The worst housing bust since the Great Depression has Florida in its grips. How the state emerges through this crisis depends on voters and views that need to be shaped by a full accounting-- and recounting-- of the stories, public officials and insiders who led the state straight onto the shoals.
If the incumbents are held accountable and voted out of office: county commissioners like Natacha Seijas who has been a key cog in the wheel of special interests, from rock miners to land speculators masquerading as farmers, to a whole host of developers, then there is hope for Miami and the State of Florida.
If incumbents get a free ride, incumbents like the unreformable majority of the county commission, I hold out little hope. Florida will become more of what it is: a pass-through state for mediocrity and diminished expectations, ringed by pollution and the same tolerance for corruption as a frog in kettle of heated water.
The arrogance of and sense of entitlement that accompanied the bulldozing of the public interest during the housing boom needs to be detailed: we do that, here, and we wish the mainstream media would, too. The Herald investigation of mortgage fraud by the I-Team is outstanding, but we would like to see the perpetrators highlighted; they are not necessarily among the 10,000 convicts who originated loans during the boom.
Homestead, Florida is the abject example of cancerous growth gone wild. The natural amenities and historical character of the last rural place in south Florida, adjacent to two of America's most threatened national parks, were thrown overboard by local bankers, like Bob Eppling and Bill Losner who sold his bank, and local political figures like Steve Shiver, the former mayor of Homestead, former county manager, and former developer of low cost housing who is now running an amusement park in North Carolina.
We featured Shiver on our blog, a few weeks ago. One of the posters complained that it was time to leave Shiver and Losner alone. Actually we are hoping more readers will come forward with their own stories about Shiver and Losner during the boom, now that the policies and practices they advocated have been revealed to be such a bust.
Shiver and Losner were the on-ground team sent by the Latin Builders constituted as HABDI to wreck opposition to the conversion of the Homestead Air Force Base as a private, commercial airport. What they wanted was the subsidiary development that would fill the banks with deposits and loans and the pockets of affiliated insiders with contracts.
Though they couldn't get the Air Force deal because the military finally stood behind laws that local politics were willing to trash, through super low interest rate policy of the Federal Reserve, instigated by Bush brothers in Tallahassee and Washington, they got the sprawl they wanted and more: it was called "the ownership society". Remember, that?
The values of the small town Shiver lorded over have been permanently changed by the housing bust. It is not stopping the special interests who speculated and purchased hundreds of acres at enormously inflated prices at the edge of Homestead and Florida City from pushing to change the zoning for even more badly planned development.
An observer wrote of Krome Gold and Parkland, by Lennar, "These 2 projects will burst open the dam holding back development. They are going to cram a new city down our throats out there and really cause Kendall to enter disaster. If you can imagine Parkland at the west end of 152 and the Water Theme park at the east end… there will be gridlock no matter how many trains come to town. It looks like 50 people are going to change the face of Dade County forever."
It won't change Shiver, though, who is running an amusement park in North Carolina. Maybe someone can provide Eyeonmiami with an update on how Shiver's amusement park is doing these days...
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11 comments:
The worst housing bust since the Great Depression has Florida in its grips
A consensus estimate of economists by Bloomberg puts second-quarter GDP at about 2.2%. First Trust Advisors' Brian Wesbury, who is admittedly at the extreme end of the expectations spectrum, thinks GDP growth will be 3%.
Not only not a recession, but quite respectable.
You are so desperate to create a situation that is far from reality. You are a blog of whiners!!!!
Yeah, yeah. It's far from reality, if you're living in a dream world.
"One of the most noted skeptics on Wall Street, NYU Professor Nouriel Roubini says the financial system is in "the worst crisis since the Great Depression," and that the bear market in stocks is only half over.Subprime mortgages are only the tip of the bad-loan iceberg, says Roubini, who expects the "subprime financial system" to ultimately suffer credit-related losses of between $1 trillion and $2 trillion vs. the approximately $330 billion thus far.Roubini believes the economy slid into recession in the first quarter of 2008 and will remain there until the second quarter of 2009, with "subpar growth" likely to characterize the recovery.That's the (very) bad news."
Are you a member of the "Vision" Council?
Let's take a little stroll down memory lane:
Lines at gas stations extending for blocks.
Riots at Political Conventions.
52 Hostages taken from the US Embassy in Iran.
Home Loan Interest Rates at 17%.
Unemployment at 10%.
Losing the war in Vietnam.
But all of you short sighted whiners suffering from amnesia are claiming we are in the second comming of the Great Depression.
Where do I get in line for a nice loaf of French Bread? Wholefoods?
m
Alan Farago got it right about a year ago. Raping a community of it's tract land is not a crime, but should it be a crime when the promoters do their damage and move on? Their actions harm the quality of life forever of those who are left behind.
Shiver is gone, most of the politicians who let him master their thoughts are gone and what is left is a traffic snarled community with HOA fees going through the roof as more homes are in foreclosure. City of Homestead is proposing to pass an ordinance to force someone to maintain homes (single family) facing foreclosure. Overbuilt with no jobs on the local scene has subjected residents to long commutes, high fuel prices and plunging real estate values. Maybe it is a crime.
http://www.counterpunch.org/farago09272007.html
The Big Picture 15
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Existing-Home Sales Fall to 10 Year Low; Shadow Inventory Looms
Barry Ritholtz
Today, 11:19 AM
Another month, another new low: Existing-home sales resumed its fall. The ugly details follow:
• Sales of single-family homes fell 3.2% to a seasonally adjusted annual rate of 4.27 million, the lowest since January 1998. Sales of condos rose 1.7% to an annual rate of 590,000, the highest since November
• All existing home Sales fell 2.6% (SA) month-to-month to an annualized rate of 4.86 million units in June. Thats a drop of 15.5% from a year ago in June 2007.
• The inventory of unsold homes on the market rose 0.2% to 4.49 million, an 11.1-month supply at the current sales pace, the second-highest inventory level since the mid-1980s.
• The median sales price fell 6.l% in the past year to $215,100. Home prices nationwide have fallen 18% on average from their July 2006 peak, according to the S&P/Case-Shiller index of 20 metropolitan areas;
• Purchases are down by about a third from a record of 7.25 million reached in September 2005.
• Short sales and foreclosures accounting for approximately one-third of transactions.
That last data point is the most important one, so let's review it: Fully one third of all existing sales are of distressed properties.This includes defaults, foreclosures, work-outs, walk-aways, etc.
Now for the really scary part: Shadow Inventory. The glut of homes for sale is likely much larger than reported. Inventory counted by the Realtors group only includes foreclosures that have been listed on the multiple listings service. The enormous number of REOs, auction properties, defaults and foreclosures not listed ARE NOT IN THIS DATA.
Because foreclosures aren't included in the data at all (they are not sold through realtors' MLS service) it is likely that the total inventory of houses for sale is APPRECIABLY HIGHER THAN REPORTED.
I expect we will be hearing more about the Shadow Inventory over the next few quarters . . .
Gimleteye writes:
This is in response to the "blog of whiners", above. It is from the recent weekly column in Barron's, that bastion of left-leaning socialism.
"WHY WE'RE STILL BEARISH WAS SPELLED out starkly in a dispatch we received last week from Nouriel Roubini. Nouriel is a professor of economics at NYU Stern School of Business (but don't hold that against him) and runs an economic advisory firm called RGE Monitor that casts a knowing and clear eye on the global financial and economic scene. We think he's top-notch (which means we agree with him, a lot of the time).
The nub of his argument is that we're suffering the worst financial crisis since the Great Depression, and he proceeds to give chilling chapter and verse. He predicts that hundreds of small banks loaded with real estate will go bust and dozens of large regional and national banks will also find themselves in deep do-do.
He reckons that, in a few years, there'll be no major independent broker-dealers left: They'll either pack it in or merge, victims of excessive leverage and a badly flawed and discredited business model.
The Federal Deposit Insurance Corp., after it gets through picking up the pieces of IndyMac, will sooner or later have to get a capital transfusion, Nouriel asserts, because its insurance premiums won't cover the tab of rescuing all the troubled banks. He foresees credit losses ultimately reaching at least $1 trillion and anticipates a heap of woe for credit purveyors across the board.
The poor consumer, he contends, is shopped out and being hammered by falling home prices, falling equity prices, falling jobs and incomes, rising inflation. The recession he anticipates will last 12 to 18 months. And the rest of the world won't escape: He looks for hard landings for 12 major economies. As for the stock market, he hazards that there's plenty of room left on the downside. In fact, he feels the bear market won't end until equities are down a full 40% from their peaks.
We must say this vision is a mite too apocalyptic even for us. But Nouriel is not a professional fear-monger out to make a splash with end-of-the-world prognostications He's a sound guy with a solid record and an impressive résumé. We obviously believe his views are worth pondering, even if they ruin your appetite."
Despite the writers above who think this is the best of times, nly the very rich and bushites are convinced that all is wonderful. Although the depression or even a depression will not hurt me but I feel for the vast majority who are being killed by these who do not care. at first I was sure that the first writer was just kidding, now that I read more I know we have some very unstable people in our midst who read the blog.
i heard the ferris wheel at ghost town has been broke down.
My job is now on the table, and numerous friends of mine, mostly professionals in finance and IT, have lost theirs.
An old friend of mine, who is "legacy" IT, made $90K a year prior to layoff last year, and says he will now be glad to see $50K a year.
And the only people getting raises are either the politicians who continue to shamelessly vote themselves 20% raises here in Chicago; and, of course, CEOs of large firms who don't blush at taking home high-8-digit paychecks while their companys' stocks drop through the floor.
How nice for the first poster that he occupies a nice where he is insulated from the ravages of the bursting credit bubble! He must have a government job.
That, or he is a corporate manager with a golden parachute and a 7-digit paycheck.
I learned a long time ago that what is being said ain't necessarily what is true. Right now, it's bad, it's scary, and it seems to be getting worse.
What am I doing - I am helping as many people I can. I am acting upon my instincts to reach out in as many ways as I can - thinking about how to create new jobs and protect existing ones. (I spent the morning at the Government Center and I think I did a good thing.) I am reaching out to people and creating good kharma. I am using terrible times to create bridges with people who see things very differently from me.
I have no use for arrogance right now. To the blogger who made the comment about bread, your timing sucks. (can I say that here).
To the blogger who's job is on the line, hold on, think outside the box, keep working on anything and everything (the positive energy will create synergy), live by the power of intention. I am praying for you specifically tonight, blogger, in hopes that the universe will reach out to you with a nod. I met a man today who is dying. That's worse than what you are going through. You'll get through it.
PS. To the guys who are living fat off the backs of less fortunate, remember - pigs get slaughtered.
You asked how is Shiver's amusement park doing? Well the incline railroad doesn't work and the roller coaster doesn't work. The biggest draws to the park are the gun fights, which by the way are very good and the beautiful view of the surrounding mountains. We in the Maggie Valley community can only hope that Steve Shiver's intentions are to keep Ghost Town in the Sky an amusement park and that he doesn't have an ulterior motive to run the park in the ground (which he seems to be doing a good job of)and then develop the land with multi-million dollar homes. That's not what this community needs. This community doesn't need to be a little Miami. Those of you that live in Miami and want to get away from it come here. Keep your Miami ideas in Miami and come to the mountains to get a bit of fresh air and small town life. From what I have read and heard about Steve Shiver, only time will tell if his intentions are for the good of the community or for the good of Steve Shiver!
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