July 14, 2017

A Financial Precarity Hiding Behind Glossy Aspirations

It’s Friday desk clearing time for this blogger. “If you haven’t looked lately, you may not have noticed he real estate market in Franklin and Gulf counties is on the rebound. Gloria Salinard, director of the Realtors Association of Franklin and Gulf Counties, said the picture seems to include a growing number of fulltime residents, as well as some ‘flippers.’ ‘As soon as it becomes a buyers market, as prices start going up, you’ll have buyers who will buy it as an investment and turn around and sell it immediately,’ Salinard said. ‘In the heyday, when the market was so hot, speculators were putting in developments in hopes of selling the land, and several sold several times over. Unfortunately the bottom fell out of the market and some individuals who bought high are holding on. Unfortunately there they sit.’”

“Home sales were up heading into summer compared to last year in Oklahoma City, but as usual, activity varied depending on price range. Sellers at $300,000 and up still have challenges and ‘are still needing a Realtor with a strong marketing approach,’ said Michele Corral of Crossland Real Estate. ‘Those holding out for the highest price in the neighborhood are still holding.’”

“With The Woodlands moving closer to residential build-out, new trends have emerged in the area’s real estate market in recent years. Between 2005 and 2015, the median sales price for homes in The Woodlands more than doubled from $252,055 to $562,000, a 122 percent surge, according to The Woodlands Development Company. Median annual household income during the same period increased by 32 percent, from $136,000 to $180,000, according to the data.”

“Somer Padilla, a real estate agent at Beth Ferester & Company, said builders are hurting, because insufficient buyer demand has led to an oversupply of houses recently built around The Woodlands. ‘The surrounding area is overbuilt, and there are not enough buyers,’ she said.”

“Is the recent downturn in the Greater Toronto Area’s real estate market a blip or the start of a severe correction? John Andrew, a professor at Queen’s University and executive director of the Queen’s Real Estate Roundtable warns that a series of rate hikes in Canada would put pressure on a lot of households – especially in Toronto and Vancouver, where many people hold massive mortgages. ‘What a quick transition we’ve seen from a very strong sellers’ market to a very strong buyers’ market,’ Prof. Andrew says of the abrupt decline in sales.”

“He figures if the central bank were to raise rates two or three times, housing markets across the country would slump. ‘By about the second increase, the response will be ‘the gravy train has stopped.’ I think we would see a decline in house prices right across the board,’ Andrew said. Rather than be out of pocket every month while hoping the unit rises in value, the investor is more likely to sell and take any gains from the appreciation above the purchase price. ‘A lot of investors will do the math at the same time and they’ll dump them,’ he said.”

“The more China tries to rein in its roaring housing market, the more obsessed people get about buying. An article of faith is that the Communist Party won’t allow housing prices to collapse. ‘The government will spare no effort to make sure there are no big swings in the property market,’ says Ni Pengfei, a housing expert at the Chinese Academy of Social Sciences, a government think tank.”

“In Shenzhen, the average home sells for 45 times average annual household income, compared with around 12 times for homes in New York City, according to Zhang Ming, a senior economist at the Chinese Academy of Social Sciences. The boom in Foshan hasn’t cooled things off in Guangzhou. Zhang Ying, a 27-year-old web designer who makes about $1,500 a month, bought a two-bedroom apartment in another development in January. Her mortgage payments amount to nearly 80% of her income. ‘I’m essentially a slave to this property now,’ she says.”

“The prospects for upmarket properties in Penang look uncertain. Checks showed that there are several luxury properties in George Town sitting in the market for more than a year now. Property agent Danny Khor said the increased difficulty in obtaining bank loans is a cause of concern as property transactions are declining. He sighted a case where at least eight potential home buyers had their loans rejected in the past six months. A majority of them had applied for housing loans of not more than RM400,000 each.”

“‘They feel that once their application is rejected by one bank, there is no point in applying from other banks. When this happens, the house is put back in the market for selling,’ he said.”

“The prospect of a ‘reasonable correction’ in Auckland house prices ‘grows by the day,’ according to BNZ economists. BNZ senior economist Craig Ebert said that, importantly, the recent decline in Auckland house prices was now getting significant media coverage. ‘This can be self-fulfilling to the extent that folk fearful that a market might correct are more likely to withdraw from it (buyers that is) and sellers will either delist their properties, simply not sell or, if under pressure, accept lower prices than might otherwise be the case. Certainly, there is already anecdotal evidence of speculators looking to exit the market for fear of getting burnt. All of this can lead to a sentiment-driven price correction over and above what market fundamentals might dictate.’”

“Reader, I solemnly regret to inform you that America is indeed back on that bullshit. The McMansion is back. A recent article by Ana Swanson in The Washington Post states that after the recession and the general evacuation of Pleasantville following the financial crisis, ‘Americans have started to flip houses again,’ which means they’ve started to flip McMansions, which has resulted in this: ‘Since 2009, construction of these homes has steadily trended upward, data from Zillow shows.’ Have we learned nothing? Why are we doing this again?”

“Economist David Harvey lays out the pre-crash thinking like this: ‘I buy a house for $300,000 and three years later its value has appreciated to $400,000. I can then capitalise upon the extra value by refinancing for $400,000 and walk away with the extra $100,000, which I can use as I wish. The enhanced exchange value [Marxist for 'a commodity’s worth on the market'] of housing becomes a hot item. The house becomes a convenient cash cow, a personal ATM machine, thus boosting aggregate demand, including, of course, the further demand for housing.’”

“The proof is in the pudding: the housing crash resulted in 4 million people losing their hopes. ‘The pursuit of exchange value,’ Harvey writes, ‘destroyed access to housing.’ And almost ended the world economy. Let’s not forget that part. So this whole pursuit has a level of financial precarity hiding behind its glossy aspirations. Whatever the dream promises in terms of security, financial and domestic, is a false promise.”




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82 Comments »

Comment by Ben Jones
2017-07-14 08:39:22

‘Four Central Austin zip codes—78701 in downtown, 78703 including Tarrytown, 78722 in East Austin and 78751 in north central Austin—saw a decrease in median home prices, according to recently released sales data from the Austin Board of Realtors.’

‘The 78703 Tarrytown neighborhood had the biggest median home price decrease, 22.04 percent year-over-year.’

Comment by scdave
2017-07-14 09:31:21

Wow…Nice post Ben…Sean is in Austin isn’t he ?? Maybe he can chime in…

Comment by Ben Jones
2017-07-14 09:39:19

I used to live near Tarrytown. It’s right by downtown. The very brief report is strangely lacking the usual color commentary from local UHS. We have seen a few reports of prices falling in Austin’s outer areas earlier this year, but this is the first I’ve read from central Austin.

Comment by scdave
2017-07-14 09:43:39

Lower sales prices = Lower appraisals…Lower appraisals are typically deal busters giving buyers even more leverage…

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Comment by Nutshot
2017-07-14 09:53:36

I lived in the Lo-Burn area (78756) for a few years…it was cool and fun but attitude can only take an area so far. After a couple of god-awful summers and watching housing get to ridiculous (”oh, everyone from California is coming with cash in hand”) I decided to bounce east for better climate and taller trees.

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Comment by Ben Jones
2017-07-14 10:05:50

Didn’t they used to call that Rosedale? It’s the UHS who started coming up with these lo-no-so designations.

 
Comment by somedewd
2017-07-14 10:08:17

Grew up in 78734 back when 2222 was woods, 71 was woods and 183 only had a mall. Haven’t been back in a while but overhead shots on G.Earth/Zillow make me glad I’ve not made the trek. Great cities don’t stay great for long as outsiders move in.

 
Comment by Ben Jones
2017-07-14 10:12:15

Liberty Hill was way out of town. They’ve ruined Austin. There’s no going back now. Actually everything from N. Austin to San Antonio. It was really beautiful with all the trees and streams.

 
Comment by Senior Navel Gazer
2017-07-14 14:45:55

We just moved from Liberty Hill and moved to Tampa. I miss TX people and HEB but that’s about it.

 
 
 
Comment by Professor Bear
2017-07-14 22:44:07

My two younger sisters used to share a home one of them owned up the hill from Barton Springs. I bet Zilldo sez it is worth over a million bucks today.

Coincidentally, it seems like half the homes in the neighborhood are currently up for sale!

 
 
 
Comment by Ben Jones
2017-07-14 08:44:07

‘Optimistic? Conservative? Unsettled? For summer 2017, some of our brokers see sunny days ahead; others warn that overpriced properties will sit. What’s the sweet spot in price? East or west of the canal? Our roundtable of local real estate professionals tells all.’

‘There is currently a lot of inventory out there for buyers to choose from, with more coming on the market every day. We expect to see that continue throughout the summer with properties staying on the market for longer than in the past. That doesn’t mean buyers should wait if they find a perfect fit. Sales have been steady especially under that 2 million price range but with so much to choose from, buyers have had options. The rental market is doing better than last year but still not as strong as past summers, so there are still some great rentals out there for all those last-minute planners. In the end, it will be a great summer for real estate in the Hamptons.—Doug Sabo, Nest Seekers International.’

‘Summer 2017 is starting off with very low inventory of quality well priced listings and an abundance of buyers in the market. If you are shopping and see a home that suits your needs at a reasonable price, grab it quickly! It will not last. Sellers: this is not an opportunity to price your properties ambitiously. The buyers in today’s market are looking for properly priced, move-in ready homes. Things that are overpriced, not properly marketed, or do not show well are still sitting on the market untouched.—Donielle Cardinale, Sotheby’s International Realty.’

 
Comment by David Lereah
2017-07-14 08:52:51

Here’s a guy who gets it …

“Economist David Harvey lays out the pre-crash thinking like this: ‘I buy a house for $300,000 and three years later its value has appreciated to $400,000. I can then capitalise upon the extra value by refinancing for $400,000 and walk away with the extra $100,000, which I can use as I wish. The enhanced exchange value [Marxist for 'a commodity’s worth on the market'] of housing becomes a hot item. The house becomes a convenient cash cow, a personal ATM machine, thus boosting aggregate demand, including, of course, the further demand for housing.’”

A financial wizard. Just like me.

Comment by oxide
2017-07-14 13:37:48

On a serious note, Learah has really gone downhill. He was an economist for the Mortgage Bankers, then for NAR. Then he left for Move Inc (they put out realtor.com), but he was only there for one year. Then he started Reecon Advisors, a consulting firm with an empty website with a “blog” section with one entry, in 2014.

Translation: his “consulting firm” is a plastic lounge chair and a Samsung Galaxy 7 on Vero Beach, waiting for someone to call him for a little gig work. (retired)

Comment by Professor Bear
2017-07-14 22:48:37

Maybe he’s living off the income from his book sales? They are going for a lot more today than the $0.01 they were a few years ago.

All Real Estate Is Local: What You Need to Know to Profit in Real Estate - in a Buyer’s and a Seller’s Market
Hardcover – April 3, 2007
by David Lereah (Author)
2.7 out of 5 stars 5 customer reviews
See all 2 formats and editions
Kindle eBook
$10.99
Read with Our Free App

Hardcover
$12.15
18 Used from $2.00
5 New from $6.11
1 Collectible from $9.80

 
 
Comment by butters
2017-07-14 13:53:31

The problem is you are not walking away with extra $100,000. It’s far less than that….considering all things.

 
 
Comment by ibbots
2017-07-14 08:59:13

A year and $100M in volume later, this flat fee listing service has gained some traction…they charge $5k flat listing fee and pay the buyer agent the traditional 3%.

“I think they should be ashamed of how much they’re charging people for this service because they know that the internet has so radically changed their job day to day,” said Alex Doubet.

Doubet is right that the internet has changed how people shop for real estate. Doubet just doesn’t believe big commissions can survive many more cycles.

http://www.wfaa.com/news/local/dallas-start-up-wants-to-disrupt-real-estate-market/456595056

Comment by scdave
2017-07-14 09:37:32

Flat fee listing brokers have been around a very long time…There are even flat fee buyers brokers…

 
Comment by PitchforkPurveyor
2017-07-14 12:32:13

Why would you pay $5,000 when you don’t need them at all? You can sell a house on Craigslist just as easy as the mls.

Comment by scdave
2017-07-14 15:15:59

You can sell a house on Craigslist just as easy as the mls ??

You are a sophisticated buyers dream come true. I would love to buy a house from you and then watch you whine like a stuck pig when I sue your a$$ and watch you spend 50-100K in defendent attorney fees. LOL. I love your type. Thinks it’s just a bit of paper work.

Comment by MightyMike
2017-07-14 15:22:17

Couldn’t a title company still be used even if there are no realtors involved in the transaction?

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Comment by PitchforkPurveyor
2017-07-14 18:51:27

Yes, and all that’s required are the appropriate disclosure statements.

 
Comment by sleepless_near_seattle
2017-07-14 20:08:33

Yep, that’s how I sold my first house to the guy renting it from me. He kept asking “don’t we need realtors?” Nope, fill out this offer sheet, have a lawyer review it, and we’ll close at the title company. Done.

 
Comment by Professor Bear
2017-07-15 07:46:55

“…fill out this offer sheet, have a lawyer review it, and we’ll close…”

That’s how Lil’ Sis got her divorce done for a song last year. Knowing my ex-BIL is a notorious cheap skate, she worked with lawyers on her own dime to draw up a fair offer, then explained to him how much more it would cost to contest her in court.

He signed amicably without hesitation.

 
Comment by Professor Bear
2017-07-15 08:03:47

There are quite a few web pages devoted to the subject of how to sell a home without a Used Home Seller’s involvement. The tradeoff is allocating enough of your own time and effort to learn enough to do it right, versus the risk that you screw up a high-ticket financial transaction if you do it wrong. But if we are talking about $30,000 or so (6% of $500K), presumably a little time and effort to figure a workaround is warranted.

But using a Used Home Seller is no panacea. I left both of my last two real estate sales transactions with a very bad taste in my mouth. The second-to-the-last time, our Used Home Sales lady tried to pressure us into using an interest-only loan to buy a home we couldn’t afford; we declined. And the last time, selling my parents’ place four miles east of Ferguson, MO the spring after the Second Wave of the Intifada, our long-time local Used Sales Person could not attract any offers at a price anywhere close to either his or Zilldo’s estimate of the home’s value. I’ll never know whether it was his ineptitude or lack of effort to sell the home for what it was supposedly worth that explains why we came up so short near the height of a mania, or some other reason.

 
 
Comment by Professor Bear
2017-07-15 08:15:18

Whoever can deconstruct this specious Used Home Seller’s argument wins the prize. Any takers?

Will You Really Save Money?

Listing your home with a Realtor will typically cost you around 6% of the sales price. For a home worth $250,000, that’s $15,000—a fair chunk of change. Selling on your own will save you at least half of that commission (if your buyer comes in with a Realtor, you will probably have to pay 3% or so to that person). So, you may save some money.

RealtorThen again, you may not. Savvy buyers know about the 6% Realtor commission. Unless you’ve already priced your home below market value, they may automatically offer 6% less, based on the fact that there aren’t any Realtors involved. Frankly, they have a valid argument. If the exact same home down the street is priced at $250,00 also, but is listed with a Realtor, that seller will receive $235,000. Why should you receive more for your home?

What typically ends up happening is that you discount the price of your home by 6%. Which means that you’re making the same amount of money as you would when listing with a Realtor, but you’re doing all the work of selling your home yourself.

 
 
Comment by PitchforkPurveyor
2017-07-14 18:50:00

You sound like an unhinged whack-job. I don’t think you could afford a 30 year old, rusty pickup truck, let alone any real estate.

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Comment by Senior Navel Gazer
2017-07-14 19:43:26

Tell me you are joking? When you hire a realtor and something happens from a legal perspective, the first words out his/her mouth are, “I’m not a lawyer.”. Hire a title company or a lawyer to review the contract or use your state’s standard Realtor Board contract. Such FUD…

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Comment by 2banana
2017-07-14 10:06:18

Wow.

No insane public unions.

No city bankruptcies. Actual budget surpluses to plow into infrastructure WITHOUT DEBT.

No overpaid and disgruntled city workers to deal with.

And things ACTUALLY get DONE for the citizens who pay the taxes.

And speaking of which - Low Taxes.

How would democrats ever win the next election if they did this Chicago? Or Philadelphia? Or Newark? Or Cleveland? Or etc.

+++++

The Town that Privatized Everything
June 18, 2014
https://liberty-intl.org/2014/06/the-town-that-privatized-everything/

Sandy Springs, Georgia may look like any other town in America. It has parks, roads, and beautiful places to live. But there’s one thing that separates this town from every other town: Sandy Springs privatized almost everything.

In 2005, Sandy Springs outsourced almost all functions of the city government (with the exception of police and fire) to a single company, which runs the town. That company is in charge of running all the vital functions of government, from the running the parks, to paving the roads, and even 911 calls!

The town is run very efficiently, with zero backlogs in permit requests. Call the city, and you’ll be surprised to find that you actually get a friendly person on the other line! The city has a 24/7 non-automated customer service hotline which fields about 6,000 calls per month. It also has a state of the art traffic system with cameras and a high tech command center.

When people come to Sandy Springs, they usually have no idea that it’s privatized, says Sharon Kraun, media relations director for the city. There are no signs with corporate logos or anything like that. According to Sharon, “What people can tell is that the city is well taken care of, and the residents who live here or individuals who work here, like being here and are happy with the level of service provided.”

Because of this efficiency, Sandy Springs generates huge surpluses. They have no unfunded liabilities. The city specifically decided not to use the traditional pension model – a model which has put almost every government across America in an unsustainable pension crisis. Instead, employees can choose their own 401K package to prepare for retirement, if they wish.

This has given the town of Sandy Springs lots of extra cash to work with – a surplus that they put into building for the future. According to Sharon Kraun, “The city, as a matter of policy, sets aside 25% of revenues into a reserve during each budget planning cycle. Capital improvements have been a major focus during our first eight years, with more than $185 million invested in capital infrastructure.”

This has lead to lots of improvements around the town. The city has repaved 147 miles of streets, 874 storm water projects, and built 32 miles of new sidewalks.

Comment by butters
2017-07-15 17:27:07

Wait until they start offshoring basic services. LOL

 
 
Comment by 2banana
2017-07-14 10:18:38

Remember the “Crack Shack or Million Dollar Home?” Website?

How about the “Death House or Million Dollar Home?” Website!

++++

Red-Tagged Lafayette Home On Market For $850,000
July 10, 2017
http://sanfrancisco.cbslocal.com/2017/07/10/red-tagged-lafayette-home-market-850000/

An East Bay home with a price of $850,000 is attracting bidders even though it currently can’t be lived in because it stands on the edge of a large landslide.

The listing admits the purchase is “not for the faint of heart.”

It goes on to say the $850,000 dollars asking price reflects the cost of repairs to the foundation. It’s estimated that those repairs will be about $300,000, according to reports.

The listing also notes that once the property is restored and the home is livable, there will be great views of Mount Diablo.

“There’s only so much real estate on the planet, and there’s only so much real estate in the Lafayette school district,” said Crowell.

She said the elderly couple who lived here had to move out when the backyard gave way after the storms in February.

The 2,400-square-foot home was put on the market Friday.

“I’m actually surprised by the interest I’ve gotten on this house. I’ve getting four to five calls a day about it,” said Crowell.

Comment by Taxpayers
2017-07-14 12:31:31

R they privatizing dc?😈

?Is inventory growing faster than last July in your hood?

 
Comment by AbsoluteBeginner
2017-07-14 20:46:51

‘“There’s only so much real estate on the planet, and there’s only so much real estate in the Lafayette school district,” said Crowell. ‘

I’ll believe anything about real estate nowadays at this point. Tell me that real estate only goes up and I will believe it. Everything is awesome!

 
 
Comment by 2banana
2017-07-14 10:23:53

Let me see if I understand Trump’s appeal.

Deport illegals.

Restrict unlimited immigration.

Restrict the sham work visa programs.

Jobs for the locals then happen…at higher wages!

It is unpossible!

++++

Shortage Of Foreign Labor Forces Maine Businesses To Hire Local Workers
7/13/2017
http://dailycaller.com/2017/07/13/shortage-of-foreign-labor-forces-maine-businesses-to-hire-local-workers/

Businesses in Bar Harbor, Maine are turning to locals to make up for a shortage of foreign guest workers that normally fill summer jobs in the bustling seaside resort town.

Because the H-2B visa program has already reached its annual quota, Bar Harbor’s hotels, restaurants and shops can’t bring in any more foreign workers for the rest of the busy summer tourist season. Like hundreds of similar coastal resort towns, Bar Harbor has for many years depended on the H-2B visas for temporary workers.

The Bar Harbor Chamber of Commerce will hold a job fair Saturday in an effort to recruit significant numbers of workers from the region. Just about every kind of business in the town is looking for help, says chamber executive director Martha Searchfield.

“All types of businesses — retail, restaurants, the tour boats, all the trips, everything. All types of workers are needed,” she told the Daily News.

The shortage is so acute that companies are sweetening incentives for local workers. Searchfield says some businesses are offering flexible schedules that might appeal to older workers who might be interested in working only a day or two each week. And other companies have gone so far as to offer higher wages to entice locals.

Several lawmakers are pressuring the Trump administration to authorize more H-2B visas, and DHS is expected to announce a higher cap this month. Independent Maine Sen. Angus King has introduced legislation that would restore the returning worker rule.

Comment by junior_kai
2017-07-14 12:38:52

B-b-but muh slaves! I can’t be paying legal workers above the board - how’z I gunna afford muh empire?

Comment by Carl Morris
2017-07-14 12:58:42

Speaking of which…the older I get the more I think the instinct to enslave is second only to the instinct to procreate. It’s generally accepted with machines and animals…just gets a little squishy with people. Chains are looked down on for humans so we have to do it economically.

Comment by Ben Jones
2017-07-14 13:07:38

‘Zhang Ying, a 27-year-old web designer who makes about $1,500 a month, bought a two-bedroom apartment in another development in January. Her mortgage payments amount to nearly 80% of her income. ‘I’m essentially a slave to this property now,’ she says.’

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Comment by Carl Morris
2017-07-14 13:25:22

It’s interesting that she sees herself as a slave to the property rather than as a slave to a banker.

 
Comment by David Lereah
2017-07-14 13:37:39

There it is: Dumb ‘em down, and profit.

 
Comment by Mr. Banker
2017-07-14 13:38:53

Hey, puke, that’s my line!

 
 
Comment by junior_kai
2017-07-14 20:24:08

Many of those slaves wear their chains by choice - they think it completes their “look”. How many ghetto fabulous people do you see in an average day riding around in a huge SUV with rims but they can’t bother to go to the dentist and fix their grill? Some of them look like first cousins to Jaws - maybe we can convince them to move to England, they’d fit right in there.

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Comment by MightyMike
2017-07-14 20:52:49

How many ghetto fabulous people do you see in an average day riding around in a huge SUV with rims but they can’t bother to go to the dentist and fix their grill?

zero

 
Comment by rms
2017-07-15 06:50:39

I see bad teeth at the government offices I frequent, and they have dental insurance. It’s probably the co-pays.

 
Comment by Professor Bear
2017-07-15 08:21:16

“It’s probably the co-pays.”

Plus a lack of cash to cover them, thanks to having used supersized, federally-guaranteed loans to buy houses they can’t afford at absurd multiples of their monthly incomes…

 
 
Comment by AbsoluteBeginner
2017-07-14 21:06:25
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Comment by @AltFacts
2017-07-14 23:28:14

The appeal obviously stems from his Russian connections.

 
 
Comment by Apartment 401
Comment by alphonso bedoya
2017-07-14 11:46:00

Dimon’s pitch is that he’s being held back. Does the following look like he’s being held back?

https://en.wikipedia.org/wiki/2012_JPMorgan_Chase_trading_loss

I’m beginning to understand why logic and laws will not stop people like Dimon.

 
Comment by Lurker
2017-07-14 12:25:43

Dimon actually makes some good points in his April letter - rising healthcare costs, trillions on foreign wars, abysmal labor force participation rate - albeit nothing posters here haven’t been discussing for years. That he offers this analysis with the naïveté of Bill Gates suggesting Europe might have a migrant problem is amusing, as if he’s the first person ever to figure it all out. No kidding.

Interesting how very suddenly, and amid record profits, certain people have realized there might be something amiss in our recovery. Seems like the realizations started around mid-January. Weird.

Comment by scdave
2017-07-14 15:20:55

How the hell can he not make profits when his deposits cost him almost zero. Give me billions of dollars at zero interest rates and I would make a boat load of money in my sleep.

Comment by Blue Skye
2017-07-14 20:01:27

More likely lose it. If your ideas require free money, they are probably not good ideas.

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Comment by alphonso bedoya
2017-07-14 17:56:14

What did Dimon discover, manufacture or invent for his one billion dollars?

Comment by rms
2017-07-15 06:55:29

U.S. taxpayer bailouts and guarantees.

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Comment by Professor Bear
2017-07-15 09:03:04

Transforming implicit federal guarantees of Wall Street into explicit insurance claims payments…

 
 
 
Comment by butters
2017-07-15 17:31:33

as if he’s the first person ever to figure it all out.

Apple almost became first trillion dollar company with that strategy. That’s a proven and tested method.

 
 
 
Comment by Ben Jones
2017-07-14 12:11:25

‘Somer Padilla, a real estate agent at Beth Ferester & Company, said builders are hurting, because insufficient buyer demand has led to an oversupply of houses recently built around The Woodlands. ‘The surrounding area is overbuilt, and there are not enough buyers,’ she said.’

I read articles all the time about how Houston is hitting new highs.

Comment by whirlyite
2017-07-14 15:39:50

And yet there was an article in the HBJ about how new car sales in the nation’s soon to be third largest city have taken a nose dive. Also that the CRE picture isn’t as rosy as it’s made out to be. Hmmmmm…

 
Comment by sleepless_near_seattle
2017-07-14 20:24:57

“I read articles all the time about how Houston is hitting new highs.”

We’ve reached the point where increasing median price doesn’t mean what they think it means.

 
 
Comment by aqius
2017-07-14 12:16:43

as soon as I saw fast food feeders advertising $8.00hr jobs in the big signs in front in the 80’s, I told my new spouse at the time “you’ll see a huge increase in immigrants”, because that was so far above min. wage, you just KNEW the owners were mad as hell having to pay so much & pressured the establishment to ignore employment rules.

sure enough; BAM - floodgates opened!

it’s not that business owners / construction/ farmers / etc. CAN’T pay higher wages, it’s that they don’t WANT to pay higher wages. they love to charge skilled labor rates but actually pay low wages & pocket the difference.

US citizens still don’t get the fact that the worst day in America for an illegal is still far better than the best day back home.

no one is going to ’self deport’ in any meaningful numbers. they’ll just sleep 20 to a house, instead of 10. drink less beer. buy fewer shiny rims. its simple economics.

same as the irish. same as the chinese coolies.

like “the Dude”, they’ll abide.

Comment by Carl Morris
2017-07-14 13:02:28

they love to charge skilled labor rates but actually pay low wages & pocket the difference.

All significant wealth comes from the skim in one way or another.

Comment by aqius
2017-07-14 13:15:02

very true. the only difference is a boot or slipper on your throat.

 
Comment by Mr. Banker
2017-07-14 13:42:52

My wealth originates from numerous signatures willingly placed over dotted lines.

Comment by Carl Morris
2017-07-14 14:48:35

It’s just paper until they send you their monthly wealth production in hopes that it will make them rich later.

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Comment by Mr. Banker
2017-07-14 15:05:21

Send me their monthly wealth production for thirty years if I can work it right.

My endless series of thanks goes out to Suzanne for the endless series of schmucks she sends to me; They work, I reap. Same goes for Suzanne, she works, I reap.

Life is good.

 
Comment by Carl Morris
2017-07-14 15:16:39

Life is good.

I’ll say. I can’t imagine the power of being able to borrow infinite amounts of money and loan it out for significantly more than the rate I’m paying. I could probably eventually take over the world with that kind of power.

 
Comment by Mr. Banker
2017-07-14 19:15:27

“I could probably eventually take over the world with that kind of power.’

Stick around a bit and do what I do and you won’t have to take it over, the world will simply be handed to you … one dotted line at a time.

 
Comment by Professor Bear
2017-07-15 08:26:46

“I could probably eventually take over the world with that kind of power.”

Why not relocate to Switzerland, startup a new cryptocurrency and see where it goes? Tempting, eh?

Business
The Future of Money: Bitcoin and Other Cryptocurrency Technologies Are a Way of Life in This Small Swiss Town
By Sonia Zhuravlyova On 7/11/17 at 10:16 AM

Dubbed “Crypto Valley,” Zug, the tiny Swiss town with million-dollar Alpine views 20 miles south of Zurich, has become a worldwide hub for entrepreneurs working with digital currencies like bitcoin. Michael Buholzer/Reuters

 
Comment by Professor 🐻
2017-07-15 11:58:07

“Zug”

That is the German word for ‘train’, which seems appropriate for a cryptocurrency center, as that’s what new entrants to this industry are jumping onto.

 
Comment by oxide
2017-07-15 12:05:45

Monthly wealth production? 30 years? My butt. Mr. Banker sold that loan in full to Fannie, or to some other middleman, within six weeks the signature. The fee is in his pocket; the loan is someone else’s problem. That’s how they roll nowadays.

 
 
 
 
Comment by sod
2017-07-14 20:25:29

Nobody seems to talk much about how illegal immigrant labor may have contributed to the last housing bubble. Would there still be a lot of speculative building without a glut of cheap labor?

 
 
Comment by Carl Morris
2017-07-14 15:28:53

Just got served an ad on FB from a place called RealtyMogul.com written to look like a news article on awesome new ways to buy shares in apartment buildings. Seems like a good indicator of a top in apartment buildings to me.

 
Comment by Raymond K Hessel
2017-07-14 17:21:34

It seems that even the Wall Street grifters are seeing their Hamptons property values crashing.

http://www.zerohedge.com/news/2017-07-13/sellers-ask-150m-14-acre-beachside-plot-hamptons-property-market-crashes

 
Comment by AbsoluteBeginner
Comment by Mr. Banker
2017-07-15 07:55:06

Bahahahahaha … if any of you pukes want to see what a complete word salad looks like read what’s in the Grilled Cheese Truck link.

 
Comment by Professor Bear
2017-07-15 08:30:13

Avalanches generally start near the top of the mountain before burying those below.

Hedgies Panic As Hamptons Luxury Home Prices Crash 43% Year-Over-Year
by Tyler Durden
Jan 26, 2017 11:25 PM

As U.S. equity markets continue to surge to new all-time highs with each passing day, something you would expect to benefit the titans of high finance in Manhattan, demand for luxurious, multi-million dollar weekend getaways in the Hamptons has all but completely disappeared.

 
 
Comment by Professor Bear
2017-07-14 22:27:43

How interesting to see China follow the example of our Fed with respect to propping up housing prices!


“The more China tries to rein in its roaring housing market, the more obsessed people get about buying. An article of faith is that the Communist Party won’t allow housing prices to collapse. ‘The government will spare no effort to make sure there are no big swings in the property market,’ says Ni Pengfei, a housing expert at the Chinese Academy of Social Sciences, a government think tank.”

 
Comment by Professor Bear
2017-07-14 22:33:30

Buying a house today could sink your wealth into a hole from which it can never be recovered.

Sinkhole swallows homes in Florida
By Ralph Ellis, CNN
Updated 10:23 PM ET, Fri July 14, 2017

(CNN) A sinkhole in Florida that swallowed two houses appears to have stopped expanding, authorities said Friday night, meaning a recovery and repair operation can begin.

“The hole itself now appears to be dormant,” Kevin Guthrie, Pasco County’s assistant administrator for public safety, said at a news conference.

Nine other houses have been evacuated in Land O’ Lakes, a residential area about 20 miles north of Tampa, Guthrie said. Power has been cut to around 100 houses in the neighborhood. No injuries were reported.

The sinkhole, estimated to be 250 by 225 feet and 50 feet deep, is full of water and not draining because of debris, Guthrie said. It’s also looks like it’s full of household chemicals and septic tank parts.

“We’re treating this in essence as a haz-mat incident,” he said.

 
Comment by Raymond K Hessel
2017-07-15 07:07:04

“The storm center of lawlessness in every American State is the State Capitol. It is there that the worst crimes are committed; it is there that lawbreaking attains to the estate and dignity of a learned profession; it is there that contempt for the laws is engendered, fostered, and spread broadcast.”

– H.L. Mencken

 
Comment by Salinasron
2017-07-15 07:11:31

So if you didn’t get sinkhole insurance before this event can any others in the neighborhood get it now?

 
Comment by Salinasron
2017-07-15 07:16:39

Still getting emails from mortgage lenders suggesting I refi and take money out. Nah, I don’t think so, love my 2.875 % mortgage and have paid off 45% of it in the five years as of April of this year.

Comment by rms
2017-07-15 17:36:45

Where have you been Salinasron?

 
 
Comment by Professor Bear
2017-07-15 08:19:27

Any attempt to interpret the flattening of the yield curve by traditional yardsticks in the era of deliberate and protracted yield suppression is doomed to failure.

Opinion: What the flattening yield curve is trying to tell us
Published: July 14, 2017 2:19 p.m. ET
Spread between short- and long interest rates is an excellent leading indicator
By Mark Hulbert
Columnist

If a flattening yield curve is on your list of things to worry about, you can cross it off.

I’m referring, of course, to the difference between interest rates on bonds of short- and long maturities. A steeper curve — one in which long rates are higher than shorter ones—is considered a sign of economic strength, since it means investors are expecting the economy to be stronger in the future than it is now.

In contrast, an inverted curve — where short-term rates are higher than long rates — is a sign of impending economic weakness. And on the surface it’s easy to see why a number of the advisers I monitor are concerned. As measured by the difference in yields between the 10-year T-Note and the 3-Month T-Bill, the yield curve is heading in the wrong direction: It fell from 2.03 percentage points in January to 1.13 points in June, before rebounding slightly to its current 1.32 points.

The first reason why you shouldn’t be overly concerned about this flattening: Its primary cause was the Federal Reserve’s decisions earlier this year to raise short-term rates from artificially-low levels. The yield on the 10-year Treasury note has eased back only slightly. Compared to past cycles when the yield curve began to flatten, recent experience therefore tells us relatively little about the economy’s underlying strength.

 
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