Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: patron_anejo_por_favor who wrote (270953)	8/24/2010 11:24:57 PM
From: posthumousone	Read Replies (1) \| Respond to of 306849

CRE collapse is taking toooooooooo long....come on already, lets rev it up!! :) I dont know how some of these businesses stay afloat.....there is one new construction on my way to work....They threw up a Walgreens in about 3 months... Think the treasury auction tomorrow will move the markets?? Treasuries fell for the first time in three days on concern five-year yields near the lowest level in 20 months will deter buyers at today’s auction of the debt. The government will sell $36 billion of debt that matures in 2015 and $29 billion in seven-year securities tomorrow after having auctioned two-year notes and 30-year Treasury Inflation Protected Securities earlier this week. Five-year yields touched the lowest level since December 2008 yesterday on signs growth in the world’s largest economy is losing momentum. “Treasury yields have already fallen to unsustainable levels,” said Hiroki Shimazu, an economist in Tokyo at Nikko Cordial Securities Inc., a unit of Japan’s third-largest publicly traded bank. The yield on the 10-year note rose one basis point to 2.50 percent at 11:39 a.m. in Tokyo, according to BGCantor Market Data. The price of the 2.625 percent security maturing in August 2020 fell 3/32 or $0.94 per $1,000 face amount to 101 3/32. The yield slid to 2.4668 percent yesterday, a 17-month low. The two-year note yield was at 0.48 percent after touching a record low of 0.4542 percent yesterday. The yield on the five- year note rose two basis points to 1.33 percent after falling to as low as 1.30 percent yesterday. Pre-Auction The five-year Treasury notes being sold today yielded 1.35 percent in pre-auction trading, dropping from 1.796 percent at the previous sale on July 28. Investors bid for 3.06 times the amount on offer last month, versus the average of 2.72 times for the past 10 auctions. Indirect bidders, the category of investors that includes foreign central banks, bought 47.3 percent of the notes, versus the 10-sale average of 46.4 percent. The two-year Treasury auction yesterday drew a record low yield of 0.498 percent. The sale’s bid-to-cover ratio, which gauges demand by comparing total bids with the amount of securities offered, was 3.12, compared with an average of 3.19 at the past 10 auctions. The $7 billion sale this week of 30-year Treasury Inflation Protected Securities, or TIPS, drew a yield of 1.768 percent, the lowest ever for sales of the debt dating to 1998. The bid- to-cover ratio was a record high 2.78. Altogether, the $102 billion of notes being sold this week is the smallest total for this combination of securities since May 2009. Limited Losses In an attempt to bolster the economy, policy makers said on Aug. 10 that the central bank would maintain its holdings of securities at $2.05 trillion to prevent money from draining out of the financial system. The central bank will purchase about $18 billion of U.S. debt by the middle of September using the money from principal payments on its holdings of agency debt and agency mortgage- backed securities. The Fed bought $1.35 billion of Treasuries yesterday, increasing the total to $7.51 billion since the program began Aug. 17. Losses were tempered as economists say a report this week will show economic growth moderated, supporting the Federal Reserve’s willingness to extend accommodative monetary policy. “Growing uncertainties about the U.S. economy and the rest of the world add to speculation that the Federal Reserve may extend credit easing, or even enhance it,” said Hideo Shimomura, who helps oversee the equivalent of $53.3 billion in Tokyo as chief fund investor at Mitsubishi UFJ Asset Management Co., a unit of Japan’s biggest bank. “Ten-year yields may fall below 2 percent.” GDP Moderating A Commerce Department update on Aug. 27 will show the economy grew 1.4 percent in the second quarter, the slowest rate since the recovery began in the middle of last year, according to a Bloomberg News survey. The National Association of Realtors reported yesterday that sales of existing homes dropped 27 percent in July after a revised 7.1 percent reduction in the previous month. The median forecast of 74 economists in a Bloomberg News survey was for a 13.4 percent drop. “The housing data was ugly and extremely weak, which is clearly a concern given the fragile state of the economy,” said Larry Milstein, managing director of government and agency debt trading in New York at R.W. Pressprich & Co., a fixed-income broker and dealer for institutional investors. “The concern now is that the Fed might need to do more than reinvest interest income and proceeds from maturing bonds.” Fed Chairman Ben S. Bernanke will discuss the outlook for the economy on Aug. 27 at a conference in Jackson Hole, Wyoming. Futures trading on the CME Group exchange showed a 30 percent chance the Fed will cut the target rate for overnight bank lending by its November meeting, up from a 25.4 percent probability one month ago.

To: patron_anejo_por_favor who wrote (270953)	8/24/2010 11:57:13 PM
From: coachbobknight	Respond to of 306849

Patron...can you pass this test..?.. STIMULUS -- REAL OR FAKE: Can you tell which of these government spending projects are real? (Brilliant Video With The Beautiful Rebel Economist) I missed 2...

To: patron_anejo_por_favor who wrote (270953)	8/25/2010 7:56:18 AM
From: carranza2	Read Replies (2) \| Respond to of 306849

Excellent. Thanks. Amazing that 80-85% of CRE was financed with interest-only or partial interest-only debt in 2006 and 2007. Since these mortgages generally come due within 5 years, unless we have a sudden but unlikely expansion of loose money, CRE is going to get hit. A lot of small and medium sized banks are going to take it on the chin. No wonder banks are piling up their excess reserves, not lending. They know substantial amounts of write-offs are on the way. The IMF generally shares the views expressed by Elizabeth Warren in the Congressional report cited by Russ. Two very powerful and reliable sources. I don't believe a word coming out of RE sell-side con artists. If you read and believe them, you can kiss your moolah goodbye. etfdailynews.com If SRS didn't erode as badly as it does, I would definitely take a look at it for a nice speculative plunge. May do it anyway since the Congressional report Russ cites is very compelling.

To: patron_anejo_por_favor who wrote (270953)	8/25/2010 8:34:54 AM
From: ChanceIs	Respond to of 306849

During the third quarter of 2007 alone, and at the very peak of the CRE cycle, 28 percent of CMBS were originated. There is little or no amortization cushion built up, as about 85 percent of these are interest only (IO) or partial IO loans. Amazing. Its just like the larger financial institutions gouging each other in the eyes back in '05 to buy the various subprime mortgage originator specialists. Golden West and Wachovia were such a perfect match. I cried at the wedding. I worked with a gentleman years ago who said that commercial real estate developers always overbuild. Its in their genes. They can't wait for the next big payday. And besides, its all they know. Its not like an ethanol crop farm where you are more or less forced by nature to mothball everything and go to Pensacola Beech for the winter.