If you don't know JOE, you don't know Florida, by gimleteye

St. Joe Corporation is the state’s largest landowner, and until today one of the state’s most ambitious developers.

"If you don’t know JOE, you don’t know Florida," is how the corporate website begins. “Let’s face it. Florida has been the center of a rampant real estate boom since Rudolph Valentino needed a suntan. The railroads crisscrossed the state in the ‘20’s, unleashing rapid growth that continues to be the name of the game in the Sunshine State.”

Well, Rudolph Valentino died of a perforated ulcer at 31 and according to Bloomberg today, “St. Joe Co., Florida’s largest private landowner afflicted by the worst housing slump in 16 years, plans to eliminate more than 75 percent of its workforce, sell about 100,000 acres of land and scrap its dividend.”

St. Joe stock has fallen 36 percent this year through Oct. 5th.

But the 16 year measure, as calculated by the S&P/Case-Shiller home price index according to the July drop, is inadequate to the description of the collapse of the housing bubble.

Lennar, Florida’s native production homebuilder, recently reported a third quarter loss of $513.9 million, according to AP “the biggest quarterly loss in the 53 year history.” Its stock price is down more than 55 percent year to date.

Mark Zandi, often quoted real estate economist from Moodys Economy.com, says, “the housing decline may push Florida’s economy into recession as early as this year.”

Look around: Florida is in a recession today—it is the single biggest story of 2007 and will be, in 2008 during a presidential election where not a single candidate in either party has managed a clear position.

As evidence emerges from the miasma of credit derivatives and other structured financial products created out of home mortgages, something else is emerging: there is no historical equivalent to the mess the housing bubble has unleashed.

Satyajit Das, one of the world’s leading experts on credit derivatives, was recently asked whether the credit crisis was in the “third inning”. According to Jon Markman, who interviewed Das for TheStreet.com, Das chuckled and said, “we’re still in the middle of the national anthem…”

“Through late last month, according to Das, as much as $300 billion in leveraged finance loans had been ‘orphaned’, which means that they can’t be sold off or used as collateral.”

Quite aside from the housing market now in cinders, buyers of debt “are in the process of rejecting the entire new risk-transfer model and its associated leverage and counterparty risks.”

On a conference call, CEO Peter Rummell said, “This is not a fire sale.” It’s the same line, that Lennar said. That Horton Homes said. That Pulte said.

So if it’s not a fire sale, why is there so much smoke?