Spanish Elite Say: Let Them Drink Sangria.

Looking at these pictures from Barcelona one would think this is Tunisia, Cairo, or at best, Athens. Instead, it is from the once incomparably wealthy capital of Catalunia (although they did have Olympics there: an event guaranteed to result in at least one municipal bankruptcy at some point in the future).

Why?

¿Por qué?

NTT Docomo Rube Goldberg Style AD:Beautiful

Corporations:Just Doing Their Job?

Via: OnlineMBA.com

Housing Bubble: New NOW in Color

Great set of charts from Visualizing Economics, showing the 2000-06 period, the 2007-11 collapse, and the c0ombination of the two.

My one beef is with the phrase Housing Bubble. As the charts show, the bubble was very specifically limited to a handful of regions. Nationally, we had a Housing boom & bust — but the “bubble” was in Credit. This was thanks to Greenspan’s ultra-low rates, the abdication of lending standards, that  were driven by the demand to feed the Wall Street securitization machine.

Anyhow, here is what the price changes look like mapped out:

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click for larger map

Amazing Time Lapse

The Mountain from Terje Sorgjerd on Vimeo.

Until I'm back posting on the jumbo mortgage market enjoy the beauty all around us in this awe inspiring time lapse.

How Low Can Housing Prices Go?

As the bubble continues it's long grinding deflation we are seeing a classic 'buyers-strike', the spring buyers haven't appeared despite historically low interest rates and home prices continue to be discounted over asking prices of just 2-3 months ago.

Here is the national home purchase application index. It measures the applications in process to buy a new home. The survey is pretty solid in that about 50% of large lenders are surveyed every week. If this was an EKG, the patient is dying, get the paddles stat!

The spike you see in Q1 2010 is the end of the home buyer tax credits and a major push by the FED to push mortgage rates down. As the tax credits expired on a Federal and state level the number of new buyers started to disappear. Then during Q3 2010 and Q4 2010 we had excellent fixed mortgage interest rates

This prompted another group of buyers to get an application in and start the home buying process. Then because of inflation, Federal government budget issues, and prospects for a better national economic environment(b.s.), mortgage rates moved back up again from the best levels in history. The amount of inventory that will be coming onto the local real estate market is huge:

These are foreclosed homes currently owned by Fannie, Freddie and FHA. They may or may not be on the market yet. Some are in need of repair, some are listed etc. As with all goods/services, supply and demand will lead the market to adjust prices. I fully expect much lower(10-25%) prices in some former bubble states. If people are concerned about jobs and unemployment is around 9-10% you can't expect any stability in housing, in the golden state unemployment is 12.3%, ouch.

Now with the recent wallet shock of $4 gas on the household and business budget it's going to be a tough spring selling season. Blockbuster closing hundreds of stores, Borders doing the same it doesn't broadcast confidence to people as they go about their daily lives.

Buyers... remember it's an asking price. Bargain accordingly. Here is your jumbo mortgage rate chart as well: