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We are renters in the Bay Area. We are ready to buy when prices return to sane levels.

“Bay Area foreclosure activity skyrockets”

That’s the kind of news we love! Let the fun begin. The Bay Area has been insulated long enough from the real estate crisis. A few hundred thousand homes that go into foreclosure is just what the doctor ordered.

Oh, one more thing. Greenspan is primarily to BLAME. He created the global credit glut that funded this disaster.

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good article. thanks for posting the link

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To those who think republican administrations have been more fiscally responsible in government spending (or no less so than democratic administrations):

By holding (and expressing) this opinion you’re broadcasting that you haven’t seen the relevant data and you form strong opinions without any basis in fact.

This data is available from many sources comparing US deficits year-by-year associated with every republican and democratic presidental term. The data is objective and the obvious conclusions are NOT disputed by respected economists of either party affiliation. Particularly in the last several decades, annual deficits, and associated growth in total government debt, have on average been far greater during republican presidential terms.

I believe one of the key reasons this country is getting rather screwed up economically (and culturally?) is that its citizens are complacent blind sheep content to be led (straight over a cliff) by politicians (and media) turning truths upside-down to suit their selfish purposes.

Mr fat_lazy_union_whatever, you have obviously have fed yourself into a fat little sheep eating those sound bites from republicans preaching their past fiscal responsibility, and you believed those lies without checking the data. You are one of the gullible, dumbed-down and easily controlled masses.

I usually refrain from writing posts this biting and nasty, but this is a touchy subject because so many Americans now make a habit of ignoring fact, and voting for politicians who do same.

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Is this a good price or should we wait longer? We know that prices for SFH (>500K) have gone down, but what about condos in the 400K range?

Are you joking?

We SOLD our 4S Ranch condo at $405k, after watching it fall in value from $425k. In 2 yrs since, its price has fallen below $350k and the decline in price is accelerating.

That was a 3BR, 2BTH, 1250 sq ft, nice unit with view and very sunny.

Over HALF of the hundreds of units in many 4S condo complex are speculator-owned and rented. You know what that means. They turned tail and dumped ’em on the market as soon as they got nervous. Next we got the mortgage resets kicking in.

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Here’s my spin.

I avoided getting burned on my short positions by selling ahead of the fed rate cut. I don’t bet against the fed.

I believe the FOMC inspired Fool’s Rally (the last two days) has already run out of steam.

So today I moved over half my portfolio back into aggressively bearish market positions (“SDS” inverse fund). I saw that QQQ puts and SPDR puts were well priced so I bought some of those also.

I found these attractive after running spreadsheets across strike prices, maturity dates:

QQQQ Jan-09 $55.00 Put (OZCMC) looks cheap, offering a 50% profit for only a 10% market correction.

The QQQQ Mar-08 $51.00 Put (QQQOY) also looks cheap, doubling your money for a 10% NASDAQ correction.

The SPDR DEC 20, 2008 $ 160.000 PUT (CYYXD : OPRA) also looks tasty.

An earlier entertaining post in this thread mentioned a list of “What I’m certain will happen”

Personally, I’m certain you WILL make money if you buy puts offering a 50% profit return in response to a 10% market correction over the next 12 months from current (overpriced) levels

We will probably end up with a 30+ percent market correction across all the US indexes.

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I’m up in Silicon Valley, San Jose.

This is another city run by idiotic managers who thought “Light Rail” was a realistic mass transit system.

Imagine buses on rails that move at about 20 miles/hour because they travel mainly on (not below or above) city streets.

The monthly pass is $65
*ouch*

It takes me 15 minutes to DRIVE the same route the Light Rail takes an HOUR to complete. “Gosh, let’s see, should I rise an HOUR earlier each morning to ride Snail Rail and save the environment, OR should I sleep in another 45 min and drive my SUV to work?” Tough choice.

An hour for “Snail Rail” to travel 13 miles!
What a joke.

Oh, user studies show the actual total system cost translates into about $100 PER RIDE. What a money saver for the city 🙂 Of course Snail Rail also completely screws up traffic as trains lock up all stop lights for miles ahead as they come lumbering through each intersection.

I grew up in Minneapolis, another city with an underutilized “Snail Rail” that takes over an hour to get people to the city center from the airport (about a 20-min car ride)

Face it, most major cities in the United States are decades behind Europe and Asia on mass transit. Americans will discover this when oil reaches $200/bbl and our economy (and transportation system) collapses.

What should G. Bush be focused on intead of his hobby of starting expensive wars his competing in the competition for World’s Biggest (sanctioned) Terrorist? How about our government going city-by-city and ripping in new highly efficient rapid subway systems AND creating HIGH-speed city-to-city supertrains.

(Those will be systems that almost nobody will use in the next few years, but 10 or 15 years from now it will be standing room only on those subways and high-speed trains.)

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PS. A hint:…If you dont….

Good post. Good advice! I think I will liquidate bear positions tomorrow morning. I have been thinking about it all day. After i see no false rally ignited by FOMC, then I restablish those bear positions.

I think it unlikely but still possible that the Fed could suprise with a very agressive rate cut (at least 0.75 pt)

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Here is my two cents on the expected rate cut.

The first rate cut (August 17) was unexpected and produced a positive (but short-term) stock market response.

This week’s rate cut, is already factored into the stock market. I predict this is going to be an ugly week for the markets, without the expected similar (2% jump or more) positive stock market reaction. The only exception would be if the fed throws a wildly aggressive (full point or more) rate cut at the market.

As for how the rate cut helps the housing sector, there is almost zero relationship there. Hardly worth commenting more on that.

I remain very agressively short the stock market.

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I think there’s a very good chance of this happening.

Yes, I consider the chance of political instability in a major oil-producing nation (either political revolution, civil war, or war with another nation) is unquestionably the most significant risk for any short-term bear strategy on the oil sectory.

I have decided no more than 10% of my total portfolio will be put into short oil positions. Today I took a 4% of portfolio position in DUG, the 2X inverse fund.

My short-term gamble is that as market participants transition (in the next five months?) from nervous uncertainty to certainty that we are entering a recession, then oil prices will drop at least 10% simply on expectations of lowered demand.

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Great article. thanks for posting that link.

I have plenty of homeowning friends in San Diego living in over 3100 sq ft homes, and they keep preaching the Party Line:

“In OUR pristine upper-class area, home prices are very stable and will NEVER drop because of how financially secure we all are”

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Only one comment about Powayseller:

She is such a pathetic amateur on all topics she writes about; it is ridiculous how seriously she takes herself. (Nobody else does)

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Tell that to the people that bought gold in 1980 🙂

That is EXACTLY the kind of chart that makes me want to BUY whatever is being charted.

If you don’t git that, you are clueless on investing.

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tnks for posting that CNNMoney.com article, it also led me to this, equally good article:

http://money.cnn.com/magazines/fortune/fortune_archive/2007/09/17/100250262/index.htm?postversion=2007090509

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worst-hit metro areas, he asserts, will be Cape Coral, Fla., with an 18.6% decline in housing prices; Reno, Nev., with a 17.2% drop; and Stockton, Calif., with a 15.7% fall.

Following up to an old post, looks like Zandi was right about Stockton, see article below dated Sept 13th.

http://news.yahoo.com/s/afp/20070913/ts_alt_afp/useconomyproperty

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Here’s S&P 500 adjusted for inflation….

(see above graph in previous post)

My comment:

Now you know why my portfolio is primarily bearish positions against the S&P 500.

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