Les Jones

Too much of everything

Wednesday, July 29th, 2009 | Economics | Permalink | 1 Comment |

The guys at Zero Hedge have put together a report on the state of the economy and why we’re not going to go back to the good old days next month or next year: “The End of the End of the Recession”. Daily Kos has a useful summary. You can download the whole 75 page slide presentation here. (Don’t let the page count put you off. It’s very skimmable and quite a bit of it is charts.)

One theme you’ll see here is one I’ve seen in many places. The past decades of excess have left us with too much of everything. Too many malls, too much office space, too many hotel rooms. Too many houses - many of them too big for the new frugality. Too many cars - many of them too big when fuel prices spike.

It will take years to run through the current real estate glut. We could quit building now and not need to build another house, condo, strip mall, office building, restaurant, bank branch, vacation home, hotel, or car dealership for years, possibly even a decade

Tags: mortage mess, too much of everything

Rent your unsold house until market improves? Probably not gonna work

Thursday, July 2nd, 2009 | Economics | Permalink | No Comments |

The New Homeowner Hallucination: “We’ll Rent For A Year And Then Sell When The Market Comes Back”

When I asked her what made her think the market would come back when rates were going higher, availability of credit was down, incomes were down, unemployment was up and willingness and availability of people to spend was down, she had no answer.

Even more amazing was that we looked at four places in a similar price range and almost all of them had a similar strategy…”rent it out for a year and then sell when things get better”…

All these high-end people think they’ll just keep burning through capital and that everything will self-correct in 12-months and then go right back to the idiotic pricing levels that they themselves were crazy enough to pay.

You know who’s trying this strategy with their own homes? Financial geniuses FDIC Chairman Sheila Blair and Treasury Secretary Timothy Geithner. The country is in the very best of hands.

What I’d like to do is just the opposite. Sell my house now and rent until the housing market finds its bottom. The challenge I’ve had is finding a rental big enough for my family. Finding one that wasn’t ungodly expensive would be a bonus, but just finding a four bedroom property to rent in a good school district ain’t easy.

Tags: Geithner, mortage mess

Why refinancing won’t solve housing problem

Tuesday, March 3rd, 2009 | Economics | Permalink | 1 Comment |

A straightforward explanation.

Tags: mortage mess

Mortgage problems in the UK

Tuesday, December 16th, 2008 | Misc | Permalink | No Comments |

Telegraph - House prices to crash 30 per cent, Barclays chief executive John Varley warns:

In a remarkably candid interview, John Varley, the group chief executive of Barclays, warned that Britain is only mid way through the house price slump - meaning the total fall could be as much as 30 per cent.

He described as “madness” the previous lending policies’ of banks, in which 100 per cent mortgages and beyond were approved.

Mr Varley admitted that banks were partly to blame for the current recession, saying it was time they showed “humility” and said “sorry” to customers for their role in the sharp economic downturn. He said banks needed “to take their share of responsibility”.

Previously:

• Canada is having its own mortgage meltdown
• What caused the global housing bubble?

Tags: mortage mess