features
Eco Tech Management Corporation is a Full Service Southern California REO Maintenance and Security Company. Offering Green Solutions to Property Clean-Up, REO Maintenance, Property Security and Maintence Products and Security Consultation Services. We provide services ranging from Closed Circuit Cameras to Board-Ups and Remodeling. All jobs are performed in a clean, organized, professional manner. Contact Eco Tech today, for all of your property Maintenance needs! 1-866-965-6999 or email us at: ecotechinc@yahoo.com EcoTech Management is a fully licensed General Contractor.
Links
Listing Website

Choose Nursing, Choose Hoag

FOR IMMEDIATE RELEASE

PRLog (Press Release) - Feb 17, 2009 - Chris Smith of Chris Smith and Associates (Surterre Properties) and his wife Julie were in attendance at the Choose Nursing, Choose Hoag Celebration of Success Luncheon 2008 The luncheon took place at the Island Hotel in Newport Beach, CA. The mission of Choose Nursing, Choose Hoag is spreading the word that nursing education is a viable component to the solution for the critical nursing shortage. Its members are an outstanding group of community leaders dedicated to supporting nursing education in order to attract and develop the best and brightest new nurses and to providing career-advancing education for established nurses. Mr. and Mrs. Smith are both active members of Hoag's 552 Club and Volunteer and Assist in the Hospital's Philanthropic Efforts and Events. "Nursing plays such a vital role in our community's health care, there is such a need for nurses, nursing educators and advanced practice nurses going into the next decade, we feel this an excellent way to attract and inspire those interested into the Nursing Field", said Chris Smith. If you have any questions about Choose Nursing, Choose Hoag or Questions Related to this even you may contact the Hoag Hospital Foundation Directly or you May Contact Chris Smith and Associates at 1-800-390-4437.

January 28, 2009, 1:04 pm Why Luxury Housing Could Be Hit Hardest The realtors and housing analysts who argued that the top of the housing market would be immune to the housing market’s travails have now mostly given up. Most agree high-end homes have followed the rest of the market into the tank. SothebyBut what if the high end actually does worse than the rest of the market? I haven’t heard anyone of repute raise this theory, but consider the following: JUMBO DEFAULTS. An article today by my colleague Nik Timiraos shows that delinquency rates for jumbo mortgages–those that are too high to qualify for backing by the government–are more than three times as high as regular conforming loans. About 6.9% of prime jumbo loans were at least 90 days delinquent in December, compared to 2.1% for other mortgages. That suggests mortgages taken out by the affluent and wealthy, or at least the aspiring or former wealthy, are deteriorating at a faster rate. FEWER BUYERS. When everyone was getting richer, selling a high-end home was a plus, since there was a rising number of buyers. Now, with Richistan evacuating faster than Malibu in a mudslide, the number of potential buyers for big, $1 million-plus homes is on the decline. At least on the middle and lower end of the housing market, there is a crowd of first-time buyers and discount-seekers ready to take up the slack. At the top, well, it is getting much more lonely among buyers. WORST REGIONS. The regions with the highest-valued properties–New York, California, Nevada–have reported the biggest fall in prices. That means homes that once were priced at the top of the national market may take the biggest spill, and have the hardest time recovering. THE INDEBTED RICH. Everyone assumed that the wealthy were living more within their means than the rest of the population. But they may have been just as leveraged as everyone else–and certainly owe more in dollar terms. From 1995 to 2004, the top 1% of Americans by wealth more than doubled their mortgage and residential debt to $494 billion. Since the recession reached the rich later than the rest of the country, that mountain of debt could become a huge overhang on the high-end housing market. Permalink | Trackback URL: http://blogs.wsj.com/wealth/2009/01/28/why-luxury-housing-could-be-hit-hardest/trackback/ Save & Share: Yahoo! Buzz| Share on Facebook | Del.icio.us | Digg this | Email This | Print Comments Report offensive comments to wealth@wsj.com Lower the rates for Jumbo Holders as much as conforming loans… I have a FICO above 800, income to support the loan, and a significant amount of equity, but interest rates are at least 2% higher than conforming loans.. Comment by Jumbo Loan Holder - January 28, 2009 at 8:33 pm The 80/20 rule applies to all sectors of society. Poor, middle class, uber-rich. Look at the NFL. This is supposed to be the best of the best that were picked out of all the kids in all the colleges across the nation. And in the NFL about 20% of the players really stick out. And 5% of the 20% shine like diamonds in the sun. The same could be said for the NFL of wealth. 80% of these people are getting loans, using credit and barely staying “wealthy” by the skin of their teeth. 20% are comfortable now because they make wise decisions. 5% will never worry. Even if you took all their assets, they’d rebuild a fortune because they wealthy were it matters most. In their mindset. Note Taking Nerd #2 http://www.mynotetakingnerd.wordpress.com Comment by Note Taking Nerd #2 - January 29, 2009 at 1:03 pm Hard for me to believe, but we could actually “afford” to buy up — by quite a bit. But every time we look at one of the $1million + homes, the amount of taxes makes me blanch, and I stop looking. Taxes are something that I have taken a much more serious look at — particularly now that we are living in Obamaville where socialist seem to abound. Comment by Taxes are one of the issues - January 29, 2009 at 7:14 pm I live/rent in Fairfield County, Conn and yes, the blood bath in the higher end real estate market, $1M to $5M has started in earnest with no end in sight. It will be worse than in the more moderate price range. Its not just the purchase prices that are out of reach of potential buyers, you also have to consider the carrying costs of these McMansions–i.e. heating, insurance and real estate taxes and that puts off even buyers who can afford them, who ask why should I be paying $30,000 a year in property taxes for a house? Comment by Megalos - January 30, 2009 at 12:34 am As always - Irrational on the way up = Irrational on the way down Cannot outrun supply/demand fundamentals…maybe delay for the short run. But eventually they catch up with you. Let the ultra wealthy hold the houses - they are ‘immune’ to the economic crisis. And honestly, the prices do not reflect current market conditions and repricing of risk. So - let them hold until 2012+ when the market flattens. Good Luck to All Comment by Save Money... - January 30, 2009 at 9:00 am Frank- indebted rich? that’s a contradiction in terms. you question whether the wealthy live within their mean? “everyone assumed that the wealthy were living more within their means than the rest of the population.” i tell you they would not be weathly if they did not do so! many of those people purchasing multimillion dollar estates are not rich they just pose as being rich. Stanley’s “Big Hat, No Cattle” syndrome. Comment by littleitaly - January 31, 2009 at 7:51 pm Donald Trump and others of his ilk could, in fact, be insolvent. I think Manhattan condo values will decline 50 -60% over the next three years. Comment by Richard Cranium - February 2, 2009 at 11:49 am Keep hearing that tired refrain. Bet they said that in Greenwich too. Note taking nerd nailed it exactly. Anyone who is truly wealthy will ride this out without drastic lifestyle adjustment or nasty price cutting. For the come lately nouveau faux rich Wall St class that was overpaid and hence overleveraged (on overpriced properties) just like their now defunct firms and who now stare listlessly at their bonus envelopes which are either, shrunken to a fraction, empty or mostly stuffed with IOU’s collateralized by toxic CDO’s that even the USG won’t buy, that loud clucking noise is the din of the chickens coming home to roost. There is a lag to this wave of the credit tsunami and while Joe six-pack and company got washed away in the first rush, time for the rest of the imprudent to snap out of their trance and price their homes correctly, or get swamped in the next surge. Things are different this time, there will be a reckoning at the top of the market, not just the middle or bottom. Regional nuances are nice to talk about but let’s be real here - Every region in the country is now feeling this recession on steroids, few more acutely than the NE Wall Street crowd. Boo-hoo!