Credit Crisis is Over. Ted Spread BELOW normal historical spread of .38.

"Credit Crisis is Over"

Dammit, Steve, why did you have to do that. Not that means it will be at least another year.

Anytime Steve calls a bottom, it means we're nowhere near.

Business credits are easing too along with credit limits being raised around the country.
All of this while housing prices finally inched up last quarter around the country.

nothing to report. credit has come in huge and I discussed that a few times months ago. its what lies ahead that I am concerned about. subprime is contained, bear stearns is solvent, lehman cant fail, the gse's are in great shape, the credit crisis is over...yea yea yea.

does the TED at .38 mean that the problems with commercial, helocs, lbos, prime, jumbos, fasb rule switches, 9.4% unemployment + rising, 9M + getting UE benefits, etc.. all go away? if I did a piece on your topic, I would say WATCH OUT, because Im fairly certain we have another wave to go through at some point down the road.

Crains from 2 weeks ago actually did a small business report and survey in NYC, and they noted that small businesses were still having a harder time last month than previous month getting credit.

Banks can lend to one another, thats great.... but if they don't lend it out to the folks that, well, pay salaries, its not going to really help a lot there.

There was tons of money in the system in January, too, but it just wasn't being lent out.

If someone wants to claim credit is loose, they should actually document credit being, well, loose.

Good points, UD.

Challenge is, the credit crisis caused a massive recession. You can even get rid of the credit crisis, but that still leave a, well, massive recession left.

Urbandigs,
If all these negative forces are still at work, how can we explain why "home" values have gone up in Q2? And why are credit easing in times of uncertainly as you have noted.

"If all these negative forces are still at work, how can we explain why "home" values have gone up in Q2?"

compared to what Q1? or y-o-y? Where did it come from? which report are you referring to? Been crazy busy and out of loop the past few weeks.

I mean, if we are down 45% in 4 years, and just rose 1% month to month, well, that is not really much to get excited about. Its all relative. Where did we come from? Foreclosure sales have been and will continue to mess with these numbers, and we know we have a few more waves of forteclsure sales in pipeline to get through. Some markets went through worst already and are prob great buys at the right price - forgetting exact bottoms here.

Why is credit easing? Come on now. Have you seen what the fed/treasry/govt has done in the past 20 months?

then why is the manhattan rental market imploding ?

According to some in the glass half empty camp its the value of foreclosures that have gone up. Interesting theory.

(AR's busy fountain diving in Europe so I'm filling in)

This story.

http://www.housingwire.com/2009/07/09/home-prices-post-first-quarterly-gain-since-2006/

Im not familiar with clear capital's data or reporting methodology or if they seasonally adjust their model, but considering where we came from and the quarter to quarter nature of the report for a strong seasonal marketplace like housing, its more a sign of what we went through and less a sign that all is clear from now on. Yes, worst for many markets is likely over, but pressure will continue for years

Case Shiller is the best national measure we have... and the "good" news there was its falling big, but just a little slower.

Its not good for Manhattan, we know that, but I'm not sure why folks are using anything other than CS for the national stuff.

don't you have any unemployed friends to hang out with?

I had to stop hanging out with them, because I kept feeling pressure to hire them.

steveF - when the next wave comes, who knows when or what sparks it, dont say I didnt raise concerns over the specific reasons for it...ill let others get complacent as even politicians start to hear warnings over them; mainly cmbs

http://therealdeal.com/newyork/articles/lawmakers-worried-about-commercial-real-estate-carolyn-maloney-joint-economic-committee

steveF - when the next wave comes, who knows when or what sparks it, dont say I didnt raise concerns over the specific reasons for it

I won't. But be prepared to take your lumps if it doesn't plan out like you "predict". I wish Nouriel Roubini would take his.

you got it! but know that it very well might not come until 2010! Trust me, Id rather be WRONG AND ADMIT I WAS WRONG AND THE PROBLEMS DO NOT COME!

Talking without my head in the sand since mid 2007 and wanting it to happen are two very different things! Always know that. I dont want it to happen.

I have to say Noah, you have patience dealing with the likes of steveF. you would be a great father for kids.

Noah, I hope you don't want it to happen. But you are a renter right? and you are human right? well, no matter how hard you try to suppress it and stay unbiased you are still not a Vulcan and have an interest right now in prices dropping. But, then again, you have an interest in your blog as well and that means the more accurate your blog is the more eyeballs will take notice. So....you, my friend, are a conundrum. I think what you need to do is divide your assets up evenly with each bias offsetting each other. This will not only help you in your "predictions" but placate any critics. Maybe rent your higher-end primary home but own a mid-range investment rental. And of course, full disclosure.

You did nail the Dec/2007 to May?-June?/2009 recession. Have a great weekend!

MMafia, is that some sort of marriage proposal to Noah?

been planning my next move for 2 years. ill be removing myself from any vested interest in real estate transactions, so that I can continue, and perhaps more, to talk about macro/manhattan/credit, etc openly.

ill be announcing some news in a week or two.

I'll be there :)

MMafie - ha thanks! no kids yet, but ya never know

I think there are SOOOO many different places the next wave COULD come from that it's almost impossible for none of them to occur (especially since we already see the wave coming in many cases: like the commercial RE "ticking time bomb" mentioned above).

"Noah, I hope you don't want it to happen. But you are a renter right? and you are human right? well, no matter how hard you try to suppress it and stay unbiased you are still not a Vulcan and have an interest right now in prices dropping"

SteveF, just get off it already.

You know crap about real estate, and tons of folks have called you wrong and been right, and now one of the ESTABLISHED folks who are RIGHT ON abotu real estate has PERSONALLY told you that you are wrong.

And now you're coming up with "well, you are biased".

Dude, you are a completely biased re know-nothing... and you're complaining about others?

seriously?

30yrs - very true. been talking about this with my buddies lately, and I think cre and lbos will prove to be way more severe than current perceptions or valuations would have you believe. Although cmbs has been getting hurt.

Next wave may be China's stock and asset bubble popping.

Does anyone seem to understand the problems the banks have in their loan/banking books vs. their trading/securities books?

One is good looking and the other is ugly as sin yet they both come from the same parents....

I'm betting the former had plastic surgery

"Trust me, Id rather be WRONG AND ADMIT I WAS WRONG AND THE PROBLEMS DO NOT COME!"

I doubt any of the bears here will admit it. My guess is by then you'll find a reason to stay negative. It's the same with equity. The folks that missed the bottom will find a reason to stay out until things are all rosy and a top is starting to form.
I recall one of the great bears (Richard Russell) on Wall Street finally flipped bullish in 2007 (14K Dow) while being bearish from 2003's low. He found it tooth and nail for 4 years...he was eventually proven right in 2008, but not after being wrong for years.

"30yrs - very true. been talking about this with my buddies lately, and I think cre and lbos will prove to be way more severe than current perceptions or valuations would have you believe. Although cmbs has been getting hurt."

I believe that there is a concerted effort by the current administration to make things look much rosier than they are (I know, I sound like a conspiracy nut) because if the Gen Pop got wind of how bad things actually are/could be, there would be bank runs and blood in the streets.

"I believe that there is a concerted effort by the current administration to make things look much rosier than they are (I know, I sound like a conspiracy nut) because if the Gen Pop got wind of how bad things actually are/could be, there would be bank runs and blood in the streets."

Not just you, 30yrs.

"I doubt any of the bears here will admit it."

will any of the bulls admit they were wrong in late 2007, early 2008, or now mid 2009 about the green shoots that according to the stock markets, seem no longer green?

Urbandigs,
Do the bears really need to admit they were wrong in 07,08 and early 09? It was bloody obvious.

meant to say Bulls...

REO and tenemental - you can add me to your list.

The commercial loan problem is just that, a problem. Banks are going to need another bailout from the government. Plus we're already talking about another stimulus plan.
Things don't get better when unemployment is rising. These unemployed will eventually default on their mortgages and we'll see more and more foreclosures.
Right now a huge resetting of prices is taking place. It's going to take years to work through all of this. Still lots of pain ahead.

dont you love hindsight

the same arguments we are having now and in past few months, about sustainability of up moves, were exactly the same right here on SE boards for months back in late 07 and early 08 and after Bear was rescued, except you werent here then.

You should look at some of the spunky threads from say 18-19 months ago and see the emotion against the bears warning about this. And yes he had his entourage behind him. it was a fun time to get hooked into discussions here...stevejhx definitely remembers those times!

Im not out to get the bulls, and Im not as bearish as I was 18 months ago. But I think there is a story to play out here. It has nothing to do with finding a reason to stay negative. It has more to do with not finding enough good reasons to get positive yet.

noah, you said - "ill be announcing some news in a week or two." - I believe in the context of some type of personal move, and at least as I read it, a purchase. Is this right? And if so can you discuss at all what is so compelling about the opportunity to make you seeminly act in opposition to your prediction about what lies ahead?

lp - nope, not buying yet, money is going into urbandigs. taking the blog to next level and will be leaving halstead in a matter of days, once my last listing gets contract fully executed.

promised exclusive to the real deal, so ill let them provide some details on what jeff and i are planning...exciting for us though, been waiting for this.

Aaaah - much better & best of luck. I'll look forward to learning more about your new venture in the coming weeks.

Even if the credit crisis were over, does that mean we go right back to a credit bubble, with all the implications for banking leverage, financial employee incomes, and borrowing madness? I don't think so.

I know its been said, but the fact that bulls love national data now that its good is pretty wild.

"will any of the bulls admit they were wrong in late 2007, early 2008, or now mid 2009 about the green shoots that according to the stock markets, seem no longer green?"

Of course not.

> Do the bears really need to admit they were wrong in 07,08 and early 09? It was bloody obvious.

Yet, amazingly, the bulls on this very board who said "RE will not decline" are still here, still trying to argue they weren't wrong!

I think the bulls have focused on the argument that with this correction, prices are no longer abnormal relative to rents...and that a reasonable horizon (5-7 years plus) makes real estate a good bet from here.... Neither argument is very supportable.

Of course... when rents were just measured at 18% off.

Just means prices are pretty much as high as ever on a ratio basis.

There's a little bit of a spread. I am kinda convinced we are going to work through the "inventory" of buyers who accumulated wealth from 2004-2008 and there is really going to be neither shit nor shinola to support this market. Couple in our rental building. The guy makes good money. They just bought a house in upstate CT. I think there are the enthusiastic who will buy...and there are many who will not catch a knife. The latter group grows the more it falls.