June 30, 2017

The Question About The Users Of Real Estate

It’s Friday desk clearing time for this blogger. “Metro Denver home prices are about 18.3 percent higher than what income gains can explain and justify, according to a first quarter update from Arch MI. That’s on the high side among metro areas and above the excess appreciation rates seen a decade ago during the housing boom. In fact, they haven’t been so high in Denver since the oil boom days of the early 1980s. But the odds that metro Denver will suffer a home price decline over the next two years remains at a low 2 percent due to a strong economy and the region’s continued popularity among those relocating, according to the Housing and Mortgage Market Review from Arch MI.”

“Arch MI, which is based in Walnut Creek, Calif., provides mortgage insurance, giving it a motivation to stay on top of home price trends. ‘Don’t expect Denver home prices to go down. Everybody wants in. It isn’t a bubble and it will continue to be like this,’ predicted Ralph DeFranco, global chief economist with Arch MI.”

“You don’t have to be an industry insider to know that Central Ohio real estate is on fire. You’ve surely seen reference to the skyrocketing home prices in Columbus. Neighborhoods like Upper Arlington, Bexley, Clintonville and Grandview have risen nearly 50 percent since the economic recovery began in 2012. But it’s not just those pricey neighborhoods, where median home values are now exceeding $300,000, that are hot.”

“Jim Hilz, executive director of Building Industry Association of Central Ohio says, ‘We’re not building what the consumers want.’ He says the average sale price of an existing home in Central Ohio in 2016 was $202,000, while the average cost of a new home was $333,000, ‘and on the north part of town, that average new home price goes well over $420,000.’”

“It is no secret Bay Area housing prices are expensive. Recent data revealed three counties now have average housing prices above $1M. While USC Lusk Center for Real Estate Director Richard Green said he does not think there is a housing bubble, he is concerned about tech companies that do not technically make any money, like Uber. The Bay Area is filled with tech companies that are doing good things, but the industry does not know what they are actually worth. ‘The question about a bubble is not about the real estate itself, but about the users of real estate,’ Green said. ‘How solid are they? How long are they going to be around?’”

“Home sales in the Greater Toronto Area plunged more than 56 per cent during the first two weeks of June, compared with a year ago, according to the latest numbers from the Toronto Real Estate Board. Meanwhile, the number of new listings rose to 9,988, which represents a 22 per cent increase. Juliette Fergus, of Keller Williams Referred Urban Realty, told CTV News Toronto it’s too hard to say whether these listings are truly new listings or ones being relisted.”

“‘We’re seeing homes that are listed for multiple offers…. They stay on the market for a week, they don’t sell, they’re being pulled and relisted,’ she said. ‘Homes are now being listed at what the actual price is.’”

“Rental prices have significantly dropped in the UAE capital within the last year. However, property experts predict that prices will slide further, suggesting that supply is increasing while demand is decreasing. Jalal Mamdouh, leasing coordinator at Prime Capital, said that landlords are finding it difficult to compete with one another, adding: ‘They are desperate to lease their apartments,’ particularly those who have bank loans. Today, a one bedroom apartment in the Gate Towers has an average of Dh75,000, decreased by approximately Dh15,000.”

“‘You can find brand new apartments for Dh70,000 now, which has not happened in the previous years,’ he said. ‘Landlords listing their one bedroom apartments for Dh90,000 and above will never have them rented out.’”

“The differential between the listing price and selling price of homes in the current market can be as much as 30%, according to Cameron Jansen, Manager of RE/MAX Central, whose office services the central Gauteng region. ‘Buyers are aware that market conditions are in their favour and as such, are looking for a bargain where possible, often putting in offers that are 25%-30% below the seller’s listing price,’ says Jansen.”

“He adds that this is not something that is unique to any particular price range, but is a phenomenon that is across the board. ‘It is not that we just see the trend developing in one sector of the market – it is from one end of the market to the other, from the affordable housing sector right up to the luxury market,’ says Jansen.”

“Thailand might encounter a repeated economic crisis like the one which occurred two decades ago, said a former governor of the Bank of Thailand. According to Prasarn Trairatvorakul, Thailand’s property sector has been growing so fast and widespread that it is apparently oversupplying the consumer market. Such oversupply might possibly trigger a new economic crisis, following the one unofficially called Tomyum Kung crisis (hot soup with shrimps) in 1997.”

“The Tomkun Kung crisis prompted the country’s economic bubble to burst, causing property developers and their customers as well as banks, financial firms and their clients to suffer enormous losses. ‘Nobody can assure that the Tomyum Kung crisis will not be repeated but certain measures may be taken to prevent it,’ he said.”

“Australia’s looming apartment glut has prompted panicked developers to offer potential buyers significant incentives, including discounts with rental guarantees, free furniture and appliances, upgrades to fixtures, and significant stamp duty concessions. An estimated 25,500 apartments will be completed in Sydney this calendar year, with a further 17,090 in Melbourne and 10,300 in Brisbane, according to property advisory firm Charter Keck Cramer.”

“A plethora of banking, regulatory, and additional factors are turning the tide for property developers. This has lead to panicky developers resorting to offering incentives to try and get apartments moving. Regulatory measures, combined with the Chinese government’s curbs on its citizens buying property overseas, has caused a dramatic slowdown in off-the-plan selling, according to developers.”

“Feedback from our Australian Property Conference and mystery shopping highlight a clear change in the apartment market, particularly so in Perth, Brisbane and to a greater extent in Melbourne,’ said Citi analysts David Lloyd, Adrian Dark, and Suraj Nebhani.”

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Comment by Ben Jones
2017-06-30 05:47:58

FYI I am finally driving back to Arizona starting today, so there will be delays with posting and moderating.

Comment by acutehemroid
2017-06-30 06:55:16

Ok, let’s start: “Metro Denver home prices are about 18.3 percent higher than what income gains can explain and justify, according to a first quarter update from Arch MI.”

Denver Metro
Median House Price:$379k
Median Household Income: $71k (2015) add 2% gives $72.4k. I’m trying to adjust for the 1.5 year difference between 2015 and 2017. I’m certainly open to better numbers at this point.
Ratio: $379k/$71k = 5.2
This ratio should be about 3. Ok, let’s see what the actual home price should be.
Price: $71k x 3 = $210k for the median home price.
We now calculate the percent difference:
%diff = 100% x abs(379k - 210k)/210k
%diff = 80%. This is NOT 18%.
Ok, try again:
%diff = 100% x abs(379k - 210k)/379k
%diff = %45. Still too d*** high!
My guess is the true number is between 80% and 45% niether of which is 18%. So, does anyone know where that number came from? I know I’m wrong in this, but at least I give a rational why I’m wrong. This 18% just floors me. Clearly the income for this market to be affordable should be over $120k which is not possible. Most families have no hope of earning that much.


Comment by oxide
2017-06-30 08:42:16

A ha.

I think the paper is looking at a much simpler concept. In their minds, if income rose by 2%, then — using the 3x income rule –housing should appreciate by 6%.

According Zillow, home prices in Centennial CO increase by 7.1% YoY.

(7.1-6.0)/7.1 = 0.18333.

That is, prices increased 18% more than 3x income did.*

Meanwhile, you’re looking at a totally unrelated concept. You’re assuming that median house price should be 3x the median income, and calculating the differential. In your calc, the differential is 80%. House prices are 80% higher than they should be.

However, I don’t agree with the initial assumption that the median income should be able to buy a median house. That implies that the lowest income (minimum wage or welfare) should be able to afford the lowest house price, which implies that *everyone* should be able to afford a mortgage payment.

But we know that’s not true. Low incomers are usually renting, some with assistance. They are not in the pool of buyers. So, we should really not compare the median income of the total adult population ot house prices. We should use the median income of the pool of viable buyers, which of course is higher. In that case, 3x median income of the pool of buyers can afford a median house. 3x of the median income of the total adult population can only afford a below-median house. Makes sense?

*Admittedly, I looked at Centennial. According to your link, the increase in Denver city limits was 6.9% YoY, which is 13% more than expected. But at least this appears to be ballpark.

Comment by oxide
2017-06-30 08:49:38

Just a side note, I’m talking practically here, not philosophically. Sure, in an ideal world, everyone should have an income, and there would be housing at every available income level to where even low-income people can have a chance to buy (and pay off) a house. But practically, I’m not sure that’s ever been true in any society in human history.

Also, for the numbers, there is some skew at the bottom end because that’s where the demand is. People who buy at the lower-middle end are stretching themselves more than an equivalent family at the middle-high end. We’ve seen this — bidding wars at the low end $200-300K while upper end $600K+ just sits.

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Comment by acutehemroid
2017-06-30 09:47:48

You are correct in that the lowest tier of wage earners usually cannot afford a house, but how much of a “fat-tail” are the low and high end distributions vis-a’-vis wage earners? BTW, I’m worried that there are more and more people entering the lowest tier than leaving it in many areas of the country.

With an unemployment rate of just over 2.1%, metro Denver appears to enjoy a full-employment scenario. I see your point, but I’m pretty sure that metro Denver ought be affordble even at both the higher and perhaps the middle of the lower tier of workers -Did that make sense?- due to full employment.

Now, anecdotally, both of my sons are studying CompSci. They may relocate to Denver to work upon graduation. Would they want to buy a house? I’m not sure they would, actually. This is boiling down to individual choices and needs/wants.

This is somewhat muddled, but most things like this are. Your thoughts?

Comment by MightyMike
2017-06-30 10:10:42

But practically, I’m not sure that’s ever been true in any society in human history.

That’s an interesting point. Back in the Middle Ages in Europe most of the land was owned by feudal lords and the serfs didn’t own their own homes.

Comment by oxide
2017-06-30 11:37:46

Roidy, full employment is not the same as affording a house. The full employment could be delivering pizza, or, in Denver, baking brownies. And wouldn’t full employment make housing *less* affordable, not more? People with jobs are more likely to bid up the price of scarce housing, and bid that price up more than incomes would dictate. And of course developers have no incentive to build affordable housing if they know there are people with income who want it.

Mike, the Middle Ages was about the polar opposite of housing being available for all incomes. The closest I think we’ll ever get was the early 70’s in the US, when even factory workers could buy a small starter home. And, perhaps, even now, if two spouses can get full 40 hours at minimum wage in a $70K house in the boonies.

Comment by Taxpayers
2017-06-30 09:12:24

That Oxide is a smarty pants !
Maybe some co equity comes
from ca too

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Comment by Blue Skye
2017-06-30 18:53:03

“if income rose by 2%, then — using the 3x income rule –housing should appreciate by 6%.”

Oh my Oxy, that is a huge math fail. If something 3x that which rose 2% followed, it increased 2%, not 6%.

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Comment by oxide
2017-06-30 19:05:03

Oh wait… you’re right Blue. I worked it out with some numbers. Well then, I don’t know what they mortgage insurers arrived at 18%, except that it has something to do with house prices rising faster than incomes can support.

Comment by Doom
2017-06-30 09:44:39

We have lived and invested in Denver real estate over the years, we no longer live there or invest. Denver wants to be a big city but is really a triple AAA town not major league.
It has and will be a feast or famine place. Housing will crash there because as soon as a major downturn hits Denver is the whipping boy town. It’s history is rich in boom or bust. Bust is coming, I would be very careful moving there or investing, matter of fact sell your property soon if you can still sale a overpriced home seems anything under 450k is gold, anything over is tarnishing fast?

Comment by Apartment 401
2017-06-30 11:14:58

Denver is a dump.

Don’t move here, you’ll be really disappointed if you do :(

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Comment by AbsoluteBeginner
2017-06-30 13:34:01

CO is great for hiking. Denver is so huge, I don’t get that it is Californicating.

Comment by Montana
2017-06-30 14:03:21

Is it still real smoggy there?

I’m amazed how much la cleaned up. Maybe I just visited at the right time.

Comment by Raymond K Hessel
2017-06-30 06:26:35
Comment by Raymond K Hessel
2017-06-30 06:28:13
Comment by PitchforkPurveyor
2017-07-01 09:39:40

This is surprising how?

Comment by Raymond K Hessel
2017-06-30 07:42:51

A waiter in the UK only needs to save for 106 years to get on the housing ladder.

Heckova job, central bankers.


Comment by aqius
2017-06-30 08:24:57

hey. just a quick thanks to whomever it was that recommended the Brave browser.

gotta say, been using it a few days on my new ipad 9.7 & boy howdy its like back when the net was new w/out all the overwhelming relentless intrusive B.S. ads.

don’t know how long until the spammers change their code or whatever to defeat the browsers ad block but it is once again, a PLEASURE to net surf!

if it was on Zero Hedge, then like Roseanne Rosanna Dan:

never mind.

(disclaimer: yes, I do understand & accept the ad-based sponsorship content model BUT, like everything else, greedy azzholes never moderately use restraint but inevitably overwhelm us with a flood of advertising. which, like cable TV, has pretty much ruined the internet)

Comment by aqius
2017-06-30 08:50:49

back to housing related topics. a house right around the corner
(Citrus Heights) finally sold after a few months of chasing the market down from original list $345k to 295.

seller did not use a realtor. only had several home-made fsbo signs in
5 gallon plastic buckets in front yard . . . wth? definitely weird!

of course, the local used house 6%ers blackballed him. saw few, if any buyers. and location on a very noisy 4-way stop didn’t help matters.

according to public records details, he used the “relisting” tactic after a month to game the market. didn’t work so well as he resumed regular price drops every week.

(oh dear, meant to say “New Price!” instead of lowered. must. not. cause. stampede. or legions of black Mercedes/white Canonyero SUV’d blonde soccer mom realtors will shun me in school parking lot.)

Comment by tresho
2017-06-30 10:51:19

saw few, if any buyers
One buyer is all that was necessary.

Comment by oxide
2017-06-30 10:57:40

If he hired a realtor and sold at $345K, it would have cost him $20K. Going FSBO cost him $50K. Not that I like realtors, but until somebody breaks that MLS monopoly and collusion, realtors will have the upper hand.

Comment by taxpayers
2017-06-30 15:16:39

ive done fine w/o realtors

Comment by Mr. Banker
2017-07-01 06:14:46

I love realtors. They bust their asses in convincing ignorant pukes to destroy their financial lives then they bring these ignorant pukes to me, the dotted line guy.

They work, I reap.

Comment by 2banana
2017-06-30 09:13:53

Yep. Hillary did not get elected and there is no federal bailout coming.

But keep attacking the president and his hotels. One of the few areas in Chicago that actually pay taxes and hire people.

God Bless DJT.


Chicago Facing Bankruptcy but Spends Taxpayer $ to Place ‘Real Fake’ Statue in Front of Trump Tower
thegatewaypundit | Jim Hoft

The city of Chicago is facing bankruptcy due to Democrat Party leadership that has simply destroyed the great American city. But this isn’t stopping the Democrat leadership in Chicago from paying for and placing a statue in front of Trump Tower in Chicago. The statue reads “Real Fake”.

It was reported earlier this week that Chicago is on the verge of bankruptcy. Two years ago Moody’s Investors Service downgraded Chicago’s debt to junk status, now politicians in Chicago are arguing that maybe bankruptcy is not such a bad thing. Chicago currently faces $25 billion in pension promises that it cannot pay.

But this hasn’t stopped the liberal Democrat politicians running the city to place the anti-President Trump statue in front of his building in Chicago. No wonder this city is going bankrupt.

Comment by junior_kai
2017-06-30 18:44:12

You see the plans for the Obama library in chiraq? LOL! 5 minutes after the ribbon gets cut the libs will flee in their limos and it will look like Rwanda.

That or they put armed guards, metal detectors, and - wait for it - build a badazz WALL around it for the libs to have their safe space. Must suck having so much brain damage. But I guess thats what the legal weed movement is for.

Comment by MightyMike
2017-07-01 10:47:59

Do you have a link for that? Has George Soros also already made a donation to pay for all of that?

Comment by Raymond K Hessel
2017-07-01 14:00:51


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Comment by Blue Skye
2017-06-30 19:08:33

It’s a rejection of our system of government on a grand scale, which I don’t think I’ve seen before. It is unlikely that we will all pull together through what is coming.

Comment by redmondjp
2017-06-30 22:22:04

Yes, I think you are correct. The gun-owning red-staters are going too take care of the blue city-folk that manage to escape the urban war zones. I don’t wish it to be the case, but likely given the track we are on now. The FSA will go bonkers once the EBT cards don’t get recharged.

How do we successfully get over this right-vs-left divide that the globalists are successfully promulgating?

Comment by Mr. Banker
2017-07-01 08:29:50

“How do we successfully get over this right-vs-left divide that the globalists are successfully promulgating?”

More importantly, how can one make lots of money out of it?

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Comment by PitchforkPurveyor
2017-07-01 09:42:20

“How do we successfully get over this right-vs-left divide that the globalists are successfully promulgating?”

You can’t fix stupid.

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Comment by MightyMike
2017-07-01 10:50:51

The gun-owning red-staters are going too take care of the blue city-folk that manage to escape the urban war zones.

I though that the prevailing theory was that the gun-owning red-staters were going to kill the city slickers.

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Comment by tresho
2017-07-02 08:32:59

I though that the prevailing theory was that the gun-owning red-staters were going to kill the city slickers.
Regardless of whatever may be considering by the chattering classes as the “prevailing theory”, historical accounts of similar societies’ situations indicate that many will die prematurely & violently. All blood is red.

Comment by Taxpayers
2017-06-30 09:15:44

Tor,NYC,San Fran
Let’s just say cities are soft
It’s always an “over there” story.
Then it spreads to all markets.

Comment by Muh facelift aint the only thing bleeding
2017-06-30 09:36:58

Thailand’s property sector has been growing so fast and widespread that it is apparently oversupplying the consumer market. Such oversupply might possibly trigger a new economic crisis, following the one unofficially called Tomyum Kung crisis (hot soup with shrimps) in 1997.”

Gotta LOL at the hot soup with shrimps analogy. I think we need a contest for the best food analogy for both bubble 1.0 and the current one. I’ll start it off - weak I know, but what the heck

1.0: Sour dumplings, sour dumplings everywhere
2.0: Steak? More like roadkill!

Comment by oxide
2017-06-30 10:58:58

1. Crow
2. More crow

Carved by falling knives

Comment by MightyMike
2017-07-01 10:57:55

For America in 2017, cheese should be included.

Comment by PitchforkPurveyor
2017-06-30 10:42:59

We have a special interest, lobbying and corruption problem in the United States. That’s what’s brought us to where we are today.

Comment by redmondjp
2017-06-30 22:24:44

You are correct. And DJT isn’t going to change that, like it or not. He is, however, buying himself some insurance by keeping the military/industrial complex adequately funded.

Comment by rms
2017-07-01 18:31:56

“We have a special interest, lobbying and corruption problem in the United States.”


Comment by aqius
2017-06-30 10:55:22

1.0 Soufflé
2.0 Sue Flay

Comment by aNYCdj
2017-06-30 11:53:50

This area has been going crazy for years…and they still cant stop

he Department of Buildings approved permits for the site on May 6, for a 48 story build with 977,086 square feet of residential space and 39,765 feet of commercial space for a total FAR of 8.00.2 According to the on site rendering, work will complete on the site in winter, 2017.


Comment by MarkinSF
2017-06-30 16:31:21

‘The question about a bubble is not about the real estate itself, but about the users of real estate,’ Green said. ‘How solid are they? How long are they going to be around?’” Translation- it’s about the real estate itself.

Comment by Mr. Banker
2017-07-01 08:31:22

Wrong. It’s about idiots.

Comment by Mr. Banker
2017-07-01 08:37:23

Real estate is just a vehicle used to separate totally dumbed-down ignorant pukes from their money. These vehicles could just as easily be Cabbage Patch dolls or tulips or dot-com stocks.

Whatever it is that can be made fashionable. Use what works.

Comment by Mr. Banker
2017-07-01 09:19:27

FWIW: Here’s an interesting article I ran across that tells of the successful marketing of Beanie Babies:


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Comment by Mr. Banker
2017-07-01 09:25:44

Here’s an article from …

(drum roll)

… The New York Times! (REAL JOURNALISM! so it MUST be true) that covers the Cabbage Patch doll phenom …

“Advertising; Behind the Cabbage Patch Kids”


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Comment by GreenEggsAndSpam
2017-07-01 16:05:06

You forgot crypto currencies. There’s only something like 700 of them in circulation. Maybe everyone will have their own - yo Ben, you got your hbbcoin yet?

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Comment by Neuromance
2017-07-01 10:15:31

When he refers to the users of real estate, I think he’s referring to the pure consumers vs consumer-speculators vs pure speculators.

It again comes back around to “speculative demand” vs “consumption demand.” Economists have not looked at this dichotomy before, so it’s ignored and demand is only viewed in the aggregate.

High consumption demand means the market has lots of people whose primary goal is to consume the asset (live in it). High speculative demand the market has lots of people whose primary goal is to sell at a profit.

A market with high speculative demand is going to be more unstable than one with high consumption demand, because if the possibility of profit goes away (house prices stop going up at a suitable pace), they will seek to exit the market, by sale or default.

Comment by Karen
2017-06-30 16:51:59

Metro Denver home prices are about 18.3 percent higher than what income gains can explain and justify…

But how much of the ‘income gains’ are due to the bubblicious economy? The bubble is not just in housing. It’s a virtuous circle until it turns into a vicious one.

Arch MI, which is based in Walnut Creek, Calif., provides mortgage insurance, giving it a motivation to stay on top of home price trends. ‘Don’t expect Denver home prices to go down. Everybody wants in. It isn’t a bubble and it will continue to be like this,’ predicted Ralph DeFranco, global chief economist with Arch MI.”

This does not sound like the sort of conservative, rational thinking one would expect from a traditional insurance company. Sounds more like the BS you would hear from tech bros.

“Everybody wants in.” Well, OK, I’m convinced. I’ll take 50 houses in Denver Ralph. Put it on my tab.

Comment by Taxpayers
2017-06-30 18:03:39

6/2005 6/2017
=twin peaks

Comment by SW
2017-06-30 20:28:26

I can’t decide if 2017 is 2005 or 2007.

2005 was the top. 2007 was when things started to unravel.

Comment by redmondjp
2017-06-30 22:33:31

I’m having trouble determining the same thing for the Seattle area, which has previously been late to the party ending. I’m thinking 2005 or early 2006 for our area - the price appreciation in the past 6 months alone has been stratospheric and completely unsustainable (even tech salary increases are nowhere close to the same rate).

Comment by PitchforkPurveyor
2017-07-01 09:56:44

I wouldn’t be surprised if prices ran for another year in Seattle. Last time around it felt the same, that things couldn’t possibly go any higher, and they did.

The thing to watch is not Seattle or King County prices, but Pierce, Snohomish and other outlying counties as the money runs. They’ve recently surpassed their previous bubble highs, but not anything like King County.

I have certain “little areas” I pay attention to, and they’re the bellwether. When their appreciation on a yearly rate starts to far outpace King County, you’re getting close to the top.

The strong jobs market, Chinese money laundering, and mass population growth (fastest in history) are adding fuel to the fire. The media cheerleaders gleefully announce rent hikes and accelerating house prices daily. It’s a mania that’s as bad or worse than last time.

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Comment by Professor Bear
2017-06-30 22:41:28

I’d go for 2005, based on the observation that these bubble debacles always take longer to unravel than I expect them to take.

Comment by PitchforkPurveyor
2017-07-01 10:16:44

I can’t believe it’s been 12 years since I found this blog.

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Comment by Professor Bear
2017-07-01 10:40:23

I can’t believe the bubble is still aloft 12 years after we began watching it.

Comment by PitchforkPurveyor
2017-07-01 17:30:58

The sheeple will probably be on board for another bailout, too…

Comment by Jingle Male
2017-07-01 12:29:56

I believe the equivalent of 2005 will occur in 2019 or 2020. There is too much demand and not enough new product being built in my area (Sacramento foothills).

I remember thinking we must be in a bubble in 2002…..and it took until 2005 to start seeing price reductions……

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Comment by Prime_Is_Contained
2017-07-02 09:18:13

and it took until 2005 to start seeing price reductions……

You’re off by a couple of years; San Diego was the first market to peak, and it wasn’t until Dec 2005. Price declines were slow, so the earlier you would have really seen reductions was in 2006.

Comment by SW
2017-07-02 00:02:06


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Comment by aqius
2017-06-30 18:27:49


Comment by Ben Jones
2017-07-01 04:45:03

‘The U.S. dollar recovered slightly on Friday, but posted its biggest quarterly decline against a basket of rival currencies in nearly seven years after hawkish signals from foreign central banks this week pressured the greenback further.’

‘Investors have ramped-up expectations for tighter monetary policy from the European Central Bank, Bank of England and Bank of Canada after hints from officials this week.’

“What really gave the hawkish central banks extra punch was how it seemed to be a coordinated effort to signal a shift away from low-rate policies,” said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington.’

Comment by Ben Jones
2017-07-01 05:20:08

‘Businessman and diplomat Bruce Gelb has reduced the price of his Park Avenue apartment by a whopping $27 million. Gelb, whose father founded Clairol, and who was George H.W. Bush’s ambassador to Belgium from 1991 to 1993, has slashed the price of his massive 15-room apartment at 1060 Fifth Ave. from $65 million to $38 million.’

‘The sprawling residence, in one of Fifth Avenue’s most prominent prewar buildings, offers stunning views of Central Park, its reservoir and the city skyline.’

I can’t recall one article saying the bubble has popped in New York.

Comment by Professor Bear
2017-07-01 05:32:01

“USC Lusk Center for Real Estate Director Richard Green said he does not think there is a housing bubble,…”

Bubble denial among REIC-funded experts is one of the primary indicators that a bubble is currently expanding to ginormous proportions.

Comment by rms
2017-07-01 18:50:30

Same goes for used trucks. Craigslist is loaded with 4-door pick-up trucks that likely have a huge balloon payment looming. Which lender is going to lend on a seven year old vehicle that has 100k+ miles and a $30k+ balance?

Comment by PitchforkPurveyor
2017-07-01 19:26:55

Lots of lenders right now, which is why there’s a massive bubble in used truck prices.

Comment by Professor Bear
2017-07-01 05:44:25

REIC boosters had better hope for more future U.S. immigration, lest future housing demand dies with the birthrate.

Americans keep having fewer babies as U.S. birthrates hit some record lows
The number of births in the U.S. last year fell 1% from 2015 while the general fertility rate for women ages 15 to 44 dropped to a record low. (CaseyHillPhoto / Getty Images)
By Karen Kaplan

Hey stork, you’ve been slacking off — and U.S. health officials know it.

For the second year in a row, the number of babies delivered in the U.S. fell in 2016, according to a new report from the National Center for Health Statistics. For some groups of women, the birth rate reached record lows.

The provisional figures released Friday include 99.96% of all births in the United States last year.


Comment by Neuromance
2017-07-01 10:19:26

A speculative bubble doesn’t need a growing population, just a lot of money chasing return. Remember, the most sparsely populated country on the planet, Mongolia, has a housing bubble, fanned in part by its central bank, which has been prohibited by the IMF from engaging in “quasi-fiscal” activities like buying MBS as a condition of its bailout.


The strings attached to the IMF’s loan are more conventional. They include keeping the central bank out of “quasi-fiscal” activities: it had bought cheap-rate mortgages worth 1.95trn togrog ($787m), helping to support a housing bubble in a country known for nomadism. At the IMF’s urging, the government is also distancing itself from the management of the Development Bank of Mongolia, a state lender that accounts for over a fifth of credit in the country.

Comment by PitchforkPurveyor
2017-07-01 17:42:07

Wow, thanks for the link. I hadn’t hear about Mongolia.

Comment by Neuromance
2017-07-01 20:20:42

There are multiple factors involved it seems to me. You can have factors like increasing population “naturally” bidding up prices for pure consumption purposes. But then that price updraft draws in speculators and then it’s off to the races. Government and central bank policies can then fan the flames of the price increases, combined with speculative activity.

From what I’ve seen I think the first step is a natural price increase from consumption demand, then the rest of the bubble machine kicks into gear. In Mongolia, there was a commodities boom.

For someone with a few million dollars to speculate/invest, buying a house with cash in a hot area, during a sustained price updraft, could be a quick way to get a healthy return on that money.

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Comment by Raymond K Hessel
2017-07-01 14:01:53

Korn - Evolution (with lyrics)


Comment by Taxpayers
2017-07-01 15:54:06

I’ll bet welfare warriors ,especially new arrivals bred like rabbits

Comment by Professor Bear
2017-07-01 05:56:19

Gotta luv the URL for this article. A snippet:

The Upshot
Simplifying Shelter
Why Falling Home Prices Could Be a Good Thing
Minh Uong / The New York Times
February 10, 2017

Suppose there were a way to pump up the economy, reduce inequality and put an end to destructive housing bubbles like the one that contributed to the Great Recession. The idea would be simple, but not easy, requiring a wholesale reframing of the United States economy and housing market.

The solution: Americans, together and all at once, would have to stop thinking about their homes as an investment.

The virtues of homeownership are so ingrained in the American psyche that we often forget that housing is also a source of economic stress. Rising milk prices are regarded as a household tragedy for some, and spiking gas prices stoke national outrage. But whenever home prices go up, it’s “a recovery,” even though that recovery also means millions of people can no longer afford to buy.

Homes are the largest asset for all but the richest households, but shelter is also a basic necessity, like food. We have a variety of state and federal programs devised to make housing cheaper and more accessible, and a maze of local land-use laws that make housing scarcer and more expensive by doing things like prohibiting in-law units, regulating how small lots can be, and capping the number of unrelated people who can live together.

Another big problem: High rent and home prices prevent Americans from moving to cities where jobs and wages are booming. That hampers economic growth, makes income inequality worse and keeps people from pursuing their dreams.

So instead of looking at homes as investments, what if we regarded them like a TV or a car or any other consumer good? People might expect home prices to go down instead of up. Homebuilders would probably spend more time talking about technology and design than financing options. Politicians might start talking about their plans to lower home prices further, as they often do with fuel prices.

In this thought experiment, housing prices would probably adjust. They would be somewhat cheaper in most places, where population is growing slowly. But they would be profoundly cheaper in places like super-expensive San Francisco.

Comment by Raymond K Hessel
2017-07-01 06:14:56

The chickens are coming home to roost for the votes-for-entitlements mob who have keep corrupt Democrat patronage and graft rackets in power for decades in blue cities and states.


Comment by aNYCdj
2017-07-01 08:57:11

i still to this day believe the pension crisis was caused by massive amounts of people who stopped smoking or never started and living a healthier lifestyle and was never reflected in the actual payouts. you cant have people retiring at 50-55 with full pensions, and then getting another full time job.

then the pension spiking adding OT sick vacation` days to your final paycheck

Comment by Professor Bear
2017-07-01 06:18:08

Dead cats do some times bounce, at least figuratively speaking.

Top News
Fri Jun 30, 2017 | 3:59 PM EDT
Oil up for seventh day but first-half drop biggest since 1998
Sample bottle of crude oil are seen in this illustration photo June 1, 2017.
Reuters/Thomas White/Illustration
By Julia Simon | NEW YORK

Oil climbed on Friday for a seventh straight session as a decrease in the U.S. rig count and stronger demand data from China lifted depressed prices that still finished the first half with the biggest decline for that period since 1998.

U.S. drillers decreased their number of rigs for the first time since January, according to energy services company Baker Hughes. [RIG/U] The rig count had risen for the previous 23 weeks.

Earlier, Chinese data showed factories grew at the quickest pace in three months. Rob Haworth, senior investment strategist at U.S. Bank Wealth Management, said the Chinese data “certainly gives you hope that demand is growing globally.”

U.S. crude futures CLc1 settled up $1.11, or around 2.5 percent, to $46.04 a barrel. Benchmark Brent crude futures LCOc1 settled up 50 cents at $47.92 a barrel.

Both benchmarks ended the first half of 2017 with drops of more than 14 percent since Dec. 30, 2016, the largest drop since Brent and U.S. crude fell about 19 percent in the first half of 1998.

Comment by PitchforkPurveyor
2017-07-01 10:18:08

Yeah, erasing all of the previous losses in the face of the largest glut in history. Can you say “short squeeze?”

Comment by Raymond K Hessel
2017-07-01 06:19:00

BIS has it wrong. Janet Yellen has assured us there will be no more financial crises in “our lifetime.” Our wise and omniscient central bankers and central planners will steer the Titanic through the ice floes.


Comment by Professor Bear
2017-07-01 09:50:27

Or in case the steering exercise fails, they will get the upper-class passengers safely onto life boats, while hoping the 99.9% remaining will be able to successfully stay afloat in the ice cold sea.

Comment by tresho
2017-07-02 08:37:51

hoping the 99.9% remaining will be able to successfully stay afloat in the ice cold sea. They may “stay afloat” but they’ll be debtors deaders from the cold.

Comment by Taxpayers
2017-07-01 09:59:38

There should be a deflation every 7-8 years
Otherwise u become Japan

Comment by Lurker
2017-07-01 15:33:24

“There should be a deflation every 7-8 years”

There used to be. Before Alan Greenspan tried to outlaw the business cycle.

Comment by Professor Bear
2017-07-01 06:40:35

Get used to super-low rates, as it increasingly appears they are here to stay.

A Yellen replacement is unlikely to throw Fed off course, says Bullard
- Trump administration seems happy with the Federal Reserve’s current policy, says Fed’s James Bullard.
- Policy unlikely to be thrown off course even if chair Janet Yellen is replaced.
Karen Gilchrist
Fri, 30 Jun ‘17 | 4:25 AM ET

When President Donald Trump officially embarked upon his presidential career in January, deafening whispers began to circulate around Washington that it soon could spell the end of another highly prized title: that of Federal Reserve chair.

Yet, six months on, Janet Yellen remains at the helm of the U.S. central bank and, according to one of its members, the chances of a drastic overhaul are becoming less and less likely.

The Trump administration is signalling that, as far as policy goes, and as far as interest rates go, they’re not too unhappy with the current policy,” St. Louis Federal Reserve chief James Bullard told CNBC Friday.

“This suggests that even if they reappoint her or appoint somebody else, you’d get some continuity in the process and you wouldn’t have an abrupt change,” he opined.

Comment by Professor Bear
2017-07-02 06:06:36

The Fed might be raising rates too late
John Mauldin, Mauldin Economics

I think there is a mixture of political bias and legacy-building that is driving Federal Reserve policy. The simple fact is that the Fed should have been normalizing interest rates starting in 2013.

Fifty basis points a year, and we would be at 2% now. That is not exactly a torrid rate-hike path. It cannot be seen as putting your foot on the brakes. It’s simply moving to normalize a situation that everybody realizes is abnormal.

I think that everyone on the FOMC recognizes that rates do have to be normalized, and they don’t want to leave the Committee with rates sub-1% as their legacy.

Making up for past mistakes before leaving

It’s a simple fact that for four years during a Democratic administration, they basically refused to raise rates. They said their actions were data-dependent and that the data was telling them it was too early to tighten.

Then Donald Trump gets elected, and all of a sudden the data is telling them it’s time to raise rates.

After they have blown a series of bubbles with their low rates-in housing, stocks, all sorts of debt instruments, the automobile market, markets of all sorts-now somehow the data is different, and we have to raise rates.

No two ways about it: There is no significant difference in the data today from that of four years ago-except that four years ago, we didn’t have all the bubbles. And we are already late in the cycle.

And-the elephant in the room-we now have a Republican president who is not going to reappoint these governors.

Comment by rms
2017-07-02 17:00:22

“There is no significant difference in the data today from that of four years ago-except that four years ago, we didn’t have all the bubbles.”

I thought they built a floor under several bubbles eight years ago… to prevent them from correcting.

Comment by Professor Bear
2017-07-01 07:30:23

Might recent Fed efforts to walk back planned rate hikes explain the sudden resurgence in oil prices?

Will falling oil prices keep the Fed from hiking rates?

Published: June 24, 2017 2:24 p.m. ET
Weakness in the oil market is likely to push down inflation in the coming months say market strategists
By Sunny Oh

Depressed energy prices are stoking worries that the recent raft of weak inflation numbers may be more than “transitory,” which, analysts say, could derail the Fed’s timetable for future interest-rate increases.

A buildup in oil inventories has helped to push prices into bear-market territory as the coordinated production cuts of the Organization of the Petroleum Exporting Countries fails to blunt growing output from stateside frackers. The tectonic shifts in the crude market have prompted strategists at the Macquarie Group to lower their forecasts for oil prices, suggesting a return to the 2017 peak of $54 a barrel in the next few years is unlikely.

At the beginning of the week, Western Texas Intermediate crude slid into a bear market, trading below $45 a barrel (CLQ7, +3.12%) for the first time in 2017. The dim outlook for energy prices could ultimately keep a lid on inflation, and therefore yields, giving senior Fed officials some pause as they look to further tighten monetary policy by the end of the year, argues Thierry Wizman, global interest-rates and currencies strategist for Macquarie.

Comment by Professor Bear
2017-07-01 09:56:04

Business News | Thu Jun 29, 2017 | 2:16pm EDT
Leave interest rates, next step trimming balance sheet: Fed’s Bullard

There is nothing left for the Federal Reserve to do on interest rates and the natural next step for the central bank would be to start trimming its balance sheet, St. Louis Federal Reserve President James Bullard said on Thursday.

“I don’t think we have to do anything on rates now,” Bullard told an event in London.

“There’s only one thing left for us to do which is to start normalizing the balance sheet - in my view of the world, this is kind of the natural next step.”

Comment by Professor Bear
2017-07-02 06:22:30

I can certainly appreciate Bullard’s great reluctance to take away the financial heroin of the Fed’s protracted period of historically unprecedented low interest rates, as the wailing and knashing of teeth involved with the withdrawal of extraordinary accommodation is certain to be deafening.

Comment by Prime_Is_Contained
2017-07-02 12:53:14

I can certainly appreciate Bullard’s great reluctance to take away the financial heroin of the Fed’s protracted period of historically unprecedented low interest rates

It’s interesting, though: the Fed has basically been getting the economy high with both heroin and meth at the same time; can one drug dull the pain of withdrawing from the other?

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Comment by Raymond K Hessel
2017-07-01 08:07:06
Comment by Professor Bear
2017-07-01 09:53:54

Hong Kong residents march to defend freedom as China’s president draws a ‘red line’
Chinese president delivers stern warning to Hong Kong’s new leader
Chinese President Xi Jinping swore in Hong Kong’s new leader with a stark warning that Beijing will not tolerate any challenge to its authority in the city as it marked the 20th anniversary of its handover from Britain to China. (Reuters)
By Simon Denyer July 1 at 7:48 AM

HONG KONG — Tens of thousands of Hong Kong residents marched through the streets in defense of their cherished freedoms Saturday, in the face of what many see as a growing threat from mainland China, exactly two decades after the handover from British rule.

Earlier in the day, China’s president, Xi Jinping, marked the 20th anniversary of the handover with his sternest warning yet to the territory’s people: You can have autonomy, but don’t do anything that challenges the authority of the central government or undermines national sovereignty.

Under the terms of the 1997 handover, China promised to grant Hong Kong a high degree of autonomy for at least 50 years, but Xi said it was important to have a “correct understanding” of the relationship between one country and two systems.

“One country is like the roots of a tree,” he told Hong Kong’s elite after swearing in a new chief executive to govern the territory, Carrie Lam. “For a tree to grow and flourish, its roots must run deep and strong. The concept of one country, two systems was advanced first and foremost to realize and uphold national sovereignty.”

Comment by taxpayers
2017-07-01 10:18:52

on this 12 year anniversary of the housing bubble peak,what’s your prediction for yoy prices
Tm saying down 2%

Comment by Jingle Male
2017-07-01 12:56:02

Up 5% for ‘17, up 4% in ‘18, flat in 19, down 2% in 2020…..

Comment by Brynn
2017-07-01 10:24:55

I’ve talked to many working couples here in Central Arizona who are finding it harder than in recent past to find a home they can qualify for (that is if there is even enough inventory to choose from as there’s so few in the $200K-$250K range to even get a decent CMA from juggling two jobs Realtor. I’m talking dual income people here in fairly decent jobs, not Home Depot $10 an hour worker of foodservice employees. Housing supply is down. Lenders are being very careful. Well-to-do investors are buying up what resell homes there are and making them rentals. Rental landlords are loving the higher rents and rents are expected to rise even higher for years to come. I spoke to a fellow from abroad who has joined with several other investors (all from out of US) who are buying homes here from Flagstaff to Prescott in batches. For hopeful Central Arizona homes buyers who do manage to get through the loan process and buy their first home, I hope they are able to stay in that home for a long time in order to ride out future downturn in home values in order to realize sustainable home equity increases. In Verde Valley most jobs are lower-middle income service oriented. The only employment that has half way decent salaries and benefits are same as employers here as elsewhere outside of cities - that is healthcare and local government jobs.

Comment by AbsoluteBeginner
2017-07-01 10:50:20

All these investors, are they counting on leverage by bank loans or did they buy the houses outright for cash?

Comment by Brynn
2017-07-01 10:44:06

Look at the dollar lately. For seniors with chunk of their lifeline savings in money market accounts or anything else linked to US dollar it isn’t alarm bells certainly, but definitely a tinkling of those same bells that the US Dollar is not immune from devaluation. Yellon’s statement that likely not another financial crisis in our lifetimes seems odd to me. What is the upside to making predictions that may come back to bite you? Greenspan said many things that came back to bite him. Why don’t these economic big shots knock-off the speculation game. At least publicly?

Comment by Raymond K Hessel
2017-07-01 12:39:06

When the Fed prints away all government and Wall Street debts and obligations, seniors will be lucky if their pension checks buy a can of beans.

Comment by alphonso bedoya
2017-07-01 12:48:19

John Kenneth Gailbraith(”The New Industrial State”) said, “If one is an economist who chooses to predict, predict often.” So…. Yellen is an academic hag wishing to raise rates, so there will be something later to lower.
What is of interest is that CASH is an asset class in a deflationary environment. Count the number of articles telling you to get out of cash. Everyone is pitching at you because we have too many homes, too many college loans, too many unsold new cars…too much of MUCH.
Yellen isn’t worried about her reputation and neither is anyone on the Senate panel. When she is done she goes to either: a think tank, or, a university Endowed Chair for Oulde Hags, or, a seven figure book deal that will detail how misunderstood she was during her impotent reign of FED gamemanship.

Yellen is a “player” and the old and the young are logs for the fireplace. She displays no remorse, no hesitation and no regret for any of her actions.

You are a Senior and that’s the problem. You were conditioned to TRUST the system. The NEW system, however, is built on hustle : “How can I engage in an activity that I don’t have to pay for, or, be responsible for, and, should anything go wrong, I can claim I knew nothing about.”

Comment by Mr. Banker
2017-07-02 08:05:02

“What is the upside to making predictions that may come back to bite you?”

If these predictions are made to a nation of totally dumbed-down ignorant pukes then there is no down side because whatever happens to the prediction can easily be explained away to this totally dumbed-down population of ignorant pukes.

If the population of pukes had any sense then none of this nonsense would come about because nobody would buy into it.

Comment by Mr. Banker
2017-07-02 08:13:44

The reason the PTB continously push their sh1t onto the enormous population of totally dumbed-down ignorant pukes is because they can.

They, like everyone else, does what works. If what they are doing stops working then they will be forced to do something else.

Comment by Professor Bear
2017-07-01 10:46:29

‘Til debt do us part…

1 in 10 Americans say they will die in debt

Published: June 30, 2017 2:20 p.m. ET
The under-30 age group is most sure that won’t happen to them
By Catey Hill Editor

Debt may follow many of us to the grave.

More than 1 in 10 Americans (12%) think they will die in debt, according to a survey of more than 1,000 U.S. adults from CreditCards.com. That’s a dramatic improvement from the 21% who said that in 2015. This drop may be due, in part, to increased consumer confidence, says Matt Schulz, the senior industry analyst for CreditCards.com. But it’s troubling because Americans now have more debt than they have in years. “I’m worried that some people are getting carried away,” he says. “Credit card debt has been rising steadily for more than five years. It seems like a lot of people are forgetting the painful lessons of the Great Recession.”

The under-30 age group is most sure that dying in debt won’t happen to them. Meanwhile, the older you get, the more likely you are to think you’ll carry debt with your forever, with more than one in four people 65 and up saying they’ll never get out of debt.

Comment by alphonso bedoya
2017-07-01 13:00:11

If you are being told NEVER pay off a mortgage you die in debt.

I’m still hoping that somewhere in East Texas or Zimbabwe, someone will build the George Orwell Condos.

Comment by MightyMike
2017-07-01 11:15:11

Why you’re paying way more for beef than you should

Cattle prices fall, but grocery store prices don’t
By Lydia DePillis | June 29, 2017

In a competitive market, when the price of raw materials goes down, consumers should pay less for finished goods, right?

Sure. The problem is, a lot of markets aren’t as competitive as they should be. Take airlines, which kept ticket prices high even as fuel prices plunged. Increasing industry consolidation means that even super-low-cost carriers don’t cut fares as much as they might otherwise.

The same is true with your burger, says the Dallas Federal Reserve.

In a handy infographic published yesterday, economists laid out the evidence for monopoly pricing dynamics in the beef industry. In recent years, the amount you pay for beef in grocery stories declined only slightly while cattle prices plunged. Cattle prices have bounced back slightly, the gap is still large.

What’s going on here exactly? As the Dallas Fed lays out, ranchers re-stocked their cattle herds in 2015 and 2016 after a severe drought, helping to bring prices down from their spike in 2014. The cost of corn also decreased, meaning that feedlots didn’t have to put a whole lot more money into each animal before sending it to slaughter.

But there are lots of ranchers, and not very many meatpackers. The top four — JBS, Tyson Foods, Cargill, and National Beef — process 85 percent of America’s beef, compared to 66 percent of the pork and 51 percent of chicken. (According to Cattle Buyer’s Weekly, the number for beef is actually 73.4 percent, and 85 percent figure applies just to steer and heifer slaughter.)


Comment by Professor Bear
2017-07-01 15:24:55

Do you plan to ignore the clear warning signs on stocks until it is too late to act?

German bonds may offer the clearest warning that the stock market’s bull run is sputtering
By Mark DeCambre
Published: July 1, 2017 9:12 a.m. ET

Tom McClellan sees a warning that ‘the great bull market in stock prices from the 2009 low is in its last stages’

German bunds are trying to deliver a message to stock-market investors: Achtung!

According to market technician Tom McClellan, a narrowing yield spread between German 10-year bonds, known as bunds (TMBMKDE-10Y, +3.58%) and their U.S. counterpart (TMUBMUSD10Y, +1.44%) has historically been a bad omen for equity markets.

The yield differential between bunds, which were carrying a negative yield about a year ago and reached a record spread—2.38 percentage points—on Dec. 28 with U.S. 10-year paper, has been on a tightening trend lately, illustrated by one McClellan chart (see below):

Comment by Professor Bear
2017-07-01 15:40:39

Central bank intervention
Global bond market sell-off infects equities
Yields surge after central banks spark fear that era of ultra-loose policy is ending
ECB chief Mario Draghi sparked the initial wave of bond selling when on Tuesday he said ‘deflationary forces have been replaced by reflationary ones’ © AP
June 29, 2017
by: Robin Wigglesworth and Joe Rennison in New York and Jennifer Hughes in Hong Kong

Asian bourses followed Europe and Wall Street lower on Friday as a global sell off in the bond market spread to equities amid fears that the post-crisis era of easy money was coming to an end.

Recent remarks by the heads of the European Central Bank, the Federal Reserve, the Bank of England and the Bank of Canada have convinced many investors the period of historically-low interest rates and unprecedented central bank bond buying will soon recede.

On Thursday a bond market sell-off reached stocks, triggering the worst one-day drop in European equities since September, and the biggest fall for the US S&P 500 in over a month.

Comment by aNYCdj
2017-07-01 16:29:12

here is a sad story with a video

After 108 years, Dearden’s is closing its stores. For many Latinos, it was more than just about housewares


Comment by Professor Bear
2017-07-01 18:17:39

I had to look up this one:


Gauteng is a northern province of South Africa, with most of its territory defined by 2 of the nation’s largest cities. Pretoria is the de facto national capital, with the Voortrekker Monument to 19th-century Dutch residents and Kruger House, home of 19th-century president Paul Kruger. Johannesburg has many sites relating to the country’s 20th-century struggle to end segregation, including the Apartheid Museum.

Comment by Professor Bear
2017-07-02 05:21:05

When I read about homes selling for 30% below list, I wonder if that reflects euphoric sellers listing at 30% above recent market prices, buyers unwilling or unable to pay more than 30% below recent market prices, or some other intermediate situation. It is hard to infer market value from discussion of buyer and seller pricing strategy out of context.

Comment by rms
2017-07-02 06:51:49

Someone posted a link years ago about a white South African farmer being tied to a metal bed spring and being “slow cooked” by high voltage low amperage hand crank generator. No thanks.

Comment by taxpayer
2017-07-02 06:57:34

same as HA’s $50 a sq ft hoods in the USA
=dead honky

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Comment by Professor Bear
2017-07-02 07:21:55

It doesn’t seem the end of apartheid ushered in an an era of racial harmony. Where is the outrage in the international community when Caucasians are the victims of such heinous crimes?

‘Bury them alive!’: White South Africans fear for their future as horrific farm attacks escalate
March 25, 2017 6:16am
Robert Lynn and Susan Howarth were tortured at their farm in South Africa.
Frank Chungnews.com.au

LAST month, British woman Sue Howarth and her husband Robert Lynn were woken at 2am by three men breaking into a window of their remote farm in Dullstroom, a small town in the northeast of South Africa, about 240km from the nearest capital city.

The couple, who had lived in the area for 20 years, were tied up, stabbed, and tortured with a blowtorch for several hours. The masked men stuffed a plastic bag down Mrs Howarth’s throat, and attempted to strangle her husband with a bag around his neck.

The couple were bundled into their own truck, still in their pyjamas, and driven to a roadside where they were shot. Mrs Howarth, 64, a former pharmaceutical company executive, was shot twice in the head. Mr Lynn, 66, was shot in the neck.

Miraculously he survived, and managed to flag down a passer-by early on Sunday morning. Mrs Howarth, who police said was “unrecognisable” from her injuries, had multiple skull fractures, gunshot wounds and “horrific” burns to her breasts.

“Sue was discovered amongst some trees, lying in a ditch,” writes Jana Boshoff, reporter for the local Middelburg Observer newspaper. “Her rescuers managed to find her by following her groans of pain and then noticing drag marks from the road into the field.

“Her head was covered with a towel. Her eyes were swollen shut. She was partially clothed with just scraps of her shirt remaining. Her breasts and upper body was bloody. The plastic bag, shoved down her throat, took some effort to remove because her jaw was clamped down tightly.

“How she managed to breathe with the bag in her throat remains a mystery. One of her rescuers later recalled how Sue was unresponsive except for the constant groaning. Whilst the man ran back to the road to see if an ambulance has not arrived yet, she managed to curl one of her arms around her breasts in a last attempt to protect herself.”

She was rushed to hospital and placed on life support, but died two days later. Due to her British nationality, her murder attracted an unusual amount of overseas media attention.

Robert Lynn managed to survive the attack.

In any other country, such a crime would be almost unthinkable. But in South Africa, these kinds of farm attacks are happening nearly every day. This year so far, there have been more than 70 attacks and around 25 murders in similar attacks on white farmers.

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Comment by tresho
2017-07-02 08:43:43

And so I wonder why the “white farmers” have dared to stick around as long as they have been doing.

Comment by Mr. Banker
2017-07-02 08:51:46

The white farmers are Boers and they have been in South Africa for centuries. Wikipedia says …

“Boer (English: /ˈboʊ.ər/, /bɔːr/ or /bʊər/; Afrikaans: [buːr]) is the Dutch and Afrikaans word for “farmer”. As used in South Africa, it was used to denote the descendants of the Dutch-speaking settlers of the eastern Cape frontier in Southern Africa during the 18th century. For a long time the Dutch East India Company controlled this area, but it was eventually taken over by the United Kingdom and incorporated into the British Empire.

“In addition the term was applied to those who left the Cape Colony during the 19th century to settle in the Orange Free State, Transvaal (which are together known as the Boer Republics), and to a lesser extent Natal. They left the Cape primarily to escape British rule and get away from the constant border wars between the British imperial government and the indigenous peoples on the eastern frontier.”

Comment by Mr. Banker
2017-07-02 08:58:05

For an interesting read I suggest you go to Wikipedia and look up the term “Boer”.

Comment by tresho
2017-07-02 09:03:25

North American aborigines lived there for millennia. Things went to hell for them after 1492 or so…

Comment by Mr. Banker
2017-07-02 09:48:51

A difference is: The North American aborigines were driven close to extinction, not so regarding the South African aborigines.

As a result the descendants of the immigrants that settled in North America do not have a large population of aborigines to contend with. Not so with the descendants of South African immigrants.

Comment by Mr. Banker
2017-07-02 11:02:21

Russell Means says the U.S. is one big reservation and we are all in it.

A video:


Comment by Professor Bear
2017-07-02 06:18:00

Bitcoin Nears Bear Market Territory
David Z. Morris
Jul 01, 2017

Bitcoin is currently down about $500, or nearly 17%, from its June 12th peak of $3,000 per coin. Essentially every other major cryptocurrency, including Ethereum and Litecoin, has seen similar declines. There have been fluctuations since the peak, but the overall trend has been steadily downhill for weeks.

While it can seem odd to apply old-school securities terms to newfangled digital money, that means the crypto market is nearing the conventional 20% decline that defines bear territory.

Few insiders — or regular Fortune readers — are likely surprised by this. “Bubble” was maybe the single word most consistently spoken by expert panelists at the Consensus conference in late May. Our Robert Hackett diagnosed a speculative bubble two weeks before the peak.

Recent weeks’ losses weren’t the one-day implosion often associated with a bubble. But the more important feature of bubbles – delirious optimism ungrounded in reality – has been swirling for months. Investment Strategist Matt Prusak, writing at Coindesk, has rounded up some novel examples of “dumb money” (his term) rushing into cryptocurrency. Many of them are quite entertaining if you aren’t among those taking losses right now.

Prusak points out, for instance, this account of amateurs rushing into the market as it peaked:

Dmitry Buterin @ChiefApricot

Most dangerous sign it’s a buble: friends 71 year old aunt is being pitched a no-lose investment in ethereum by a coffee shop manager.
7:34 PM - 13 Jun 2017

The tweet is particularly notable, of course, because Dmitry Buterin is the father of Vitalik Buterin – creator of #2 cryptocurrency Ethereum. Dmitry, like most insiders, has been watching for a correction for weeks.

Comment by Mr. Banker
2017-07-02 07:20:57

Bitcoin, what an incredible joke. No way the concept would fly unless the population was sufficiently dumbed down. No way.

Fools all.

Comment by Professor Bear
2017-07-02 07:30:44

The endless period of extraordinary central bank accommodation does much to send bubbles like Bitcoin aloft.

Comment by Prime_Is_Contained
2017-07-02 13:14:01

The endless period of extraordinary central bank accommodation does much to mis-price EVERYTHING.

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Comment by Mr. Banker
2017-07-02 07:39:05

Wikipedia says:

“There were more than 900 cryptocurrencies available over the internet as of 25 June 2017 and growing. New cryptocurrency can be created any time. By market capitalization, Bitcoin is currently the largest blockchain network, followed by Ethereum, Ripple and Litecoin.”

“New cryptocurrency can be created any time”, and I am sure it will since the planet is filled with dummies who will trade their hard-earned cash for the … stuff (stuff? Is it correct to refer to something that does not actually exist in the real world as “stuff”?).

Comment by Mr. Banker
2017-07-02 07:47:32

As I understand it (and I really and truly don’t) one of the attractive features of bitcoins and other cryptocurrencies is that there are limitations placed on the supply of the stuff (there’s that word again) but Wikipedia states that this not so.

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Comment by Professor Bear
2017-07-02 09:05:05

While there may be a theoretical limit on the intensive margin of virtual supply for any particular cryptocurrency, the extensive margin of new cryptocurrency creation is unlimited.

In sum, the overall imaginary cryptocurrency supply is unlimited.

Comment by Mr. Banker
2017-07-02 09:41:13

If there were a contest held between what is has the least amount of limitations, cryptocurrencies or the stupidity of human beings, my bet would be placed on the stupidity of human beings.

It is the stupidity of human beings that allows for the illusion of limitations placed on cryptocurrencies.

Comment by julie
2017-07-02 07:06:27

Hi, I have followed this blog off and on for many years. Although we don’t know the future, I think it’s important to analyse the data yourself. I think each individual should really be thinking about self preservation if the prices were to fall 20 or 30%. I am very worried about young people buying homes. I sold a home in Albuquerque in 2005 and I remember going into the mortgage office to sign the papers and trying to tell people about the inverted yield curve. I was trying to warn them. They literally looked at me like I was completely insane. My house sold for full price in 3 hours back then. Today in Albuquerque, the prices are still not up to where they were then, for the most part. I then went on a bit of an odyssey and ended up moving all over the place and flipping houses with my three kids in tow. It was moves that came out of desperation, but I ended up succeeding. We rented for a time during the crash and then bought mostly foreclosures. I am now out of the market aside for a paid off house in Maricopa Arizona that I use as a rental, and a paid off house that me and the kids live in. My last two flips were in Bremerton Washington- which I fear is ground zero for the next crash. One was a condo that almost doubled in 2 years, and one was a house the I bought for 75,000 and sold 10 months later for 128k. I had put about 5000 into the house for repairs. I suppose I am writing this now to sound the alarm. With Trump in office, immigration is way down, and people are not having kids these days. I even wonder if we are about to enter a deflationary environment that could go on for many years. I don’t want to be too pessimistic since no one knows the future, but I just want all the young people to really consider the possibility that a house bought today might be worth less in the future and also that the imaginary money fueling Uber and some other companies might suddenly dry up. There could come a day that the emperor is exposed as being naked. Please be careful with your hard earned money and with taking on too much debt. Use your own mind to decide what is going on, and what is right for you and your situation. Good luck, and I hope I am wrong.

Comment by Professor Bear
2017-07-02 07:33:33

“I remember going into the mortgage office to sign the papers and trying to tell people about the inverted yield curve. I was trying to warn them. They literally looked at me like I was completely insane.”

I don’t bother with such discussions any more.

Comment by Mr. Banker
2017-07-02 07:54:23

Not all of the lemmings go over the cliff.

(At least not yet; There is work yet to be done.)


Comment by Professor Bear
2017-07-02 07:39:15

“I just want all the young people to really consider the possibility that a house bought today might be worth less in the future and also that the imaginary money fueling Uber and some other companies might suddenly dry up.”

Not to worry, as we have been assured and reassured by top policy makers that a replay of the 2007-2009 episode is unpossible.

Comment by palmetto
2017-07-02 08:18:39

The NYT reports there has been a shooting in downtown Arkansas.


Yeah, they don’t need no stinkin’ copy editors.

Comment by tresho
2017-07-02 08:48:42

Former beneficiaries of CLE low-cost housing complain about their mis-treatment by the church.
Brian Cummins, the city councilman for the ward:

“The pastor and other personnel live at St. Rocco’s. It’s their neighborhood, too, so they have a vested interest in its stabilization.”

Cummins said it was an unfortunate irony that the former priest, Fr. Michael Contardi, likely believed he was helping people. But, in the end, the church was charging low rents for substandard housing to tenants who didn’t even have leases.

“Ultimately it was a bad situation,” he said. The church’s actions, meant to rectify a problem, may have created more issues [for] residents who remain on the street, Cummins said.

Comment by Mr. Banker
2017-07-02 10:11:21

“Homes the diocese boarded up were stripped of siding, wiring and copper pipes.”

… and taken to recycling centers where this siding, wiring and copper pipes were exchanged for a pittance.

The homeless pukes that roam the night do all the work of stripping these houses and the recycling center owners reap all the benefits.

I like it, I love it, I want to get in on it.

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