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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Chispas who wrote (20149)	1/2/2005 9:59:18 AM
From: mishedlo	Read Replies (1) \| Respond to of 116555

January Contrary Investor [lots of interesting graphs and analysis - mish] contraryinvestor.com

To: Chispas who wrote (20149)	1/2/2005 10:13:12 AM
From: mishedlo	Read Replies (1) \| Respond to of 116555

The Las Vegas RE Bubble appears to have burst NEW 1/1/2005 7:06:57 PM I spent 3 days of R & R at the Las Vegas Mandalay Bay last week, and thought it would be fun to spend a day driving around town doing some on the ground reconnaissance of the most expansive real estate bubble in the US. Based on my 8 hour survey of the Summerlin and Anthem suburbs of LV, I can say with 90% certainty that the bubble has burst and prices may spiral down for years to come. The latest finished phase of a Dell Webb developement had over a hundred homes that had been completed back in August of 2004. I knew I had hit the information jackpot as I drove up and down the streets of Anthem, a new upscale suburb of LV, about a 20 minute commute to the Strip. It felt kinda like the twilight zone as my count indicated that only 10 percent of the homes were inhabited and almost half the homes had for sale or for lease signs out in front of them. Note..each of these homes was approx 1600 sq. ft, single story on a postage stamp/5000 sq. ft. lot. I stopped my SUV to talk to a 40ish gentleman who was doing some work out on his new driveway. I told him I was interested in the RE market in the area and he proceeded to give me 10 minutes of his long sad story about speculative investing in a bubble market. He said that every home in this neighborhood had been purchased by speculators back in early 2004, hoping to take possession of their home and then instantly flip it and make a quick 100k or more. I listened in stunned amazement as he told me that he and the rest of the speculators had paid between 600 and 700k for these crackerbox tract homes. As he was talking I did the quick math on what Dell Webb, the builder had into these homes and figured that he had no more that 130 - 150k into the land and the construction costs for each home. The nice man in the driveway said that the bottom had fallen out of home prices back in Sept. and overnight the homes had lost over 150 - 200k in value. He had purchased two of them, hoping to make a killing and was deciding which of the two he was going to live in and which of the two he was going to try and sell. He was absolutely certain that prices were going to continue rising from here and I did everything I could to contain my astonishment as he tried to give me his rationale on why prices would continue up from here. I asked him what these properties would rent for and he said that people were trying to get 1850.00 a month but that 1600.00 was probably what they were worth. After talking to this fellow I did a little more research on the homes in this tract. Many of them had for sale by owner signs in them and some of them had a sell sheet with asking price taped to inside of the front window. On one street I saw 3 different sell sheets in 3 seperate but almost identical houses. The asking price of one of the homes was $529,000 another was $429,000 and another was $395,000 and based on the fact that only 10% of the homes were inhabited, it didn't look as though 395k was attracting any interest. As I drove out of this ghost town I noticed that a newly constructed school for the area had been named "Dell Webb Middle School" and I couldn't help but chuckle. prudentbear.com Scroll down and read some of the replies Mish

To: Chispas who wrote (20149)	1/2/2005 10:17:39 AM
From: mishedlo	Read Replies (6) \| Respond to of 116555

The Las Vegas RE Bubble appears to have burst NEW 1/1/2005 7:06:57 PM I spent 3 days of R & R at the Las Vegas Mandalay Bay last week, and thought it would be fun to spend a day driving around town doing some on the ground reconnaissance of the most expansive real estate bubble in the US. Based on my 8 hour survey of the Summerlin and Anthem suburbs of LV, I can say with 90% certainty that the bubble has burst and prices may spiral down for years to come. The latest finished phase of a Dell Webb developement had over a hundred homes that had been completed back in August of 2004. I knew I had hit the information jackpot as I drove up and down the streets of Anthem, a new upscale suburb of LV, about a 20 minute commute to the Strip. It felt kinda like the twilight zone as my count indicated that only 10 percent of the homes were inhabited and almost half the homes had for sale or for lease signs out in front of them. Note..each of these homes was approx 1600 sq. ft, single story on a postage stamp/5000 sq. ft. lot. I stopped my SUV to talk to a 40ish gentleman who was doing some work out on his new driveway. I told him I was interested in the RE market in the area and he proceeded to give me 10 minutes of his long sad story about speculative investing in a bubble market. He said that every home in this neighborhood had been purchased by speculators back in early 2004, hoping to take possession of their home and then instantly flip it and make a quick 100k or more. I listened in stunned amazement as he told me that he and the rest of the speculators had paid between 600 and 700k for these crackerbox tract homes. As he was talking I did the quick math on what Dell Webb, the builder had into these homes and figured that he had no more that 130 - 150k into the land and the construction costs for each home. The nice man in the driveway said that the bottom had fallen out of home prices back in Sept. and overnight the homes had lost over 150 - 200k in value. He had purchased two of them, hoping to make a killing and was deciding which of the two he was going to live in and which of the two he was going to try and sell. He was absolutely certain that prices were going to continue rising from here and I did everything I could to contain my astonishment as he tried to give me his rationale on why prices would continue up from here. I asked him what these properties would rent for and he said that people were trying to get 1850.00 a month but that 1600.00 was probably what they were worth. After talking to this fellow I did a little more research on the homes in this tract. Many of them had for sale by owner signs in them and some of them had a sell sheet with asking price taped to inside of the front window. On one street I saw 3 different sell sheets in 3 seperate but almost identical houses. The asking price of one of the homes was $529,000 another was $429,000 and another was $395,000 and based on the fact that only 10% of the homes were inhabited, it didn't look as though 395k was attracting any interest. As I drove out of this ghost town I noticed that a newly constructed school for the area had been named "Dell Webb Middle School" and I couldn't help but chuckle. prudentbear.com Scroll down and read some of the replies That is a very interesting read. BTW we have a Del Web "Sun City" development about 30 minutes from me. It is in Huntley Illinois. Just last week I was reading in the newspaper that property taxes for homes in the development have been slashed. Reason, homes were over-appraised and prices have dropped like a rock. Mish

To: Chispas who wrote (20149)	1/2/2005 10:34:23 AM
From: mishedlo	Respond to of 116555

UK Christmas sales most lacklustre since 1979 By Andrew Johnson and Tim Webb 02 January 2005 After the most disappointing December trading for 25 years, British retailers are now bracing themselves for a new wave of card fraud. The British Retail Consortium is expected to report that shops experienced, on average, a fall in like-for-like December sales of up to 2 per cent last month compared with 2003. City analysts said that even last week's sales business would not make up for dismal pre-Christmas trading. The news comes as banks and retailers prepare to face a massive increase in hi-tech crime, including identity theft and online fraud, following yesterday's introduction of new super-secure credit and debit cards. Police and security experts believe that chip-and-PIN cards, which require customers to tap in their secret personal identity number rather than signing their name, will deprive organised criminal gangs of around £241m a year and that they will look for other ways to make up the loss. Plastic last week overtook cash as Britain's preferred method of payment. Yesterday marked a major change in retailing, with banks no longer covering losses from card fraud unless shops have upgraded to chip and PIN. Customers without a chip-and-PIN card will still be able to sign for goods. Identity theft - where a criminal uses stolen bank account details to order new credit cards or empty a victim's bank account - increased by 66 per cent to £37m last year. Cash machine fraud - where illegal "skimming" devices are used to read card details - was up 85 per cent to £61m. Mail order fraud, with details taken by telephone, was up by 51 per cent, also to £61m. Mail order and internet retail are thought particularly vulnerable because the cardholder need not be present for the transaction. "The other new burgeoning fraud is online banking fraud," said Jemma Smith, of payments association Apacs. "Phishing" scams, in which customers are sent emails purportedly from their bank asking for account details, first emerged in 2002 and cost £4.5m a year. In other countries money has been transferred out of accounts. Retailers will gather in London next month for a conference on tackling retail fraud and "fraud migration". Organiser Paul Bessant said that when chip and PIN was introduced in France, card fraud fell by 80 per cent. The police's Dedicated Cheque and Plastic Crime Unit, funded by the big banks to the tune of £3m, has recovered 35,000 stolen credit cards since 2002. news.independent.co.uk