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Don't spend much time at MSN Money because, well, I don't spend much time using MSN, but I headed over and checked out some of the latest news on the US housing market as an antidote to Victoria euphoria.

Jim Jubak has written a detailed explanation of how tranches of sub-prime debt were sliced up and doled out. Jim then takes apart the careful assumptions that led to this debt being marketed as high grade paper in the first place, using the analogy of natural disasters like storms, to show how the risk that was priced into these collateralized debt obligations was understimated. The story is here.

First there was this:

In Closing… a Message to My Wife My Dearest G,

I know it’s painful for your to read anything from me and my words have lost all meaning. And as much as I hate, HATE, what Mark V. and Duane L. have done and are still doing with their bully tactics and pointless threats and severe interferences in my life and our marriage…

I have to take a step back and accept that it was I who originally brought all of this upon ourselves - financial ruin, toxic publicity, serious marriage problems.

Breakdown of the financials in the housing stocks, and how fears about these are connected to the US sub-prime uncertainties.

A weak housing market is the problem that is making sub-prime a problem in the US, sub-prime is not a problem in isolation....

The highest number of vacant homes ever in history?

Price of housing may fall more than ever before?

Everything will be just fine?

Canada can evade these problems, because we don't have the same kind of mortgage and debt problems?

Let's introduce 40 year mortgages right now?

I like this picture, cranes sprouting, and almost hidden at the bottom right, the remediation.

Things are going well. Just listen to what the media has to say:

The foreclosure wave moves closer to Western Canada.

Boy, there's a lot out there!

Some drive by footage of houses for sale in Riverside California, after the first segment in which some California politicos express their concern with the current housing problems, way too late....

Even a few potshots at Mr Greenspan, but no explanation why those in authority never challenged his flip/cryptic comments on froth or exuberance, at the time they were made. 

Florida has second highest rate of foreclosure in USA. More than 90,000 foreclosures in Florida since January?? Ouch!

Not enough demand, not enough qualified buyers.

So the vultures are circling - looking for condos at 60 cents on the dollar.

Or an 88% price drop, from over 3 million to half a million, for a luxury unit, in a case of "for example"...

Just some stories from a dead market, not a buyer's market.

And further construction coming on line in the next year will just push inventory thousands higher.

As someone said, since retirees like Florida so much, there are no similarities between Florida and Victoria.

Is Jim Cramer a deranged carney, let loose in the midway of debauched capitalism?

To paraphrase: "Even if the 500 billion dollar sub-prime market blows up, so what? It's all over seas, the risk was spread around, it was just that idiot at Bear Stearns, read the facts and don't worry."

Oh really?

Spanish property prices could fall after a warning to banks to rein in mortgages and prepare for bad debts....BBC News.

Musical accompaniment from the Talking Heads, "Burning Down The House". Good visuals, signs galore, California RIGHT now!

Nice observation: "Put them any closer and those gingerbread sized houses would be condos."

Quote Peter Schiff, a cheerful guy, "The market is going to drop, there will be nowhere to hide."

Thanks john67elco.

This Australian story covers the global effect of the collapse of the US sub-prime lending market, that spreads the risk around the globe. As debts were not considered toxic at the time of their origination, this allowed the banks to package the debt and sell it to other financial entities like hedge funds, who then used these packaged loans as so-called assets, then used these so called assets to securitize futher borrowing from banks, creating a toxic cycle of debt.

While Greenspan touted the spreading of risk previously, what this has served to do instead, is spread the danger of contagion, now that the credit cycle is swinging the other way.

The financial analyst wraps up optimistically by saying, "The day of reckoning may be nigh!"

Zombie movies, Bear Stearns, Sub-Prime, Hip-Hop, connect the dots, breakdown of how these incidents could even be considered a surprise. Overall - pretty cool!  After all, zombie's don't know what they're doing....

Thanks itulipdotcom.

This video talks about the herding behaviour of consumers, and how this can be utilized to actually predict trends, tops and bottoms. Lots of charts on the US Housing Market. While this advertisement for a course is a typical Youtube promo, the information provided is detailed, and provides an interesting overview of the economic forces at work in the US housing market.

There is also some general advice about how to interpret the over-hyped messages of popular media, like magazine covers on housing, for instance, and how they can counter-intuitively signal opposite trends are about to begin.

Any relevance to the current Canadian housing market? Hmmmm.

Warning!! This is a potty mouth, foul denigrating infomercial. Otherwise, it's kind of funny. I apologize in advance to those it offends, but this "infomercial" is hard to differentiate from some of those late night sales programs, which offer the key to riches. Except these guys are better looking.

Story that looks at the big boom continuing without any sign of stopping, and concludes things are different than the US, the boom will continue, and warns next year prices will be even higher.

Balanced? Cheerleading? Objective? Hmmm....

Courtesy maddohartlepool.

Here is a story from Fox news which explains Zillow and how their "zestimate" works. If the mainstream media is now pumping out information about sites like Zillow, how are Realtors going to react and retain their relevance? It would seem that the fate of travel agents in a world of on-line bookings has not quite arrived yet, but sites like Zillow are making it a lot easier to get comparable sales prices, with or without the help of an agent.

This is a big help to the "for sale by owner" crowd. Now, the question is, who can or will do the same in Canada?

Some choice criticisms of Greenspan are dished out too late. Also, sprawls of for sale California tract housing.

Interesting video, *note for jmk* - the mention made of concessions which do not show up in the sale price on record. Neither do upgrades. Or home warranties.  Which is masking the magnitude of price drops in the US, so far.

Housing Bubble in Temecula. 85 signs. One neighborhood. With some Pink Floyd thrown in for good measure. Courtesy of ARMTV.

This is just a story. A true story? Well, two similar houses were built on small lots in Fernwood by a developer. First sold within days for over half a million dollars. Second is still on the market, over two and a half months later.

Next door, is a ramshackle Fernwood traditional, probably circa 1914 or earlier, paint peeling, architecture similar to other houses in the neighbourhood. In realtor parlance, a "diamond in the rough".

So the developer approaches the owners of the rundown house and offers to paint it for free - cost is around $5000. Why? Well, it's right next to the house that hasn't sold yet.