Giving ‘Too Big To Fail’ An Exit Strategy
A report from Bloomberg. “Wells Fargo & Co. surprised investors this week by withholding more than $90 million due to buyers of pre-crisis residential mortgage-backed securities. The bank said it invoked its right as trustee to hold back funds to cover legal costs. The 20 transactions had a principal balance of $540 million and are among more than 2,000 deals involved in a lawsuit brought by bondholders in 2014 to recover losses from the financial crisis. It’s only the second time that proceeds from bonds involved in that litigation have been withheld from investors. Wells Fargo’s move caused losses for some bondholders and sent others scrambling to assess risks for similar deals in a market still recovering from the bursting of the housing bubble in 2008.”
“HSBC Holdings Plc put $2 million in a reserve account when a deal was called in September 2015 and 10 other called deals were paid in full, according to Webbs Hill. ‘This has happened before, but not with so many deals at once,’ said Jasraj Vaidya, a director at Amherst Capital Management and a former mortgage bond analyst at Barclays Plc. ‘It’s definitely a problem for those investors.’”
From CNBC. “News of a bipartisan effort underway in the U.S. Senate to reform the housing finance industry is a welcome development, but the devil is in the details. Almost a decade after the financial crisis, in addition to repairing damage caused by the flawed Dodd-Frank law, policymakers must work swiftly to wind-down Fannie Mae and Freddie Mac, the two institutions at the heart of the last financial crisis.”
“Because of the GSEs’ large market share, low- and moderate-income level lending targets – first set at 30 percent – had immediate nation-wide impact: in 1989 just 7 percent of mortgages were made with a down payment below 10 percent, but by 1994, the share of low down payment mortgages had grown to 29 percent. The Department of Housing and Urban Development steadily increased the targets to 55 percent through 2007, causing underwriting standards to concurrently fall along the way. By 2007, two in five loans acquired by the GSEs were made with down payments below 3 percent.”
“In a 2010 CNBC interview then-Representative Barney Frank expressed hope for substantial GSE reform: ‘I hope by next year we’ll have abolished Fannie and Freddie…it was a great mistake to push lower-income people into housing they couldn’t afford and couldn’t really handle once they had it.’”
“Two major changes in the mortgage market go into effect this month, and both could help millions more borrowers qualify for a home loan. The changes will also add more risk to the mortgage market. First, the nation’s three major credit rating agencies, Equifax, TransUnion and Experian, will drop tax liens and civil judgments from some consumers’ profiles if the information isn’t complete. With these hits to their credit removed, their scores could go up by as much as 20 points, according to a study by credit rating firm Fair Isaac Corp. (FICO).”
“In addition to the FICO changes, mortgage giants Fannie Mae and Freddie Mac are allowing borrowers to have higher levels of debt and still qualify for a home loan. The two are raising their debt-to-income ratio limit to 50 percent of pretax income from 45 percent. That is designed to help those with high levels of student debt. That means consumers could be saddled with even more debt, heightening the risk of default, but the argument for it appears to be that risk in the market now is unnecessarily low.”
“‘In this case, we’re changing the underwriting criteria, and we think the additional increment of risk for making that change is very small,’ said Doug Duncan, Fannie Mae’s chief economist. ‘Given how pristine credit has been post-crisis, we don’t feel that is an unreasonable risk to take.’”
The San Francisco Chronicle. “Fannie figures a creditworthy borrower with $10,000 in monthly income could spend up to $5,000 on mortgage and debt payments. Not everyone agrees. ‘If you have a debt ratio that high, the last thing you should be doing is buying a house. You are stretching yourself way too thin,’ said Greg McBride, chief financial analyst with Bankrate.com.”
“Of course, spending no more than 28 percent of income on housing is not realistic for many people in the Bay Area. According to the California Association of Realtors, only 25 percent of people here had enough monthly income ($13,362) to make the monthly payment including taxes and insurance ($4,010) on a median-priced single-family home ($780,3330), in the first-quarter. Many buyers are afraid to go that high. ‘We have buyers balk at going to 45 percent, much less 50 percent,’ said Jay Vorhees, a mortgage broker in Walnut Creek. This is especially true with Millennials.”
“Borrowers who are refinancing a mortgage and taking cash out to pay off other debt may be tempted to go up to 50 percent, especially if they are already spending at least 50 percent of income on debt. This move seems appealing, because interest on home-equity debt is deductible — up to a limit — whereas interest on other debt is not.”
“‘If this is data-driven as Fannie says, I guess it’s OK,’ said David Reiss, who teaches real estate finance at Brooklyn Law School. ‘A lot of immigrant families have no problem spending 60 or 70 percent (of income) on housing. They have cousins living there, they rent out a room.’ Reiss added that homeownership rates are low and expanding them ’seems reasonable.’ But making credit looser ‘will probably drive up housing prices.’”
From Realty Biz News. “When real estate is bought with all cash, buyers have a lot more flexibility and are able to take many more shortcuts. When Wall Street funnels billions into securitized bonds this becomes real power. Today, Fannie Mae is guaranteeing the income of all but the bottom tranches of Blackstone’s latest rental securitization. The mission of these government-backed agencies is enabling home ownership (Main Street). Not to, again, give ‘too big to fail’ financial institutions another ‘loss avoidance’ or undeserved ‘deliver on promised returns’ exit strategy.”
“Enter the SEC, which has opened an investigation into whether bonds backed by single-family rental homes and sold by Wall Street’s biggest residential landlords used overvalued property assessments. The investigation focuses on the use of Broker Price Opinions (BPOs) instead of appraisals. In March, the SEC sent letters to several Wall Street registered companies that provide BPOs. Disclosure of these letters began emerging through regulatory filings in May.”
“Consider the drive-by BPO. A glaring difference between an appraisal and a BPO is the drive by valuation. These are BPO value estimates done from the curb without entering the home. No consideration is given to if the house has a 1970s modeled kitchen and bathroom to say nothing about if the interior walls and fixtures are even intact. In an April securities offering of about $944.5 million, one major provider (Green River) submitted BPOs that relied on ‘drive-by’ evaluations. As stated in a deal prospectus issued by Fannie Mae, these homes were ‘assumed to be repaired and in good condition.’”
“But why should Main Street care? After all, once Fannie Mae (taxpayers) pays out their guarantee, Main Street buyers will help Wall Street recover their earned losses by paying top dollar as these houses coming up for sale during a period of tight inventory. This helps explain where the foreclosure ‘shadow inventory’ went to.”
From The Sentinel in Pennsylvania. “Although they’re been selling at a brisk pace since the end of the national economic recession, foreclosed and otherwise in-limbo properties seem to be the gift that keeps on giving. In fact, Cumberland County is selling more of them than ever, according to real estate data. But at the same time, local governments are seeing more and more unkempt properties crop up—properties whose ownership is often unclear.”
“‘You have a lot of lending institutions now that, for whatever reason, do not take ownership and protection of [the property],’ said Dearan Quigley, Zoning Officer for East Pennsboro Township. ‘They may do some things to protect their investment, they may even have property maintenance come in, but they don’t want to indicate their financial interest.’”
“Also important are the number of homes that are delinquent on mortgage payments, but not necessarily foreclosed upon just yet. For the first quarter of 2017, that delinquency rate was 3.93 percent of residential mortgages, according to the St. Louis Federal Reserve. This is a huge drop from the delinquency peak of 11.53 percent in the first quarter of 2010, but still significantly higher than the historic low of 1.41 percent seen in the last quarter of 2004.”
“In many cases, these homes – those that are seriously delinquent but which banks have not actually claimed – are the ones most difficult for local officials. ‘Basically you had people who could no longer afford the payments on their houses, and the banks essentially said they were going to foreclose, but have not actually done it,’ Quigley said. ‘Either the occupant walked away from the mortgage preemptively, or was warned by the bank that they were delinquent and assumed foreclosure was going to go through.’”
From KATU in Oregon. “A couple who recently moved to the Portland area woke Sunday to find their home and car spray-painted with graffiti telling them to ‘move back’ to California. On Sunday Preston Page and his fiancée, Jessica Faraday, found their house and car covered in graffiti, and the car was also keyed. The gold paint messages included ‘CALI - surfs up’ and ‘get California out of Portland.’”
“Page said he feels that the act was likely out of frustration with Portland’s housing market. ‘So much industry has come in here and, I’m sure, pushed some locals out. That can be rough … you see housing prices double, or triple in the past five to ten years,’ Page said.”
‘For the first quarter of 2017, that delinquency rate was 3.93 percent of residential mortgages, according to the St. Louis Federal Reserve. This is a huge drop from the delinquency peak of 11.53 percent in the first quarter of 2010, but still significantly higher than the historic low of 1.41 percent seen in the last quarter of 2004.’
This has been the case for a long time, but is almost never mentioned.
‘Basically you had people who could no longer afford the payments on their houses, and the banks essentially said they were going to foreclose, but have not actually done it’
See that Rent-a-Crow? You can post statistics all day but what if the shack never makes it into the statistics? Kinda meaningless. Here’s some more:
‘The GSEs prevented more than 49,000 foreclosures in the first quarter, an increase of nearly 5,000 preventions compared to Q4, according to the Federal Housing Finance Agency’s Q1 Foreclosure Prevention Report.’
‘By the end of March, there were about 44,000 home retention actions overseen by the GSEs this year. That’s about on par with 2016 numbers. For all of 2016, there were roughly 164,000 home retention actions. These include actions like loan modifications and repayment plans.’
‘In 2016 overall, there were 190,000 short-sale and deeds-in-lieu actions taken.’
http://www.dsnews.com/daily-dose/06-22-2017/foreclosure-prevention-paying-off-gses
Almost as many of those questionable loan mods as foreclosures. Hmmm…
‘Basically you had people who could no longer afford the payments on their houses, and the banks essentially said they were going to foreclose, but have not actually done it’
When you add in the zombie houses which WERE foreclosed on but sit empty, with Megabank, Inc. paying the taxes, the shadow inventory is massive.
wonder what the rate was in the 1950s?
big recessions,but people paid their tab
Want to make Fannie and Freddie mostly go away?
How about limiting their mortgages to three times median household income, with a debt service to income ratio of 20 percent — instead of 45 percent?
The choice would be to sell to less well off younger generations for less, or sell to someone with a private mortgage.
+1. There has always been too much jawboning about down payment. Income is a better indicator of repayability.
(That said, I can understand the emphasis on down payment. The banks don’t care whether the loan will be repaid or not. They just wanted a big down payment to cover losses if/when the FB defaults. Heck, a private bank would sell a McMansion to a $15K strawberry picker as long as the strawberry picker had 20% down. Strawberry picker defaults, bank keeps 20%, sells McMansion at fire sale, breaks even or better.)
‘Home Possible Advantage, offered by Freddie Mac, and HomeReady, offered by Fannie Mae, are similar programs for homebuyers without large down payments. Neither program requires you to be a first-time homebuyer. Both let you finance up to 105 percent of the property purchase price when combined with a community second mortgage. Both let you borrow up to 97 percent of the property value with a first mortgage.’
‘Your mortgage program might require ten percent down, for example, but allow you to borrow half of that or receive it as a gift. In that case, you’d have a minimum borrower contribution of five percent.’
There are differences in borrower contribution requirements for these two programs. If you want to buy a duplex, triplex or four-plex, these differences could come into play.
‘Fannie Mae’s HomeReady demands a minimum borrower contribution of three percent of the purchase price when you buy multifamily property. Freddie Mac requires no minimum borrower contribution for one- to four-unit houses.’
‘Freddie Mac allows non-occupant co-borrowers when the loan-to-value is 95 percent or lower. A household may have several members with income that can be used to pay the mortgage. Usually, lenders only count income from the resident who is obligated by the loan.’
‘Fannie Mae considers non-borrower income a compensating factor. This can help a borderline applicant get an approval he or she would otherwise not get. Freddie Mac’s Home Possible Advantage does not count non-borrower income at all. However, both programs count boarder income. So if you have been living with someone for at least a year, and he or she has been paying you rent, you can count this as income.’
“Strawberry picker defaults, bank keeps 20%…”
That 20% down was adequate in the “walk-away” states.
No it wasn’t. Prices dropped 50% or more in some areas of CA. Houses that sold for $650,000 or more in 2006 we’re selling for $225.000 in 2011.
Walking away from your $130k down payment would be difficult.
…you do make a good point.
I have seen people seriously upside down in houses and they stayed, because they could make the payment…..which goes more to Oxy’s point.
If you are upside down and cannot make the payment, you walk no matter what you put down….after milking the process for a while and trashing the place on the way out….
I remember back around 2008 or 2009 speaking with a man who lost his home to foreclosure. He was a veteran and had a VA Mortgage.
Nearly a decade later the comment that I remember him saying, with a little bitterness, was that the mortgage company would not work with him as it was easier for them to foreclose and make the claim against the government entity which was the guarantor.
The house was nice, but nothing extravagant. It was a plain vanilla 3br/2ba single story house that was maybe 1600sqft in a modest income neighborhood.
“I remember back around 2008 or 2009 speaking with a man who lost his home to foreclosure. He was a veteran and had a VA Mortgage.”
Yeah? Well I know of one way this could have been prevented. It’s called the “Make Your F*cking Monthly Payments” plan.
Do this enough times and the house is yours.
A no-brainer.
I worked with one REO broker for years. He had always been one, even during the bubble. I never saw him get very excited. One day we were standing in front of a foreclosed shack in Flagstaff and he got a little agitated about these people who “use their house like a G-D### ATM”. Only time I ever saw him that way.
From yesterday:
———————
Comment by Ben Jones
2017-07-04 18:59:39
From what I used to call the Daily Oxide:
‘There is a new group named WTF Democrats. Laugh at them with me.’ [dailykos link]
(BTW, Trump wasn’t “Republicans have moved further to the right”). It just shows how irrelevant left/right crap has become.
——————
DailyKos was great 10 years ago. But since about 2012, the website itself became nearly impossible to navigate, and the rules and rating systems for the comment boards were chummy, clique-y, petty, and even vengeful. The site itself crashed under a wall-to-wall carpet of java-type advertising and requests for donations. Of course it all exploded during the Bernie-Hillary primaries, leading to even more comment rules. I haven’t been there in at least 18 months.
And Ben is right, Republicans are not moving toward the right. If they had, they would have nominated Cruz or Rubio. No, what happened is that the leftward Dems moved sooo far left that centrists (of both parties) who were standing still just *looked* like they were moving to the right.
The fossilized concepts of right and left are being discarded. Increasingly it looks like the federal government isn’t being run by who we think it is. Take this GSE easing - again. When prices move up it is by definition more risky, yet they loosen up even more! We now know the GSE’s are up to their eye balls in apartment loans, senior housing, etc. They are also backing Blackstone and friends. No one says boo to Mel Watt.
“Increasingly it looks like the federal government isn’t being run by who we think it is.”
It’s run by unelected deep state bureaucrats and their goons. On behalf of central banks, I guess, but who really knows.
It’s being run by who I think it is and has been for quite a long time.
Elections are mostly illusions. The real power rests with the unelected.
“The real power rests with the unelected.”
Well that’s good for me, I’m unelected.
Well that’s good for me, I’m unelected.
Some unelected are more equal than others.
Best example of how far left the dems have gone is JFK. A modern day JFK would be crucified by the leftists today.
“A modern day JFK would be crucified by the leftists today.”
Well, he was assassinated by the leftists (globalists) back then.
George Carlin nailed it: It’s a big club (running this plutocracy) and you ain’t in it.
https://www.youtube.com/watch?v=cKUaqFzZLxU
The United States needs a “dekulakization” of globalists.
There’s nothing in the streets
Looks any different to me
And the slogans are replaced, by-the-bye
And the parting on the left
Are now parting on the right
And the beards have all grown longer overnight
I’ll tip my hat to the new constitution
Take a bow for the new revolution
Smile and grin at the change all around
Pick up my guitar and play
Just like yesterday
Then I’ll get on my knees and pray
We don’t get fooled again
Don’t get fooled again
No, no!
http://www.azlyrics.com/lyrics/who/wontgetfooledagain.html
Yep. Interesting that you posted that. Just a short while ago, I was watching one of the George Webb-Jason Goodman videos where they were walking around Manhattan and discussing the Clinton Foundation and Teneo and Doug Band. They went over the massive movement of funds and such.
All of a sudden it dawns on me. Like really dawns on me more than just a cynical idea, what the law actually is. It’s a device to protect criminals and their organizations from others cutting in on their action. That’s the whole point of it. Really. With police and military as the enforcers, to keep people in line at all levels and prevent them from having a piece of the action, however small.
And that’s why we see people “get away with it”. “The Law” actually protects them. They couldn’t exist or operate without it.
I posted at the Daily Kos for more than ten years, more than two thousand comments. I left because I couldn’t stand it anymore. Rather than remaining a left-wing, reform community where ideas could be discussed thoughtfully, it became an intolerant domain of tenuous or discredited establishment narratives, personality cultism, and identity politics. You easily could tell when the site was being used to push a meme, too.
Way back when, the blog would scare people. That’s why you’d see so many sitting politicians post. Now it scares no one. It’s changed, just like the Democratic Party has changed.
I also found the frequent format changes to be disconcerting and of little utility.
Gee, how about we just cut China off, right now, at the knees? No more trade. All Chinese nationals out. If Apple wishes to switch allegiances and stay in China, so be it. Same for Amazon and FB. Their management and employees can re-locate with the Chinese nationals. That’ll empty a few housing units. Maybe they’ll still nuke us via NK, but them’s the breaks. Better than living on your knees in vassalage to China.
My understanding is that China does not grant permanent immigrant visas (AKA Green Cards) to westerners. You can go work at your multinational over there for a few years, but then you have to leave.
I do wonder how long until we preemptively strike NK. Not necessarily nuke them, but take out their missile and nuke capabilities. Being that they are armed to the teeth it does seem that a conventional strike would result in many US/Western casualties, not to mention extensive civilian casualties in SK. So I could see some people considering nuking them before they nuke us. Talk about a Black Swan event.
“My understanding is that China does not grant permanent immigrant visas (AKA Green Cards) to westerners. You can go work at your multinational over there for a few years, but then you have to leave.”
Fine. First we offer the multinationals a choice. Here or there, mutha-effer. There? Fine. Go now. They won’t take you? Fine. We’re revoking your citizenship and dropping you off on the Spratlys.
Make no mistake, we are being threatened with nukes by China, via NK. Period. As the lawyers like to say, govern ourselves accordingly. This goes all the way back to the Korean War, which we lost to China, actually.
And then there’s Nixon and his sidekick Kissinger, who deserves to live out his days in Beijing. Drop him off on the Spratlys, too.
Scott Adams (Dilbert creator) did a very good periscope about the issue. He doesn’t think the government is going to come up with a solution, but the citizens can. Don’t buy Chinese. Period. Grow a pair and drive if you have to, instead of ordering on Amazon. Use those lists of Made In the USA. Future depends on it.
While the Supreme Court may have granted some aspects of personhood to businesses, citizenship was not one of them.
But yeah, we can restrict imports. The globalists will howl in protest. Angela Merkel is currently griping about Trump’s trade policy:
http://money.cnn.com/2017/07/05/news/economy/merkel-trump-trade-warning/index.html
But the thing to remember is that nobody, and I mean NOBODY, outside of the US has our best interests at heart. They want us to buy their cr@p and absorb their surplus, bottom of the barrel population. They can go to Hades.
“While the Supreme Court may have granted some aspects of personhood to businesses, citizenship was not one of them.”
We can revoke the citizenship of upper management, along with the corporate charters.
And this guy:
http://foreignpolicy.com/2017/06/23/bumbling-ex-cia-officer-charged-for-selling-secrets-to-china/
Either give him the Warmbier treatment and ship him to Beijing, or have Trump live-tweet a hanging.
“But the thing to remember is that nobody, and I mean NOBODY, outside of the US has our best interests at heart.”
Not to mention some of the folks INSIDE the US. Jam McCain into a fighter jet and point him over Pyongyang, tell him he’s on a nuke mission. Let him keep on flyin’ till he runs out of fuel. It’ll be his finest moment.
I do wonder how long until we preemptively strike NK ?
If the heat in the kitchen gets to hot what could be a better distraction for the bone head. Abraham Lincoln said that to reveal a mans true character give him power.
Talk about a Black Swan event ?
We don’t see Black Swans coming. This event is right in front of our face.
Are you tired of winning yet ?
Abraham Lincoln once said something very funny about fiat money. “Greenbacks” were authorized by Congress in February 1862. During a cabinet meeting there was some discussion of adding the motto “In God We Trust” to the new US paper money. Lincoln remarked, “If you are going to put a legend on the greenbacks, I would suggest that of Peter and Paul: ‘Silver and gold I have none, but such as I have I give to thee.’“
“Are you tired of winning yet ?”
Are you tired of whining yet?
Are you tired of winning yet ?
The screecher would have done nothing until there was a mushroom cloud over LA.
until there was a mushroom cloud over LA ??
LOL. You buy that fear Colorado ? That’s the same crap that Cheeney & Bush sold to the brain dead. We would reduce NK to ashes in minutes if they attacked the USA, SK or Japan.
There’s nothing to “buy”. The Obama regime was utterly ineffective in stopping NK nuclear program. Now they are testing ICBMs.
But you make an interesting remark: “if they attacked”. I take that to mean that we would retaliate if they nuked the west coast. That would be a dollar short and a day late for my taste.
is inventory booming in your hood
today is peak day
looks like it’s mushrooming here
No “pent-up demand” happening here:
http://www.dailymail.co.uk/health/article-4666794/Millennials-aren-t-ready-reality-life.html
Funny story - went to visit a friend of a friend in the Boston suburbs about ten years ago. 40ish guy, middle class, nice middle-class neighborhood of split-level ranch houses. Everything looked great from the outside, nothing to differentiate this house from any of the others.
But when we walked in, I couldn’t believe my eyes. I’m no building inspector, but I’m pretty sure this house should have been condemned. The floors were full of gaping holes. You could see right through to the basement and when you looked up there were holes above you as well. There was basically only one narrow pathway through the living room. I was afraid to be in there, and this guy was living there! I didn’t stay long, as I didn’t feel safe. It was horrifying.
When we had the ten-feet-of-snow winter here in Boston a couple of years back, colleagues of mine were swapping tips about slicing panes out of their drywall in order to get water leakage from the ice dams to dry up before mold could set in. One guy had to demolish an entire covered porch because of the damage; another, who’d raided a 401k to buy a half-house half-plywood thing from the 1700s just a few months earlier, disappeared for a week and came back looking absolutely grey.
Lot of garbage houses here for sure; the idea of shackling myself to one of those old ranches makes me ill.
These are drive-by BPO’s on previously foreclosed houses. What could go wrong?
‘relied on ‘drive-by’ evaluations. As stated in a deal prospectus issued by Fannie Mae, these homes were ‘assumed to be repaired and in good condition.’
Hundreds of million$ and not an appraiser in sight.
“These are drive-by BPO’s on previously foreclosed houses. What could go wrong?”
That’s even more amazing, as you’ve seen what happens to foreclosed houses. The house I visited was not foreclosed, it was the house that man grew up in that he had inherited from his parents. One would have never imagined that it was in that state. I’m sure his neighbors had no idea.
bpo? in 2004-5 same thing
I must live in the wrong part of the country, or at least not know the right people. I had to get an appraisal just to apply to have PMI removed, much less sell the place. Maybe my handshakes weren’t green enough?
PNC was sued for this and lost, almost 20 years ago.
All ten of the Shard’s £50million luxury apartments have stood empty for FIVE YEARS because rich buyers ‘don’t want to live south of the river’
Developers hoped to sell plush homes to world’s richest but they remain empty
Team behind Shard originally claimed it would take just 20 calls to sell them all
Potential buyers were said to boast access to room service from five-star hotel
Agents believe luxury properties cannot be shifted due to undesirable location
http://www.dailymail.co.uk/news/article-4667216/Shard-s-50m-apartments-stood-FIVE-YEARS.html
Excuses, excuses.
Maybe they can fill them with members of London’s Free Sh!t Army. I understand that the waiting list for Council Housing is years long.
I’m sure that Corbyn would find a way to pay for it if he was Prime Minister. A 30% VAT would do the trick.
sounds racist
wow, it is fun saying that
instant virtue
I’m feeling triggered
Interesting aggregation of headlines:
South Africa moving to expropriate land without compensation.
Nikki Haley says US will use military in NK “if it must”.
Retail store traffic plunged 8% over July 4th weekend.
Assets ripe for a correction.
Auto sales disappoint.
PIMCO reducing risk across the board.
Italy and Austria having a spat over refugees.
What does this all mean?
It’s OVER. Globalization on its death bed. Party’s over, everyone out of the pool!
South Africa moving to expropriate land without compensation.
Palmy, I’ve been buying platinum at these ridiculously discounted prices.
10X more rare than gold, with much higher industrial usage, yet selling for ~$200 an oz less than gold.
Main sources of supply: Russia and South Africa. Both dodgy from a geopolitical risk standpoint.
With South Africa going down the same road as Zimbabwe, those platinum mines are not going to be producing for too much longer.
Or I could listen to the permabulls at CNBC and buy moar stawks….
Platinum is where it’s at. Also silver.
Italy and Austria having a spat over refugees.
I’m saying that it’s more than a spat. Austria is threatening to mobilize its army, close its open borders and require Passports to enter from Italy, which is a very big deal.
“On Sunday Preston Page and his fiancée, Jessica Faraday, found their house and car covered in graffiti, and the car was also keyed. The gold paint messages included ‘CALI - surfs up’ and ‘get California out of Portland.’”
“Page said he feels that the act was likely out of frustration with Portland’s housing market. ‘So much industry has come in here and, I’m sure, pushed some locals out. That can be rough … you see housing prices double, or triple in the past five to ten years,’ Page said.”
Could be, Preston. OTOH, maybe they’re just not that into you. Y’see, some of us in Florida feel much the same way when we see economic refugees from the Northeast and Mid-Atlantic settle in our fair state. It’s not just the housing prices. It’s the ‘tude.
And here’s a sob-story about the struggles of Puerto Ricans in Florida.
http://www.mypalmbeachpost.com/news/local/some-puerto-ricans-struggle-find-careers-florida/cyr2XD6BjwlykkXe15gQUL/
Don’t like it here? Well, there’s always New York and Connecticut.
Chinese embezzlers and money launderers, er I mean investors, may be getting a similar reception in Toronto by priced-out locals.
https://www.bloomberg.com/news/articles/2017-07-04/foreigners-account-for-4-7-of-home-sales-in-toronto-region
Took a peek at the headlines Ben posted today -
Me thinks these articles have nothing but Debt Donkey written all over them.
By the way - who the hell would live in PHX this time of year? Just got back from there yesterday - 112 deg ambient temp at 4 in the afternoon!!
Yikes.
Aren’t you glad you escaped Chi, though? I hope you are doing well. You’re one of the good ones.
Yellen says we won’t have another financial crisis in our lifetime. BoE head Carney says our wise and all-omnicient central bankers have fixed the issues that caused the 2008 financial crisis.
I’m going to take that as my cue to buy more gold, canned goods, candles, and ammunition.
https://www.theguardian.com/business/2017/jul/03/financial-crisis-mark-carney-fsb-bank-of-england-g20
“In a 2010 CNBC interview then-Representative Barney Frank expressed hope for substantial GSE reform: ‘I hope by next year we’ll have abolished Fannie and Freddie…it was a great mistake to push lower-income people into housing they couldn’t afford and couldn’t really handle once they had it.’”
This scumbag and Chris Dodd should be playing nightly games of “the escaped convict meets the warden’s wife” in their prison cell as they serve out their life sentences in the Florence, CO. Supermax for their role in causing the housing bubble.
When Australia’s housing bubble implodes, a lot of FBs will be taking their parents with them to the poorhouse.
http://wolfstreet.com/2017/07/05/australia-sydney-melbourne-house-condo-price-bubble-affordability/
Holeee Jeebus, the flamestream media’s going down faster than a guy with cement overshoes in NY’s East River.
Who goes dark first, CNN or NYT?
Don’t think I can make it through tomorrow.
Did the family get that house sold yet? If not, better hurry, CT is circling the drain, unfortunately.
Don’t think I can make it through tomorrow.
Jeez, phony, what’s up?
I think he was making a joke, at least I hope so. But if so, it sort of went over my head.
Earth to jeff, you OK, bro’?
A week ago Tuesday I lost my 23 year-old daughter.
I can’t do phony scandals anymore.
I am so sorry friend.
Me too, that’s tough.
jeff, my heart to you and yours. My thoughts are with you. I apologize for thinking you were making a joke.
Jeff, I am so sorry.
Ben, maybe can you post an uplifting/appropirate picture for Jeff?
Jeff, I have daughters of my own and can’t begin to imagine what it would be like to lose one. Stay strong, bro, you’ve got people who need you to be there for them.
Jeff, very sorry to hear that. Shattering. My sincerest condolences.
Teddy Roosevelt lost his mother and wife, two days after his wife gave birth to their daughter. In his diary, he wrote a large X, with the words, “The light has gone out of my life.”
And it did, for a while. But eventually, it came back. Eventually.
“A week ago Tuesday I lost my 23 year-old daughter.”
I hope it wasn’t perpetrated violence. Either way, my condolences.
You hang in there man. I am sorry for this terrible event.
I can only begin to imagine…My condolences.
Blogs now rule.
It doesn’t seem like many pundits manage to connect the dots between government programs that pour trillions of dollars into propping up real estate valuations and the spiraling rents that are driving more and more low income families over the financial edge. This is not rocket science, folks.
Here are the workers hit hardest by San Diego’s rent hikes
San Diego is the No. 11 toughest place to build new apartments, says new report.
Phillip Molnar
Rent has gone up for everyone in San Diego over the last decade, but no group has been affected more than service workers, said a new report from Apartment List Rentonomics.
Money left after paying rent by San Diego service workers — waiters, healthcare support, retail — dropped by 8.6 percent from 2005 to 2015. That’s more than the nationwide average decrease of 7 percent, but not as high as San Jose where service workers have lost 19.9 percent of their money.
…
‘If this is data-driven as Fannie says, I guess it’s OK,’
Should be A-OK, so long as real estate keeps going up.
“But making credit looser ‘will probably drive up housing prices.’”
Sounds like ever-higher prices are headed our way, so all is A-OK.
It seems late in the game to initiate the handwringing exercise.
The Fed grows worried its loose policy threatens US financial stability
Several Fed officials voiced concern over the effect that their recent measures were having on financial markets, according to the minutes of the FOMC’s June meeting.
The summary did not reveal a timetable on when the central bank would begin unwinding its balance sheet.
Jeff Cox | @JeffCoxCNBCcom
13 Hours Ago
CNBC.com
Federal Reserve Board Chairwoman Janet Yellen speaks during a news conference after the Fed releases its monetary policy decisions in Washington, June 14, 2017.
The Federal Reserve’s most recent interest rate hike came amid worries that keeping policy loose was posing increasing risks to financial stability and the economy.
Fed officials indicated a determination to continue raising rates even with muted inflation levels, which they considered to be temporary and likely to rise over the long run to a targeted level of 2 percent, according to a summary from the June meeting of the policymaking Federal Open Market Committee.
The Fed raised its benchmark rate target a quarter point at the meeting and outlined a plan to reduce its $4.5 trillion balance sheet of bond holdings it accrued while trying to stimulate the economy during and after the financial crisis. Meeting minutes released Wednesday indicated that Fed officials believe the balance sheet can be reduced with “limited” disruption to financial markets.
…
Are quantitative easing and an endlessly protracted period of extraordinary accommodation a free lunch?
first ever college economics class taught that there is no such thing as a free lunch. If this is the case, who pays for quantitative easing, and how and when are the payments made?
This book might be worth a look, if you can handle the $84 price tag for a used copy.
https://www.amazon.com/Theres-Such-Thing-Free-Lunch/dp/087548297X
Vancouver starts collecting special tax on vacant houses…
Under the new rules, homes that are not occupied for at least six months of the year are subject to a tax of one per cent of the property’s assessed value. The deadline to rent out empty dwellings was July 1.
I am curious, how do they determine that the house is unoccupied? Do they regularly have inspectors swing by, enter the house and make sure no one is home?
Jingle
Probably a number of ways: Visual, mail delivery, utility usage, neighbor reporting, etc……..
Who’s house is it? The state
?
If the Fed unwinds its balance sheet, is it a given that long-term rates will normalize?
No,fed is selling half. If they do 5 to 1 treasuries they can keep the nasty stuff contained