An Era When Some Were Making Small Fortunes
A weekend topic starting with Vulture. “HGTV was the third-most-popular network on cable television in 2016, a 24/7 testament to the powers of Target chic, the open-plan kitchen, and social conservatism. It unspools with the same bland cheerfulness as Leave It to Beaver, and its heart is in the same place. Many viewers — in red states and blue cities, in rent-controlled studio apartments and 6,000-square-foot McMansions — confess it’s a bedtime ritual, prelude to a night spent dreaming of ceramic-tile backsplashes and double-sink vanities.”
“Over the past two years, it has become such a ratings and advertising sensation that it is largely responsible for the recent sale, this summer, of its parent company, Scripps Networks Interactive, to Discovery Communications for $11.9 billion.”
“We are supposed to be in rehab from our housing binge of ten years ago, the one that nearly bankrupted the country. We are supposed to be in a state of contrition. But our national love of HGTV suggests that the dream won’t die. The longing it addresses is impervious to market corrections, or personal financial realities, and as economists continue to explore the true causes of the 2008 financial crisis, they are beginning to suspect that some speculative Americans acting on that longing got us into that mess as much as — or more than — unscrupulous bankers or Wall Street. In fact, the network may now be tempting its millions of fans to dip their toes back into the most dangerous waters of the past crisis: flipping.”
“It was in 1999 that the network found its audience with a new show called House Hunters, of which there are now an astounding 1,772 episodes. The early episodes are very different from what the show has become; they were full of the pitfalls of buying a house for the first time. Today, House Hunters, like all HGTV shows, follows a formula as inflexible as the Latin Mass. But just as the mild stimulant of Decorating Cents made way for the Adderall of House Hunters, so did the latter prepare viewer and network for the speedball of flipping, which is now the core of the network’s most successful shows and which may be the most dangerous part of a national obsession that has caused us all great grief in the past and possibly even spurred that global financial crisis. It all began with Property Brothers.”
“The Property Brothers don’t flip houses; they remodel for individual clients. But viewers found that they loved watching the process of a butt-ugly house getting transformed into an open-plan showplace. Soon, a new HGTV genre was born: shows about married couples (he’s a contractor, she’s a designer) who buy and flip houses together. Once the network started putting a married couple with star power on a show — and featuring not just the houses they were flipping but also their own homes and their children and happy moments from their daily lives — it jump-started the ratings streak that has made it so successful.”
“We really shouldn’t be watching this much HGTV during our rehab. Although it’s a soothing experience, it is also a fomenter of deep feelings of discontent about one’s living arrangements. The discontent gnaws as the addiction to the programming grows, and you have to imagine many viewers find themselves enticed to do foolish things like take out second mortgages so that they can blast out a few walls and get a little of what Chip and Joanna seem to have. More troublingly, we also have to wonder how many may be inspired to think that they, too, have what it takes to flip houses.”
“A recent, worrisome working paper released by the National Bureau of Economic Research reported on the tinder of the last conflagration: the national sense that housing prices were going up every day and that there was no way that a buyer’s reach could exceed his grasp. It’s true that bankers made loans to Americans wildly unqualified for them — but the notion that buyers on the lower end of credit distribution began to default in unprecedented numbers isn’t accurate. In fact, the rate of default in the subprime market throughout the bubble and the bust remained steady compared with before the crisis.”
“It was buyers from the top and middle top who account for the skyrocketing rate of default — and it wasn’t that they were buying bigger family homes that they couldn’t afford. It was that they were buying additional houses to flip for a profit, and when holding on to them stopped making financial sense, and with no personal and emotional connection to them, they began walking away in huge numbers.”
“And yet … the flippers on HGTV make it look so simple, so fun. At the end of each episode, they run the numbers and show how much the happy couples have pocketed. What could the network be quietly motivating its viewers to do? With our real-estate-loving president — who has Property Brothers programmed into the TiVo on Air Force One and who is eager to do away with regulations, which are one of the forces supposed to protect us from another bust — we could be in the early stages of another crisis. Our collective fate could be largely in the hands of … Christina and Tarek El Moussa and however many people they inspire to pick up a house at a foreclosure sale.”
From Vice Magazine. “At the age of 24, making $35,000 a year working as an editorial aide at a newspaper, I bought some real estate: a 770-square-foot, one-bedroom condo in Northern Virginia. This was 2006, with the housing bubble at its most distended, basically the worst possible time to be buying a piece of real estate, and in the DC area, where inflated prices are the norm in any market condition. I avoided a subprime loan because I had the backing of my middle-class parents, but this was still a terrible, terrible decision.”
“Eleven years later I’m stuck in debt, besieged by bank fees, and unable to get myself out of what has become a life-altering real estate clusterfuck. Even as the country recovers from the crash of 2008, the financial crisis is still dragging me down.”
“Looking back, it’s easy for strangers to armchair quarterback my path to financial ruin. I obviously wasn’t making enough on my own to afford the place, and my career choice, print journalism, has never been known for its robust earning potential. And this was at a time when newspaper jobs were decreasing and digital media jobs were still few in number.”
“Nevertheless, my parents pressed me on the idea of home ownership. I told them I had heard there might be a housing bubble. They brushed it off. I worried what would happen if I suddenly had to move to another city for work, a very real possibility for someone starting out in newspapers. They told me if I didn’t buy then, there was a good chance I’d never be a homeowner. I’m not sure that warning would bother me now, but evidently it spooked me then. Bottom line, I was a 24-year-old being gifted with what seemed like a great opportunity. My parents were going to help me buy a home. Why say no to that?”
“I figured if my parents, who both had government jobs dealing in finance and had worked in banking before that, were confident, it would work out. This was also an era when some people were making small fortunes flipping houses. I figured I could live in this place for a few years, move if I had to, and maybe come away with a little extra money.”
“I was wrong: Today I’m still living in the condo, but just barely hanging on. I can’t sell the place. Mine is one of about 5.5 million, or nearly 10 percent of all US mortgages, that currently underwater, meaning I owe more than the property is worth.”
“I’m struggling to stay afloat and taking on a punishing work schedule in a desperate attempt to stick it out and avoid foreclosure. The equity I’ve built is closing in on the point where it might cover the value the property lost in the crash. That’s being optimistic. Even after more than a decade forking over interest on a mortgage, the idea of simply breaking even—getting away from this condo with nothing to show for it—sounds like a dream. But I’m worried I won’t make it to that point, much less ever get close to owning the place outright.”
“I would be fine with foreclosure, even though that would wreck my credit, simply to move on and extricate myself from this mess—but because my parents are also tied up in the purchase, bankruptcy or foreclosure would harm them, as well. So with no ability to relocate for better work or lower monthly bills, I press on, at least for now.”
“Earlier this year, one of the endless array of reductive takes about millennials made the rounds online, this one regarding my generation’s tendency to eschew home ownership. The reasoning, put forth by some Australian millionaire I’d never heard of and hopefully never will again, was that millennials spend too much on frivolous things like avocado toast and fancy coffee instead of saving toward a down payment on a home. In no time at all people pointed out the flaws in this argument: Experts say millennials are actually more frugal than Boomers in their spending habits. It also doesn’t help that since the crash home builders have concentrated on high-end properties, and not the sort of starter homes young first-timers could afford.”
“But my experience suggests another reason millennials don’t buy homes. Maybe they just know what they’re doing.”
Redwood City, CA Housing Prices Crater 13% YOY
https://www.zillow.com/redwood-city-ca/home-values/
HA, Ha, ha, hahahaha. You are such a tool. Redwood City is not cratering, even by the signs in your own link. “VERY hot” market. Up 7.5% in the last 12 months….$1,000/SF prices.
Sure, it’s frothy, but your post only shows you’re an idiot!
On the other hand I went to look at a SF apartment for rent yesterday. 2BD, 2BA, probably 1,000 SF. $4,200/Mon, before parking.
Here is the interesting point: They offered a $99 security deposit if the leased was signed on.the spot. A few years ago it was typical to ask for 1st, last, +full security….($12,600 ?).
The market is changing for multifamily. The reason is more units being built. When we see that in SFR production, that market will change too……
“making six figures thanks in part to an advance on my first book. Sadly, there was eventually an ebb to that flow.
I left a full-time editing job in 2015.”
That pretty much some up the fate of condo boy.
Being irresponsible.
Robots will one day make many IT jobs obsolete.
Hopefully sooner than later. I’ve come across numerous IT professionals who are clueless and not worth their pay.
FWIW, the IT industry has been promising this for decades. What has happened instead is that things have become even more complicated than ever. I remember 30+ years ago being told that programmers were going to become obsolete “real soon now” as AI’s would soon be writing all the code. Unless we count H1-B’s as AI’s, that didn’t happen.
Larry Ellison is promising that AI will make database admins obsolete for his Oracle database software, and by the end of the year no less.
Let’s just say no one is buying it, as Oracle stock has fallen about 8% since Sept 14.
I believe everything you just said.
Just like driverless cars will become all the rage, and revolutionize everything in existence.
Right.
Can you imagine being in your driverless car when it malfunctions and runs over your neighbor’s kid? Then what?
Yeah, I cannot wait for a driverless car!
Just like driverless cars will become all the rage, and revolutionize everything in existence.
Sounds all sci-fi, but I found one parked behind my car recently…
Can you imagine being in your driverless car when it malfunctions and runs over your neighbor’s kid? Then what?
Millions of miles driven, and how many kids have been run over? Um, I think that would be none.
Frankly, I trust a good AI more than I trust the average Seattle driver, where it is clear that roughly half of drivers don’t understand even basic rules of right-of-way at a 4-way stop.
I’m a Luddite at heart, and a skeptic as well, but I do believe that the driverless car wave is going to happen, and not in the distant future. I’m a cheap b@st@rd as well, but I’ll totally buy one when it does. Until then, I’ll stick with my nearly four-decade-old ride.
the average Seattle driver, where it is clear that roughly half of drivers don’t understand even basic rules of right-of-way at a 4-way stop.
Lol, so very true!
Until then, I’ll stick with my nearly four-decade-old ride.
You have a 40 year old car???
“Eleven years later I’m stuck in debt, besieged by bank fees, and unable to get myself out of what has become a life-altering real estate clusterfuck. Even as the country recovers from the crash of 2008, the financial crisis is still dragging me down.”
Bahahahaha … pukes work, bankers reap.
God’s Plan.
😁
The Housing Bubble victims of their own desire are too numerous to count.
Everyone loves Nicolas Cage looking miserable in Kazakhstan
Nicolas Cage stars in “Bad Lieutenant: Port of Call New Orleans.”
By Martha Ross | mross@bayareanewsgroup.com | Bay Area News Group
PUBLISHED: July 24, 2017 at 11:45 am | UPDATED: July 24, 2017 at 1:41 pm
Sometimes it’s not easy being Nicolas Cage. He might have an Oscar and famous Coppola relatives, but he also blew through much of his $150 million fortune on castles in Europe, a so-called haunted house in New Orleans, the late shah of Iran’s Lamborghini and a $7-million dinosaur skull that turned out to be stolen from Mongolia.
Now Cage, once one of Hollywood’s highest-paid actors, has to take jobs “right and left” to pay off his debts, including the millions he owes to the IRS, CNBC reported.
Perhaps that explains how he ended up as an honored guest at the 13th annual Eurasia International Film Festival in Astana, Kazakhstan, where he posed for a hilarious photo that has gone viral and inspired countless delightful memes.
In the photo with that city’s mayor, Cage, 53, is wearing a deer-in-the-headlights expression, along with a traditional fur-lined Kazakh hat and coat and a suit and sneakers.
…
A $7M dinosaur skull? What an idiot. That’s truly one of the dumbest things I’ve ever heard.
Vanity Fair
How Did Johnny Depp Find Himself in a Financial Crisis?
For years, Depp has topped the box office as one of Hollywood’s highest-paid actors, yet somehow he’s facing a financial hole. The actor is charging his former business managers, Joel and Robert Mandel, with fraud, while their counterclaim cites his manic spending: the private islands, French château, 156-foot yacht, and much, much more.
by Mark Seal
July 5, 2017 5:00 am
…
Saw Mr. Depp in a cologne commercial.
How the mighty have fallen.
Years ago Willie Nelson got into trouble with the IRS for unpaid taxes. A short while later he was doing Taco Bell commercials.
He got his bell ring? The IRS will do that!
How the mighty have fallen.
To promote his latest Disney Pirate movie he appeared live on the ride in Disneyland.
Just to show how big this mania is:
‘Over the past two years, it has become such a ratings and advertising sensation that it is largely responsible for the recent sale, this summer, of its parent company, Scripps Networks Interactive, to Discovery Communications for $11.9 billion’
HGTV didn’t cause the bubble. It’s just part of it, a reflection of it. Many of you know I don’t watch TV at home, but I see it enough when I travel. Heck, if I’m in a waiting room one of these shack shows is on. Even if it’s a remodeling deal, note how they throw around vast sums of money. $400,000, $800,000, with regular joe and jane borrowers sitting there without a blink. Why? Because it’s an investment.
What it really is is gambling. Speculation, usually with borrowed money. And even if it’s not borrowed, the end user in mind would be a borrower.
Anyway, the writer did a good job at breaking down the weird cultural aspects.
“Even if it’s a remodeling deal, note how they throw around vast sums of money. $400,000, $800,000, with regular joe and jane borrowers sitting there without a blink. Why? Because it’s an investment.”
No, it’s because joe and jane borrowers are just plain stupid.
Speaking of stupid (from 2015) …
PBS Looks Into The Student Loan Problem.
https://www.youtube.com/watch?v=pYmq9C7kFTw
I always like the shows like this.
“He is a 31 year old stay at home graphic designer. She is a 28 year old top end dog groomer. Together they are looking for a 5 bedroom, three bath house in the suburbs for around $900,000…”
I can only laugh!!!
Yeah, I’m not sure where the $400K number comes from as they all seem, ok except for the Wac(k)o Texas crew, to have $800K+ budgets to work with.
What it really is is gambling.
Or greed & stupidity combined with a compulsion for excitement.
What it really is is gambling.
Or greed & stupidity combined with a compulsion for excitement.
Straight from the Department of Redundancy Department.
Ben Jones: What it really is is gambling. Speculation, usually with borrowed money.
I wonder what will flush the speculators out of the market.
‘I figured if my parents, who both had government jobs dealing in finance and had worked in banking before that, were confident, it would work out. This was also an era when some people were making small fortunes flipping houses. I figured I could live in this place for a few years, move if I had to, and maybe come away with a little extra money’
Remember the line, “I can always sell”? Boy that became a laugher.
This guy was speculating. And there’s a lot more of this than most think. For instance, the Sacramento landlord we have posting here, is a speculator. Why? Motivation. The rents are pitiful compared to what he borrowed. He has revealed that the big enchilada is selling. Again, to someone that will have to borrow his “small fortune”. Oxide is a speculator. Why? The goal is to sell to someone down the road for an amount a future Oxide admits could never afford. Just how that can be isn’t rational. But that is the nature of a mania.
How about the 60% of luxury NYC condos that are empty: speculators. The Miami multi-million$ airboxes: just gamblers. All this stuff about safe deposit boxes in the sky was BS. They are all gamblers plain and simple. The Sunnyvale neighbor who won’t sell because the shack is “too valuable”. The Boulder shacks that have become “collectors items”, even while 1,000 apartments sit empty. Well take that shack to the antiques roadshow, because I’d bet at the first sign of panic it will turn out like Toronto has.
The main thing to watch is speculative motivation. This should never exist on a lay person level in housing. It didn’t for hundreds of years. Now it’s a multi-billion dollar entertainment industry.
You call them speculators. We all know them as degenerate gamblers.
And like all gamblers, you never hear about the losses.
“Degenerate gamblers” doesn’t scratch deep enough. They are so sure they will win they are gambling a penny down and a dollar on credit.
Like Jingle says he’s making 30% on his penny.
My current leverage is under 50% on my portfolio. I always put 25% down when I buy.
I bought housing no one wanted, no one could buy and provided rental homes for people needing a place to live. I never raise the rent on existing residents and the average occupancy term is over 4 years.
Cash flow is King. I mentioned the other day it is not the best economic decision to sell, but we want to move soon. Investing in real estate during the Downturn has been the best decision of my life.
“people needing a place to live…”
Oh. I thought you did it for the appreciation.
“I bought housing no one wanted, no one could buy and provided rental homes for people needing a place to live.”
St.Peter will certainly admit you.
I purchased the houses because they were great investment opportunities that were laying fallow. It was a win/win all the way around. I bought them for the cash flow. People were able to have a great place to live. If they appreciated, that was icing on the cake.
I publish the results here because some posters espouse that buying real estate is always a terrible investment and you will lose money. I show that is untrue.
The other week while I was waiting for my car’s tires to be rebalanced and rotated, there was housing chat in the waiting room. HGTV was on the TV and people were discussing the local housing market in excited tones. And older woman, probably a senior was saying she kept losing bidding wars but finally was able to close, but that there was some serious remodeling needed, which was in progress.
When asked what I thought, all I said was “Remember after the previous crash, how you couldn’t give a house away? It’s going to happen again.”
The waiting room became very silent.
I saw one about a year ago. It was a military couple in Hawaii looking at condos “because it was all they could afford”. They went into a 1970’s airbox priced at $400,000 and the wife immediately ran into the kitchen and started gushing about a $40 faucet on the sink.
To me those are the saddest.
The “military” dude should know better.
He will likely be ordered to move to another base in 3-5 years. That is life in the military. And he should know that better than anyone.
There is no way his salary will cover the mortgage, let alone the loss when he has to sell.
A one star general make about $140,000 base pay per year. Add in Housing Allowance and some special pay, maybe he is at maybe $170,000 per year.
And he could barely afford to buy that place.
No chance for a NCO or a mid level officer.
But I see it all the time.
They turn into long distance landlords with no money and lots of frustrations.
Yeah, but the government has a program to cover military shack losses in some cases.
‘Looking back, it’s easy for strangers to armchair quarterback my path to financial ruin’
And consider that in the back of most people minds, they know they can toss the keys and nothing bad will happen:
‘I would be fine with foreclosure, even though that would wreck my credit, simply to move on and extricate myself from this mess’
Wreck your (probably already wrecked) credit for what, 3 years?
“How long do you have to wait to get a FHA loan after a foreclosure?”
“Waiting Period. Wait three years before applying for an FHA loan. This is lenient compared to conventional lenders who typically require you to wait seven years after a foreclosure.”
6 Tips For Boomerang Buyers Of Homes | Bankrate.com
http://www.bankrate.com/finance/mortgages/tips-boomerang-buyers-homes-1.aspx
Folks in the housing biz love people who want to buy homes. And these days, many real estate and mortgage brokers feel especially fond of so-called rebound or boomerang buyers: people who lost a home to foreclosure, but are now ready to buy again. … Getting a mortgage after foreclosure. FHA loans after foreclosure.
“Wreck your (probably already wrecked) credit for what, 3 years?”
That’s the line that stood out for me. Coulda walked away years ago and been years into his next underwater adventure by now.
“Wreck my credit”
What does this dude need good credit for anyways? So he can go out and buy another overpriced house?
When you can’t have something, you want it more. I’ve seen this work on toddlers. The father (a marketing professional) wanted his daughter to eat something. She didn’t want to. He took it away and told her she couldn’t have it. She then wailed and reached for it. A truly fascinating experiment.
True.
In this case, that father is doing his daughter a great disservice. A whiny, needy consumer in training who reaches for something she really doesn’t want or need.
A misguided strategy for getting a tot to eat something.
“the wife immediately ran into the kitchen and started gushing about a $40 faucet on the sink.”
https://www.youtube.com/watch?v=6iEEbYIWhxM
I learned that the type of doorknob installed on the front door of a house can make or make-or-break a first impression.
If the doorknob feels, er, wimpy then the first impression of the house will not be favorable. If the doorknob has a solid feel to it then the first impression will be favorable.
Same rule goes for the “heft” of the door. If the door has a solid, hefty feel then the first impression of the house is favorable, if not then it tends to be un-favorable.
Think “castle”; If one thinks - thinks deep-down - of his home as his castle then he will want the door of his castle to be solid and strong and he will want the doorknob on his door to be solid and strong.
There are numerous real estate gamblers who post here regularly, and exponentially more gamblers who read the HBB regularly yet never post.
There are times when I sit back and laugh about how often the “Realtors Are Liars” line appears here, without a single comment about willing accomplices. Not all of a realtor’s customers these days are easy marks. These days, the percentage of easy marks is likely lower now than it was two years. Criminality is up.
There are plenty of individuals out there in collusion with realtors. Some participate on this board. Behind the scene deals, screwing others out of offers. You name it, it’s happening.
If anyone here doubts that, then they are fools.
Realtors are liars.
We constantly comment about bad decisions buyers make. What on earth are you talking about?
And we have also talked about, and Ben has posted about: money laundering through housing, crime syndicates who buy houses from each other and collude with willing appraisers to inflate the value of homes and obtain money from banks and then let the houses go into foreclosure, etc. etc.
But in the end, realtors really are liars. They’re drug pushers selling fraudulent, ersatz merchandise.
The typical house buyer in a bubble is also a fraud, buying what he cannot afford, expecting the “appreciation”. Who better to facilitate the fraud than a Realtor.
I thought I was quite clear in what I was talking about.
There are many, many people on the take, including “investors” and other “buyers”. A sizeable number of these people are individuals — not realtors, banks or hedge funds. Some are every bit the liars and criminals we often chide.
Some are the 2010s version of slum landlords, screwing their tenants with granite counter tops and/or Section 8 rather than faulty pipes and no heat.
Where’s the culpability of this group of individuals? Where’s the discussion?
Years ago, apparently there was some talk here about Casey Serin. Not much since.
I wonder why.
This is a good point. In fact I’d argue that anyone who buys a place and is counting on selling it for more than they paid is a speculator. They’re guessing that home values will be higher than they are today regardless of when they try to sell.
Which is a very strange notion considering housing depreciates rapidly.
That’s even more crazy. Not only do they think they can sell for a profit later, but that they can do so when the house is in worse shape than when they bought it. Or they think they can renovate and then double the money they put in when they sell, just like on every HGTV flip show.
Does it really qualify as speculation if you buy a condo to live in?
His wasn’t the best decision due to his likely continued moderate income, but none of us know the future of our careers, industry, the housing market or need to move for other reasons like meeting a mate who lives elsewhere. We’re deluding ourselves if we say we do. He bought the condo to live in, not to flip or become a landlord. He mulled over some worst-case scenarios and then purchased. His assumptions were off.
Hey Ben, I read this blog religiously. I’m an RN, and I work with lots of travel RNs who go around the country for 3-month gigs. Lots of them are truly mobile (read: they live in RVs and have no house). It’s an interesting lifestyle and they tend to do pretty well since these contracts pay well. Maybe the most valuable arrangement they have is they are not tied to any one location, so they can move to where the work is.
Anyway, I have come to believe that electric RVs could pose a serious threat to the housing industry. I think we could be entering an age of digital nomads. These hurricanes, floods, and earthquakes make me seriously consider the tail risk of plunking down most of my life savings in something as fickle as real estate.
If there were to be built a Tesla-like RV on the chassis of a sprinter van, I know tons of techies who work in the bay area who would rather buy a compact RV instead of burning $3000 for a room in San Francisco. Just saying.
I totally get it. But you still have to park it somewhere. And the locals carrying the tax load will want you to ante up if you’re going to park in their community. So my prediction is you’ll still have to pay up.
The beauty of a small sprinter van-like vehicle is that it can be parked anywhere and doesn’t need to hunker down at a RV park. These mammoth RVs are not a good bargain because they require RV hookups, and RV park fees aren’t cheap.
There is a Norwegian guy that is semi-famous (Bjorn) in the Tesla world as he travels around the country side talking up the praise of EVs. He sleeps in his Tesla, and it works! But if someone could come up with a small car that was inconspicuous, it could be parked in 24/7 places with no needed hookups. This, in my opinion, is how home ownership could be side stepped.
Sleeping in a car. That is not living, that is just surviving.
There is a very big difference between going around the country in an RV (which, obviously you would sleep in) and sleeping in your car.
I have a friend in a small town in coastal Massachusetts who commented to me over the summer about a few people he saw sleeping in cars every night. Two women he said appeared to be in their 70’s spent every night this summer sleeping in a beater. One of them would stay awake and watching the street until it got late enough no one was likely to disturb them.
I’d call that just barely surviving, and hardly an adventure or something someone would write a blog about.
Airbnb has made the housing situation in vacation spots way worse than it ever was.
October 1st approaches…
It will sink in to the markets and investors.
Especially the housing market.
God Bless DJT.
Dumb question of the day:
What do October 1 and DJT have to do with the housing market?
A good article on it:
https://wolfstreet.com/2017/09/20/this-fed-is-on-a-mission/
It’s another head fake.
Just who is going to but all those bonds?
After reading the article, my takeaway is that if you’re going to hold bonds, then you’re better off holding shorter length maturities and a shorter duration.
If the Fed is not going to go out and buy new bonds then it seems to me that prices of bonds fall and as a result yields will rise.
With the short maturities and durations, you’ll be able to reinvest your interest coupons and maturity payments at a higher rate than the maturing bond. If you’re holding low rate long term paper, then you’re holding the bag.
This may be a good time to take some chips off the table.
‘We are supposed to be in rehab from our housing binge of ten years ago, the one that nearly bankrupted the country. We are supposed to be in a state of contrition. But our national love of HGTV suggests that the dream won’t die. The longing it addresses is impervious to market corrections, or personal financial realities’
Recall that the “aggressively priced” Sunnyvale shack recently sold for almost $800,000 over asking, the UHS mentioned the buyers did so for “the appreciation.” Speculative motivation. And in 2005, the bay area newsgroup approached then SF Fed chief Janet Yellen and asked if it was a bubble. She said no - big surprise. Yet even as the Mercury News wondered about this sale and “what does it mean?” Note that no one in the media asked the current SF Fed chief about a bubble.
Was Mel Watt available for a comment?
The longing it addresses is impervious to market corrections, or personal financial realities
This was one of my favorites.
No. No it’s not. Just let the market actually correct with no backstop and watch how much learning occurs. This behavior was engineered.
“This behavior was engineered.”
Damn straight it was. By globalists.
What better way to redistribute wealth and induct several hundreds of millions worldwide into perpetual subservience?
Slavery sucks. Get off the globalist plantation if you’re on it, stay off it if you’re not.
“We are supposed to be in rehab from our housing binge of ten years ago, the one that nearly bankrupted the country. We are supposed to be in a state of contrition. But our national love of HGTV suggests that the dream won’t die.”
Stupid stays as stupid is.
‘Real estate agents insist a fall in profits in this year’s finale of The Block NZ is proof the Auckland housing bubble has burst. Winners Andy and Nate claimed the highest profit of $31,000 in last night’s dramatic episode, as well as $100,000 in prize money. That’s just a fraction of the profits made in previous years last year’s winners made $380,000, not including the $100,000 bonus.’
‘Jeremy O’Hanlon from Homes.co.nz says what viewers saw last night is also happening in auction rooms across the city. “It shows that there’s a bit of a slowdown in the market. It’s harder to get buyers into the room at the moment.”
‘Real estate agents told Newshub they were impressed The Block NZ homes managed to sell at all, as buyers are taking a wait-and-see approach just days out from the election.’
‘All four Northcote houses fetched between $1.2 million and $1.3 million each, slightly higher than estimates for other homes in the Auckland suburb.’
‘The Real Estate Institute says the bubble hasn’t burst, but the market has flattened. “I think it’s a sign things have stabilised in Auckland, particularly with the price and the volume,” says REINZ chief executive Bindi Norwell.’
‘Andy and Nate, the dads from Waikato, reckon it means Aucklanders should move south. “I guess what it indicates is that everyone’s got to move to Hamilton - the city of the future,” says Andy. “It’s going well in the ‘Tron’, eh … Cambridge is going off,” adds Nate.’
This was a fascinating event. I read multiple articles with a mood like they had all just watched a puppy get drowned on live TV.
More like how the fake legacy news media reacted on November 8, 2016.
More like how the fake legacy news media reacted on November 8, 2016 ??
While Russia Cheered…
Russia Cheered…
So far they’d be right and you’d be wrong. Time will tell.
I wouldn’t like to be in a scapegoating war to cover up lies and corruption in DC.
Stomp those feet! Stomp them!
Eight months after the election you still have no clue.
And you will wonder why Trump won again in 2020 in an even bigger electoral college landslide.
And why the democrats still have taken the senate or the house.
If only there was a democrat in the White House for eight years protecting our voting system…
“We were frankly more concerned in the run up to the election to the possibilities of vote tampering, which we did not see evidence of, and we’re confident that we can guard against.”
– obama, December, 2016
++++++
While Russia Cheered…
The Russian’s aren’t doing a whole lot of cheering these days. I seem to recall an insult hurled our way from the Kremlin, about Americans not knowing the difference between Austria and Australia, and they aren’t backing Trump’s stance against NorKo.
If they cheered the Screecher’s defeat, it was probably out of relief, knowing how dangerous that demented woman would have been in the Oval Office.
it was probably out of relief, knowing how dangerous that demented woman would have been in the Oval Office ??
LOL. So somehow Trump is the passive alternative ?? The guy is a big bag of methane gas. Here’s the latest from Russia;
Russia issued an unusually blunt warning to the U.S. that it will retaliate against American-backed fighters in Syria, accusing them of firing on government troops battling for territory in a strategic region bordering Iraq.
Russian special forces are fighting there alongside the Syrian soldiers, and any further attacks on them “will immediately meet with retaliation,” Defense Ministry spokesman Igor Konashenkov said Thursday.
Is this something new dave, that the Syrian rebels are actually fighting against the Syrian government troops? Somehow I thought this had been going on for more than 8 months.
Don’t confuse partisan dave with facts.
Not having cable, and rarely watching over the air TV, I simply have no real concept of what kind of garbage captivates the hoi polloi these days.
I couldn’t think of anything more boring than watching a show about house flippers. Yet that now apparently has surpassed the amateur singer shows and the reality TV shows in popularity, which were already mind numbing. Just the thought of New Zealanders faithfully tuning in to find out who is the #1 house flipper in Auckland is simply discouraging, if not outright scary.
“I figured if my parents, who both had government jobs dealing in finance and had worked in banking before that, were confident, it would work out. This was also an era when some people were making small fortunes flipping houses. I figured I could live in this place for a few years, move if I had to, and maybe come away with a little extra money.”
You wouldn’t believe the debt loads of some of the closings I see across my desk from those in the “financial investment,” “banking” or “Advisory” type businesses. These cats live large but are broke. The next time I have a financial advisor hit me up for my investments etc. I swear I will tell them, “show me your debt load first.”
I will keep beating the drum: People are underestimating the debt loads out there in housing and in particular the leverage in flipping. I close them. I see it. And the cash out refi’s taking place? Just moving debt onto housing increasing CLTV’s when the CLTV’s should be lowered due to either equity position or reducing debt load from earned income. Nope. Put my Nordstrom, Citi, MasterCard, GM Finance, BMW Finance, Lowe’s, Macy’s, Student loan debts, etc. onto the house.
This is the SAME debt load situation as before. Same.
‘moving debt onto housing increasing CLTV’s when the CLTV’s should be lowered’
Similarly, when house prices are getting to nosebleed levels, out comes more drip-drip lower standards and easing of conditions. In other words, just when risk is moving higher, it gets easier to borrow.
The number one obstacle for short-term real estate investors is fix and flip funding. Investors need capital to purchase and renovate a house before they can flip the house for a profit. Luckily, there are four fix and flip financing options available to flippers.
Jun 13, 2017
Fix and Flip Loans: The 4 Best Fix-and-Flip Financing Options
fitsmallbusiness.com/fix-and-flip-loans/
How to Get a Loan to Flip a House | Investopedia
http://www.investopedia.com/articles/investing/012617/how-get-loan-flip-house.asp
Jan 26, 2017 - Traditional crowdfunding sites like Prosper aren’t geared toward buying and flipping houses; Prosper’s maximum loan amount of $35,000 is intended for projects like home renovation, debt consolidation and small business funding. That’s where specialty crowdfunding sites for residential real estate flippers come in.
Loans for Flipping Houses: What Works and What Doesn’t - The Balance
https://www.thebalance.com › Personal Finance › Banking and Loans › Home Loans
Feb 23, 2017 - If you’re flipping houses, the lender wants to know that they can sell the house quickly to recover their money (like other lenders, private lenders will have a lien on the property, allowing them to take possession of the property and sell it if you don’t repay the loan).
Fix and Flip Loans: The 4 Best Fix-and-Flip Financing Options
fitsmallbusiness.com/fix-and-flip-loans/
Jun 13, 2017 - See the 4 top options for fix and flip loans. An in-depth guide to fix and flip financing with tips from the pros and resources for real estate …
Untapped Sources of Government Funding for Real Estate Investments
connectedinvestors.com/blog/government-funding-for-real-estate-investments/
There are little known sources of government funding for real estate … Many folks talk of hard money financing, or self-directed retirement accounts, or “one-off” investors. … Investor 101: Funding Fix and Flip Projects; Making The Jump From …
How to Get a Loan to Flip a House | Investopedia
http://www.investopedia.com/articles/investing/012617/how-get-loan-flip-house.asp
Jan 26, 2017 - House flipping is at its highest level since 2007, thanks to rising home prices and the increased availability of financing. What’s more, a limited …
How to Apply for a Government Grant for Flipping Houses | House
https://www.pinterest.com/pin/259449628509511561/
Feb 7, 2017 - Flipping houses, which is the process of buying a home that is in less … http://www.ehow.com/how_4740166_apply-government-grant-flipping-houses.html ….. Debit cards loans is the finest hassle free solution when you need …
“Student loan debts, etc. onto the house.”
Not a bad idea, actually. Since student loan debts are not dischargeable in bankruptcy, might as well pay them off in such a way that they’re “on the house”! Yes, I know it’s a transfer, but removes some of the danger.
You’re in Seattle, where the debts loads are some of the largest in the nation. The “rich techie” supporting high housing prices meme is a lie, more like declining wages in the sector due to H1Bs.
Every time I visit the division’s main campus in Santa Clara, I am blown away by the number of Indians and other H1-B visa holders. It is simply staggering and I’m sure it’s the same at other companies.
What is even more interesting is that most of these H1-B’s have a mortgage, even though their visas are, at least theoretically, temporary. I know one poor guy at the Broomfield campus who was axed on Sept 1 (our division dejobbed over 2000 people that day). In theory he has until Nov 1st to find a new job, otherwise his visa expires.
In theory he has until Nov 1st to find a new job, otherwise his visa expires.
Ouch—only two months, and then a house that he would have to sell…
our division dejobbed over 2000 people
Heh, I’ve never heard the term “de-jobbed” before!
From the first link:
‘Today, House Hunters, like all HGTV shows, follows a formula as inflexible as the Latin Mass. You meet the buyers (usually a couple), learn where they live and what their budget is, and watch as they describe marriage-busting differences of opinion in a way that makes them look like they’re choosing what to watch on Netflix. He’s the breadwinner who wants to live close to work; she’s an at-home mom who wants to live in a far-off suburb. She’s a spender; he’s a saver. What they need is a post-nup; what they get is an expensive house an hour from his job, because HGTV women tend to win these quarrels, although he will usually get some concession — a north-facing patio so he won’t sweat like a dog when he’s out grilling; a three-car garage. By the time we bid them farewell, they’re in the great room, sipping white wine from giant, reality-TV wineglasses and purring like kittens.’
On this:
‘because HGTV women tend to win these quarrels’
And we thought the Suzanne ad was manipulative.
Except, the Suzanne ad never gets OLD!
https://www.youtube.com/watch?v=20n-cD8ERgs
Admit it HBBers, it still makes you smile!
‘Jenelle Evans’ dreams of happily ever after seem to have been shattered! The Teen Mom 2 star called off her wedding tonight in a dramatic fight with fiancé David Eason moments before her rehearsal dinner, RadarOnline.com can exclusively reveal.’
‘The mother of three was livid that her baby daddy worked on their home all day instead of pampering her on the first day of their wedding weekend, an insider told Radar.’
‘The 25-year-old proceeded to slam her engagement ring on a table in the backyard of her North Carolina home in front of shocked guests. She then vented to a friend during the epic meltdown, referring to her bitter estrangement from mother Barbara.’
“I said for two hours I wanted him to care about me, talk to me about my mom situation. I don’t have a mom coming tomorrow, he has a mom. I want his attention This is my house, and he does not give a f**k,” she fumed.’
‘Eason defended himself to Radar. “When I’m out here working constantly, every f***ing minute of the day, she’s sitting around,” he said. “This place looks different every day. It’s all because of me. These people wouldn’t be here if it wasn’t for me.”
When I was in the Army some guy put this on the barracks bulletin board:
The world’s shortest fairy tale.
Once upon a time, a man asked a woman to marry him.
The woman said no.
And the man lived happily ever after.
I’m not going to let them drag me into an anti-marriage thing. I am at a disadvantage because I don’t watch these programs, but I have seen bits where they play up the tension between couples. The pointed question from the UHS, the shot of ones face, then the other. You could cut the manipulation with a knife. I get this message about who gets to decide what and these shacks are nests, dang it. Now who lays the eggs around here? It goes way past the Suzanne ad.
This is some weird crap:
’slam her engagement ring on a table in the backyard of her North Carolina home’
‘I want his attention This is my house’
I hear ya. I am very pro traditional marriage.
But there are plenty of crazy women out there. And there are decent dudes who marry them (usually for then hot wife and hot sex) despite all the warning signs.
There is not much you can do with a buddy in that situation except have a beer and laugh about it.
As a landlord I can say there are plenty of crazy guys out there as well.
How many get their social cues from TV, social media? So much “deviant” behavior has been promoted via the idiot box and we’ve seen it spread like wildfire through society, so perhaps even a person with a “normal” disposition feels its socially and culturally acceptable to act like an entitled fool over the the most insignificant slight due to this social programming.
Look at the whole tattoo/body modification phenomenon, and the ghettoization of culture that is worldwide. Media promotes that 24/7, little to no redeeming value in any of it.
a person with a “normal” disposition feels its socially and culturally acceptable to act like an entitled fool over the the most insignificant slight due to this social programming.
The older I get, the crazier the world and its people seem to be.
‘I want his attention This is my house’
She might not be getting his attention moving forward, but she will be getting a child support check every month.
As a landlord I can say there are plenty of crazy guys out there as well.
Thank you. Listening to some men these days, you would think all women were psychos. Believe me, most women know that females can be plenty difficult, and some of them are truly terrible, but there is plenty of bad behavior on the part of men.
And all of this stuff about how the family courts are anti-men is B.S. as well. I worked at a law firm and never saw a single divorce case where a man got screwed. I’m sure it occasionally happens, but it’s more of a meme that’s gotten out of hand by being repeated over and over.
I’ve met my share of guys who had to handover more than half their income to their ex
Define “get screwed”.
Eason may have just dodged a poison tipped bullet.
“Except, the Suzanne ad never gets OLD!”
What?… (clapperboard, the rattlesnake twitch). Guy folds like a bed sheet.
Battery Park Brooklyn Housing Prices Crater 20% YOY
https://www.zillow.com/battery-park-new-york-ny/home-values/
OMFG… not the pied-à-terre in The Battery?!
Oh wow…
++++
Federal Reserve to Launch Its Own E-currency: Fedcoin
EconomicPolicyJournal.com | September 23, 2017 | Robert Wenzel
The U.S. Federal Reserve will not only issue its own cryptocurrency but will also make sure Americans use it, according to Doug Casey.
“To start with, I suspect it’s going to be a parallel currency. Perhaps usable just within the U.S. which, in effect, would be a form of foreign exchange controls even more effective than the inability of Americans to open up foreign bank and brokerage accounts today [due to monetary control through FATCA]…I think it’s a near certainty that they’re going to do something like this and soon.”
They will call it Fedcoin.
David Andolfatto, vice president at the St. Louis Fed, proposed the word “Fedcoin” in 2015. He’s spoken publicly about this multiple times since then, and says Fedcoin could give the central bank an “added (policy) tool.”
It will only work if they phase out paper money.
I don’t think that would be too difficult at this point. Everybody I see uses cards for everything.
What’s the difference between Fedcoin and Uncle Buck?
Your Fedbit wallet can be really really small.
u will b pushing up tulips before the balance sheet is zero
I would guess that I will be pushing up daisies before your balance sheet is positive!
Im back in the black thx to janet yellen.
“Im back in the black thx to janet yellen.”
Ditto for a co-worker.
He bought a Detroit REO for a great discount, but the area continued its downward spiral. He rented the place for five years waiting for a buyer, but it wasn’t until the buyer down payment scams came along that he could unload the place. In the end he had to bring $5k to the closing table.
Realtors are liars.
u r all slaves to the dollar
“Eleven years later I’m stuck in debt, besieged by bank fees, and unable to get myself out of what has become a life-altering real estate clusterfuck. Even as the country recovers from the crash of 2008, the financial crisis is still dragging me down.”
Sounds like SO MANY people in the Northeast who bought during the co-op conversion frenzy of the 1980s. They were stuck living in one-bedrooms with two kids saving up money to bring to closing for years and years and years.
After that experience, I thought “gee that will never happen again.”
And this is why you need physical currency. Because a totally electronic system (a “cashless society”) goes away when the power goes away.
Puerto Rico governor: Power could be out for months
By Holly Yan, Steve Almasy and Cassandra Santiago
CNN
September 21, 2017
http://www.cnn.com/2017/09/20/americas/hurricane-maria-caribbean-islands/index.html
time to peddle some generators
Or the telecom goes away. People who have lived in Brooklyn a long time don’t keep much stealable cash around — and ran out after 9/11. Had to live off credit from the local stores until the credit card system came back up.
If the numbers are to be believed, some 30-40 percent of American adults do not have bank accounts or credit cards.
If their access to funds is shut off, what do they do? How would they pay their rent or mortgage? Do mortgage companies and landlords accept payments from prepaid store cards?
What are the implications if they do so? A cashless society certainly demands they would have to accept them.
Does it even matter?
This is an interesting thread.
“Power could be out for months”
Well schitt… there goes sanitation.
Does anyone know what the name of this song is or what it is from?
I’m thinking early to mid 70s game show but I can’t remember and it’s starting to piss me off.
https://www.youtube.com/watch?v=BaxQ0pywPUQ
I remember it from the Muppet Show (late 70’s?), try searching for ‘Mah Nà Mah Nà’ by Piero Umiliani.
Thanks Sketch
I would have been 9 but I do remember watching the The Red Skelton Show.
Mah Nà Mah Nà
From Wikipedia
“Mah Nà Mah Nà” is a popular song written by Piero Umiliani. It originally appeared in the Italian film Sweden: Heaven and Hell (Svezia, inferno e paradiso). It was a minor radio hit in the U.S. and in Britain, but became better known in English-speaking countries from its use in a recurring blackout sketch for the 1969-70 season of The Red Skelton Show first airing in October of 1969.
Sesame Street producer Joan Ganz Cooney heard the track on the radio and decided both it and a shaggy puppeteer named Jim Henson would be perfect additions to the show. First performed by Jim Henson (Kermit et al) Frank Oz (Fozzie Bear et al) and Loretta Long (Susan) on the fourteenth episode of the long running children’s show broadcast on Nov 27 1969 the song entered the public consciousness of the latter half of Baby Boomer children. The following Sunday when Henson and His Muppets performed the song on the Ed Sullivan Show it became an instant classic. Seven years later the song would also be part of the premiere episode of The Muppet Show in 1976 and was additionally featured as part of the background music in many sketches on Benny Hill Show during the same period.
https://en.wikipedia.org/wiki/Mah_N%C3%A0_Mah_N%C3%A0
It’s kinda sorta like a lot of ad jingles.
What you need is another earworm, to push that one back.
https://www.youtube.com/watch?v=1VM2eLhvsSM
I think it could be time to gut the house and put in fresh everything.
I agree.
That granite countertop by the way….it’s soooo 2005.
And it certainly doesn’t match that pea-green, black, gray and white horizontal tile backsplash mess that you recently installed.
Wow…first time I couldn’t pick and choose what to quote. I’d have to paste the whole article. So many classics…