by Calculated Risk on 4/02/2009 12:40:00 AM

From Peter Hong at the LA Times: The Hunter S. Thompson of real estate

Real estate salesman Jim Klinge ... has become a notorious Internet chronicler of the real estate crash in north San Diego County, where he has lived and worked for decades.

Rather than downplay the greed and excess that caused the region's travails, he revels in exposing them.

He surveys the wreckage with a pocket video camera, shooting footage of vacant, once-pricey houses turned into eyesores, voiced over with his deadpan narration. Then he posts them on his website, at www.bubbleinfo.com.

They're shaky, noisy clips full of coarse images and language.

Here is one of my favorites - Jim the Realtor showcases an investment opportunity in San Diego - enjoy!


More from the LA Times:

In one clip, the camera pans across the kitchen of a million-dollar fixer near Interstate 5. He pointedly notes the house's proximity to the freeway, which he calls the "De-troit river." There's mold under the sink and a foot-sized hole in the drywall just above the floor.

"December 2006 this house sold for a million dollars," he says. "Nineteen hundred square feet, built in '78, right across the freeway. One million."
...
His wife, Donna, who helps manage the family brokerage, was nervous. "He was really pushing the envelope with the blog, taking people on, naming names," she said. "I took deep breaths. I didn't know how it would turn out."

She said she was shocked one day to see a photo on the blog of two young men sitting on the floor of a house with their wrists bound like prisoners. They had been squatting in a foreclosed house Jim was selling, and he had sneaked up on them as they slept and tied them up with plastic zip ties in a brazen citizen’s arrest.

I really enjoy Jim's videos ... Here is a compilation video Jim posted today:

by Calculated Risk on 4/01/2009 10:59:00 PM

From NPR (with Chicago Public Radio: This American Life), here is a story about the FDIC takeover of Bank of Clark County: Anatomy Of A Bank Takeover (ht Ted)

Here is the audio from NPR.

Here is the FDIC announcement from January: Umpqua Bank Acquires the Insured Deposits of Bank of Clark County, Vancouver, WA

At least they get free ice cream! Click on photo for larger image in new window. Photo Credit: Otishertz, January 2009

by Calculated Risk on 4/01/2009 08:25:00 PM

In Looking for the Sun, I suggested there might be three areas to look for "rays of sunshine in a very dark season": housing starts, new home sales, and auto sales.

Just like for housing starts and new home sales, it is way too early to call a bottom for auto sales - but it does look like vehicle sales increased in March on a seasonally adjusted annual rate (SAAR) basis.

Click on graph for larger image in new window.

This graph shows the historical vehicle sales from the BEA (blue) and an estimate for March (light vehicle sales of 9.86 million SAAR from AutoData Corp).

Note: this graph includes a small number of heavy vehicle sales to compare to the BEA.

From the WSJ: Auto Makers See a Ray of Hope

The annualized sales pace ... came in at 9.86 million vehicles, well below the 16 million or more the industry typically logged a few years ago, but up from February's pace of 9.12 million.

"I believe we are in a bottoming process for the industry," Bob Carter, a group vice president at Toyota Motor Corp., said in a conference call. ...

Michael DiGiovanni, the top sales analyst at General Motors Corp., said he expects a "very, very gradual pickup" in vehicle sales in the second quarter. He cited "the first signs of brightening" in the market. ...

Even if this is the bottom for auto sales (way too early to call), the pickup will probably be very sluggish - especially considering the grim unemployment news and continuing financial crisis.

by Calculated Risk on 4/01/2009 06:09:00 PM

From Reuters: Moody's downgraded $1.76 trln U.S. corp debt in Q1

... Moody's Investors Service downgrading an estimated $1.76 trillion of debt, a record high ...

The downgrades included a record number to the lowest rating categories, signaling the approach of the worst defaults since at least World War Two ...

"The most prominent new driving force behind credit rating reductions would be deterioration of commercial real estate," [Moody's chief economist John Lonski] said. ...

Moody's has forecast that the U.S. default rate will peak around 14.5 percent in November.
emphasis added

Hopefully the bank stress tests have all these defaults factored in ...

by Calculated Risk on 4/01/2009 05:57:00 PM

From Reuters: Credit card charge-offs hit record high -Moody's (ht Brad)

Credit card write-downs soared to record levels in February, representing an all-time high in the 20-year history of the Moody's Credit Card Index ....

Credit card charge-offs, the write-down of uncollectable debt, advanced decisively to 8.82 percent in February, marking the sixth consecutive month of increases. The level, is more than 300 basis points higher than a year ago.
...
[Moody's] predicts the charge-off rate index will peak at about 10.5 percent in the first half of 2010, assuming a coincident unemployment rate peak at 10 percent.

Moody's reported the charge-off rate at 5.59% in February 2008, and 4.51% in February 2007.

by Calculated Risk on 4/01/2009 04:04:00 PM

First, the market graph from Doug ...

Click on graph for larger image in new window.

The first graph is from Doug Short of dshort.com (financial planner): "Four Bad Bears".

Note that the Great Depression crash is based on the DOW; the three others are for the S&P 500.


This graph shows the seasonal pattern for the Case-Shiller Composite 10 house price index.

The percentage change is the month-to-month change annualized.

It is important to remember this clear seasonal pattern when looking at the Case-Shiller data.

by Calculated Risk on 4/01/2009 03:03:00 PM

Click on graph for larger image in new window.

Posted with permission.

Credit: Buzz Potamkin in Animation World Magazine

See: The Macro Economy's Impact on Animation: Will Wile E. Coyote Dodge the Anvil?

"Economists and commentators are increasingly citing Wile E. Coyote to explain the macro economy, with Nobel-laureate Paul Krugman first hoisting the anvil in 2007. Cartoon image courtesy of Warner Bros. Animation. Graphs courtesy of Project X."

by Calculated Risk on 4/01/2009 12:04:00 PM

Update2: Toyota sales off 36.6%. GM Sales off 47%. Chrysler off 39%. From MarketWatch:

Chrysler LLC on Wednesday reported a 39% drop in March U.S. sales to 101,001 cars and trucks from 166,386 a year earlier.

Update: from MarketWatch: Ford U.S. March sales drop 40.9%

Ford Motor Co. said Wednesday that U.S. March sales fell 40.9% ... At the end of March, Ford said that Ford, Lincoln and Mercury inventories totaled 408,000 units, about 27% lower than a year ago.

This is reported as Year-over-year (March 2009 vs. March 2008)

Last month (February) Ford sales were off 46.3% YoY

And in January Ford sales were off 42.1%

December: 32.4%

November: 31%

Ford's numbers will probably be better than GM or Chrysler!

by Calculated Risk on 4/01/2009 11:50:00 AM

From Bloomberg: Thornburg Mortgage to File for Bankruptcy, Liquidate

Thornburg Mortgage Inc., the “jumbo” residential loan specialist battling a slump in home sales and the collapse of mortgage markets, plans to file for bankruptcy protection and shut down.
...
Thornburg specialized in mortgages of more than $417,000, typically used to buy more expensive homes.

Thornburg specialized in prime Jumbos.

It was an early report of Thornburg's problems that prompted Tanta to famously exclaim: "We're all subprime now!"

by Calculated Risk on 4/01/2009 10:00:00 AM

Residential construction spending is 59.3% below the peak of early 2006.

Non-residential construction spending is 8.5% below the peak of last September.

Click on graph for larger image in new window.

The first graph shows private residential and nonresidential construction spending since 1993. Note: nominal dollars, not inflation adjusted.

Residential construction spending is still declining, and now nonresidential spending has peaked and will probably decline sharply over the next 18 months to two years.

The second graph shows the year-over-year change for private residential and nonresidential construction spending.

Nonresidential spending is now slightly negative on a year-over-year basis, and will turn strongly negative going forward. Residential construction spending is still declining, although the YoY change will probably be less negative going forward.

These are two key stories for 2009: the collapse in private non-residential construction, and the probably bottom for residential construction spending.

From the Census Bureau: February 2009 Construction at $967.5 Billion Annual Rate

Spending on private construction was at a seasonally adjusted annual rate of $665.9 billion, 1.6 percent (±1.1%) below the revised January estimate of $676.9 billion. Residential construction was at a seasonally adjusted annual rate of $275.1 billion in February, 4.3 percent (±1.3%) below the revised January estimate of $287.4 billion. Nonresidential construction was at a seasonally adjusted annual rate of $390.7 billion in February, 0.3 percent (±1.1%)* above the revised January estimate of $389.5 billion.