[XBoxBoy]

For what it’s worth….

Not sure why you aren’t seeing the effects, but I do know quite a number of people who have left San Diego over the last couple of years, citing the high cost of housing as a principle reason. Also know of some who have been foreclosed on. So, they are out there.

Also, keep in mind that the wave of foreclosures is just really getting started. The big jumps in statistics we are seeing are mostly the first stages of foreclosure. In six months there will be lots more foreclosures in the final stages.

XBoxBoy

[XBoxBoy]

For what it’s worth….

Not sure why you aren’t seeing the effects, but I do know quite a number of people who have left San Diego over the last couple of years, citing the high cost of housing as a principle reason. Also know of some who have been foreclosed on. So, they are out there.

Also, keep in mind that the wave of foreclosures is just really getting started. The big jumps in statistics we are seeing are mostly the first stages of foreclosure. In six months there will be lots more foreclosures in the final stages.

XBoxBoy

[XBoxBoy]

La Jolla Price Decline

Alex_angel wrote:
Sorry to say it but you aren’t going to find a home in La Jolla that was reduced from $1.5 million to $700k.

Maybe not, but how about one that sold a year ago for $1.7 and is now pending with an asking price of $1,425,000? By my math, even if it closes at asking price (doubtful) that would be a drop of $275,000 plus realtor fees and taxes. Alex, would that qualify as a drop in prices to you?

Here’s the details:

1925 Nautilus, La Jolla, CA 92037

Sold 8/17/2006 for 1.7mil
http://www.sdlookup.com/Property-C41A0F03-1925_Nautilus_St_La_Jolla_CA_92037

Currently pending with an asking price of $1,425,000 and I’d bet if it closes it will be less than the asking price.

mls# 076033909
http://www.prudentialcal.com/Listing/ListingDetail.aspx?&Listing=21424185

[XBoxBoy]

La Jolla Price Decline

Alex_angel wrote:
Sorry to say it but you aren’t going to find a home in La Jolla that was reduced from $1.5 million to $700k.

Maybe not, but how about one that sold a year ago for $1.7 and is now pending with an asking price of $1,425,000? By my math, even if it closes at asking price (doubtful) that would be a drop of $275,000 plus realtor fees and taxes. Alex, would that qualify as a drop in prices to you?

Here’s the details:

1925 Nautilus, La Jolla, CA 92037

Sold 8/17/2006 for 1.7mil
http://www.sdlookup.com/Property-C41A0F03-1925_Nautilus_St_La_Jolla_CA_92037

Currently pending with an asking price of $1,425,000 and I’d bet if it closes it will be less than the asking price.

mls# 076033909
http://www.prudentialcal.com/Listing/ListingDetail.aspx?&Listing=21424185

[XBoxBoy]

La Jolla Price Decline

Alex_angel wrote:
Sorry to say it but you aren’t going to find a home in La Jolla that was reduced from $1.5 million to $700k.

Maybe not, but how about one that sold a year ago for $1.7 and is now pending with an asking price of $1,425,000? By my math, even if it closes at asking price (doubtful) that would be a drop of $275,000 plus realtor fees and taxes. Alex, would that qualify as a drop in prices to you?

Here’s the details:

1925 Nautilus, La Jolla, CA 92037

Sold 8/17/2006 for 1.7mil
http://www.sdlookup.com/Property-C41A0F03-1925_Nautilus_St_La_Jolla_CA_92037

Currently pending with an asking price of $1,425,000 and I’d bet if it closes it will be less than the asking price.

mls# 076033909
http://www.prudentialcal.com/Listing/ListingDetail.aspx?&Listing=21424185

[XBoxBoy]

I don’t think that the banks needed to borrow money as a result of delinquent loans. The banks needed to borrow money due to a cash flow problem caused by the fear in the credit markets. So, in most cases I suspect those loans will get repaid. (Remember that most of the failed mortgages that we are always talking about on Piggington have been sold off to investors. There losses are seperate from what the fed is trying to deal with here.)

Potentially, we could see a major bank who is borrowing from the discount window collapse, but I suspect that’s not a big risk at this time. Regardless if that happens the fed will step in and try to make the process of dissolving the failed bank orderly. (And this process could be viewed by some as a bailout, but we haven’t reached that point yet)

XBoxBoy

[XBoxBoy]

I don’t think that the banks needed to borrow money as a result of delinquent loans. The banks needed to borrow money due to a cash flow problem caused by the fear in the credit markets. So, in most cases I suspect those loans will get repaid. (Remember that most of the failed mortgages that we are always talking about on Piggington have been sold off to investors. There losses are seperate from what the fed is trying to deal with here.)

Potentially, we could see a major bank who is borrowing from the discount window collapse, but I suspect that’s not a big risk at this time. Regardless if that happens the fed will step in and try to make the process of dissolving the failed bank orderly. (And this process could be viewed by some as a bailout, but we haven’t reached that point yet)

XBoxBoy

[XBoxBoy]

I don’t think that the banks needed to borrow money as a result of delinquent loans. The banks needed to borrow money due to a cash flow problem caused by the fear in the credit markets. So, in most cases I suspect those loans will get repaid. (Remember that most of the failed mortgages that we are always talking about on Piggington have been sold off to investors. There losses are seperate from what the fed is trying to deal with here.)

Potentially, we could see a major bank who is borrowing from the discount window collapse, but I suspect that’s not a big risk at this time. Regardless if that happens the fed will step in and try to make the process of dissolving the failed bank orderly. (And this process could be viewed by some as a bailout, but we haven’t reached that point yet)

XBoxBoy

[XBoxBoy]

I’m no expert but I’ll take a stab at answering your questions:

– Where does this money come from? Who pays for it?

The money is essentially “printed” by the fed. Not actually, but what happens is the fed credits the account of a bank with the money and allows that bank to then spend that money. Effectively creating the money out of thin air. (Bet you wish you could do that, huh?)

– Where exactly does it go?

Wherever the bank spends it. Effectively, this puts more cash into the system. Or as is often said, more liquidity.

– What will it’s effect be on the value of the dollar?

Well, assuming that when the repo comes due, the bank will repay the money back to the fed, and take back the bonds it offered in collateral, nothing will really change. On the otherhand, if the fed, continues to renew the repo indefinitely that is the same as increasing the money supply and would have the effect of lowering the value of the dollar. (Note that in the last week the value of the dollar has risen while the fed has done this, thus world currency traders are believing that the value of the dollar is NOT falling)

– Who stands to benefit from these “injections”?

Well, everyone really. If the banks get into a situation where they do not have enough cash to function, all hell will break loose, there will be runs on banks, etc. So by adding this liquidity to the market, the fed makes sure that the banking system continues to function.

– Will this help or hurt our economy in the long run?

Well, making sure that the banks keeps function is beneficial, so think of it as avoiding seriously hurting our economy. But this action should not (at least theoretically) hurt or help our economy. Our economy is going where it is going. The fed could “juice” the economy by lowering the fed rate, but that is something they are currently not doing. Don’t confuse lowering the fed rate with opening the discount window.

– What will the effect be on housing?

Again, assuming that the banks repay the repos in a fairly short period of time, probably nothing. Bottom line to housing is that lots and lots of people have overextended themselves, and that’s got to be unwound.

Hope this is informative/helpful

XBoxBoy

[XBoxBoy]

I’m no expert but I’ll take a stab at answering your questions:

– Where does this money come from? Who pays for it?

The money is essentially “printed” by the fed. Not actually, but what happens is the fed credits the account of a bank with the money and allows that bank to then spend that money. Effectively creating the money out of thin air. (Bet you wish you could do that, huh?)

– Where exactly does it go?

Wherever the bank spends it. Effectively, this puts more cash into the system. Or as is often said, more liquidity.

– What will it’s effect be on the value of the dollar?

Well, assuming that when the repo comes due, the bank will repay the money back to the fed, and take back the bonds it offered in collateral, nothing will really change. On the otherhand, if the fed, continues to renew the repo indefinitely that is the same as increasing the money supply and would have the effect of lowering the value of the dollar. (Note that in the last week the value of the dollar has risen while the fed has done this, thus world currency traders are believing that the value of the dollar is NOT falling)

– Who stands to benefit from these “injections”?

Well, everyone really. If the banks get into a situation where they do not have enough cash to function, all hell will break loose, there will be runs on banks, etc. So by adding this liquidity to the market, the fed makes sure that the banking system continues to function.

– Will this help or hurt our economy in the long run?

Well, making sure that the banks keeps function is beneficial, so think of it as avoiding seriously hurting our economy. But this action should not (at least theoretically) hurt or help our economy. Our economy is going where it is going. The fed could “juice” the economy by lowering the fed rate, but that is something they are currently not doing. Don’t confuse lowering the fed rate with opening the discount window.

– What will the effect be on housing?

Again, assuming that the banks repay the repos in a fairly short period of time, probably nothing. Bottom line to housing is that lots and lots of people have overextended themselves, and that’s got to be unwound.

Hope this is informative/helpful

XBoxBoy

[XBoxBoy]

I’m no expert but I’ll take a stab at answering your questions:

– Where does this money come from? Who pays for it?

The money is essentially “printed” by the fed. Not actually, but what happens is the fed credits the account of a bank with the money and allows that bank to then spend that money. Effectively creating the money out of thin air. (Bet you wish you could do that, huh?)

– Where exactly does it go?

Wherever the bank spends it. Effectively, this puts more cash into the system. Or as is often said, more liquidity.

– What will it’s effect be on the value of the dollar?

Well, assuming that when the repo comes due, the bank will repay the money back to the fed, and take back the bonds it offered in collateral, nothing will really change. On the otherhand, if the fed, continues to renew the repo indefinitely that is the same as increasing the money supply and would have the effect of lowering the value of the dollar. (Note that in the last week the value of the dollar has risen while the fed has done this, thus world currency traders are believing that the value of the dollar is NOT falling)

– Who stands to benefit from these “injections”?

Well, everyone really. If the banks get into a situation where they do not have enough cash to function, all hell will break loose, there will be runs on banks, etc. So by adding this liquidity to the market, the fed makes sure that the banking system continues to function.

– Will this help or hurt our economy in the long run?

Well, making sure that the banks keeps function is beneficial, so think of it as avoiding seriously hurting our economy. But this action should not (at least theoretically) hurt or help our economy. Our economy is going where it is going. The fed could “juice” the economy by lowering the fed rate, but that is something they are currently not doing. Don’t confuse lowering the fed rate with opening the discount window.

– What will the effect be on housing?

Again, assuming that the banks repay the repos in a fairly short period of time, probably nothing. Bottom line to housing is that lots and lots of people have overextended themselves, and that’s got to be unwound.

Hope this is informative/helpful

XBoxBoy

[XBoxBoy]

Waterboy, (or anyone else actually)

Can you provide an address for this foreclosure sale that took place in Ventana? I can’t find it in any of the sites I checked.

Thanks,

XboxBoy

[XBoxBoy]

Waterboy, (or anyone else actually)

Can you provide an address for this foreclosure sale that took place in Ventana? I can’t find it in any of the sites I checked.

Thanks,

XboxBoy

[XBoxBoy]

Waterboy, (or anyone else actually)

Can you provide an address for this foreclosure sale that took place in Ventana? I can’t find it in any of the sites I checked.

Thanks,

XboxBoy

[XBoxBoy]

Could be wrong… but…

I’m pretty sure that the fed bought both treasuries and agency debt today. That agency debt is what people are referring to as MBS’s. Note however that I believe these securities are backed by Freddie Mae and Freddie Mac. They are conforming loans and already backed by the government. I don’t believe any of the MBSs bought by the fed today are the risky MBSs backed by 2nds and other non-conforming mortgages. (In other words, no non-agency MBSs)

I believe that the fed loans money to the big banks, and takes these securities as collateral. That allows the big banks to function smoothly until things quiet down, and then the banks return the funds and get their bonds back. The hope is that this will keep the markets from going into a full panic.

This will NOT however alleviate any of the basic problems like the fact that there are lots of junk mortgages out there headed for default. (Or that housing seems to be slowly but steadily dragging the economy into recession.) I believe that this is really only a move to stop a full panic from happening. (or put another way, this will allow for an orderly unwinding of problems instead of a chaotic panic)

If one of these big banks should go bankrupt, the fed will hold the collateral loans, (treasuries and agency debt) which it can sell. If the fed can’t sell treasuries or agency debt onto the open market, then well… we’ll talk about that while we wait in the food line.

Just remember, these comments are worth exactly what you paid for them…

XBoxBoy

[Author]

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