Financial News

[Balta1701]

Boy, how is it possible this man could have been convinced that housing prices couldn't go down? I mean, he's so sharp and able to understand the economic situation.

Despite the surge in federal debt to the public during the past 18 months—to $8.6 trillion from $5.5 trillion—inflation and long-term interest rates, the typical symptoms of fiscal excess, have remained remarkably subdued. This is regrettable, because it is fostering a sense of complacency that can have dire consequences.

[Y2HH]

I'll agree but modify slightly - mutual funds or ETF's. ETF's are nice because they give you the diversification of mutual funds, but without the load. Single stock picking is asking for trouble.

 

And as for where to get mutual funds... any brokerage you go to, including optionshouse.com, will allow you to trade both ETF's and mutual funds. You don't need to go to a special place for them.

 

Do some research - there is all kinds of useful data available for free out there. You can even see zone charts for mutual funds and ETF's that show the dynamic of risk vs reward, showing a heat map of where in that graph each fund sits. So decide BEFORE you pick something - where are you in the graph? Higher or lower on the risk axis (longer or shorter return period), higher or lower reward.

 

Single stock picking works well for me.

 

And mutual funds cost a lot most of the time, costs most people aren't even aware of. If you wan't to be totally hands off and plan on being long term -- as in you have no plan to touch the money for 10-20+ years -- you will not beat the S&P500 straight up...nobody does, and when they do, it's for short periods and they always lose in the end. The longer you go back, the more and more impossible it becomes to beat the S&P500.

 

When people want to invest in that manner, I simply tell them buy S&P500 index, and you're done. In the long run, the S&P will win out.

Edited June 21, 2010 by Y2HH

[Cknolls]

 

 

At least Illinois is ranked #1 in something.

 

http://www.cmavision.com/market-data

 

 

 

 

Hopefully we defaullt and reset these pensions to affordable levels.

[mr_genius]

http://www.nytimes.com/2010/06/24/business...ml?ref=business

 

U.S. New Home Sales Drop 33% in May

 

Sales of new homes dropped to a record low in May, according to new government figures released Wednesday, providing a gauge of the market’s dependence on a federal stimulus program.

 

Prices need to be allowed to fall to levels which reflect wages and job growth. No more tax payer funded 'home discounts'. Homes will sell for what they are worth.

[kapkomet]

http://www.nytimes.com/2010/06/24/business...ml?ref=business

 

U.S. New Home Sales Drop 33% in May

 

 

 

Prices need to be allowed to fall to levels which reflect wages and job growth. No more tax payer funded 'home discounts'. Homes will sell for what they are worth.

 

 

If that's how the value of a home should be based, every home is worth exactly zero.

[lostfan]

There's a newly foreclosed property at the end of my row (I live in a townhouse) and damn, it only takes 1 to make the 30 or so surrounding houses look like s***. The bank doesn't cut the grass or anything and they boarded it up.

[kapkomet]

My f***ing neighbor hasn't mowed all year. And I am not f***ing doing it.

 

I need to call the city.

[mr_genius]

If that's how the value of a home should be based, every home is worth exactly zero.

 

a home is worth what someone is willing to pay for it. if you think it's all zero? i'll overbid you.

 

if you think your house is worth more than it actually is, too bad.

[kapkomet]

a home is worth what someone is willing to pay for it. if you think it's all zero? i'll overbid you.

 

if you think your house is worth more than it actually is, too bad.

 

Dude. Buy my house. I don't want the payments anymore. It's $X,XXX a month. Make it snappy.

[mr_genius]

Dude. Buy my house. I don't want the payments anymore. It's $X,XXX a month. Make it snappy.

 

but you said it's worth zero.

 

bad initial negotiating stance

 

[lostfan]

Buy my house too please. It's not worth zero though

[mr_genius]

Buy my house too please. It's not worth zero though

 

well that settles it

 

I AM BUYING EVERYONES HOUSE

 

 

so you guys all gonna rent now?

 

 

[lostfan]

well that settles it

 

I AM BUYING EVERYONES HOUSE

 

 

so you guys all gonna rent now?

Pretty much yeah.

[kapkomet]

I'm going to go live in my mom's basement. You know, the one that's not there.

[southsider2k5]

I'm going to go live in my mom's basement. You know, the one that's not there.

 

Hi Mrs and Mr Marion Kap!

[NorthSideSox72]

http://www.nytimes.com/2010/06/24/business...ml?ref=business

 

U.S. New Home Sales Drop 33% in May

 

 

 

Prices need to be allowed to fall to levels which reflect wages and job growth. No more tax payer funded 'home discounts'. Homes will sell for what they are worth.

This is NEW home sales, not existing. So its really mostly about how many new homes are being built. I've said all along, and its still true, I am glad to see these NEW home sales numbers continue to plummet. This is good because it puts less supply on the market. So ultimately, this will help lead to a stronger overall real estate market, since EXISTING home sales make up the majority of it.

 

Believe it or not, this is good news for the real estate market. Bad for new home construction personnel though.

 

[Balta1701]

This is NEW home sales, not existing. So its really mostly about how many new homes are being built. I've said all along, and its still true, I am glad to see these NEW home sales numbers continue to plummet. This is good because it puts less supply on the market. So ultimately, this will help lead to a stronger overall real estate market, since EXISTING home sales make up the majority of it.

 

Believe it or not, this is good news for the real estate market. Bad for new home construction personnel though.

The problem with saying it that way is...those are new home sales numbers, not new home construction numbers, and construction numbers kept trying to inch up while the government was dumping billions of dollars into trying to blow the popped balloon back up.

[NorthSideSox72]

The problem with saying it that way is...those are new home sales numbers, not new home construction numbers, and construction numbers kept trying to inch up while the government was dumping billions of dollars into trying to blow the popped balloon back up.

Not really. Take a look around at reports the last 6 months or so of new construction permits. They are ALSO dropping like a rock, as they should. Further, if construction is outpacing sales, since the gov't is no longer providing special incentives, the construction companies will have no choice but to continue to cut back. This is all an overall good thing for the real estate market - but as I said, the new home construction business and its suppliers will feel the pain. Better that small segment than the rest of the country.

 

[mr_genius]

This is NEW home sales, not existing. So its really mostly about how many new homes are being built. I've said all along, and its still true, I am glad to see these NEW home sales numbers continue to plummet. This is good because it puts less supply on the market. So ultimately, this will help lead to a stronger overall real estate market, since EXISTING home sales make up the majority of it.

 

Believe it or not, this is good news for the real estate market. Bad for new home construction personnel though.

 

http://news.yahoo.com/s/ap/us_home_sales

 

The housing market may be on the verge of taking another plunge that could weaken the broader economic recovery.

 

Sales of previously occupied homes dipped in May, even though buyers could receive government tax credits. And nearly a third of sales in May were from foreclosures or other distressed properties. That means home prices could soon be heading down after stabilizing over the past year.

 

more good news?

 

[NorthSideSox72]

http://news.yahoo.com/s/ap/us_home_sales

 

 

 

more good news?

 

Foreclosures SELLING is good, so is the fact that we appear to be around the top or just past of the big foreclosure bubble. The dip in general is bad. But the marketplace does appear to be shedding inventory in a healthy way, yes. It will be quite a while before we see is truly be strong though, another couple years at least. But this huge second drop in prices and sales that people have been predicting for a while doesn't seem to be in the cards. I'd bet 2010 ends up an overall wash, with the market staying more or less stagnant for the year. 2011 should see some improvement.

 

[mr_genius]

Foreclosures SELLING is good, so is the fact that we appear to be around the top or just past of the big foreclosure bubble. The dip in general is bad. But the marketplace does appear to be shedding inventory in a healthy way, yes. It will be quite a while before we see is truly be strong though, another couple years at least. But this huge second drop in prices and sales that people have been predicting for a while doesn't seem to be in the cards. I'd bet 2010 ends up an overall wash, with the market staying more or less stagnant for the year. 2011 should see some improvement.

 

Foreclosures are up sharply. But you are right, foreclosed homes should be sold first, as it is necessary for a market correction. The good news is that delinquencies are going down.

 

http://www.occ.treas.gov/ftp/release/2010-69.htm

 

According to the OCC and OTS Mortgage Metrics Report for the First Quarter 2010, delinquency rates dropped in the quarter, with improvement in all categories of mortgages—prime, Alt-A, and subprime. The percentage of mortgages that were current and performing increased for the first time since the agencies began publishing this report in June 2008. Mortgages in all stages of pre-foreclosure delinquency improved during the first quarter, with the percentage of mortgages that were 30-to-59 days delinquent, 60-to-89 days delinquent, and 90 or more days delinquent all declining.

 

but Q1 of 2010 was pretty bad for foreclosures.

 

 

However, the number of foreclosures increased substantially, including new foreclosures, foreclosures in process, and completed foreclosures. Compared with the previous quarter, newly initiated foreclosures increased nearly 19 percent to almost 370,536; foreclosures in process increased nearly 9 percent to 1,170,874; and completed foreclosures increased nearly 19 percent to 153,654. Prior reports also cited the increase in foreclosures, as servicers began to exhaust options to assist holders of seriously delinquent mortgages and existing foreclosures in process worked through the system.

 

I still think there is more price correction needed before true stabilization. Homes were just priced at outrageous levels.

Edited June 24, 2010 by mr_genius

[Balta1701]

Foreclosures are up sharply. But you are right, foreclosed homes should be sold first, as it is necessary for a market correction. The good news is that delinquencies are going down.

There's a reason why foreclosures are up sharply...for about a year, banks have been putting off foreclosures for people because they can't sell the home if they foreclose on them. The term that has become commonly accepted for this is "Shadow inventory", they are houses that will be on the market but that banks have kept off the market to avoid the double-whammy of depressing housing prices further and taking the financial hit to themselves. If the people keep living in them, the people basically get free rent on the bank, but the bank gets the benefit of the house not sitting vacant and general upkeep/usage being done.

 

They started pushing more Foreclosures earlier this year because their financial situation has improved and because, thanks to the government intervention, the housing market somewhat stabilized and could absorb some portion of the hit.

[mr_genius]

There's a reason why foreclosures are up sharply...for about a year, banks have been putting off foreclosures for people because they can't sell the home if they foreclose on them. The term that has become commonly accepted for this is "Shadow inventory", they are houses that will be on the market but that banks have kept off the market to avoid the double-whammy of depressing housing prices further and taking the financial hit to themselves. If the people keep living in them, the people basically get free rent on the bank, but the bank gets the benefit of the house not sitting vacant and general upkeep/usage being done.

 

They started pushing more Foreclosures earlier this year because their financial situation has improved and because, thanks to the government intervention, the housing market somewhat stabilized and could absorb some portion of the hit.

 

there are more of those to come too.

[NorthSideSox72]

There's a reason why foreclosures are up sharply...for about a year, banks have been putting off foreclosures for people because they can't sell the home if they foreclose on them. The term that has become commonly accepted for this is "Shadow inventory", they are houses that will be on the market but that banks have kept off the market to avoid the double-whammy of depressing housing prices further and taking the financial hit to themselves. If the people keep living in them, the people basically get free rent on the bank, but the bank gets the benefit of the house not sitting vacant and general upkeep/usage being done.

 

They started pushing more Foreclosures earlier this year because their financial situation has improved and because, thanks to the government intervention, the housing market somewhat stabilized and could absorb some portion of the hit.

And the articles you see from bankers and realtors state that the shadow inventory has been diminishing - that they are processing more and more of them. This is good in the long term, now that they are accelerating their pace, but not putting them all out in a huge wave.

 

[Balta1701]

 

i hope that was a joke

Not at all. The surge in buying that started last fall probably wouldn't have been nearly as big had the government not dumped in truckloads of cash.

 

Not that it was the most effective method of stimulus, but when the government ponies up $20 billion or so, it's going to have an effect.