Comments on: We’re looking at a fool’s rally – plain and simple.

By: Philip

Philip — Tue, 22 Jan 2008 19:01:38 +0000

To me, a rally right now is like saying “the Fed agrees, now is the time to panic, so that means stocks must be oversold!” Most stocks I follow are still higher than their peak from 2006. Most companies those stocks are attached to have not improved their business since 2006. I say therefore that the stocks are still generally overpriced. Specific stocks vary, of course.

By: mikew

mikew — Tue, 22 Jan 2008 15:02:24 +0000

Well the fed just had an emergency rate cut of .75 with more possible next week. Oil is falling, the world economy is slowing which means a stronger dollar.

Do you still think this is a fools rally? I am quite sure there will be an improvement in the mortgage origination business.

By: mikew

mikew — Mon, 21 Jan 2008 15:30:50 +0000

The dollar will stabilize very soon as the global economy slows. Oil prices have dropped and are expected to drop further. Gold looks to me to be the next specultors bubble.

The fed is easing rates and it will have a positive effect on the mortgage industry. The economic stimulus plan is in the works. Fha reform is near final passage. Real estate is present in its 3rd year of decline. Its not like this just started 5 months ago.

The mortgage market is about 40% the size it was 2 years ago. There will certainly be more pain out there. I don’t disagree with that all. More lenders will fail and I am not sure thats a bad thing. I have found that the vast majority of mortgage brokers still standing today are those that are honest and ethical. Given that the mortgage industry has contracted so much recently the quote “to the victors go the spoils” rings true.

I don’t have my head in the sand at all about the state of the economy in general. We are heading for a recession. Recessions are typically good for mortgage companies. If things are that bad then can someone please explain to me why big retail lenders are resisting cutbacks in their retail lending divisions?

We are in a political year. Its in everyone’s interest to say things are good or bad. We will soon have a new President and a different congress. If history is any indicator that change will also bring forth a change of attitude. Quite frankly in a world driven by markets a change of attitude is all we need.

By: Philip

Philip — Mon, 21 Jan 2008 08:18:18 +0000

I cannot see the chain reaction playing out before mid-2009. There are so many links in the chain that many links are going to have to get revisited over and over. There is no person or organization in the world smakrt enough to anticipate the path or the extent and many participants will try and slow it down hoping for a reprieve. I can’t see how anyone who sees how many facets there are to this mess could expect it to sort out in 52 short weeks. And if China goes down (which should be expected given the genesis of its system) I think we can say 2010 is optimistic and 2012 is more likely. Anyone who disagrees please give a rough calendar of when you would expect various issues to be fully discounted and re-discounted as revelations feedback onto each other.

By: BEnBernanke

BEnBernanke — Mon, 21 Jan 2008 03:53:20 +0000

Gentlemen,

There is absolutely no need for panic. The printing press has been running 24/7 (help needed for 3rd shift operators), and the helicopters are getting ready (ordered a few more). Now, listen carefully as this is very important. The dollar is being devalued and as a result housing will only crash in real terms but not in nominal terms. Housing prices have already declined quite a bit, finding a good deal will soon be equivalent to renting. Take care, gotta go back to work.

By: The Odysseus Medal competition — Voting for the People’s Choice Award is open | BloodhoundBlog: Real estate marketing and technology blog | Realtors and real estate, mortgages, lending, investments

Sun, 20 Jan 2008 19:18:11 +0000

[...] Here is this week’s short-list of Odysseus Medal nominees: Dan Green — Herd Mentality, How Herd Mentality Determines The Direction Of Mortgage RatesJim Cronin — Readers or Search Engines?, Dichotomy of the Real Estate Blog – Do You Please the Readers or Search Engines?Connie Brzowski — Mortgage Crisis, The Mortgage Crisis Has a Silver Lining (and other truths you won’t hear on cable news this week)Chris Johnson — Economics of Wholesale Lending, Some Economics of Wholesale Lending: Yet another Reason Why it’s a dead man walking.Brian Brady — Fishwrap Classifieds, The Future of the Fishwrap ClassifiedsGreg Tracy — Realtors are too Damn Old, Realtors are Just too Damn OldMichael Wurzer — Seeking Clarity, Seeking Clarity in Real Estate Data StandardsGary Elwood — Writing, Why Writing Is the Most Important Thing You Can LearnDoug Quance — School Of Hard Knocks, Tuition Is Expensive At The School Of Hard KnocksDrew Meyers — Neighborhood Boundary Files, 7000+ Neighborhood Boundary Files in Shapefile FormatEric Blackwell — Network Solutions, Network Solutions — I-CANN too hold your domain ideas hostage!Kris Berg — Technology Hangover, Technology Hangover – I’m a little fuzzy.Stan Humphries — Zestimation, What’s in a Number?Trevor Smith — Different Kind of Buyer, Theology, Postmodernism, and a Different Kind of BuyerMorgan Brown — A Fool’s Rally, We’re looking at a fool’s rally – plain and simple. [...]

By: Morgan

Morgan — Sun, 20 Jan 2008 06:38:28 +0000

Javier – how are you supposed to refinance w/out any equity? neg-am payments plus dropping prices will sap most equity out of a house in time for a refinance.

By: Morgan

Morgan — Sun, 20 Jan 2008 06:28:34 +0000

Jeff - I agree, my blog posts are nothing more than my opinion and perception. I'd like to think that my analysis of the situation counts for something; but in the end I'm just one voice. It seems a voice that people have resonated with; but nonetheless just one opinion. And we all know the sayings about opinions. I'm definitely open to the other voices of the cacophony that surrounds these times. We have commenters that routinely call me to task and I'm more than happy to adjust my views accordingly.

I like to think that after an assessment of the risks and problems in the marketplace my bets are in the right place; but that's all they are - bets.

Thanks for reading and for your always insightful commentary.

By: Javier Gonzalez

Javier Gonzalez — Sun, 20 Jan 2008 05:57:22 +0000

mortgage rates will drop significantly this year.

this will allow prime borrowers to refi their option ARM mortgages with fully amortizing payments which are close to their option ARM neg am payments.

By: Jeff Brown

Jeff Brown — Sun, 20 Jan 2008 05:16:58 +0000

Morgan — thanks, I appreciate that.

The large short term risk is your perception — a legitimate one, but still a perception.

I enjoy reading the experts, commenting as if their words came off the third tablet Moses lost on his way down the mountain. A long time ago I used to be sure too.

If there’s anything sure about these interesting times, it’s that we can’t be sure what our reality will be in six or twelve months. Those who are sure one way or the other show their inexperience.

I am unconvinced of the ‘prices drop into the black abyss’ script. After contemplating the factors pointing in that direction, I label it as plausible. I’m equally unconvinced of the ‘late 2008 recovery’ scenario. Again though, I see how it’s plausible. I categorize each as unlikely.