Case-Shiller Bear Porn

McCain = Bush = McCain

I've kept the blog largely apolitical, but after watching Obama's masterful speech in Berlin, I had to post this. If you'd like four more years of Bush, by all means vote for McCain.



If you want change then Obama is your man.

Interest Rates Rise, Housing Death Spiral to Ensue

Due to the problems that housing and lenders have had as of late, interest rates for California home purchases have gone up, way up, in the last couple of months. Have a look at this graph from BankRate.com

It shows that the interest rate for a "typical" home in OC has gone up from about 5.7% to about 6.5% since May. When I run the numbers, this translates into a roughly 9% higher mortgage payment! My guess is that this change alone will cause 10 to 20% of those that could have qualified for a loan in May to now be unable to qualify.

Put another way, the recent run-up in interest rates has reduced the effective demand for homes in OC by 10 to 20%. Now, if we assume that housing prices are unit-elastic, this change in interest rates/demand ought to cause home prices to drop between 10 and 20% more.

Then there's the compounding effects of the price/demand declines. If prices drop, more people will walk from their homes. If more people walk from their homes, then there will be more inventory on the market and if there's more inventory on the market, prices must drop to meet demand.

Not to mention the fact that, banks seeing a greater increase in foreclosures might use the same inscrutable logic as they've used in the last couple of months and raise their rates in response, which leads to fewer people qualifying and so it goes...

It's called a death-spiral friends and neighbors and the banks are bringing on themselves with the help of the White House...but guess what? You, me and all the rest of the American tax payers are going end up paying this particular bill in the form of bailouts and every other manner of Republican Socialism the Bushies can muster.

How much more of this crap are we going to take?

Are Your Bank Assets at Risk?

Regulators learned in the 1990s that the higher a bank's Texas Ratio the more likely it is to fail. Is your bank on this list? If it is, move your money. And call mom and dad to be sure that they don't have any money in these insitutions either.




Using this ratio, regulator say as many as 150 financially strapped institutions could fall over the next 18 months. You do NOT want to be one of the "statistics" in this fallout.

The (Un)Natural (De)Evolution of the Blog

As I have mentioned before, the cratering of the OC RE market is now so obvious, I find it uninteresting to comment on it any further. Once things start to turn, I'll be back on topic, but for the moment I still want to blog about something, though I have no idea what.

Until I figure it out, or the market turns, I'll just try out some random concepts and see where they go.

I've always enjoyed the message and simplicity of the "Wear Sunscreen" song. If one were absent a defined moral or ethical perspective, I think one could use its message as a reasonable surrogate, at least on a short-term basis. It is definitely better than MOST ethical systems I have come across.



While "Sun Screen" is fairly light-hearted , Chris has made an even more light-hearted parody of the video. Some might consider it profane; I think it's funny and it contains a few good nuggets of wisdom. Having traveled to Amsterdam as much younger man, I will also offer that based on first-hand experience central premise of Mr. Rock's video is most certainly true...