Finally feeling something close to normal again after starting a new relationship, seeing her go away for a few weeks, refreshing my WFR Certification and cleaning up the office.
- So I see that Larry Kudlow is trumpeting "Home Sales Up!" in one of his 15 second mid-day promos on CNBC. Once again proving that he is nothing but an lying sack of shit scumbag shill for the Bush Administration who would have been fired long ago by any news organization that respected itself. If you haven't seen the real numbers, here they are courtesy of Barry Ritholtz at The Big Picture:
- Resales increased 2% to a 4.99 million annual rate (4.89 million pace in April) [note, this is month-over-month, and May is always higher than April, so big whoopee...]
- Median existing house price dropped 6.3% from May 2007
- Sales were down 16% versus May 2007.
- About one-third of total sales last month were “short sales'' that reflected foreclosures or distressed properties;
- Banks repossessed twice as many homes in May as in the same month last year;
- Inventory of unsold homes at the end of May fell 1.4% to 4.49 million; [again, month over month, so big deal....]
- Mortgage Bankers Association's index of loan applications to purchase homes fell last week to the lowest level in more than five years...
Yet from all this, Larry manages to conclude that "sales are up." Guess it just shows that if you have an agenda and are willing to pick the weakest and most irrelevant numbers, you can always find something to justify your pre-ordained point of view.
- Of course, any self-respecting news organization would have fired Jim Cramer long ago too, especially after proving himself to be a scumball liar once again, as documented in the attached video.
Jim, all those "critics" out there aren't "missing the point," "failing to understand how to watch the show," or anything else of the sort. They're merely noting that on Friday June 13, you told your viewers that your oscilator said the bottom was in and that the trade was to buy all the weak stuff -- financials, tech, etc. -- while getting out of everything that had been strong -- energy and commodities -- then exactly one week later you told them they were idiots and weren't paying attention to the show if they hadn't done the exact opposite. Guess what Jim, I have been paying attention and there's only one conclusion: You are nothing but lying scum.
- With all due respect to my buddies Toddo and Cody, Fox Business News isn't much better. Too much fluff, too many half-truths, maniuplated numbers and failures to note stuff that should be obvious to anybody who looks even halfway behind the numbers. But I guess you don't get free rides on the Citi jet if you actually think for yourself and report accordingly.
- All of which explains why on your typical day I don't do much other than running the TV with the sound off so I can see the ticker and maybe some of the scrolling headlines. Increasingly I don't even do that. It's all virtually worthless and in many cases has actual negative value.
- I really enjoyed the WFR recertification. Should have done it sooner as it really tended to hammer in a lot of the information from my WFR course three years ago. Doing it with a different instructor made a huge difference as well, I think. Getting the same information from a different person in a different way turned out to be really good for the learning process. I also found the setting at the UCSD campus to be really cool and the recertification group to be far more diverse than the initial class.
- Have been out in my kayak a lot lately, particularly in last week's heat wave. From the looks of things at Marina Del Rey, the market for big yachts is a lot like the market for big SUVs. One guy I spoke with tells me that the only big business right now is in repos, and that some of the county owned lots are beginning to fill up with boats whose owners simply walked away, stopped making payments, or didn't keep up with their slip fees. The New York Times reports that this is a nationwide trend. Those who thought that Southern California would escape these trends have been wrong. They are likely to be wrong about real estate as well.
- Nigel visited from Salt Lake a couple of weekends ago to see the Lakers actually win one against the Celtics. We took a bit of time going around looking at open houses as he wanted "on the ground" information about what's going on in this market. The bottom line to me is that:
- Affordablility (as percent of income) still sucks
- Owning is still a really bad deal compared to renting
- Prices have come down, but not nearly enough
- Financing around here, where just about anything requires a jumbo loan, is all but impossible for most people
- Sellers are still not realistic about the market. One broker went so far as to show us "numbers" predicated on mortgage products that no longer exist and interest rates that haven't been available for a year or more.
My conclusion, in the absence of a real economic rebound with higher incomes, is that prices have further to fall. Nigel suggested that I am being unrealistic in my expectation that "resort town" prices would ever really fall in line with rental or other costs. While I agree that costs here, close to the beach, will always be higher than some other areas, the reality is that we're hardly a resort, just a residential neighborhood near the beach, with all the problems of traffic, crime, occasional gang activity, noise and everything else that you will find in any other part of the city. Yes, our prices will be higher close to the beach, but own vs. rent is going to come back in line. And that's still 20-30% away. Don't tell Larry Kudlow.
- I'm sort of dating somebody fun right now. I say "sort of" because she left town for family reasons shortly after we started going out. We're still in touch, but I always hesitate to assume to much when something gets interrupted right at the start. I'll know more soon.
- Fleck reports this evening that one of his sources says "behind the scenes, many parts of the credit/mortgage market were 'offered only.'" This, I suspect, is what some of the smart money knows and that much of the dumb money, including guys like Cramer, are completely missing. This credit contraction is hardly over. Want to know more? Subscribe.
- I've spent the past couple of days going through my various credit card bills and accounts, and cancelling all sorts of worthless features that cost money every month or year. I've also moved a bit of money around to keep myself above the "monthly fee minimum" in all my accounts. Total savings will probably be about $300 a year, which is as much as the Federal government just sent me as "stimulus." Unfortunately for the banks, my stimulus for myself won't help them much. I did much the same with my cellphone account, and will save about $10 a month there. Not huge money, but certainly not money I feel a need to keep paying.
I found it amazing that when I called to cancel features, how quickly the institutions were always able to find some comparable feature that won't cost me anything. On my Citibank Mastercard, for example, cancelling the $25 per year "awards" program led me instead to be switched to a "free" awards program that offers the same awards, but doesn't award as many points for certain purchases, most of which I don't make anyway. Verizon Wireless found an unadvertised text messaging plan that cut my cost in half and still gives me more than enough free text messages each month. (I never use pictures or video messages, and don't text much period.) Always worth checking it out for those fees and features that you don't quite need and seem overpriced.
- Toyota puts crappy tires on their cars. I guess that shouldn't be much of a surprise since everybody else does too, but I was really annoyed to pop a sidewall after a very minor curb encounter. No tire I've ever had has torn that easily. Fortunately, I'm happy with the replacements which should last me several years.
- Smile. Tomorrow probably won't be better.
-btc
