Evidence of economy crashing...

[dbarberic]

Re: Linens 'n Things weighing bankruptcy

George Ure, whose UrbanSurival Web site you cited earlier, has named them "Bushvilles."

Yes... Credit should be given where credit is deserved.

[rros]

Re: Evidence of economy crashing...

This Sunday there is a home auction being held at the Miami Beach Convention Center. The homes listed start at a very low bid. I am inexperienced on this and like others, looking for a bargain... So I looked at some of the houses in the list and although starting prices were low I found them in a very poor state, unfinished and in some cases in rapid decline. Locations from Aventura to new subdivisions southwest of Pinecrest.

In one ocassion, the real estate agent that accompanied me told me to forget about the auctions. He said the properties were bank owned and had fairly high reserves and upon no winning bids they would come back to the market... at yet even lower prices. He said the bank he works for is being stubborn. For one of the houses I checked, the agent had an offer on the table in the low 300's that the bank refused. On Sunday, the starting bid for it will be $59k. He expects no one to hit the reserve and then list the house back for even less than the last firm offer. He also mentioned that the Brickell area was a real mess.

Today, after shipping some goods at the local UPS store I asked the clerk about the store being empty... a rare ocurrance. He said it started on April and had been a marked slow down compared to March, which apparently posted a 10% growth y-o-y across the company. He also said the 5 stores at beach had seen the same dramatic slow down for April so far. On another front I am also noticing a lot less people in Aventura Mall where I didn't have any problems parking my car for lunch at Rosalia and where I didn't have to wait for a table. Something I can't remember in the last 3 years.

But maybe this is just anecdote.

[metalman]

Re: Evidence of economy crashing...

Florida is ground zero... All those greedy investors, or is it? I bought a few condos in Fort Lauderdale in a lower-middle income neighborhood as a modest cash flow investment. Bought in 2005 with a 30 year fixed mortgage...

In 2005:
$750 rent - $400 mortgage - $140 fees - $60 tax = $150 profit

In 2008:
$750 rent - $400 mortgage - $560 fees - $120 tax = $330 loss

Fees up by 4x due to a 300% insurance increase and 50% of owners not paying their share. Every time fees go up, less people pay, making fees go up again... I don't know where it ends, but I don't think anybody will be able to hang on for much longer...

My advise is to ignore any analyst who tells you we've hit a bottom. The bottom will be when each and every property has completed the foreclosure process and is resold at its new (much lower) market value. In my complex only about 8% of the units have completed foreclosure and none have sold at auction. Also, because of the court glut, foreclosure is taking longer and longer, up from 6 months to about a year. I'd guess we have another 2-3 years to go from here.

The sad part is that these properties might lose 80% of their value in the process, and in Florida the owner can be responsible for the deficiency in the loan to that value. A $200k home foreclosure can leave an owner without the home and still on the hook for $160k! Short sales and deed-in lieu are a joke! Expect a large bankruptcy wave behind the foreclosure wave!

ouch! when to buy? 2010 - 2015 per the 2005 itulip housing bust forecast?

read these posts and i start to worry... the economy is collapsing.

[Verrocchio]

Re: Evidence of economy crashing...

Sign of Distress: More Who Can’t Pay Their Bills
Like a ship that keeps springing new leaks, new numbers keep appearing that show an economy in distress.
Here’s another sign that the ship is listing: The American Bankers Association recently reported that in the fourth quarter of 2007, consumer credit delinquencies reached their highest level since 1992.
In other words, more people were 30 days or more overdue on their home equity loans, auto loans, personal loans and several other types of installment loans. (Bank cards were not included in the mix because their balances can fluctuate.)


Click for link to rest of New York Times article...

[rros]

Re: Evidence of economy crashing...

Today, after shipping some goods at the local UPS store I asked the clerk about the store being empty... a rare ocurrance... ...But maybe this is just anecdote.

Well, it wasn't anecdotal...

http://www.bloomberg.com/apps/news?p...LRc&refer=home

[Jim Nickerson]

Re: Evidence of economy crashing...

Well, it wasn't anecdotal...

http://www.bloomberg.com/apps/news?p...LRc&refer=home

rros, nice support for your anecdote.

This is an aside from the meat of that article, but to my knowledge UPS is way less old that 101 years, and in another article it spoke of UPS's record over a century. Does anyone know when UPS was actually founded as UPS? EDIT: I found the answer: Company History
Founded in 1907 as a messenger company in the United States, UPS has grown into a $42.6 billion corporation by clearly focusing on the goal of enabling commerce around the globe. Today UPS is a global company with one of the most recognized and admired brands in the world. We have become the world's largest package delivery company and a leading global provider of specialized transportation and logistics services. Every day, we manage the flow of goods, funds, and information in more than 200 countries and territories worldwide. http://www.ups.com/content/corp/abou...ory/index.html

[Abracadabra]

Re: Evidence of economy crashing...

I'm a civil engineer in the Montreal area, I design municipal infrastructure. So far there is still plenty of business, although most of it composed of street rehabilitation projects, wind farms and commuter rail projects. I feel like I'm sitting on the beach waiting for the tsunami to hit.

[Jayhawk]

Re: Evidence of economy crashing...

Hmmmm, interesting stories.

I bought some new appliances here in Colorado recently and was shocked how packed the local store was. Everyone was in there buying without hesitation. Same thing with the local Home Depot on my last several visits.

Friends of ours in our neighborhood just put their house on the market and sold it within 3 weeks at asking price. :confused: To top it off, their roof was leaking right in the middle of the showing and the folks still made the full price offer. There are a few homes for sale in the neighborhood, but nothing out of the norm. I have yet to see a foreclosed sale/bank sale sign anywhere. Non of my friends are unemployed. I just don't see this doomsday scenario at all at this point. (Not saying it won't happen, just wondering if others are not seeing this huge crises yet.)

[c1ue]

Re: Evidence of economy crashing...

Are you in the oil business part of Colorado? I.e. refining in Denver, etc.?

Perhaps mining? Defense?

There certainly are regions such as Montana where no doubt the American Way is in full steam.

Here in the West, I'm seeing 1 lb bags of salad already gone down to 12 ounces.

As noted before, 1/2 loaves of bread for full bread price.

[GRG55]

Re: Evidence of economy crashing...

the nytimes had a piece on that...

In a Modern Gold Rush, Can Memories Beat $913 an Ounce?

and ej's written about it.

the nytimes story REALLY PISSES ME OFF.

these folks aren't greedy, selling their stuff because the gold price is high. they're broke and selling because of the recession and inflation... they'd sell if gold was $800 or $700 or $600. they're DESPERATE. you could say they're selling not because $900 creates an 'opportunity' to sell their precious heirlooms but on account of the REASON gold is $900... INFLATION!

inflation without representation!

i demand an antispin on this story!

And this must be what happens next...after the family gold is pawned and melted down:

Americans tapping the attic for spare cash

Auction sites see upturn in desperate sellers hurt by down economy

updated 7:31 p.m. ET April 29, 2008

NEW YORK - The for-sale listings on the online hub Craigslist come with plaintive notices, like the one from the teenager in Georgia who said her mother lost her job and pleaded, "Please buy anything you can to help out."

Or the seller in Milwaukee who wrote in one post of needing to pay bills — and put a diamond engagement ring up for bids to do it.

Struggling with mounting debt and rising prices, faced with the toughest economic times since the early 1990s, Americans are selling prized possessions online and at flea markets at alarming rates.

To meet higher gas, food and prescription drug bills, they are selling off grandmother's dishes and their own belongings. Some of the household purging has been extremely painful — families forced to part with heirlooms.

"This is not about downsizing. It's about needing gas money," said Nancy Baughman, founder of eBizAuctions, an online auction service she runs out of her garage in Raleigh, N.C. One former affluent customer is now unemployed and had to unload Hermes leather jackets and Versace jeans and silk shirts...

...Craigslist CEO Jeff Buckmaster acknowledged the increasing popularity of selling all sort of items on the Web, but said the rate of growth is "moving above the usual trend line." He said he was amazed at the desperate tone in some ads...

http://www.msnbc.msn.com/id/24375110/

[Jayhawk]

Re: Evidence of economy crashing...

Are you in the oil business part of Colorado? I.e. refining in Denver, etc.?

Perhaps mining? Defense?

There certainly are regions such as Montana where no doubt the American Way is in full steam.

Here in the West, I'm seeing 1 lb bags of salad already gone down to 12 ounces.

As noted before, 1/2 loaves of bread for full bread price.

We are located in North of Colorado Springs, so the Defense Industry is pretty big here. There's a decent size increase in troops coming in the next couple of years. This could be the issue?

[c1ue]

Re: Evidence of economy crashing...

I think may be a big part of the local boom you're seeing.

While combat pay itself is not that much ($225/month), being in combat allows up to $10,000/year to be put into a special savings account which guarantees a yield of 10% or more.

In addition to the $225/month, there is family separation pay ($250/month), hardship (Iraq, Kuwait, Afghanistan, etc) ($50-$150/month), and likely a few others (combat flight pay, etc).

There are also significant tax benefits - at minimum at the federal level.

This doesn't diminish the great sacrifices and personal risks for our armed forces, but does point to a significant cash influx into areas with large numbers of serving military.