THE PIG NOTICED THE SPANIARDS ARE UPSET BY THEIR GOVERNMENTS AUSTERITY PLAN. THE PIG CAN'T BLAME THEM, THEY HAD NOTHING TO DO WITH IT. THE GULF SPILL IS NEARER TO A SOLUTION...OR IS IT ? THE IRANIAN NAVY SAYS ITS GOING TO ESCORT THE NEXT SHIP OF RELIEF SUPPLIES THROUGH THE ISRAELI NAVAL BLOCKADE. THE PIG SAYS THE WORLD IS GOING MAD.
WE HAVE FORGOTTEN HOW TO LIVE WITH FRUGALITY, APPRECIATE FRIENDS AND FAMILY, AND A GENERAL ZEST FOR LIFE. THE PIG WILL MAKE A PREDICTION. THAT HUMANS WILL HAVE A RENAISSANCE OF SORTS AND RE-DISCOVER THE JOYS OF THESE TRAITS, OF FRESH AIR, OF GOOD FOOD, AND GOOD COMPANY. THIS WILL HAPPEN SOON, THE PIG FEELS.
THE PIG SEES THAT WE STILL DO NOT HAVE THE MTB/DEC RESULTS IN HAND. THIS COULD BE FOR A MULTITUDE OF REASONS BUT NOT ANYTHING TO PANIC OVER. SOME DID TODAY UNFORTUNATELY AND LOST A GOOD POSITION IN THE STOCK THE PIG IS SURE OF.
ON WITH THE BUSINESS AT HAND.....
Median home prices drop below 1989 levels in some parts of Southern California
John Beatrice, with daughter Emily, bought his house in Lancaster in 1989 for $120,000. In April, a slightly larger home two doors away sold for $66,500.
In parts of Southern California, the housing crash has upended a basic tenet of the American dream: that home values always increase over the long term.
Properties in several areas are selling for less than they did 20 years ago, and that's not even counting the effects of inflation.
The reversal is a bonanza for some first-time buyers. They're nabbing houses for less than what their parents paid in the late 1980s, jumping into a real estate market that has become a kind of economic time machine.
To return to the past, take a stroll down Mulberry Avenue in Lancaster. John A. Beatrice, 55, bought his spacious two-story Spanish-style house there brand-new for $120,000 in 1989. It was a price he could comfortably afford, and he planned on staying through retirement, so he wasn't worried about price swings.
"I always knew real estate goes like this," said the aerospace engineer, moving his hand in an undulating motion like bell curves on a graph.
But he never imagined his neighborhood would drop off the charts. In April, a slightly larger home two doors away sold for $66,500. That's just over half the $130,000 it went for new in 1992. In 2005, that house sold for $330,000.
Beatrice's 29-year-old daughter is now shopping for Lancaster houses priced lower than when she was a kid.
Home prices across most of Southern California have not fallen nearly as far. The median price in the six-county area was $247,000 in April, about what it was in 2002.
But in 14 Southland ZIP Codes, mainly desert communities in the Antelope Valley and Inland Empire, median prices have fallen below levels recorded in April 1989, according to MDA DataQuick, a San Diego real estate information service.
That means thousands of homes in those neighborhoods -- even houses barely 20 years old and in decent shape -- have lost every dime of their appreciation, giving back not just the gains of the recent bubble but steady increases logged over a generation.
The April median price in Beatrice's Lancaster ZIP Code of 93535, for example, was $87,000. That's down 74% from a $334,500 peak price in 2007. Even worse was the 92410 ZIP Code in the city of San Bernardino, which covers several older neighborhoods. Its $61,000 April median represents an 84% drop from the peak of $370,000 in 2007.
Prices also tumbled below 1989 levels in neighborhoods in Palmdale, Hemet, Barstow, Desert Hot Springs, Victorville, Highland, Santa Ana and Oxnard, according to DataQuick. Several other inland communities, including parts of Moreno Valley, Banning and Rialto, had median prices that were only slightly above 1989 levels and below the April 1990 median.
The median price is the point at which half the homes sell for more and half for less.
Losing two decades' worth of gains in a single downturn "has never happened," said UCLA economist Edward Leamer, who has studied local areas during booms and busts. "You're seeing something that's abnormal."
What's abnormal this time, Leamer and other analysts said, is the easy credit that pumped up demand and inflated home prices in those communities to unprecedented highs.
Armed with risky subprime mortgages and fearful of being priced out of the market forever, buyers flocked to the outer reaches of the Antelope Valley and Victor Valley. Those distant suburbs became the only option when areas closer to job centers soared out of reach, said John Husing, an economist who specializes in the Inland Empire.
"The families who were buying out there were the ones who couldn't get in anywhere else," Husing said. "They were paying stupid prices."
They were among the first to default when the economy crumbled, bringing real estate prices crashing down. Demand for those far-flung houses vanished when prices dropped for homes closer to workplaces. Riverside and San Bernardino counties have registered more defaults and foreclosures per capita during this downturn than other Southern California counties, according to ForeclosureRadar, an online seller of default data.
These foreclosures, sold at cut-rate prices by banks eager to be rid of them, represent the bulk of the sales activity in some communities.
In the 1990s housing bust, "you had a foreclosure here, a foreclosure there. You did not have almost entire neighborhoods being foreclosed," UCLA's Leamer said.
The fire sales have stoked demand. In April, 237 homes sold in Beatrice's ZIP Code, more than in any other area in Southern California. Most of those properties were foreclosed.
Stable homeowners such as Patricia Hynes have watched their hard-won equity rise and fall, leaving them roughly where they started a generation ago.
Hynes bought her three-bedroom home in Lancaster brand-new for $119,000 in 1989, when Milli Vanilli was riding high on the charts. The poplar, willow and ash saplings she planted in front now tower over the lawn, shading her home from the desert sun.
"It's my little oasis," said Hynes, a 62-year-old public health nurse.
Her home is an island in a sea of repos. Houses on both sides have fallen into foreclosure; one is priced $10,000 less than the amount she paid 20 years ago.
Nearby, a four-bedroom, 2,100-square-foot home sold in May for $89,000. That's less than the construction costs of $100 to $125 a square foot, according to Patrick S. Duffy, principal of Metrointelligence Real Estate Advisors in Los Angeles.
The retro prices are attracting a new wave of speculators. In April, investors bought nearly 1 in 5 homes purchased in Southern California, according to DataQuick. That figure is around 30% in some inland communities.
Mohammed Hafeez, 52, a Culver City electrician, has bought four houses in Lancaster since January.
Hafeez said he paid $49,000 for the least expensive house and $70,000 for the priciest of his investments. He's now renting them for $1,000 to $1,300 a month, and all four houses are occupied and generating positive cash flow, he said.
Still, he's holding off on more purchases. Rents are falling along with home prices as investors like him snap up foreclosures and turn them into rentals.
"I don't know how much or how far down it will go," he said.
He has reason to worry. Another tsunami of foreclosures is threatening to swamp an already saturated market. In Palmdale and Lancaster, 903 homes were sold in April, but according to ForeclosureRadar, more than 7,500 are in some stage of foreclosure.
Some buyers who thought they were getting bargains didn't. In Lancaster, Beatrice's eldest son, Daniel, bought a house near his father's for $175,000 in April 2008; comparable properties are now selling for about $95,000.
To home buyer Al Rossi, timing isn't everything. The 59-year-old bought his first house in February in Lancaster for $140,000. An administrator at the Los Angeles Mission downtown, he wanted a roomy place where he could live with his son-in-law and two grandsons. His mortgage payment on the four-bedroom house is $1,050, just slightly above the $900 a month he was paying for a one-bedroom apartment in Norwalk.
The house was in good shape when Rossi bought it, though the lawn had died. The family will be planting new greenery soon. They've just installed a new hot tub and bought a gas barbecue grill as well.
If neighborhood property values fall further, so be it, Rossi figured. The improvement in his quality of life is gain enough.
"I did not buy a slot machine," he said. "I am not an investor.
"That's what got us into this mess -- greed," he said of the housing crash.
"Greed messed everything up.
GPI.V.....TURN AROUND OR TURN ABOUT. LEAD SCANNER OF THE TRADING DAY. EVERYTHING ON THE NUMBERS SIDE SAYS "UP". SENTIMENT AND MOVING AVERAGES OFF THE CHARTS. THE PIG SAYS THERE'S THE AGE OLD ISSUE OF LIQUIDITY......IF WE CAN GET SOME...A TRADE IT MAY BECOME.
SDW.V...SECOND BIG SCANNER OF THE DAY. THIS PRIZED PIG HAS BEEN OFF AND ON THE PIGS SCANNER FOR TWO MONTHS NOW. TODAY IT SEEMS TO HAVE, AFTER A LONG ACCUMULATION PERIOD, BROKEN FREE AND LOOKS TO BE ON ITS WAY TO HIGHER HIGHS. ONCE AGAIN THE AGE OLD PROBLEM OF LIQUIDITY PRESENTS ITSELF AND WE WAIT FOR VOLUME BEFORE JUMPING. JUST TO PLAY DEVILS ADVOCATE HERE, WE COULD GO IN FOR A SLICE OF THE PORK PIE, HOWEVER IF THE LIQUIDITY DRIES UP, YOU ARE THEN STUCK IN A DEAD MONEY OR BAD TRADE SITUATION....SEE THE PIGS REASONING ?
OM.V ...THE PIG THREW IN SOME OTHER SECTOR STOCKS LAST WEEK TO EXPERIMENT WITH THEM. AS THE JUNIOR RESOURCE STOCKS WILL EBB AND FLOW, IT MAY ADVANTAGEOUS FROM TIME TO TIME TO ADD SOME OTHER SECTORS IN THE SCANS TO BALANCE OUT THE SITUATION. THIS PIGGY HAS BEEN SCANNING WELL SINCE IT CAME ABOARD LAST WEEK. HIGH NUMBERS IN MOVING AVERAGES, SENTIMENT AND DISTRIBUTION. A LONG ACCUMULATION PERIOD LOOKS TO BE COMPLETED AND A MOVE OR TWO IS IMMINENT....AND.....NOT TO FLOG A DEAD HORSE....BUT LIQUIDITY, LIQUIDITY, LIQUIDITY.
THE PIGS GOOD READ OF THE WEEK......
http://theforexbooks.com/index.php/Forex-Strategies/View-category.html
Go to the link, look for the PDF on Mark Crisps 1-2-3-charting/trading system and download the PDF and read it. Fabulous for all especially for the new guys out there.
Wednesday June 09, 2010 08:27:22 PM GMT
MARKETS-COMMODITIES
* Gold hits $1,250 on double-dip recession fear, euro rise
* Oil trades above $70 support; sugar above 15 cents
* Copper ends up for the first time in seven session
* Coming Up: US retail/auto sales data for May, due Friday
By Barani Krishnan
NEW YORK, June 8 (Reuters) - Gold closed up after hitting record highs on Tuesday and most other commodities from oil to sugar also rose as the euro gained against the dollar, boosting values of raw materials priced in the U.S. currency.
The dollar fell against the euro for the first time in four sessions as investors took profit from its four-year high on Monday against the single European currency.could lead to a double-dip recession despite the absence of any such compelling development -- pushed gold to record highs above $1,250 an ounce.Crude oil traded firmly above the $70 per barrel support through the session to settle just below $72.
Raw sugar, one of the most volatile agricultural commodities of late, breached the 15 cents a lb mark critical to the most bullish investors in the sweetener. It settled up 4 percent but below those highs.
"I think we're still feeling some de-risking. That is most likely propelling the market," Sterling Smith, analyst for Minnesota-based brokerage Country Hedging, said, explaining why sugar joined the rally in gold and oil.
Analysts said markets were expected to look out for U.S. retail and auto sales figures for May, due on Friday, for further indications on economic recovery and risk.
The 19-commodity Reuters-Jefferies CRB index settled up almost half a percent. Wall Street's key U.S. stocks index, the Dow Jones Industrial Average, settled up 1.3 percent.
U.S. gold futures' benchmark contract, August, settled up $4.80 at $1,245.60 an ounce in New York.
Spot gold got up to $1,251.20 an ounce, and was at $1,241.55 an ounce in late afternoon trade in New York, versus Monday's comparative quote of $1,238.05.
Gold is up almost 14 percent since the end of 2009. But if compared to the lows of October 2008 -- when the global financial crisis had just begun -- it is up nearly 85 percent.
Some think that's too much, too fast a rise for gold, considering that the U.S. dollar had been surging at the same time, reaching four-year highs against the euro.
Prices could drop as much as 40 percent from record highs due to bearish technical momentum and deflation related to the euro zone debt crisis, Elliott Wave International President Robert Prechter told the Reuters Investment Outlook Summit in New York this week.
Other market strategists said gold could go higher.
"You could see gold become the thing that you shove in your mattress," Gina Sanchez, director of asset allocation strategy at New York's Roubini Global Economics, said at the summit on Tuesday.
"There is geopolitical fear out there.... (that) we've placed as sort of a lower concern relative to the financial risk," Sanchez said.
Copper ended up for the first time in seven sessions but stayed close to eight-month lows as a firmer euro helped offset uncertain economic and demand prospects.
U.S. copper for July finished up 1.35 cents at $2.7795 per lb.
Prices of the red metal are down almost 17 percent since the start of 2010.
Crude oil's front-month contract in New York ended up 55 cents, or 0.8 percent, at $71.99 a barrel, down 7 cents, after touching an intraday high of $72.40.
Oil prices are down about 9 percent since the end of last year, pressured by global growth worries.
U.S. raw sugar for July closed up 0.55 cent, or 3.8 percent, at 14.88 cents a lb, after hitting a session peak of 15.03 cents.
Raw sugar prices are down almost 45 percent since the end of 2009.
(Editing by Sofina Mirza-Reid)
(c) Copyright Thomson Reuters 2010. Click For Restrictions. http://about.reuters.com/fulllegal.asp
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