The following is from an article describing the shutdown of the Krystal Sands condo development in Las Vegas before anything was actually built (having taken deposits whose status is now unknown):

“According to Victor Altomare, developer of The Summit, “Unless a residential condo is at $600-$800 per foot, I question the project’s viability. Construction costs the same next to the Bellagio or on an old downtown redevelopment site. Although land is expensive, it’s content is minor compared to construction costs. A hotel condo needs to be forward priced at $800-$1,200 per foot, or it’s just not viable. Land and construction costs are skyrocketing, which inevitably means fabulous capital gains for the buyer upon delivery. In the short to medium term (2-5 years) capital gains in Vegas are assured. The risk for buyers is the knowledge, experience and judgment of the developer in forward pricing accurately. The trick for buyers and their estate agents will be to buy in a project where the developer has charged enough in the first place!””

Prudential Realtors Press Release

KVBC Las Vegas

“NEW YORK, Mar. 24, 2005 — The New York Stock Exchange today released its weekly program-trading data submitted by its member firms. The report includes trading in all markets as reported to the NYSE for Mar. 14-18.

The data indicated that during Mar. 14-18, program trading amounted to 71.4 percent of NYSE average daily volume of 1,835.4 million shares, or 1,309.9 million shares a day. This included program trading associated with the March 18 quarterly expiration of stock-index options, futures and options on index futures. ”

NYSE

Trading Places: Real Estate Instead of Dot-Coms

“Holly Peterson, who is writing a novel about the idiosyncrasies of New York’s rich, said that at dinner parties in Manhattan, she frequently hears complaints about high home prices, followed by claims of quick profits. “They always hit you with their last jab: ‘Of course my money’s doubled three times over since I got married,’ ” she said.

Five years ago, she said, friends at parties were crowing about “making millions of dollars on paper with $25,000 and $50,000 investments.” But “most of those people,” she added, “got wiped out.”"

New York Times

Everywhere I go, I hear about the great profits people have made in their houses. Usually this consists of refinancing debt to “take money out” or selling and rolling up to a bigger house. With housing affordability down to less than 10% in some markets and over a quarter of new home sales to speculative buyers (over a third when “second homes” are included), it seems that some caution might be warranted. I therefore offer the following cautionary tale, a reader’s letter submitted to Richard Russell’s newsletter. ‘Steve’ recounted:

“For the person that said housing never crashes let me pass on these facts that I know only too well. My wife and I purchased a new starter home in Dallas in 1984 for about $102,000 (which is about $190,000 in today’s dollars) and within a few years the area did well and houses were selling for about $115,000. Naturally, we felt very smart about our ‘wise decision to purchase a home.’

Along comes 1988 and an economic downturn in Dallas which knocked down oil, technology and banking. Jobs that had been easy to find at good money started to disappear and people in the neighborhood started to talk about moving to another area if necessary to find work. The nice, cute little neighborhood started sporting “for sale” signs and then when the local economy got really bad, families just started leaving the neighborhood without even selling their home. They just sent the keys to the bank.

Suddenly a home like ours was selling for $48,000 and when I received a good opportunity in a different state I could find no buyers for our home at any price above $50,000. At that point in time my mortgage balance was around $92,000 (we had put 5% down) and it was not possible for me to take such a sizable hit. To make a long story short, after losing money every year paying for hail damage, repairs to appliances and the like we sold the house in 1992 for $72,000 and had to cover the difference. That size of a loss on a home is very painful and really puts your savings plans into reverse.”

But this time it is different. Right.

Well no posts for a long time. Travelling again with crappy internet service in hotels. Advice: stick to hotels with wired internet service. Those who’ve put in a WAP and then claimed free Internet usually delivered little or no signal to the rooms we were in, and service was spotty at best.

Interesting economic note: Low end hotels, such as Best Western, Hampton Inn, etc. have free Internet service (albeit of poor quality). Hyatt, on the other hand, charging twice as much or more for the room also charges for Internet service (typically $15/night!). Their rationale? If you are overpaying for a room you won’t care about overpaying for Internet service. This from an “inside” source at the chain.

Anyway, markets did little except a slight decline during the absence. This was enough, however, to turn all the trend indicators south and so I’m fully short right now. We’ll see.

The big stories are the slow-motion crash of GM and the peeling back of the layers of malfeasance at Fannie Mae. GM is a victim of its unions, who are killing off the industry just like they kill every unionized industry over time. FNM is a victim of bureaucratic arrogance and greed. Remember, the last official act of any government is to loot the treasury.