Ford workers reject wage concessions – “the government will bail us out”.

I admire Ford’s rejection of taxpayer funds but this kind of union stupidity almost makes me hope the company follows Chrysler into the junkyard. Boeing workers struck over similar issues a year ago, delayed production of planes and saw thousands of layoffs s the result. Good.

UPDATE: similar thoughts here.

92% of factory workers for Ford (F) in Missouri have voted against concessions which would have put them in line with those of the United Auto Workers (UAW).

This was a deal that even UAW leaders had supported promoted, to no avail.

While Ford has avoided bankruptcy thus far, these workers pushing their luck and ignoring the economic realities of their employer.

House prices stabilizing or still going down?

Merrill (are they still around?) says all is well, Goldman says, “watch out below”. One of them’s probably right.

UPDATE: Congress seems certain to extend the $8,000 first time home buyer’s credit, which will do no good in the Greenwich market, and here’s a fellow who thinks propping up housing prices at an artificially high level is a bad idea, “benefitting only home sellers and real estate agents.” Put that way, of course, I’m rethinking my opposition to the plan, but on policy grounds, it sucks.

Swine flu vaccine for politicians’ children but not for yours

Obama’s kids got theirs. You? Get in line.

Religion of peace (almost) kills again

 

It's a boom time for piece(s)!

FBI arrests two muslim terrorists for plotting Danish assassination.

 

All that criticism about winning a Nobel before accomplishing anything must have spurred him to action

Obama appears with Deeds in Virginia.

I’d like to believe this but it doesn’t parse

Rich New Yorkers flee state to escape high taxes. That sounds encouraging, but it seems many of them resettle in New Jersey, so taxes can’t really explain the move. Oh well.

Gallup: Libertarians up to 20% of electorate

Even if most of them have never heard of the term. Hey – we’re even with liberals and growing.

Tesei – what a baby!

First the guy refuses to debate her, now our First Selectman candidate accuses his opponent of inflating her resume in 1978. I lost all respect for Peter Tesei when he fired Garo Garbedian and, rather than give him a send-off tribute, had him frog-marched from the building by a security guard. No class, no spine. And now, it seems, no record to stand on, if the best he can do is drag up an incident that may or may not have happened 31 years ago. What a loser.

Always the spoilsport

Reader Fly sends along this link about housing (and stock) prices always reverting to their pre-bubble levels. Gee, even in Greenwich? I think so.

Popped speculative bubbles tend to retrace to their pre-bubble prices. Housing has already retraced 75% of the bubble–only 25% still to go.

When it comes to post-bubble retraces, the fundamental reasons may not matter as much as the technical case for a full reversion to pre-bubble prices. We all know the fundamental reasons why housing shot up–a credit bubble of epic proportions plus securitization, fraud and low interest rates, to name but a few factors–and why housing has plummeted: foreclosures and inventory are rising, tightening of credit standards by private lenders, etc.

But the ultimate predictor of price is technical: speculative bubbles retrace to their pre-bubble prices, or in many cases even crash below those levels.

Those arguing the fundamentals are always grasping at various straws to support the case that prices won’t drop all the way back to pre-bubble levels, and they’re always wrong.

Thus when the NASDAQ dot-com bubble topped above 5,000 in 2000 and then sank to 3,000, the fundamental analysts piled on reasons why 3,000 was “the bottom.” Indeed, the market did recover the 4,000 level briefly–at which point it reversed and drifted all the way down to 1,100, it’s pre-bubble level.

In other words, regardless of the fundamental reasons offered (they’re not making any more land, inventory is drying up, foreclosure rates are dropping, etc.), markets tend to fully revert to pre-bubble prices.

Here is a chart of the national median prices which have already reverted to 2002 levels. The future full retrace has been added as a projection:

Chris Dodd: you borrow at a rate we approve of or you don’t borrow at all

Given Mr. Dodd’s sordid connections with the banking industry you could explain away his proposed credit card freeze as just plain old Machiavellian politics, but I believe the man is as dumb as this plan is. He really has no clue how business – any business – works, and his being chairman of the Senate banking Committee is just about as insane as Charlie Rangel being placed in charge of writing our tax laws. What a country.

Annoy your neighbors, get rich on residuals

Yes, we have no bananas

Freddy Durante, he of the proposed cellphone tower overlooking North Mianus School, has once again slashed the price of his house at 334 Palmer Hill and it’s down to $923,000 from an original asking price of $1.3 million.  No mention on the listing whether Verizon is still willing to pay $15,000 a month for the privilege of making school kids glow in the dark but I understand Waste Management is offering a similar sum to operate a toxic dump site there. In fact, since both uses are compatible, this could be quite an investment.

Walter, better stay out of the Loan Star state unless you want to beat Bernie’s record

“The eyes of Texas are upon you …”

Texas upholds 2,460 year prison sentence for chump who had group sex with daughters. Expert medical opinion: he’ll never make it.

Bottoms up!

It took a few years and a million bucks chopped off its asking price but Horseneck Tavern, asking $1.6 million, is under contract. Cheers.

Oh sure, now the banks get tough

Imprisoned wife murderer sues JP Morgan for cutting off his home equity line of credit. He’s hopping mad – needs the loan to post bail – and the friggin’ bank cancelled just because he has this little problem with the law. Where were these fiscal guardians when their cohorts were doling out “liar loans”? Go get’em, tiger – you need a loan and in America, that means someone owes you a loan!

UPDATE from happier times: WaMu gave OJ a second mortgage and they weren’t bothered by a little matter like wife killing.

Seattle Times (via NPR): “Someone in Florida had made a second-mortgage loan to O.J. Simpson, and I just about blew my top, because there was this huge judgment against him from his wife’s parents,” she recalled. Simpson had been acquitted of killing his wife Nicole and her friend but was later found liable for their deaths in a civil lawsuit; that judgment took precedence over other debts, such as if Simpson defaulted on his WaMu loan.

“When I asked how we could possibly foreclose on it, they said there was a letter in the file from O.J. Simpson saying ‘the judgment is no good, because I didn’t do it.’

Four contracts reported

Nothing earth shaking, but some substantial prices. This one on Sound Beach Avenue reflects current trends nicely: it sold new in 2003 for $3.075, sold again in 2005 for $4.160 and has now gone to contract again with an asking price of $4.250. If the owner breaks even after living there four years he’s done pretty well, I’d say.

60 Meadow Road in Riverside, that brick home across from the fountain, is again under contract after its first deal fell apart last summer. Same asking rice, $3.895.

361 N. Maple, asking price of $2.1 has found a buyer at long last as has 19 Skylark (behind the hospital), dropped from $1.2 milion to $945,500.

And that’s it so far, though the day is still young.

The next shoe to drop will cost us an arm and a leg

Okay, mangled puns at 7:00 a.m. aren’t funny, but neither is this guy’s prediction that there’s a wave of option ARM mortgages set to implode in the next couple of years that will make the recent mortgage fun look like, well, fun.

Essentially, by giving money to the banks, the Fed has postponed the resetting of these loans to catastrophic levels (one such loan I’m aware of dropped nicely this year, with the result that the borrower is paying $2,000 less per month. Of course, it resets every year so ….).

Read the whole article for an explanation in clear language of what these things are. Here’s the conclusion:

When the lender implosion began in Aug 07, those of us in California, Florida, Arizona and Nevada already knew what the rest of the nation would soon find out. Foreclosure activity was increasing, property values were falling, and the economy was stalling out. The Fed knew this and so did those who were buying the One Year Treasury Bonds and Notes, and as a result, the Bonds and Notes were increasing in value and dropping in rates.

By Jan 08, the Federal Reserve knew the market was in freefall. They Fed knew that the Foreclosure Crisis would only worsen. They also knew that the Sub-Prime Crisis would worsen, and then later would come the Option ARM and Alt-A Crisis. The first objective would be to attempt to deal with the Sub-Prime Crisis. Their actions drove the LIBOR Index down to .31% by the beginning of 2009. Unfortunately, that was too late for most Sub-Prime borrowers. They had originated loans from 2003 to 2006, usually fixed for two years, and by the time LIBOR rates fell to a “reasonable” level that would prevent foreclosures, it was too late. The majority of the loans had recast and people had given in to being foreclosed upon.

While the Fed was dealing with the Sub-Prime Crisis, they were also hoping that their actions would prevent the Option ARM Crisis. By lowering the MTA Index, it would postpone the recasting of the Option ARM loan to the full 5 year term. Within that time, the hope was that the “lending crisis” would end. Of course, once again, the Fed was out of touch with reality.

What the Fed failed to realize, or did not care about, was that homes were completely overvalued. As foreclosures continued to occur with the Sub-Prime Crisis, home values continued to fall. Even more short sighted, the reaction of the Servicers was not considered. The Servicers had no concern for the homeowner. Instead, they mostly wanted to foreclose (as I have detailed in previous articles).

The one action that the Fed has accomplished is to postpone the Option ARM implosion. By decreasing the MTA and other indexes, they managed to extend the period of time for when the Option ARM would recast. Now, most Option ARM loans will recast in 4-5 years. Since 2005 and 2006 saw the bulk of the Option ARM loans originated, the implosion will really occur during the next two years.