With an hour to spare it's the Saturday open thread.
14 comments:
Bean Counter
said...
"The country's major banking groups each have about 100000 distressed residential properties on their books, Andrew Golding, the chief executive of Pam Golding Properties, told the Investment Property Databank (IPD)/SA Property Owners Association investment conference in Cape Town this week.
"The total excluded properties that had already been repossessed, Golding added." - Sunday Times, today.
The article then wanders off into insanity, with Herr Golding, Chief Propagandist of the Third Property Reich, explaining why it's never been a better time to buy and why a fairy dies whenever you don't buy an overpriced property. I suppose one can't expect anything more from our financially illiterate media.
Bit still...400,000 properties hitting the skids, hundreds of thousands already repo'ed: just how big are the banks' shadow inventories?
Just got stuck into Lightstone's suburb reports, very interesting reading and well worth the 35 bucks per report. I'll crunch the numbers for various Cape Town areas and report back soon. So far it's looking exactly like what most of us suspected: big average falls with big sales volume in 2008 and 2009, and a big increase in average selling prices so far this year - on tiny volume.
The 100,000 distressed properties per bank, while sounds impressive, doesn't really tell us much without knowing what's the total number of properties they have on their books. At least a ballpark figure. Anyone got any idea?
From the USA market oracle. It parallels what is going on here: "The housing depression will last for a decade or more. This is by design. The Fed has been working with the banks to withhold inventory so prices do not fall too fast or too far. That way the banks can manage their write-downs without slipping into insolvency. But what's good for the banks is bad for the country. Capital impairment at the banks, means no credit expansion in the near-term. It means the economy will continue to contract, unemployment will remain high, and deflation will push down wages and prices. Everyone will pay for the mortgage-backed securities scam that was engineered by the banks."
"As of March, banks had an inventory of about 1.1 million foreclosed homes, up 20% from a year earlier, according to estimates from LPS Applied Analytics. Another 4.8 million mortgage holders were at least 60 days behind on their payments or in the foreclosure process, meaning their homes were well on their way to the inventory pile. That “shadow inventory” was up 30% from a year earlier."
"Based on the rate at which banks have been selling those foreclosed homes over the past few months, all that inventory, real and shadow, would take 103 months to unload. That’s nearly nine years. Of course, banks could pick up the pace of sales, but the added supply of distressed homes would weigh heavily on prices — and thus boost their losses."
Basically, in the US (and UK) like here, the banks best kept secret is that they're bankrupt, with assets over-leveraged beyond the hilt.
The papers know what questions not to ask. Who needs an Information Bill? Self-censorship is working just fine. Just a total refusal to connect dots staring them in the face.
@BC
The Sunday Times isn't carrying that Andrew Golding speech about the shadow inventory, even though they do have a report or two from the conference. Plenty of other articles on the "Homeowners on the street! Forclosure! Bankruptcy!... So now is the time to BUYBUYBUY!" type.
Bejeezus, you have to be on serious tranquilisers to believe things are looking up for property.
Morning All - How is it that the banks can hold onto empty reposessed properties for so many months/years with out selling them out of hand ? All those empty properties need a security guard, and their rates payed, and electricity service charges payed. Then there's the weekly pool and garden service to pay if applicable. Then there's the plumber needed if a leak develops or the geyser bursts.
Would'nt it just make sense for the banks to just cut their losses and get the most financially draining properties off their books at fire sale bargain basement prices ? Would'nt they then just break even but be rid of the albatross around their neck ?
@Anon - either rent it through letting agents or let it rot.
If you read Realestateweb FNB has come out to say that W Cape property market is heading downwards again and they don't expect it to head up anytime soon.
AND of course, if empty houses are kept off the market, there will be fewer houses to service demand. Fewer houses = higher prices = higher mortgage incomes for the banks.
I swear this would- no, this IS major news in other countries but our ass licking press is just going to let a major scandal like this vanish down the memory hole to preserve their advertising revenues.
Also, editors are homeowners and morgage slaves. Being in media their jobs are probably insecure and an inflated house price is their only hope of digging themselves out of their debt hole. They probably don't want to rock their boat.
Benny, you should look into the history of home-ownership, some very interesting reading to be had.
One fact that jumps out at you is that the entire concept of getting into massive debt to buy a house was a carefully orchestrated method of controlling labour in the USA.
It makes perfect sense: if you owe three, four, or five times your annual salary to a bank, you're not going to do ANYTHING to tick off your boss.
Suddenly bosses not only have slaves (who will obey their every demand, never talk back, and never move away) but they have slaves who actively want to be slaves, never knowing that they've been enslaved.
Elegant, but sick.
In other news, I heard the most beautiful thing about Berlin yesterday. Apparently in some areas of Berlin haunted by artists, they key the paintwork of expensive cars that park in the streets. It's basically a big and expensive PHUQUE OFF to gentrifying yuppies who might be specuvesting. I spent a week in Berlin and found it an incredibly enlightened, progressive and human city, and this story didn't surprise me at all. Also not suprising that renters vastly outnumber owners in Berlin.
I've heard similar things but it struck me as a pretty complicated conspiracy to pull off. That said, I am easyily persuaded to believe bad things about bankers. Links?
@ Benny, no links offhand, but I know it's been a standard assumption of old lefty UK economic theorists for a while, guys like David Harvey. Very nice animation of one of his lectures online, can't remember the link but Google David Harvey and The Crises of Capitalism.
“We now return to the 1926-'27-'28-'29 sequence of events developing from selling the farmers' machinery on the bankers' drop-dead terms (mortgage means "on death terms"). In 1927 and 1928 the bigger Western city banks began to foreclose on their local country banks that had financed the farm machinery sales and had been borrowing from the bigger city banks to cover their unprecedentedly expanded loaning. First the little and then the successively bigger banks found that they had foreclosed on farmhouses that had no indoor toilets, many with roofs falling in, barns in poor condition, with the replevined farm machinery rusting out in the open—and no customers.” “In 1933, for the first time ever, the hands of the U.S. American wealthy were exposed (and by inference, all land-based capitalism everywhere around the world)—most were money empty. Their land and multiservanted mansion values dropped to almost nothing. Nobody had the almost-nothing amount of money to buy those richly housed estates. There was one exception to the last statement—the Vatican-administered Roman Catholic Church's world organization, which for a pittance acquired many extraordinary properties at that time, which it converted into monasteries and convents, colleges and schools. The game of "deedable land wealth" had been a bluff from its very beginning—multimillennia ago, when that little man on a horse, armed with a club, first rode up to the giant shepherd leader of a tribe and said, bluffingly, "It's very dangerous out here in the wilderness for beautiful sheep such as yours," and the shepherd leader's ultimate coercion into accepting "protection" from the claiming and proclaiming "owner" of the land. Landownership did not go back to an act of God. All the kings always had their priests present when the land claimage was made by their explorers. The priests planted their crosses to confirm that the king's ownership was blessed by God. The Roman Catholic Church, starting in its emperorpope days, has been in the deeded-land business for "going on" 2000 years. It is as yet the world's largest real estate owner. Real, a Spanish word, means "royal"—the succession of king-deeded estate lands.”
“ In 1933, '34, '35, and '36 the New Deal and the U.S. Congress diligently investigated the banking system and the practices of its most powerful leaders. They found many malpractices, which we will discuss later. Most prominently they found the banks loaded with worthless mortgages on properties that were unsaleable because uninhabitable—mortgages on buildings without roofs, bathrooms, etc. The government said, "The first thing we must do is make those mortgages we've inherited worth something." At this point the American government dictated the banking strategy and started refinancing of the building industry. The so-called building "industry" was already 2000 years behind the arts of building ships of the sea and sky, which ships of the sea and sky are, in fact, environment-controlling structures in exactly the same sense that land buildings are environment-controlling structures. “To those who understood some of its intricacies, everything was now out in the open about the world of banking. The New Deal said it was going to prohibit usurious rates of interest—"the banks must earn enough to keep themselves going, but only can charge 1 1/2 percent for interest." Banks were regulated just like the Post Office. No banker had authority beyond that of a postmaster. The New Deal completely separated from banking what Morgan and many of the private banks had been doing—taking deposit money and putting it into common stocks and even into the bankers' own highly speculative private ventures. Thus came the New Deal's Securities and Exchange Commission and the complete separation of banking and initial risk financing—or, at least, supposedly so. Banks' trust departments could as yet buy and sell corporate venture stocks for clients' accounts”
14 comments:
"The country's major banking groups each have about 100000 distressed residential properties on their books, Andrew Golding, the chief executive of Pam Golding Properties, told the Investment Property Databank (IPD)/SA Property Owners Association investment conference in Cape Town this week.
"The total excluded properties that had already been repossessed, Golding added." - Sunday Times, today.
The article then wanders off into insanity, with Herr Golding, Chief Propagandist of the Third Property Reich, explaining why it's never been a better time to buy and why a fairy dies whenever you don't buy an overpriced property. I suppose one can't expect anything more from our financially illiterate media.
Bit still...400,000 properties hitting the skids, hundreds of thousands already repo'ed: just how big are the banks' shadow inventories?
Just got stuck into Lightstone's suburb reports, very interesting reading and well worth the 35 bucks per report. I'll crunch the numbers for various Cape Town areas and report back soon. So far it's looking exactly like what most of us suspected: big average falls with big sales volume in 2008 and 2009, and a big increase in average selling prices so far this year - on tiny volume.
The 100,000 distressed properties per bank, while sounds impressive, doesn't really tell us much without knowing what's the total number of properties they have on their books. At least a ballpark figure. Anyone got any idea?
Anonymous Coward
From the USA market oracle. It parallels what is going on here: "The housing depression will last for a decade or more. This is by design. The Fed has been working with the banks to withhold inventory so prices do not fall too fast or too far. That way the banks can manage their write-downs without slipping into insolvency. But what's good for the banks is bad for the country. Capital impairment at the banks, means no credit expansion in the near-term. It means the economy will continue to contract, unemployment will remain high, and deflation will push down wages and prices. Everyone will pay for the mortgage-backed securities scam that was engineered by the banks."
"As of March, banks had an inventory of about 1.1 million foreclosed homes, up 20% from a year earlier, according to estimates from LPS Applied Analytics. Another 4.8 million mortgage holders were at least 60 days behind on their payments or in the foreclosure process, meaning their homes were well on their way to the inventory pile. That “shadow inventory” was up 30% from a year earlier."
"Based on the rate at which banks have been selling those foreclosed homes over the past few months, all that inventory, real and shadow, would take 103 months to unload. That’s nearly nine years. Of course, banks could pick up the pace of sales, but the added supply of distressed homes would weigh heavily on prices — and thus boost their losses."
Basically, in the US (and UK) like here, the banks best kept secret is that they're bankrupt, with assets over-leveraged beyond the hilt.
The papers know what questions not to ask. Who needs an Information Bill? Self-censorship is working just fine. Just a total refusal to connect dots staring them in the face.
@BC
The Sunday Times isn't carrying that Andrew Golding speech about the shadow inventory, even though they do have a report or two from the conference. Plenty of other articles on the "Homeowners on the street! Forclosure! Bankruptcy!... So now is the time to BUYBUYBUY!" type.
Bejeezus, you have to be on serious tranquilisers to believe things are looking up for property.
There is no bubble. Buy now before it's too late.
Morning All - How is it that the banks can hold onto empty reposessed properties for so many months/years with out selling them out of hand ?
All those empty properties need a security guard, and their rates payed, and electricity service charges payed.
Then there's the weekly pool and garden service to pay if applicable.
Then there's the plumber needed if a leak develops or the geyser bursts.
Would'nt it just make sense for the banks to just cut their losses and get the most financially draining properties off their books at fire sale bargain basement prices ?
Would'nt they then just break even but be rid of the albatross around their neck ?
@Anon - either rent it through letting agents or let it rot.
If you read Realestateweb FNB has come out to say that W Cape property market is heading downwards again and they don't expect it to head up anytime soon.
@ Anon
AND of course, if empty houses are kept off the market, there will be fewer houses to service demand. Fewer houses = higher prices = higher mortgage incomes for the banks.
I swear this would- no, this IS major news in other countries but our ass licking press is just going to let a major scandal like this vanish down the memory hole to preserve their advertising revenues.
Also, editors are homeowners and morgage slaves. Being in media their jobs are probably insecure and an inflated house price is their only hope of digging themselves out of their debt hole. They probably don't want to rock their boat.
Lot of sharks waiting for you worthless freaks.
Benny, you should look into the history of home-ownership, some very interesting reading to be had.
One fact that jumps out at you is that the entire concept of getting into massive debt to buy a house was a carefully orchestrated method of controlling labour in the USA.
It makes perfect sense: if you owe three, four, or five times your annual salary to a bank, you're not going to do ANYTHING to tick off your boss.
Suddenly bosses not only have slaves (who will obey their every demand, never talk back, and never move away) but they have slaves who actively want to be slaves, never knowing that they've been enslaved.
Elegant, but sick.
In other news, I heard the most beautiful thing about Berlin yesterday. Apparently in some areas of Berlin haunted by artists, they key the paintwork of expensive cars that park in the streets. It's basically a big and expensive PHUQUE OFF to gentrifying yuppies who might be specuvesting. I spent a week in Berlin and found it an incredibly enlightened, progressive and human city, and this story didn't surprise me at all. Also not suprising that renters vastly outnumber owners in Berlin.
@ BC
I've heard similar things but it struck me as a pretty complicated conspiracy to pull off. That said, I am easyily persuaded to believe bad things about bankers. Links?
@ Benny, no links offhand, but I know it's been a standard assumption of old lefty UK economic theorists for a while, guys like David Harvey. Very nice animation of one of his lectures online, can't remember the link but Google David Harvey and The Crises of Capitalism.
“We now return to the 1926-'27-'28-'29 sequence of events developing from selling the farmers' machinery on the bankers' drop-dead terms (mortgage means "on death terms"). In 1927 and 1928 the bigger Western city banks began to foreclose on their local country banks that had financed the farm machinery sales and had been borrowing from the bigger city banks to cover their unprecedentedly expanded loaning. First the little and then the successively bigger banks found that they had foreclosed on farmhouses that had no indoor toilets, many with roofs falling in, barns in poor condition, with the replevined farm machinery rusting out in the open—and no customers.”
“In 1933, for the first time ever, the hands of the U.S. American wealthy were exposed (and by inference, all land-based capitalism everywhere around the world)—most were money empty. Their land and multiservanted mansion values dropped to almost nothing. Nobody had the almost-nothing amount of money to buy those richly housed estates. There was one exception to the last statement—the Vatican-administered Roman Catholic Church's world organization, which for a pittance acquired many extraordinary properties at that time, which it converted into monasteries and convents, colleges and schools.
The game of "deedable land wealth" had been a bluff from its very beginning—multimillennia ago, when that little man on a horse, armed with a club, first rode up to the giant shepherd leader of a tribe and said, bluffingly, "It's very dangerous out here in the wilderness for beautiful sheep such as yours," and the shepherd leader's ultimate coercion into accepting "protection" from the claiming and proclaiming "owner" of the land.
Landownership did not go back to an act of God. All the kings always had their priests present when the land claimage was made by their explorers. The priests planted their crosses to confirm that the king's ownership was blessed by God. The Roman Catholic Church, starting in its emperorpope days, has been in the deeded-land business for "going on" 2000 years. It is as yet the world's largest real estate owner. Real, a Spanish word, means "royal"—the succession of king-deeded estate lands.”
“ In 1933, '34, '35, and '36 the New Deal and the U.S. Congress diligently investigated the banking system and the practices of its most powerful leaders. They found many malpractices, which we will discuss later. Most prominently they found the banks loaded with worthless mortgages on properties that were unsaleable because uninhabitable—mortgages on buildings without roofs, bathrooms, etc.
The government said, "The first thing we must do is make those mortgages we've inherited worth something." At this point the American government dictated the banking strategy and started refinancing of the building industry. The so-called building "industry" was already 2000 years behind the arts of building ships of the sea and sky, which ships of the sea and sky are, in fact, environment-controlling structures in exactly the same sense that land buildings are environment-controlling structures.
“To those who understood some of its intricacies, everything was now out in the open about the world of banking. The New Deal said it was going to prohibit usurious rates of interest—"the banks must earn enough to keep themselves going, but only can charge 1 1/2 percent for interest." Banks were regulated just like the Post Office. No banker had authority beyond that of a postmaster. The New Deal completely separated from banking what Morgan and many of the private banks had been doing—taking deposit money and putting it into common stocks and even into the bankers' own highly speculative private ventures. Thus came the New Deal's Securities and Exchange Commission and the complete separation of banking and initial risk financing—or, at least, supposedly so. Banks' trust departments could as yet buy and sell corporate venture stocks for clients' accounts”
http://www.maebrussell.com/Critical%20Path/Critical%20Path%20excerpts%201.html
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