<p>[Bloomberg.com:</a> Worldwide](<a href=“Bloomberg - Are you a robot?”>Bloomberg - Are you a robot?)</p>
<p>foreclosures up 60% in Feb</p>
<p>Our paper this am rpts on another adverse effect of foreclosures. The lower sale price that ensues brings down neighborhood home values (appraisers use comparables to set the value of your house), and eventually as the real estate values of a cmmty sink, it affects the tax base and the city/state get less tax revenue and public services and schools, fire/police depts and stuff start to suffer. Not to mention the damage all the debt eating does to the banks and lending institutions.</p>
<p>I agree it’s not good to have foreclosures but each family should decide for themselves based on the numbers, and not based on morality. Those guys at the top that pockets tons of money, where are they now?
I also agree Jim Cramer is crazy.:D</p>
<p>A foreclosure sale does not meet the standards of a sale at market value which presumes a willing seller not selling under duress. Comparable sales should not include non market sales unless they are adjusted to market.</p>
<p>Economic Darwinism in California</p>
<p>[BBC</a> NEWS | Business | Home speculators strike gold in California](<a href=“http://news.bbc.co.uk/2/hi/business/7289292.stm]BBC”>BBC NEWS | Business | Home speculators strike gold in California)</p>
<p>Realtors are not allowed to use foreclosures in their comps. However; having said that; if you have enough foreclosures in a neighborhood, then it will most definitely affect the selling price of the non-distressed properties. I.e. 4 houses in a neighborhood. All on the market for $200,000. That is probably the comp market. Throw in a foreclosure property going for $160,000 and it will make selling the other 4 at $200,000 more difficult. Throw a second or third in there and it gets worse. Then, a seller being desperate, drops their price to $170,000. That price drop directly affects the comps on the other 3. Those prices will come down also.</p>
<p>So, if a Realtor is using foreclosures in their comps, then challenge them. They aren’t allowed. Especially if they are trying to use your entire town as a comp.</p>
<p>Sorry. The headline used “foreclosures”, but the body of the article also discussed short sales. Perhaps it is the short sales that are used in the comparables. Would that make sense? Sometimes these AP articles don’t fully explain things. And sometimes my local paper edits out entire paragraphs to save space. I discovered this once on a trip reading an out of town newspaper - same article in two newspapers, one with more paragraphs!</p>
<p>Another reason foreclosure sales make poor comps–condition.</p>
<p>"Whoever had lived there had clearly left in a hurry: the floors littered with unwanted documents, clothes and children’s’ toys; a door is hanging from one hinge in the kitchen. </p>
<p>There are cockroaches and mouse droppings and part of the ceiling has caved in through water damage. </p>
<p>A local politician in the Corona area has proposed laws requiring banks and other companies that repossess properties to be responsible for their upkeep. </p>
<p>The measure would give county authorities the power to levy fines on lenders that fail to maintain empty homes in keeping with the properties around them."</p>
<p>Hard to have confidence when the Fed has to keep Bear Stearns afloat. I’d argue that this isn’t just “spin.”</p>
<p>[Fed</a> Races to Rescue Bear Stearns In Bid to Steady Financial System - WSJ.com](<a href=“http://online.wsj.com/article/SB120550108028136579.html?mod=hpp_us_inside_todayhttp://online.wsj.com/article/SB120550108028136579.html?mod=hpp_us_inside_today]Fed”>http://online.wsj.com/article/SB120550108028136579.html?mod=hpp_us_inside_todayhttp://online.wsj.com/article/SB120550108028136579.html?mod=hpp_us_inside_today)</p>
<p>Interesting article, ASAP. You’re right, it’s not spin. This is serious s**t, and it extends to, as the article states, “all corners of the financial markets”. </p>
<p>That said, the article in our paper, as well as what I heard on NPR, mentioned that an underlying lynch pin in Bear Stearns’ problems had something to do with a mtge fund within the Carlysle Group, which I’m pretty sure is an entity that Bush Sr. is involved with. Didn’t seem to be mentioned in the WSJ article.</p>
<p>I’m not downplaying the seriousness of this, but seeing as how this type of fed bailout arrangement hasn’t been used since the 1930’s, perhaps the Carlysle connection had something to do with it. That might be preferable to thinking we are standing at the edge of the abyss.</p>
<p>"had something to do with a mtge fund within the Carlysle Group, which I’m pretty sure is an entity that Bush Sr. is involved with. "</p>
<p>Hmm… no wonder Jr. gave such an eloquent speech Friday to the Economic Club of NY. </p>
<p><a href=“http://www.nytimes.com/2008/03/15/opinion/15collins.html?_r=1&hp&oref=slogin[/url]”>http://www.nytimes.com/2008/03/15/opinion/15collins.html?_r=1&hp&oref=slogin</a></p>
<p>The experts want to be sure, so they won’t say we’re in a recession until two bad quarters have gone by, which means they won’t admit we’re in trouble until June…long after the recession has really begun.</p>
<p>Meanwhile, the latest Gallup poll says 3/4 of Americans believe we’re in a recession.</p>
<p>Not saying we aren’t or we are in a recession. But 3/4 of Americans saying we are doesn’t mean a thing to me. There is a reason that you need 2 consecutive quarters to determine economic trends. If you understand economics, then you know the answer. </p>
<p>So, if you think our economy should be considered in recession or inflation or depression because 3/4 of Americans; many of which can’t balance a check book and max out credit cards going into debt on things they don’t need; then believe it. That’s cool. I happen to know how economics works. Again, I’m not saying we aren’t or are in a recession. I’m saying that I know what information and numbers I need to see to tell me; and it’s sure not the American public telling me.</p>
<p>The economic definition of recession is arbitrary–20% slowdown for 2 quarters is a recession; 19% is not. </p>
<p>If 3/4 of Americans think we are in recession and quit spending, then the economy will definitely grind to a halt.</p>
<p>ellemenope – The economic definition of a recession is negative growth for two consecutive quarters. A 20% drop in the stock market is the threshold for a bear market.</p>
<p>yes but by the time you actually can measure 2 quarters of negative GPD the recession is behind you.
I don’t like the tone that 3/4 of American are stupid because they can’t balance their checkbooks. :rolleyes:</p>
<p>If 3/4 of Americans think we are in recession and quit spending, then the economy will definitely grind to a halt.</p>
<p>ISn’t that what the direct and rapid stimulus is for?</p>
<p>I thought that part of the problem was that we were spending too much- spending money we didn’t have?</p>
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<p>Thank you for the clarification and the reminder that there’s another reason to feel unsettled–the bear market! </p>
<p>I’m just not sure that giving me $300/600/whatever the amount of money is going to make a difference (I probably won’t get anything). You can’t buy a car or a house with it–2 industries that could really use some buyers.</p>
<p>Columbia; you’ve really got to stop reading into things. It makes for a lot a reposting. No where did I say that 3/4 of Americans are stupid. Yes, I said that MANY Americans can’t balance a check book and MANY are in debt for things that are not a necessity and they have no reason to be in debt. These are facts. I didn’t say MOST, ALL, or any other definitive word. I said MANY. And MANY is very accurate. MANY Americans, including many in the 75% that claim we are in a recession, don’t understand economics enough to know if we are or not.</p>
<p>As far as believing that having to go through 2 quarters before determining if we are in a recession seem pointless because the recession will be behind us; that too isn’t quite accurate. Chances are, if there are 2 consecutive quarters of negative growth, then it is very unlikely that the recession is going to all of a sudden end in the very next few days. There are so many factors that change the flow of money; sometime consumer confidence, sometimes seasonal issues, sometimes wars, etc… You can’t base the economy on oil prices climbing and other volatile commodities.</p>
<p>Keep on mind some of those who say we aren’t in a recession are motivated by partisan factors such as who is in the White House. Something tells me in Day 7 of Obama’s presidency Faux Noise will start talking about the horrors of the recession and how it must be because of tax and spend liberals as opposed to conservatives who just spend and run up the deficit like gambling addicts.</p>