Flood of foreclosures: It’s worse than you think

Banks are moving slowly to list repossessed homes for sale, which could mean that housing inventory is even more bloated than current statistics indicate.

NEW YORK (CNNMoney.com) — Housing might be in worse shape than we think.

There is probably even more excess housing inventory gumming up the market than current statistics indicate, thanks to a wave of foreclosures that has yet to hit the market.

The problem: Many foreclosed homes and other distressed properties that are now owned by banks have yet to be listed for sale. The volume of this so-called ‘ghost inventory’ could be substantial enough to depress already steeply falling prices when it does go on the market.

“That’s not good news,” said Pat Newport, an analyst with IHS Global Insight. “[Excess] inventory is the biggest problem in housing these days, and it leads to lower housing prices, which leads to more foreclosures.”

Read moreFlood of foreclosures: It’s worse than you think

Paul Craig Roberts: Another real estate crisis is about to hit

Paul Craig Roberts [email him] was Assistant Secretary of the Treasury during President Reagan’s first term. He was Associate Editor of the Wall Street Journal. He has held numerous academic appointments, including the William E. Simon Chair, Center for Strategic and International Studies, Georgetown University, and Senior Research Fellow, Hoover Institution, Stanford University.

“Obama’s economic team consists of the very people who brought on the debt crisis. Now they are going to make it worse.”

Related article: Jim Rogers: Obama administration run by people who caused the latest financial problems (BBC News)

“However, the financial gangsters and their shills that Obama has put in charge of economic policy are thinking only of their own interests. What happens to the American people is not a concern.”

“The unexamined question is: Who is going to finance the next wave of debt?”

“The US budget deficit for fiscal year 2009 already appears to be on a path to $2 trillion, and that is before Obama’s stimulus program. What we are looking at is a $3 trillion budget deficit if Obama’s program is enacted in time to impact the economy this year.”

“…in marked contrast with the approach of the gangsters running US economic policy. The gangsters are using the crisis as an opportunity to steal from taxpayers and to finance their misdeeds and exorbitant salaries with Federal Reserve loans.”

“Their shills among economists and the financial press tell the people that the solution is to fatten up the banks with funds so they will resume lending to an over-indebted public that will then return to the shopping malls.”


By Paul Craig Roberts:

For a picture of the US real estate crisis, imagine New Orleans wrecked by Hurricane Katrina, and before the waters even begin to recede, a second Katrina hits.

The 1,120,000 lost US retail jobs in 2008 are a signal that the second stage of the real estate bust is about to hit the economy. This time it will be commercial real estate — shopping malls, strip malls, warehouses, and office buildings. As businesses close and rents decline, the ability to service the mortgages on the over-built commercial real estate disappears.

The over-building was helped along by the irresponsibly low interest rates, but the main impetus came from the slide of the US saving rate to zero and the rise in household indebtedness. The shrinkage of savings and the increase in debt raised consumer spending to 72 percent of GDP. The proliferation of malls and the warehouses that service them reflect the rise in consumer spending as a share of GDP.

Like the federal government, consumers spent more than they earned and borrowed to cover the difference. Obviously, this could not go on forever, and consumer debt has reached its limit.

Read morePaul Craig Roberts: Another real estate crisis is about to hit

Once Booming Dubai Goes Bust

CBS Evening News: Following Wave Of Speculation, Real Estate Collapses In Middle East’s Capital Of The Ultra-Rich


Downturn In Dubai: The worldwide economic crisis has even struck the once-booming oil city of Dubai. As Sheila MacVicar reports, developers and investors are now facing a financial standstill due to mass overexpansion.


The Palm Jumeirah, Dubai, the world’s biggest artificial island. Home prices there are down 40 percent in the last year.
Photo: ThePalmJumeirah.

(CBS) Over the years, booming oil prices helped turn Dubai into a land of opportunity and playground for the ultra rich.

But that was then and this is now. And as CBS News correspondent Sheila MacVicar reports, even Dubai is feeling the pinch of the worldwide economic crisis.

Related articles:
Dubai dream turns sour (The Straits Times)
Owner of Dubai landmarks eyes float (The Telegraph)
Dubai Bonds Signal Economic “Depression,” ING Says (Bloomberg)

The gulf city state’s property prices went up as fast and as high as the towering buildings. But reality has suddenly intruded.

One investor said it was as if someone had thrown a switch, as the global credit crunch slammed a city that was, in effect, the world’s biggest construction site

It took just 20 years for Dubai to go from a desert outpost with a handful of office towers to a world metropolis, where one fifth of the world’s cranes operate, and property became a very hot commodity, with some people playing real estate the way others play poker.

Read moreOnce Booming Dubai Goes Bust

50,000 estate agents face axe in next nine months


Experts have warned that up to 50,000 estate agents may lose their jobs in the next year

As many as 50,000 estate agents could lose their jobs by next Autumn because of the worsening economic crisis, experts today warned.

Economists said the collapse in the housing markets meant the true figure would be double previous predictions of 15,000 job losses, with some experts forecasting at least 50,000 out of work by next year.

The panic has led to some businesses making desperate attempts to secure their survival, with one estate agent even converting part of his office into a cafe to generate extra income.

Ben Read, managing economist at the Centre for Economics and Business Research, said the toll of job losses would be shocking.

He told the Evening Standard: ‘It will definitely be worse. The housing market has dropped significantly more since May and the outlook for the next nine months is pretty ropey.

‘Because of the worsening situation in the economy you could easily expect that figure of 15,000 to go up by 50 per cent. The true figure could even be as much as 50,000.

‘Most estate agents have let go significant numbers of staff and are working on skeleton staff. I’m sure it will surprise everyone how bad it is.’

Read more50,000 estate agents face axe in next nine months

Housing market ‘far worse’ than figures suggest

Online estate agent says latest figures underestimate fall in prices by two-thirds

House prices across the UK have already fallen far further than official data and market indicators suggest, Rightmove, the online estate agent warned yesterday, as it revealed that up to 300 estate agents were quitting its service every month.

While the latest figures from leading mortgage lenders such as Halifax suggest that prices are down by 15 per cent from their peak, Rightmove said the falls were up to two-thirds higher.

Miles Shipside, the commercial director of Rightmove, said: “Estate agents tell us that the actual prices that are being achieved [initially between buyers and sellers] for property are down by about 20 to 25 per cent beneath peak asking prices. That has not come out in the national indices.”

His revelation suggests that house prices have not only fallen much further than the highly regarded surveys of Halifax and Nationwide, which both track house prices based on agreed mortgages, but could also be lagging behind the situation on the ground.

Read moreHousing market ‘far worse’ than figures suggest

UK: Housing sales sink to worst for 30 years

· Estate agents average one deal a week as prices fall
· Rics calls for tax-free cash help for first-time buyers

The government is being urged to act swiftly to help drag the ailing property industry up off its knees as housing sales slow to their worst level in three decades and prices continue to decline.

Read moreUK: Housing sales sink to worst for 30 years

A Trillion Dollar Rescue for Wall Street Gamblers

Nothing for Families and Retirees

If the move to a Unitary Executive of unfettered presidential power frightens you, America’s radical right turn to Unitary Finance should compound your fears–and your debts as well. The financial events of the last two weeks of March 2008 demonstrate that the “economic royalists” and “money changers” whom Franklin Delano Roosevelt (FDR) drove from the temple of finance have returned to mismanage our economy into dire straights of unprecedented risk–debt creation, euphemized as “leveraging” and “wealth creation.”

The few checks and balances that remain in the way of the financial sector’s increasingly centralized planning, especially at the state level, are being swept aside under the guise of “saving the system.” Few Wall Street beneficiaries who use this phrase explain just what the system is. For starters, its political managers are industry lobbies appointed to high managerial and planning positions in the public agencies that are supposed to regulate these industries. Their idea of financial planning is to put a trillion dollars in government agency funds and credit guarantees at risk. This agency funding was supposed to be used to help average American families obtain housing and health care, and to protect their savings and provide for their retirement. Instead, it is being mobilized to support the economy’s bankers and financial managers. Indeed, the past few weeks have seen seemingly trillions of dollars committed for war making and bank support.

The banking system’s free creation of credit, doubling each five years or so for the economy at large, threatens to culminate in debt peonage for many American families and also for industry and for state and local governments. The economic surplus is being quickly absorbed by a combination of debt service and government bailouts for creditors whose Ponzi schemes are collapsing right and left, from residential to commercial real estate and corporate takeover loans to foreign bubble-economy credit.

This is the context in which to view the past few weeks’ financial turmoil surrounding Bear Stearns, JPMorgan/Chase and the rapidly changing debt landscape. “The system” that the Treasury, Federal Reserve and the New Deal agencies captured by the Bush Administration is trying to save is an economy-wide Ponzi scheme. By that I mean that the business plan is for creditors to lend debtors enough money for them to pay the interest costs so as to keep current on their loans.

Super Imperialism – New Edition: The Origin and Fundamentals of U.S. World Dominance

Read moreA Trillion Dollar Rescue for Wall Street Gamblers

The Subprime Crisis is Just Starting

(Excerpt: “For these reasons, there is a powerful, powerful case for moving a substantial portion of your assets into tangible assets. Good examples of tangible assets include gold, silver, commodities, real estate, farmland and energy.”)

Financial Sense

by Daniel R. Amerman, CFA | March 20, 2008

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Overview

As the author of three books on mortgage finance and related derivative securities, and speaking as someone who first turned mortgages into rated securities in 1983, I’m going to let you in on an unfortunate little secret – the real subprime mortgage securitization crisis may not have even started yet. But, there is a good chance the real crisis will arrive soon.

This assertion that the crisis could just be getting started may seem absurd and extraordinarily out of touch. What about the approximately 45,000 homeowners losing their homes to foreclosure in the United States every month? What about the 8.9% plunge in nominal housing prices in 2007, the largest decline in over 20 years? What about Bear Stearns losing 94% of the value of its stock in 2 days, with even the remaining 6% in value being based on an unprecedented loan from the Fed before JP Morgan would agree to the acquisition? How much worse could it get?

Read moreThe Subprime Crisis is Just Starting