CA Shadow Inventory

[outtamojo]

You know, at this point, banks are just like anyone else trying to make a living selling stuff-I mean, if you want top value for something you are trying to sell, why in the world would you cram your stores with inventory all at once? Should I be afraid to buy a diamond because the De Beers may at any moment triple production and release all the shadow diamonds in the ground?

[temeculaguy]

Rich, the tin foil hat crowd isn’t gonna like what you just did. You just redirected the focus to understanding the market dynamics as if the market is mindless and if all the data were available, somewhat accurate predictions could be made.

It’s more fun for them to imagine a room full of fat old bankers conspiring to screw the little guy, to control prices, to keep them from making accurate predictions. Once they are awakened to the secrets of the powers that be, they can outsmart them.

Placing emphasis on supply and demand instead of conspiracy, the “sexy” just goes away.

On a serious note, the ups and downs of the distressed pipeline do happen, but the capacity of the system to process those properties takes the gyrations out of it and the inventory is delivered at a measured pace. I don’t think the system has the ability to flood anything, a steady stream is about all they can provide and that doesn’t cause huge fluxuations in prices unless the buyers stop. It’s the only conclusion I can come to as to why the holders of distressed properties wouldn’t have tried to get everything out on the market while it’s being snapped up in hours and while rates are low, who knows how long this little “short term sellers market within a longer term buyers market” will last.

[temeculaguy]

Rich, the tin foil hat crowd isn’t gonna like what you just did. You just redirected the focus to understanding the market dynamics as if the market is mindless and if all the data were available, somewhat accurate predictions could be made.

It’s more fun for them to imagine a room full of fat old bankers conspiring to screw the little guy, to control prices, to keep them from making accurate predictions. Once they are awakened to the secrets of the powers that be, they can outsmart them.

Placing emphasis on supply and demand instead of conspiracy, the “sexy” just goes away.

On a serious note, the ups and downs of the distressed pipeline do happen, but the capacity of the system to process those properties takes the gyrations out of it and the inventory is delivered at a measured pace. I don’t think the system has the ability to flood anything, a steady stream is about all they can provide and that doesn’t cause huge fluxuations in prices unless the buyers stop. It’s the only conclusion I can come to as to why the holders of distressed properties wouldn’t have tried to get everything out on the market while it’s being snapped up in hours and while rates are low, who knows how long this little “short term sellers market within a longer term buyers market” will last.

[temeculaguy]

Rich, the tin foil hat crowd isn’t gonna like what you just did. You just redirected the focus to understanding the market dynamics as if the market is mindless and if all the data were available, somewhat accurate predictions could be made.

It’s more fun for them to imagine a room full of fat old bankers conspiring to screw the little guy, to control prices, to keep them from making accurate predictions. Once they are awakened to the secrets of the powers that be, they can outsmart them.

Placing emphasis on supply and demand instead of conspiracy, the “sexy” just goes away.

On a serious note, the ups and downs of the distressed pipeline do happen, but the capacity of the system to process those properties takes the gyrations out of it and the inventory is delivered at a measured pace. I don’t think the system has the ability to flood anything, a steady stream is about all they can provide and that doesn’t cause huge fluxuations in prices unless the buyers stop. It’s the only conclusion I can come to as to why the holders of distressed properties wouldn’t have tried to get everything out on the market while it’s being snapped up in hours and while rates are low, who knows how long this little “short term sellers market within a longer term buyers market” will last.

[temeculaguy]

Rich, the tin foil hat crowd isn’t gonna like what you just did. You just redirected the focus to understanding the market dynamics as if the market is mindless and if all the data were available, somewhat accurate predictions could be made.

It’s more fun for them to imagine a room full of fat old bankers conspiring to screw the little guy, to control prices, to keep them from making accurate predictions. Once they are awakened to the secrets of the powers that be, they can outsmart them.

Placing emphasis on supply and demand instead of conspiracy, the “sexy” just goes away.

On a serious note, the ups and downs of the distressed pipeline do happen, but the capacity of the system to process those properties takes the gyrations out of it and the inventory is delivered at a measured pace. I don’t think the system has the ability to flood anything, a steady stream is about all they can provide and that doesn’t cause huge fluxuations in prices unless the buyers stop. It’s the only conclusion I can come to as to why the holders of distressed properties wouldn’t have tried to get everything out on the market while it’s being snapped up in hours and while rates are low, who knows how long this little “short term sellers market within a longer term buyers market” will last.

[temeculaguy]

Rich, the tin foil hat crowd isn’t gonna like what you just did. You just redirected the focus to understanding the market dynamics as if the market is mindless and if all the data were available, somewhat accurate predictions could be made.

It’s more fun for them to imagine a room full of fat old bankers conspiring to screw the little guy, to control prices, to keep them from making accurate predictions. Once they are awakened to the secrets of the powers that be, they can outsmart them.

Placing emphasis on supply and demand instead of conspiracy, the “sexy” just goes away.

On a serious note, the ups and downs of the distressed pipeline do happen, but the capacity of the system to process those properties takes the gyrations out of it and the inventory is delivered at a measured pace. I don’t think the system has the ability to flood anything, a steady stream is about all they can provide and that doesn’t cause huge fluxuations in prices unless the buyers stop. It’s the only conclusion I can come to as to why the holders of distressed properties wouldn’t have tried to get everything out on the market while it’s being snapped up in hours and while rates are low, who knows how long this little “short term sellers market within a longer term buyers market” will last.

[analyst]

[quote=Rich Toscano][quote=analyst]

The mortgage is $600K. While the mortgage owner sits idle, due to the suspension of mark-to-market rules, the mortgage owner is allowed to maintain the fiction that an asset worth $600K is owned.
[/quote]

Analyst, according to a longtime pigg who is very knowledgeable about the banking industry, that isn’t how it works… see this comment for his explanation:

http://piggington.com/shadow_inventory_the_flood_that_may_never_come#comment-117626

Rich[/quote]

Check the dates.

FASB revised the mark-to-market rules in the first week of April, 2009, to be effective for accounting periods ending after June 15, 2009.

The comment by davelj is dated May 8, 2009.

He was describing the situation before suspension of mark-to-market, not the situation that exists today.

[analyst]

[quote=Rich Toscano][quote=analyst]

The mortgage is $600K. While the mortgage owner sits idle, due to the suspension of mark-to-market rules, the mortgage owner is allowed to maintain the fiction that an asset worth $600K is owned.
[/quote]

Analyst, according to a longtime pigg who is very knowledgeable about the banking industry, that isn’t how it works… see this comment for his explanation:

http://piggington.com/shadow_inventory_the_flood_that_may_never_come#comment-117626

Rich[/quote]

Check the dates.

FASB revised the mark-to-market rules in the first week of April, 2009, to be effective for accounting periods ending after June 15, 2009.

The comment by davelj is dated May 8, 2009.

He was describing the situation before suspension of mark-to-market, not the situation that exists today.

[analyst]

[quote=Rich Toscano][quote=analyst]

The mortgage is $600K. While the mortgage owner sits idle, due to the suspension of mark-to-market rules, the mortgage owner is allowed to maintain the fiction that an asset worth $600K is owned.
[/quote]

Analyst, according to a longtime pigg who is very knowledgeable about the banking industry, that isn’t how it works… see this comment for his explanation:

http://piggington.com/shadow_inventory_the_flood_that_may_never_come#comment-117626

Rich[/quote]

Check the dates.

FASB revised the mark-to-market rules in the first week of April, 2009, to be effective for accounting periods ending after June 15, 2009.

The comment by davelj is dated May 8, 2009.

He was describing the situation before suspension of mark-to-market, not the situation that exists today.

[analyst]

[quote=Rich Toscano][quote=analyst]

The mortgage is $600K. While the mortgage owner sits idle, due to the suspension of mark-to-market rules, the mortgage owner is allowed to maintain the fiction that an asset worth $600K is owned.
[/quote]

Analyst, according to a longtime pigg who is very knowledgeable about the banking industry, that isn’t how it works… see this comment for his explanation:

http://piggington.com/shadow_inventory_the_flood_that_may_never_come#comment-117626

Rich[/quote]

Check the dates.

FASB revised the mark-to-market rules in the first week of April, 2009, to be effective for accounting periods ending after June 15, 2009.

The comment by davelj is dated May 8, 2009.

He was describing the situation before suspension of mark-to-market, not the situation that exists today.

[analyst]

[quote=Rich Toscano][quote=analyst]

The mortgage is $600K. While the mortgage owner sits idle, due to the suspension of mark-to-market rules, the mortgage owner is allowed to maintain the fiction that an asset worth $600K is owned.
[/quote]

Analyst, according to a longtime pigg who is very knowledgeable about the banking industry, that isn’t how it works… see this comment for his explanation:

http://piggington.com/shadow_inventory_the_flood_that_may_never_come#comment-117626

Rich[/quote]

Check the dates.

FASB revised the mark-to-market rules in the first week of April, 2009, to be effective for accounting periods ending after June 15, 2009.

The comment by davelj is dated May 8, 2009.

He was describing the situation before suspension of mark-to-market, not the situation that exists today.

[analyst]

[quote=temeculaguy]

On a serious note, the ups and downs of the distressed pipeline do happen, but the capacity of the system to process those properties takes the gyrations out of it and the inventory is delivered at a measured pace. I don’t think the system has the ability to flood anything, a steady stream is about all they can provide and that doesn’t cause huge fluxuations in prices unless the buyers stop. It’s the only conclusion I can come to as to why the holders of distressed properties wouldn’t have tried to get everything out on the market while it’s being snapped up in hours and while rates are low, who knows how long this little “short term sellers market within a longer term buyers market” will last.[/quote]

The amount of work to accomplish a foreclosure using the trustee sale method is minor, bordering on trivial. Most of the work is handled by the computer system, which produces the required action documents on a pre-programmed schedule when the payments don’t show up. Send the property to auction without price restrictions, and the auction buyers will take all the risk and do all the clean-up, moving the prices appropriately lower in the process.

The work becomes substantial only when the goal is to avoid foreclosing. This is the policy adopted by the federal government to avoid exposing the insolvency of the banking system, and to protect the people downstream from them who would suffer devastation to their retirement funds and other investments.

The federal government is carrying out the policy by greatly affecting both supply (downward due to suspension of mark-to-market, direct rescue money) and demand (upward due to artificially low interest rates, low down-payments, down-payment assistance).

[analyst]

[quote=temeculaguy]

On a serious note, the ups and downs of the distressed pipeline do happen, but the capacity of the system to process those properties takes the gyrations out of it and the inventory is delivered at a measured pace. I don’t think the system has the ability to flood anything, a steady stream is about all they can provide and that doesn’t cause huge fluxuations in prices unless the buyers stop. It’s the only conclusion I can come to as to why the holders of distressed properties wouldn’t have tried to get everything out on the market while it’s being snapped up in hours and while rates are low, who knows how long this little “short term sellers market within a longer term buyers market” will last.[/quote]

The amount of work to accomplish a foreclosure using the trustee sale method is minor, bordering on trivial. Most of the work is handled by the computer system, which produces the required action documents on a pre-programmed schedule when the payments don’t show up. Send the property to auction without price restrictions, and the auction buyers will take all the risk and do all the clean-up, moving the prices appropriately lower in the process.

The work becomes substantial only when the goal is to avoid foreclosing. This is the policy adopted by the federal government to avoid exposing the insolvency of the banking system, and to protect the people downstream from them who would suffer devastation to their retirement funds and other investments.

The federal government is carrying out the policy by greatly affecting both supply (downward due to suspension of mark-to-market, direct rescue money) and demand (upward due to artificially low interest rates, low down-payments, down-payment assistance).

[analyst]

[quote=temeculaguy]

On a serious note, the ups and downs of the distressed pipeline do happen, but the capacity of the system to process those properties takes the gyrations out of it and the inventory is delivered at a measured pace. I don’t think the system has the ability to flood anything, a steady stream is about all they can provide and that doesn’t cause huge fluxuations in prices unless the buyers stop. It’s the only conclusion I can come to as to why the holders of distressed properties wouldn’t have tried to get everything out on the market while it’s being snapped up in hours and while rates are low, who knows how long this little “short term sellers market within a longer term buyers market” will last.[/quote]

The amount of work to accomplish a foreclosure using the trustee sale method is minor, bordering on trivial. Most of the work is handled by the computer system, which produces the required action documents on a pre-programmed schedule when the payments don’t show up. Send the property to auction without price restrictions, and the auction buyers will take all the risk and do all the clean-up, moving the prices appropriately lower in the process.

The work becomes substantial only when the goal is to avoid foreclosing. This is the policy adopted by the federal government to avoid exposing the insolvency of the banking system, and to protect the people downstream from them who would suffer devastation to their retirement funds and other investments.

The federal government is carrying out the policy by greatly affecting both supply (downward due to suspension of mark-to-market, direct rescue money) and demand (upward due to artificially low interest rates, low down-payments, down-payment assistance).

[analyst]

[quote=temeculaguy]

On a serious note, the ups and downs of the distressed pipeline do happen, but the capacity of the system to process those properties takes the gyrations out of it and the inventory is delivered at a measured pace. I don’t think the system has the ability to flood anything, a steady stream is about all they can provide and that doesn’t cause huge fluxuations in prices unless the buyers stop. It’s the only conclusion I can come to as to why the holders of distressed properties wouldn’t have tried to get everything out on the market while it’s being snapped up in hours and while rates are low, who knows how long this little “short term sellers market within a longer term buyers market” will last.[/quote]

The amount of work to accomplish a foreclosure using the trustee sale method is minor, bordering on trivial. Most of the work is handled by the computer system, which produces the required action documents on a pre-programmed schedule when the payments don’t show up. Send the property to auction without price restrictions, and the auction buyers will take all the risk and do all the clean-up, moving the prices appropriately lower in the process.

The work becomes substantial only when the goal is to avoid foreclosing. This is the policy adopted by the federal government to avoid exposing the insolvency of the banking system, and to protect the people downstream from them who would suffer devastation to their retirement funds and other investments.

The federal government is carrying out the policy by greatly affecting both supply (downward due to suspension of mark-to-market, direct rescue money) and demand (upward due to artificially low interest rates, low down-payments, down-payment assistance).

[Author]

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