Consumer credit numbers prove we're not scared yet

Gary Sattler — Wed, 09 Jan 2008 15:13:00 EST

Filed under: Consumer Experience, Rants and Raves, Citigroup Inc. (C), Bank of America (BAC), Bank of New York (BK), Economic Data, Personal Finance, Wells Fargo (WFC), Housing

Consumers are still willing to run their lives based on credit, so says an Associated Press report. Consumer borrowing increased at an annual rate of 7.4% in November compared to an increase of just 1% in October - ah yes, the faux magic of a consumerist Christmas.

The truth of the matter rests in the cause for the rise. Is it because consumers are still confident in their earning potential? The more likely cause is that consumers are running out of funding options, read that -- they're running out of cash.

So why is it that mortgages are getting harder to write but consumer purchases can still be funded with just a signature? Although they're deflating in value, homes still provide significant backing for lenders to lean their bets on whereas credit cards float in the unknown. With bankruptcies at an all time high, are we setting up for the final crash?

Continue reading Consumer credit numbers prove we're not scared yet

Consumer credit numbers prove we're not scared yet originally appeared on BloggingStocks on Wed, 09 Jan 2008 15:13:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments

Are you ready to make a killing in real estate?

Gary Sattler — Wed, 31 Oct 2007 17:45:00 EST

Filed under: Forecasts, Press Releases, Consumer Experience, Money and Finance Today, Personal Finance, Housing

Every dark cloud has a distress sale. That's the old saying, isn't it? Well, perhaps things look pretty bad for the mortgage industry, but I can guarantee you one thing. Real estate investors are eagerly awaiting for the dust to settle so they can pounce on distressed properties which will need to be liquidated for pennies on the dollar. I can hear them drooling from here.

Correct me if I'm wrong, but last time I checked, commercial banks aren't especially fond of holding title to single family dwellings. Given the possibility that nearly 2 million homes are slated for foreclosure in the next year, that could make for a lot of motivated selling. Many of those distressed homes are in highly desirable areas and I'm sure that there will be plenty of duplexes and quad unit apartment buildings caught up in the fray. The board rooms of large real estate holding companies must feel like war rooms right about now.

If you would like to get a feel for our government's official position on the matter, have a look at The Real Estate Realist. You will find insight there into what has been officially declared by the Joint Economic Committee as its position on the matter. The committee press release, peppered with words such as loss, destroyed and catastrophe, does little to ease national concerns about a real estate scene in flux. In fact, what I read of the release could be characterized as an astounding declaration of the obvious. I will concede however that the report did make nice use of a tsunami metaphor.

If you have a lump of cash that you'd like to invest in something that you can set your feet on, now is the time to begin your research. It's time to begin surveying the field but don't be too eager to move in for the kill just yet. The massive real estate devaluation that seems to be impending has not yet gotten up to speed. I have a feeling that there will be absolutely astounding regional real estate bargains beginning to surface going into the second quarter of 2008 as cash strapped banks scramble to unload real estate they have no desire to hold on to.

Are you ready to make a killing in real estate? originally appeared on BloggingStocks on Wed, 31 Oct 2007 17:45:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments