Creating The Illusion
Readers suggested a topic on perception. “Do people want to be lied to? I look at the debt overhang with this economy, and realize it’s going to be tough sledding until we get out from under it, perhaps for a generation. In state and local government, I see the crushing burden of past debts and pensions. And yet no politician is willing to say ‘here is the reality, let’s work together and deal with it.’ It’s like ‘elect me and I’ll fix things.’ But you can’t make the past go away. Romney is being dishonest. Obama should have been making ‘blood and tears’ speeches for the past four years, but went with happy talk instead.”
“I own an overpriced house. Worth over $1 million, in theory, in a neighborhood traditionally occupied by civil servants and small shop owners. I’ve got one kid in college and one going in. At these prices, they can’t live here. Friends have moved away because they didn’t buy before the bubble. The only people who benefit from this are those who cash in and move to Florida. That cash pumps up the economy of Florida, while the excess debt on the buyer cripples the consumer economy of New York.”
A reply, “Humans have an innate sense of what is just and what is not, and THAT plays against their innate greediness. Somewhere between the two, the manipulative wreak their mischief. No one WANTS to be lied to, but our small vanities prevent us from recognizing when we are. Hence the rationale of politics.”
Another had this, “Hearing what you want to hear may be the truth on occasion. Often it isn’t. Often the truth (this is going to cost a lot, you can’t get the good deal with that credit score/small down payment/whatever, there aren’t any tickets left) isn’t what you want to hear. But every once in a while, the truth is what you want to hear. The determining factor is whether it is what you want to hear, not whether it is untrue.”
A reply, “Well…nobody asks to hear a lie that they didn’t want to hear. And everybody is happy to hear the truth that they do want to hear. So we’re really just choosing between lies we do want to hear and truth that we don’t want to hear. Tons of people seem to prefer the lie.”
The Guardian. “A national campaign representing more than 50,000 families caught up in America’s foreclosure crisis has been launched, with the aim of making mortgage relief a key issue in battleground states during the 2012 election. The Home Defenders League plans to be active in 17 states across the US recruiting members via phone and door-to-door campaigns. Staffed by people who themselves are suffering from foreclosure, the HDL wants to create a powerful lobby in swing states like Florida, Colorado, Nevada and elsewhere.”
“It is planning to tap into some of the 15.7 million American homeowners suffering from foreclosure or whose houses are ‘underwater.’ It seeks to vet politicians on their attitudes towards a policy of resetting mortgages at current market levels, arguing such a move would keep families in their homes and provide a stimulus to the economy. ‘This country needs this. It is not just about helping struggling homeowners, it is about fixing our country,’ said Amy Schur, head of the Alliance of Californians for Community Empowerment.”
From OpEd News. “Don’t get snookered by the ‘housing prices have hit bottom’ hype. It’s just another scam to lure people back into the market. The only reason that prices aren’t still plunging, is because the banks have slowed the foreclosure process to a crawl to decrease supply. It’s all about creating the illusion of a ‘bottom.’”
“But, if you absolutely ‘must’ buy a house, then at least consider this tidbit from Abigail Field over at Firedog Lake: ‘Phoenix: RealtyTrac identifies 6,611 ‘bank-owned’ properties there. An Arizona realty website lists only 275 for sale. Similarly, Yahoo real estate claims there’s over 8,000 foreclosure properties in Phoenix, but Realtor.com lists less than 4,000 homes of any type. AZHomeonline.net lists a bit over 4,000, plus 312 foreclosures and shortsales. So are the foreclosures in Phoenix on the order of 300 or 6,600? Makes a wee bit of difference when the non-’distressed’ market is about 4,000, don’t you think?’”
“‘Phoenix isn’t the only place where banks are holding properties off the market. In Portland, Oregon, banks aren’t selling 80% of the homes they own, The Oregonian reports. All the bank owned inventory statewide represents more than a year and half’s supply of houses all by itself, according to a RealtyTrac executive quoted in the piece. If the housing inventory is that distorted in Oregon, what’s it like in the hardest hit states?’”
“Now check this out from CNBC: ‘Foreclosure activity in April fell nationally to the lowest level since the summer of 2007, but government intervention and the recent $25 billion mortgage servicing settlement are now changing the face of the crisis.’ Jeez, they’re running out of houses. I guess I’d better go out and get me one right now!”
“So, the question is: When are the banks going to put more of their distressed inventory on the market? Answer: No one knows for sure. But when the government and the central bank are on your side, then there’s no hurry. You can take your own sweet-time and drag the Depression out for ever.”
From SmartCompany. “Approximately 99.7% of the earth’s people believe Australia is the strongest, wealthiest, most fortunate nation on the planet. The 0.3% who do not believe it are all Australians. We rank at or near the top for economic prosperity, standard of living and personal wealth. That’s how it looks from the outside looking in. But Australians refuse to accept it. We’re a boom nation with a recession mentality.”
“How did we get to be so pessimistic amid so many reasons be bullish? How did a nation that embodies confidence and success in so many spheres – notably in sport and in entertainment – manage to develop such a massive dose of the sulks? Here’s a plausible explanation, one that speaks directly to the real estate industry.”
‘We are infested with politicians, industry associations and business leaders who seem determined to talk us into a recession. There is no greater example of the problem that the housing sector. For years the HIA has been trying to extract concessions from government by pumping out ‘crisis’ media statements on an almost-daily basis. We have an affordability crisis, a housing shortage crisis, a red tape crisis, a taxation crisis. Even positive data has been twisted into a tale of pessimism.”
“Australians are out there buying homes and investment properties again – and markets are rising. But they’re not building new homes, they’re buying existing ones. Why would anyone want to build when the HIA keeps telling them the industry is stuffed and their products are too expensive? The only thing that’s collapsed is common sense and sound judgment at the HIA.”
“They should be selling the benefits of building new homes. They should be highlighting the areas in Australia where the economy is strong and business is good.”
From Kuensel Online. “This week the central bank, having exhausted its Rupee borrowing limit of INR 10B from the State Bank of India, had to borrow INR 2B from the Punjab National Bank of India at a higher interest rate to replenish domestic banks that had run dry of Rupee to facilitate payment of import from India, Bhutan’s largest trading partner. Now almost 12 weeks since the central bank tightened credit, land prices in Thimphu and other urban centres are showing signs of falling. This is significant because land prices in Thimphu have always been appreciating and accelerated in the last decade.”
“Just as easy credit helped fuel speculation and pushed land prices to ridiculous levels all these years, the absence of money in the market is having the opposite effect. With loans no longer easily available landowners are willing to let go off plots here and there to complete a construction or repair one, educate children, buy a car or a truck or machinery required for an ongoing project.”
“Whether people selling land at lower than market prices represent a few desperate cases or is the beginning of a trend remains to be seen. But the fact that sellers are willing to go below is a clear indication that land in Thimphu is way overpriced. Overpriced land has its baggage in terms of unaffordable housing, which rides on an ever -increasing population gathering at urban centres.”
“Years ago when rent control measures were proposed the banks were the first to object, apart from real estate owners, because they could go bust if hundreds of housing loans clients defaulted in repayments if rents did not catch up. The crunch just may be a blessing is disguise.”
