Poole Party (and other short stories)

It's time for a "Poole Party" and other "Words of Wisdom".
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CNNMoney is reporting Poole sees rising interest rates.

Poole: St. Louis Federal Reserve president says it's better to overshoot mark, then loosen, rather than let inflation get out of control.

Mish: Yeah, let's overshoot both directions. This is just more of the Greenspan philosophy of dealing with bubbles (bubbles the FED helped create) after they pop, then attempting to blow a bigger bubble in the wake of the crash. One more note, Poole sounds as confident about the economy as Greenspan did in March of 2000. We all know what happened then.
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The Orlando Sentinel offers this headline Realtor: Home values in Florida to remain solid

Orlando Sentinel: We've seen the real-estate market in Orlando and Florida cool from last year's record pace. Is it going to continue to slow?

Beverly Pindling, Realtor: Continue to slow? I think what may happen -- I don't think you'll see a reduction in [intangible] value; let's put it that way. Value and price are different things. You probably won't see a reduction in value, but maybe in prices, meaning you can pay less but it's worth more. Value is how much that particular piece of property is worth to you.

Mish: Is this part of some new math curriculum sponsored by Bush?
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A South Florida Sun-Sentinel reader is claiming Newspaper adding to housing slump in the following letter to the editor:

When one wields great power, as you do, it is imperative that they do it responsibly. This is a great public trust that I think that you are not living up to.

Reporting on the slump in the Florida home sales and prices and the damage caused by Hurricane Wilma can be informative or destructive. I believe that you are no longer reporting news but creating news by repeatedly hammering away at the negative aspects of living in South Florida. I think that what you are practicing now is irresponsible journalism and being part of the cause of the present real estate slump rather than part of the cure.

I'm sure that I speak for many Florida homeowners when I say thank you for doing such a wonderful job in adding to the slump in our housing market.

Mish: Of course there was no problem when the newspaper reported all of those year over year gains. Only good news is allowed. Otherwise shoot the messenger.
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From a Dow Jones newswire
David Lereah, NAR's chief economist, said the latest reading shows a flattening out that is in line with "the soft landing we've been expecting" for housing market. "We are at a much more sustainable level of home sales now - a welcome cooling from the super-heated conditions that were driving exceptional price gains," Lereah said.

Mish: This is a soft landing? It seems to me we are in a freefall at 5000 feet somewhere over the grand canyon. When we hit the bottom the landing will be anything but "soft".
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Brian O'Connor writing for the Detroit News says Slam the door on big bargains from home foreclosures.

Detroiters love a bargain.
Which is why I am warning you all to stay away from dabbling in foreclosed property.
After reporting last week that home foreclosures have doubled in the state -- and that Wayne County led the nation in foreclosures during January -- I received a stream of e-mails and calls from readers wanting to know where they could snap up the bargains.

The answer: Nowhere.

Equity is wrung out

The fact is that most of these foreclosures would never get to the sheriff's sale if there was any equity left. Either the owners have borrowed too much to buy them in the first place, or they've wrung out every dime of equity in loans, or the home values have declined to the point where the house is -- in the best case -- barely worth more than the bank is owed.

For starters, foreclosed homes don't auction for less than $1 over what the bank is owed, and you have to pay on the spot with a cashier's check. Then you'll wait six months and a day -- under state law -- to see if the homeowner can scratch up the dough to redeem the property or arrange a sale.

If the foreclosed property does finally pass to the successful bidder, chances are good that the property is not in what you'd call "move-in" condition. They're often strewn with trash or stripped down to the walls by desperate or malicious homeowners. In some cases, Schneider notes, bidders offer "cash for keys:" an upfront payment to prompt an owner to move out and walk away.

At the Wayne County Sheriff's auction I witnessed, 379 properties came up for auction. Three received bids, all for just $1 over what the bank had into the place. The rest all went back to the lenders.

The bottom line, it turns out, is that you won't find your dream house at the end of someone else's nightmare.

Mish: You have to read a lot of nonsense to find someone that makes any sense.
My advice.... Listen to Brian O'Connor.

Mike Shedlock / Mish
http://globaleconomicanalysis.blogspot.com/