Luxury Apartments For Folks Worried About The Apocalypse
A weekend topic starting with The Real Deal. “In March 2013, financier Martin Zweig’s widow Barbara put her penthouse at the Pierre Hotel on the market for $125 million. This August, four years, several brokers and several price cuts later, it finally sold — for $44 million- one of the biggest discounts the market has ever seen. Finding the right asking price in Manhattan real estate can feel like a game of pinata, and every miss is costly. If Zweig had listed her pad for $44 million four years ago, sold it right away (assuming the demand was there) and put the money in an S&P 500 ticker fund, she would be sitting on around $70 million today.”
“Distinguishing a $50 wine from a $500 wine may be tricky, but telling a a $5 million pad from a $50 million one is something most buyers can do. And even if they can’t, they usually hire brokers who can. ‘I don’t think overpricing is effective in any price range,’ said Elizabeth Sample, a top luxury broker at Sotheby’s International Realty. ‘We all lost listings recently that we just couldn’t take and we’re just walking away from,’ Jade Mills, one of the top agents in Los Angeles, recently said.”
“In a 2001 study, economists Paul Anglin, Ronald Rutherford and Thomas Springer found that a 1-percent increase in a property’s price increases its time on the market, on average, by 1.3 percent. Time on the market costs money. It can also create luxury real estate’s version of a deflationary spiral: if an apartment gets price chop after price chop buyers may be more inclined to wait and see if it gets another.”
“‘It’s a Zillow world and the price history of a property is akin to getting a tattoo,’ said Chad Roffers, chair of luxury real estate auction house Concierge Auctions.”
“We take it for granted that homes are sold through the song-and-dance of ask and offer, while auctions are for bankruptcy. That wasn’t always so. As TRD’s Adam Pincus pointed out, in the 1880s, a lot of New York properties were sold via auction at the Real Estate Exchange and Auction at 26 Liberty Street. Brokers and asking prices didn’t really take over until the turn of the century.”
From The Healdsburg Tribune in California. “Some in Healdsburg would like to tax the owners of homes that sit vacant most of the time, but California voters have made that a difficult task. At Monday’s Healdsburg City Council meeting, a discussion on whether to levy a tax or assessment on ’second homes’ began with a primer on property tax law from the city attorney. Councilmember David Hagele noted that when he campaigned for a city council seat last year, ‘if you knocked on a door on Tucker Street, you knew that the next voter would be six doors down.’”
“‘This issue has a tangible effect on the quality of life in our community,’ said councilmember Joe Naujokas, adding that ‘we need more data,’ about how many vacant homes are in the community, especially after members of the public have cited figures ranging from 10 percent to more than half of the community being vacant homes.”
The Vancouver Sun in Canada. “The author of Millionaire Migrants was one the first to provide evidence that the foreign real-estate dreams of China’s wealthy have arguably had more impact than anything on Metro Vancouver’s housing unaffordability. UBC geographer David Ley, along with SFU’s Wu Qiyan, told me early this year the city’s real-estate bubble would be punctured when leaders of the People’s Republic of China further restrict money leaving their country.”
“Now strong signs are appearing that Metro Vancouver’s real-estate balloon has indeed been pricked by China’s heightened capital controls. Demand for multi-million dollar dwellings in Metro Vancouver is falling. ‘All the high-end stuff is sluggish,’ says Vancouver realtor-analyst Steve Saretsky.”
“Real Estate Association of Greater Vancouver figures show the median price of a detached home is down more than $500,000 since February, to $1.7 million. Veteran Canadian real-estate data analyst Stephen Punwasi also has little doubt ‘Chinese capital is having a tougher time getting out of China’ since leaders introduced tighter controls in January. ‘Vancouver locals selling $3 million bungalows are going to have trouble finding an alternative to foreign urban land buyers, so prices need to be slashed,’ Punwasi said.”
“Even though Canadians can be forgiven for being uninterested in the macro-economics of China, it’s worth knowing its authoritarian leaders motives. They want to keep more capital in China to bolster monetary reserves and secure the country’s extraordinarily high volume of loans. As Saretsky says, China is trying ‘avoid a run on its banks.’”
From The Florida Times-Union. “The sky is falling. The sky is falling … or probably will any day now the way things are going. Cat. 5 hurricanes, 7.1 and 8.1 magnitude earthquakes, a total solar eclipse, terrorist attacks and threats of nuclear war with North Korea have me shaking in my flip flops.”
“I’m not the only one worried about the apocalypse. Doomsday writer David Meade predicted the world would end Sept. 23, but later backtracked that claim, saying astronomy and the biblical Book of Revelation predict Oct. 17 will start a seven-year cycle that will bring about the end of the world. He cited hurricanes Irma and Harvey as omens of things to come. ‘The world is not ending, but the world as we know it is ending. A major part of the world will not be the same the beginning of October,’ he told the Washington Post. No kidding!”
“On Jan. 1, followers of the Sword of God Brotherhood prepared for Armageddon by climbing a mountain in Bugarach, southwest France, where they believed aliens hidden inside the rock would save them. Larry Hall had a better idea. In 2008 he bought a retired vertical, underground missile silo and converted it into luxury apartments for folks who are worried about the apocalypse. His survival condo project can withstand catastrophic events, can house a dozen families, and has food, fisheries, gardens and a pool. A second silo is due to be finished fall 2018 — sounds like a hotel chain time-share to me.”
“Nevertheless, as author Stephen King said, ‘There’s no harm in hoping for the best as long as you’re prepared for the worst.’”
“I better get busy working on my bucket list — write a best-seller; fill my sharks teeth jar to the top; clean the house — nah; research the family tree; shred 40 years of tax records in case a post-cataclysm extraterrestrial or zombie tries to steal my identity, and shed a few pounds, because if I go, I want to go lookin’ good.”
“On the other hand, as Erma Bombeck said: ‘Seize the moment. Remember all those women on the Titanic who waved off the dessert cart.’”
‘Real Estate Association of Greater Vancouver figures show the median price of a detached home is down more than $500,000 since February, to $1.7 million. Veteran Canadian real-estate data analyst Stephen Punwasi also has little doubt ‘Chinese capital is having a tougher time getting out of China’ since leaders introduced tighter controls in January. ‘Vancouver locals selling $3 million bungalows are going to have trouble finding an alternative to foreign urban land buyers, so prices need to be slashed’
It sounds like these Chinese people fleeing their country are more of a doom and gloomer than anyone I know. What are they afraid of?
Not only is the easy money gone, it’s negative appreciation time, so like rats fleeing a sinking ship they’re bailing out in droves.
Negative appreciation at 40:1 leverage…
Not going to give it away!
Two interesting anecdotes in the past 12 hours.
Was reading a blog devoted to real estate investors - mostly hardened ones who have been to a few rodeos. While we hear about how RE loans are much better compared to bubble 1.0 - income is actually verified and credit scores are on average better (although as we know being relaxed constantly), 90% LTV is at its most pervasive at any time in history. I thought this was . . . interesting.
Second point but unrelated to RE, more bubble psychology related. Heard a commercial on the radio last night advertising an upcoming seminar at a major sports arena devoted to cryptocurrencies. The voice breathlessly stated that people are making millions in crypto, learn all about how to get in on it.
I might go, I just hope between workshops I can grab some lunch - kinda in the mood for a gourmet grilled cheese, lol!
“The voice breathlessly stated that people are making millions in crypto, learn all about how to get in on it.”
Create your own currency, convince millions of folks to buy it, and make millions of dollars!
Do they offer similar seminars on starting your own religion?
Well of course…
How To Start Your Own Religion
By John Howell, May 20th 2013
If you’re one of the growing number of young adults who identify as “other” when asked about religious affiliation, this is for you. Unlike those who claim to be atheists, you are honest enough with yourselves to realize that as a human being you are hardwired to be religious, but at the same time you don’t like the standard choices on the menu.
The best thing about being a young adult right now is that you, more than any previous generation, have the freedom and the resources to create your own religion. So, let’s get started.
…
Why not start your own religion AND your own cryptocurrency at the same time. Or aim for the trifecta: add a start-up virtual cyberspace colony to the venture? Soon you’ll be swimming in the money your cult followers send you.
If you’re the priest of your own religion, can you collect that tax-free income in bitcoin?
Of course. Why else would you subject yourself to the hassle of death threats from followers of rival faiths?
‘if you knocked on a door on Tucker Street, you knew that the next voter would be six doors down’…members of the public have cited figures ranging from 10 percent to more than half of the community being vacant homes’
That’s some shortage.
Healdsburg is about 1hr North of San Francisco on highway 101. The Russian River runs through the town, and it is a very popular weekend/tourist destination in Sonoma County Wine Country. Very nice and pricey downtown square that caters to the weekend wine country scene - lots of great food/drink/boutique stores. They are shooting for a certain demographic.
It is not a surprise that some many houses are vacant - they are vacation homes. Property values are very high in this town, and either high income Silicon Valley folks buy them, or they were bought many years ago before the prices were out of reach for the 99%.
‘It is not a surprise that some many houses are vacant - they are vacation homes’
No they aren’t. This is mass speculation. Here I am having to post this - yet again. In 2005 I was living in Sedona and a California couple owned the house directly behind me. They would drive in every couple of weeks or so. Spend the entire weekend raking and sweeping. Then pack up and make the long drive home. There are plenty of nice resorts with better views and things to do. Oh, but shack prices were through the roof! Sedona was the next Aspen, I was told, prices are up $10,000 a month, a UHS told me.
Then it fell, and what do you know, this couples house had a for sale sign in front of it.
Flagstaff has 24% “vacation” housing, even though the weather is miserable most of the year. Again, lots of California plates. They really don’t show up often. The city estimated these speculators spend just over a thousand bucks a year in the local economy. But man, shack prices are higher than ever, thanks to a very generous federal loan cap. Did you know second shacks get all the tax/loan guarantee bennies as a primary shack? Why it’s a no brainer!
Mel Watt thinks this is just dandy.
More to come - until 2019.
“Flagstaff has 24% “vacation” housing, even though the weather is miserable most of the year. Again, lots of California plates. They really don’t show up often. The city estimated these speculators spend just over a thousand bucks a year in the local economy.”
Ben, methinks you are giving these people too much credit. Are you sure they are even speculating?
I’d bet that may of these “speculators” from California are driven as much or more by hedonism than by greed. Nothing beats being able to brag and one-up your neighbors and colleagues whilst attending a soiree.
It’s why people love to tell people about their attending a wine tasting. No one gives a sh*t about their ability to swirl piss in a glass except them.
‘Nothing beats being able to brag and one-up your neighbors and colleagues whilst attending a soiree’
It comes down to motivation. My part time neighbors in Sedona could have bragged that they stayed at a different golf resort several times a year for less than the property taxes and insurance cost of a shack. And nary a rake nor broom did they lift, much less washing and changing sheets. I’m sure they did brag about their wise investment though, as those old shacks were selling for north of 500k about that time. Then it got cut in half and up goes the sign.
Yours is an interesting point, Ben.
And it underscores the dubious and depressing results of how we got to here from there.
“And so it goes” - Kurt Vonnegut
“second shacks get all the tax/loan guarantee bennies as a primary shack”
And the opportunity for leverage beyond the wildest dreams of most people. They put down less than $100k (usually way, way less) and the lender gives them $400k+ to play with. That kind of leverage in an eTrade account and they would be getting an unpleasant phone call from the margin department.
This point is worth underscoring. What other investment class can you get a third party to offer you 25:1 leverage to speculate? Especially since your financial risk is only your down payment, people probably roll the dice simply because they see themselves as having so little downside relative to the perceived upside.
There is no upside unless using DonkeyMath.
“…a California couple owned the house directly behind me. They would drive in every couple of weeks or so. Spend the entire weekend raking and sweeping. Then pack up and make the long drive home. There are plenty of nice resorts with better views and things to do.”
“Did you know second shacks get all the tax/loan guarantee bennies as a primary shack? Why it’s a no brainer!”
Why does Uncle Sam think it is a good thing for all these Californians to waste their weekends taking care of vacant houses in other places? Not to mention pricing out the local workers from the housing market?
I just don’t get the objectives behind our federal housing policy.
“I just don’t get the objectives behind our federal housing policy.”
Revenue stream for them while all the crime is ignored…… Until it implodes.
It’s the local govs (not the feds) who get the revenue stream in the form of property taxes. I wonder what would pencil out better: forcing the vacay houses to low-income housing and collecting less in property tax, or getting higher property tax from the overpriced vacay houses and providing services for the poor.
Gee, wine country!
Do they have candle shops there? I’d visit and spend money there if they have candle shops.
Is there a cupcake store nearby as well? Hope so. It’d make my day.
I despise haughty, snotty wine centers. Swarming with wannabes and jackasses.
And pirate costume shops! Halloween is right around the corner, Arrh.
Really? Wow. Can you imagine being surrounded by people wearing Bernie Sanders masks AND sharing endless observations about wine and pedigree?
That is a true horror.
For those who may have missed the inside joke:
July 2, 2008
From The Argus. “All hands on deck! The Tri-City area’s unique pirate store plans to abandon ship after nearly three years on the stormy retail seas. Owner Don Hatcher said SeaWolf Trading Co. will raise anchor by Aug. 31, when the store’s lease is up.”
“‘We did great the first year, but we’ve been in the swamp for the past year, ever since the foreclosures started,’ he said. ‘We started to immediately see sales start slumping. People come in the store and they’re like, ‘Why are you closing?’ I don’t know if people don’t see what’s happening around them.’”
“Rather than struggle against the tide, Hatcher said he decided not to sink more money into the niche business. ‘We knew going into this that any business is risky,’ he said. ‘We thought we’d try to create something fun in Fremont. A more traditional business would be able to weather the storm better.’”
“Hatcher also was a vendor at last month’s second Northern California Pirate Festival in Vallejo. He said plenty of people attended but seemed to spend less than at last year’s fest.”
“He plans to sell off the décor, including an elaborate treasure cave, as well as the discounted wares before the store is sent to Davy Jones’s locker. ‘At first it’s shocking, you know,’ he said. ‘At a certain point you just kind of accept it and make plans for the next step.’”
http://thehousingbubbleblog.com/?p=4706
The other articles are interesting too. Oh, the tales of woe in California. How soon they forget.
“Foreclosures in San Diego County hit a record 1,556 properties in May, while lenders started foreclosure proceedings by issuing notices of default on 3,139 dwellings.”
“About 2,600 Marin properties have been reduced in value in the county’s biggest reassessment purge of the past several years. ‘We haven’t had large numbers over the last two to five years,’ said Richard Benson, Marin County’s assistant assessor.”
“He said 475 property values were reduced last year, and 421 properties the year before that.”
“Levi Swift, president of the Marin Association of Realtors, was not surprised by recent reductions. ‘It pretty much falls in line with the reduction in property sales and values we’ve seen over the past year,’ he said. ‘It’s not a leading indicator certainly. It’s a lagging indicator, catching up with the reality we already know.’”
A comment I made:
Comment by Ben Jones
‘He plans to sell off the décor, including an elaborate treasure cave, as well as the discounted wares before the store is sent to Davy Jones’s locker. ‘At first it’s shocking, you know,’ he said. ‘At a certain point you just kind of accept it’
I’m as shocked as anyone Don. What with all the candle making shops closing down, and the used house sales people going out of business, and the St Joseph statues not selling as quickly as expected, I worry about the states economic competitiveness.
Nothing says success more than paying $14 for a burger and fries at a chain gourmet burger place…
Socialism is costly. $14 for a burger and fries is for the greater good.
Suck it up and quit your whining.
Because your betters say you should.
I rarely eat out though last month I had Subway once for lunch. A footlong vegetarian, drink and chips was $12. Seemed high, but I don’t do it often.
Socialism is costly. $14 for a burger and fries is for the greater good.
FWIW, chain burger prices soared into the stratosphere while wages were stagnant. I can still get a meal at Wendy’s for under $10. I generally find that places like 5 Guys or SmashBurger are better quality , but yeah, a meal there will set you back $14 or more. I can make a filet mignon dinner at home for less.
For other people, investing in a mortgage may be more affordable,” says Beverly Williams, who has been renting an apartment in the Port Tampa area for a decade.
Two years ago, Williams applied for a mortgage to see if she would qualify. Although pre-approved, she ultimately was turned down because her debts, including car payments, ate up too much of her income as a cashier.
Besides, she adds, “I want financial freedom. I don’t want to be tied into a 30-plus-year loan.”
Bless you, woman! You’ve seen the light!
http://www.tbo.com/news/business/realestate/in-tampa-bay-burdened-renters-abound-as-home-ownership-stays-low/2340026
The lie of the “pre-approved” mortgage scam.
+++++
“Although pre-approved, she ultimately was turned down because her debts, including car payments, ate up too much of her income as a cashier.”
When I was house-hunting, “pre-qualified” meant nothing and was handed out like candy. “Pre-approved” was very different. You had to hand over the paperwork first and they pre-approved your mortgage even before you found a house.
Even wonder why state and property taxes are so high and yet nothing works?
++++++
Welcome to the dysfunction of Illinois government
Chicago Tribune - Diana Sroka Rickert - October 6th, 2017
Except this building is dilapidated, many of the employees are political hires and the computers will never be repaired, ever.
And it’s all paid for by you, Illinois taxpayers.
“Welcome to state government,” said a new colleague, as we boarded the elevator for the 16th floor.
This summer I got to see how Illinois government works from the inside when I accepted a high-level position at the governor’s office.
Here is a taste of what I saw: The Thompson Center, where I worked, is a near-perfect representation of state government. It is gross, rundown, and nobody cares.
Despite the shoddy condition of the state — fiscally and otherwise — there is a disturbing sense of entitlement among some state employees.
Another government employee asked me to authorize a raise in excess of $25,000. This person was not a direct report, and we would not be working together. But she said, “I know that it can and has been done.” She then explained how to execute such a significant salary increase without raising red flags. (I rejected her request.)
We hear all the time that the government is bureaucratic and inefficient. Guess what? It really is. Shuffling the underperformers
Underperformers aren’t fired; they’re simply transferred to different positions, shuffled elsewhere on the payroll or tucked away at state agencies.
I also learned that state employees showing up to the office was no guarantee they would actually do their jobs.
One state worker seated near my team’s work area regularly brought her personal laptop to the office so that she could do things unrelated to her job without it being tracked on a state computer.
Throughout all levels of state government, what permeated the most was an overall attitude of defeat. There was no sense of purpose. No hunger to do more, push further or to succeed.
No acknowledgment that this is a state government that is ranked last by almost every objective and measurable standard. A state government that fails every single one of its residents, day after day — and has failed its residents for decades. A state government that demands more and more money each year, to deliver increasingly less value to Illinoisans. A state government that cannot pay its bills, cannot make good on its promises, cannot help people in need.
I have never lived in Chicago, so can’t speak at all to any real or perceived government shortcomings. But where I live (Southern Utah), government is run exceptionally well. I just ran the St. George marathon and I was amazed at how well the city put on a tremendous event that draws runners from all states and at least 26 countries.
So many cheerful volunteers everywhere, of all ages, helping and celebrating the runners. The local parks and trail systems here are amazing. I take my son to the local library and the recreation center and I am amazed at how wonderfully enriching the activities are. Schools are wonderful here. Sometimes it’s easy to take a blanket approach that “all government is bad” (federal, state, or local). But sometimes government really does work, and it’s great to see it when it does.
I’m not sure if anything could be more opposite than Chicago versus St. George :-).
Hey2 Maybe Trump can change civil service rules to make it easy to fire workers like in private business.
3 warnings and go find another job
ZERO pay raises until your turnover rate gets close to 10% per year.
Pension based only on base pay not OT or any spiking
I think that will motive a lot of people.
I’m one of those fed dot gov people. I’m all for this, but the unions will never allow it. I have to work with these deadwood people every day. It is beyond frustrating, because their coworkers have to do the work and these people get paid anyways.
Some of them are so incompetent that their coworkers are actually happy that they don’t do anything, because when they do work, it’s so screwed up that it makes even more work for the coworkers to un-screw it up and then do it right.
Yup, some workers are worth negative money, because the rest have to fix their screw ups
The fed offices that I service are caught-up in the gender, racial, etc., diversity act these days… Obama legacy.
Same where I am - at a recent retirement lunch, I counted so-called minorities and it was 75% of the 36 people there.
The worst thing is, the new millenial employees of all races think that it’s OK to constantly be staring at their phone all day, especially in meetings and training sessions. Ugh.
‘On the other hand, as Erma Bombeck said: ‘Seize the moment. Remember all those women on the Titanic who waved off the dessert cart.’
This reminds me of the relative woes we are constantly fed.
‘China is trying ‘avoid a run on its banks.’
Boy that’s great depression stuff, huh? It happened a few years ago:
March 25, 2014
‘How rumor sparked panic and three-day bank run in Chinese city’
‘In response, local officials and bank managers kept branches open 24 hours a day and trucked in cash by armored vehicle to satisfy hundreds of customers, some of whom brought large baskets to carry their cash out of the bank. ‘
‘Saturday, July 11, 2015′
‘China Underground Banks Spread Pain As Defaults Rise’
‘Now, as losses rise, Beijing faces political tension and pressure to help investors recover their money. “Many investors don’t realize the risk until something goes wrong,” said Guo Tianyong, director of the Banking Research Center at Central University of Finance and Economics in Beijing.’
Take a foreclosure. Golly, that’s the worst! They have to move. A hurricane. It rained a lot, blew some shingles off.
I don’t want to downplay what happened in Las Vegas, but more people overdose every day in the US.
‘Calm Down … You Are Much More Likely to Be Killed By Boring, Mundane Things than Terrorism’
‘McClatchy reported in 2010: There were just 25 U.S. noncombatant fatalities from terrorism worldwide. (The US government definition of terrorism excludes attacks on U.S. military personnel). While we don’t have the figures at hand, undoubtedly more American citizens died overseas from traffic accidents or intestinal illnesses than from terrorism.’
‘The March, 2011, Harper‘s Index noted: Number of American civilians who died worldwide in terrorist attacks last year: 8 — Minimum number who died after being struck by lightning: 29.’
‘Indeed, the leading cause of deaths for Americans traveling abroad is not terrorism, or murder … or even crime of any type. It’s car crashes.’
‘In fact: With the exception of the Philippines, more Americans died from road crashes in all of the 160 countries surveyed than from homicides. The U.S. Department of State reports that only 17 U.S. citizens were killed worldwide as a result of terrorism in 2011. That figure includes deaths in Afghanistan, Iraq and all other theaters of war.’
‘You are 5,882 times more likely to die from medical error than terrorism. The CDC says that some 80,000 deaths each year are attributable to excessive alcohol use. So you’re 4,706 times more likely to drink yourself to death than die from terrorism.’
‘According to a 2011 CDC report, poisoning from prescription drugs is even more likely to kill you than a car crash. Indeed, the CDC stated in 2011 that – in the majority of states – your prescription meds are more likely to kill you than any other source of injury. So your meds are thousands of times more likely to kill you than Al Qaeda. The number of deaths by suicide has also surpassed car crashes.’
‘The CDC notes that 3,177 people died of “nutritional deficiencies” in 2011, which means you are 187 times more likely to starve to death in American than be killed by terrorism.’
‘The 2011 Report on Terrorism from the National Counter Terrorism Center notes that Americans are just as likely to be “crushed to death by their televisions or furniture each year” as they are to be killed by terrorists.’
‘Reason notes: [The risk of being killed by terrorism] compares annual risk of dying in a car accident of 1 in 19,000; drowning in a bathtub at 1 in 800,000; dying in a building fire at 1 in 99,000; or being struck by lightning at 1 in 5,500,000. In other words, in the last five years you were four times more likely to be struck by lightning than killed by a terrorist.’
‘Scientific American reported in 2011: John Mueller, a political scientist at Ohio State University, and Mark Stewart, a civil engineer and authority on risk assessment at University of Newcastle in Australia … contended, “a great deal of money appears to have been misspent and would have been far more productive—saved far more lives—if it had been expended in other ways.”
I work as an RN, and I can attest to the scourge that opioids are on the population. China was the “Sick Man of Asia” in the turn of the 19th century and was being forced to accept trade of addictive opium by Britain. It totally decimated work ethic of the population. It seems that the tables are turned. I can’t tell you how many derivative problems are coming from families that are being scourged by prescription drugs.
I just watched this Netflix documentary. It is excellent.
Heroin(e)
2017 TV-14 39m
This documentary follows three women — a fire chief, a judge and a street missionary — as they battle West Virginia’s devastating opioid epidemic.
https://www.netflix.com/title/80192445
This sound extremely interesting, I’ll give it a watch. Thanks for suggesting it!
One major problem with this crisis is that insurance and pharmacy benefit companies make the most addictive pain medicine the lowest priced (Norco, Vicodin, Percocet, Oxycodone, morphine, etc.). Some of the less addictive (and more effective) non-opioid pain medicines carry much larger co-pays, so this is a disincentive to clinicians to prescribe. This is true of Medicaire and Medicaid.
I read a NYT article yesterday about a New Hampshire medical examiner quitting the morgue:
“It’s almost as if the Visigoths are at the gates, and the gates are starting to crumble,” Dr. Andrew said. “I’m not an alarmist by nature, but this is not overhyped. It has completely overwhelmed us.”
https://www.nytimes.com/2017/10/07/us/drug-overdose-medical-examiner.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=second-column-region®ion=top-news&WT.nav=top-news&mtrref=undefined
‘Vancouver locals selling $3 million bungalows are going to have trouble finding an alternative to foreign urban land buyers, so prices need to be slashed’
See what I mean? It’s so horrible that these tiny shacks can’t fetch $3 million!
‘financier Martin Zweig’s widow Barbara put her penthouse at the Pierre Hotel on the market for $125 million. This August, four years, several brokers and several price cuts later, it finally sold — for $44 million- one of the biggest discounts the market has ever seen’
Ouch Barbara, I guess it’s baked beans and crackers for you. What’s that? Oh, you still have gobs of cash? Never mind.
Some jerk checked in at Mandalay Bay last night and asked for a similar suite to the one his friend Steve had last week. The desk clerk did as he asked and told a supervisor about it later. Security went up and threw him out of the hotel.
He should have taken a knee…
That seems more along the lines of a potential threat where the cops should have been called, at the very least to ask him what he knows about his “friend Steve.” That is nothing to joke about whatsoever.
IIRC, it was those dessert-waving wealthy women who were saved in the lifeboats. The women in steerage were the ones who should have eaten dessert… but of course they never saw a dessert cart.
Big ladies were all the rage back then… thigh gap now.
I personally hope Hillary and the obama’s keep talking for the next 3.5 years.
It will almost guarantee a DJT landslide in 2019.
++++++++
Obamas continue to divide US society
The Sunday Guardian | October 7, 2017 | Mitchell Feierstein
Neither Michelle Obama, Barack Hussein Obama nor Hillary Clinton will go away. Why does the media keep giving them a platform and allow them to continue to encourage and enable division in America?
The former First Lady’s latest attention-grabbing stunt was to dismiss the entire GOP as entirely male and white. Needless to say, the Republican Party is not taking kindly to Mrs Obama’s reckless race-baiting.
“It’s unfortunate Michelle Obama would disregard the contributions of conservative women and people of all backgrounds with one sweeping, false accusation,” RNC Chairwoman Ronna McDaniel told Fox News on Thursday.
The race-baiting Obamas just can’t help themselves. The racial divide has not widened this much since the 1960s. Thanks, Obama! Are we trying to fracture and splinter America? Create race wars? If so, America is headed in the right direction, given the divisiveness of Obama and Clinton’s “resistance” rhetoric and the current progressive mantra of “if I disagree with you—you are a Nazi, racist, misogynist, sexist, homophobe, Islamophobe, etc. etc.”
Add to this liberal-left and media’s failure to denounce Antifa, along with their normalisation of violence against Donald Trump and his family. From Kathy Griffin’s bloody photo op with a severed Trump head, to Johnny Depp’s terrible, tasteless assassination “joke”, to Snoop Dogg’s infamous music video for the song “Lavender”—in which the rapper is shown shooting a clown version of Donald Trump—and it’s clear that purveyors of progressive pop culture have fuelled a hostile environment towards Trump and the Republican Party.
Besides you, I don’t think anyone is paying any attention to Hillary and Obama these days.
Well, expect for the guy who tried to assassinate a republican congressmen and all his republican friends/assistants…
And the BLM assassinating police…
And the looting and rioting in the name of social justice…
etc.
Funny how those stories get buried so fast…
Here’s a puzzler: the government had every email and phone call this Vegas shooter suspect (I know “suspect” is so 1970’s, the media has closed the case) made for years, as they have on all of us. They knew he was buying guns like crazy. They could have known he was renting rooms above mass gatherings all over the country. Yet they didn’t stop him. What’s more it’s a week later and they still can’t tell us why he did it. Now that’s worth sacrificing the privacy and constitutional protections of every single citizen in the nation!
But yet literally in 15 minutes after the shooting, the FBI declares he is not linked with any foreign terrorists.
The same FBI, after two years, can’t say anything definitive about Russia.
https://www.bloomberg.com/news/videos/2017-10-02/no-international-terror-link-to-vegas-shooting-video
“Here’s a puzzler: the government had every email and phone call this Vegas shooter suspect (I know “suspect” is so 1970’s, the media has closed the case) made for years, as they have on all of us. They knew he was buying guns like crazy. They could have known he was renting rooms above mass gatherings all over the country. Yet they didn’t stop him. What’s more it’s a week later and they still can’t tell us why he did it. Now that’s worth sacrificing the privacy and constitutional protections of every single citizen in the nation!”
Tis why the HBB is much more than a blog about housing and mortgage crimes.
“They knew he was buying guns like crazy. They could have known he was renting rooms above mass gatherings all over the country. Yet they didn’t stop him.”
That’s the part that I wonder about. What is America gaining in exchange for all of the intrusive surveillance into our private lives?
OK, so I’m thinking that the supposed shooter was set up for this. Consider this scenario: he is tasked with buying all of these guns and then bringing them to Vegas, where supposedly he is to meet gun buyers (drug runners, gangs, mooslim terrorists, who knows) in his suite. This explains all of the guns in the room.
Now, the ammonium nitrate and tannerite in his car. What do shooters use this stuff for? Why to go out into the boonies and to shoot at it and it goes ‘boom.’ It’s a lot of fun! So he has this in his car so he can take prospective buyers out into the desert for some hands-on product demonstrations. So that explains that.
But the gun buyers never show up. Maybe somebody did shoot from his room and then slipped out, probably dressed as a hotel security guard who had full credentials/keycard access and was able to sneak out the back way. This is problematic because that person or persons would be on dozens of security video cameras, so somehow they would have had to deal with that.
There are just far too many unanswered questions about this entire thing. The piece of paper found in his room with the supposed angle and distance calculations? Completely useless when you have a bump stock on a gun which allows you to spray & pray, as they say - there is no accuracy there, so no need to calculate anything. Only a real sniper would use calculations like that and they would never use a bump stock.
And his tax return that showed that he made $5M one year by gambling? No freaking way. If true, no casino in the entire state would let him walk past the front doors. That money came from somewhere else, possibly laundered through supposed gambling winnings.
So many questions . . .
And according to Vegas casino owner Steve Wynn on the Sunday morning news show, the shooter and his girlfriend have been going to Vegas since 2004 or so. Wynn’s employees noticed that neither of them ever drank alcohol either, which is unusual in that town. The profile Wynn’s organization had on the guy gave zero indication that he would ever do something like this, FWIW.
What’s more it’s a week later and they still can’t tell us why he did it.
It’s been 2 years since the shootings in San Bernardino, and we still don’t have the ballistics reports we were promised. But that whole thing has gone down the memory hole.
Who knows what the real story behind each of these incidents is.
To be fair, the media sure is. They’re pushing Shrillary stories almost daily.
In fairness, as someone who seldom turns on a TV set, I shouldn’t assume that Obama and Hillary are forgotten, though it seems regrettable if that is the case. Hopefully the Democratic party leaders have wised up to the train wreck that can result from running her as a presidential candidate against the people’s will.
I don’t turn on the tv either, I see the stories on Yahoo or other rags almost daily.
Don’t subscribe to Yahoo, either.
Yahoo’s 3 billion breached accounts are a boon to identity thieves
By Travis Jarae, opinion contributor — 10/08/17 09:40 AM EDT
The views expressed by contributors are their own and not the view of The Hill
Calling the exposure of a whopping three billion Yahoo accounts a mere “hack” undermines the magnitude of the breach, and it does a disservice to the sheer damage that has occurred and could still come from what is a truly monumental cybersecurity failure.
Yahoo wasn’t just hacked back in 2013 — the company’s three` billion user accounts were completely exposed, resulting in a massive treasure trove for criminals, looking to profit from the sensitive information.
Information stolen in the Yahoo incident included personally identifying information such as email addresses, birthdates, telephone numbers, passwords and more.
…
Hillary is a trainwreck. What a mess!
“If Zweig had listed her pad for $44 million four years ago, sold it right away (assuming the demand was there) and put the money in an S&P 500 ticker fund, she would be sitting on around $70 million today.”
That is a great illustration of the opportunity cost of mispricing a home at a level where it will never sell. A lot more folks will experience this lesson over the next couple of decades during the course of Housing Bubble denouement.
“denouement…”
I kinda think history will choose a more catchy nickname for the crash and burn that awaits.
Flaming fireball?
Cratered meteorite?
Black-holerized supernova?
Extinct supervolcano?
Washington, DC Housing Prices Crater 15% YOY
https://www.zillow.com/adams-morgan-washington-dc/home-values/
“We take it for granted that homes are sold through the song-and-dance of ask and offer, while auctions are for bankruptcy. That wasn’t always so. As TRD’s Adam Pincus pointed out, in the 1880s, a lot of New York properties were sold via auction at the Real Estate Exchange and Auction at 26 Liberty Street. Brokers and asking prices didn’t really take over until the turn of the century.”
Dutch auctions are soon to make a big comeback.
At auctions you need cash.
In 1880 - that meant gold.
I am use a broader definition of “auction” than the Walrasian kind where everyone shows up on the same day to make open outcry bids on an asset for sale. My definition includes Dutch auctions of homes where the seller overprices for years, like Barbara Zweig did, only to eventually face reality and lower the price to a level where a buyer is forthcoming.
“Doomsday writer David Meade predicted the world would end Sept. 23, but later backtracked that claim, saying astronomy and the biblical Book of Revelation predict Oct. 17 will start a seven-year cycle that will bring about the end of the world. He cited hurricanes Irma and Harvey as omens of things to come. ‘The world is not ending, but the world as we know it is ending. A major part of the world will not be the same the beginning of October,’”
Our 2banana?
2banana reads the Bible. I also have read the Koran and the Book of Mormon. I would read more of the Holy Texts of Hinduism (but where to start and keep going?) and there really isn’t much in English on the translations of the massive Tripiṭaka (Buddhism).
I am an engineer. I like to look at ALL the data.
“But concerning that day and hour no one knows, not even the angels of heaven, nor the Son, but the Father only.
– Matthew 24:36
So I don’t worry about it. And kinda laugh at those who make predictions. They have been getting it wrong for 2000 years.
“ALL the data…”
Data are observed, having already happened. Forecasts, predictions and visions of the unseen are by no means data. Just sayin, brother of the iron ring.
Realtors are liars.
• So, like a week or two ago, I posted a link from the Dallas Fed about global house prices.
• I used the spreadsheet linked for “First Quarter 2017″ at this link: https://www.dallasfed.org/institute/houseprice/#tab2 (Year 2005 is set as the zero or 100 point for each of these countries, thus the house price indexes all intersect at year 2005).
• Specifically, the spreadsheet link is: https://www.dallasfed.org/~/media/documents/institute/houseprice/hp1701.xlsx
I generated the house price graphs in two pieces:
1) House prices moving at generally similar rates (16 countries): http://picpaste.com/hpi_similar-6ah1hDpb.png
Below are links to their population charts (Google automatically displays a chart first), as increasing population is the most obvious consumption-demand based reason for house price increases. However the rate of population increase can vary significantly from price increases:
Australia: https://www.google.com/search?q=population+australia
Belgium: https://www.google.com/search?q=population+belgium
Canada: https://www.google.com/search?q=population+canada
Denmark: https://www.google.com/search?q=population+denmark
Spain: https://www.google.com/search?q=population+spain
Finland: https://www.google.com/search?q=population+finland
France: https://www.google.com/search?q=population+france
UK: https://www.google.com/search?q=population+united+kingdom
Ireland: https://www.google.com/search?q=population+ireland
Italy: https://www.google.com/search?q=population+italy
Luxembourg: https://www.google.com/search?q=population+luxembourg
Netherlands: https://www.google.com/search?q=population+netherland
Norway: https://www.google.com/search?q=population+norway
New Zealand: https://www.google.com/search?q=population+new+zealand
Sweden: https://www.google.com/search?q=population+sweden
US: https://www.google.com/search?q=population+united+states
2) House prices not moving at generally similar rates (7 countries): http://picpaste.com/hpi_different-E8527yBt.png
Below are links to their population charts (Google automatically displays a chart first):
Switzerland: https://www.google.com/search?q=population+switzerland
Germany: https://www.google.com/search?q=population+germany
Japan: https://www.google.com/search?q=population+japan
S. Korea: ps://www.google.com/search?q=population+south+korea
S. Africa: https://www.google.com/search?q=population+south+africa
Croatia: https://www.google.com/search?q=population+croatia
Israel: https://www.google.com/search?q=population+israel
Conclusion:
• It seems to me that there are transnational factors.
• I’m intrigued that house prices are rising in 20 of 23 countries.
• In 14 of 23 countries, rising in generally similar patterns.
• Prime_is_contained noted it was part of a global liquidity bubble. Makes sense as different countries and the euro zone are trying to depress their currencies and push interest rates lower, as everyone is using the same playbook.
• House prices are a combination of consumption demand and speculative demand.
• We’re all interested, bulls and bears, consumers and investors, about what house prices will do going forward - rates of return for investors, purchase prices for consumers. So, another data point to consider.
One error: I included Croatia in the first chart but put it in the 2nd group.
The problem with that is population growth is at record lows in the US.
Population growth creates an attractive base narrative for investors and consumers as to why prices should go up.
However, for prices to actually go up initially, it requires increasing wages plus increasing availability of debt. I think this creates the initial price updraft.
Then, if the rate of return relative to other investments is sufficient, investors begin moving in, more money coming into the market, further driving up prices and increasing rate of return, creating a positive feedback loop..
It seems to me we have three bubbles right now: stocks, bonds and real estate. And probably other assets. Rates of returns here are probably higher than can be achieved anywhere else.
Where’s it go from here? Ray Dalio talked about a beautiful deleveraging. Looking around, I can see no deleveraging, in fact more leveraging.
“However, for prices to actually go up initially, it requires increasing wages plus increasing availability of debt.”
Couldn’t prices go up even when wages were stagnant and debt loads were static? If a larger percentage of disposable income is spent towards servicing a mortgage, then house prices could go up. This of course crowds out other spending and leads one to
become “house poor.”
Indeed, the percentage of Americans who are “rent burdened” (spending more than 30% of income on rent or housing expenses) has steadily increased in most of the frothiest markets, California being perhaps the worst state in the union.
Population growth only works when the number of paying jobs increases. With automation, that is no longer true. We have come to a point where more population simply means more deadweight.
“more deadweight…”
I don’t actually think this is the result of automation. Automation promised to increase quality and productivity, but in my experience it has not delivered either. I could give plenty of examples. You got your increased entitlement crowd at the lower end and the increased maga rich at the upper end and efficiency in the middle isn’t anything to brag about.
Automation has already delivered. The advent of fossil-powered heavy machinery in mining, agriculture, and heavy construction puts millions of low-skill workers out of a job. The advent of the computer put millions of typists and clerical assistants out of a job. The advent of software eliminated even more clerical jobs. The advent of customer-operated transactions such as self-checkout, ATMs, UPS lockers, airline check-in kiosks, and everything done over the Internet, eliminated millions more jobs. Workers who would have done those jobs are now deadweight.
I just realized that Dalio’s beautiful deleveraging scenario did not require lowering about the absolute amount of debt, but rather only required transferring the loss from the last over-leveraging, from debt holders to the public. Or seen another way, extracting the amount due from the public rather than the debtors.
Off topic. Still bummed out about Tom Petty.
I’ve been listening to a lot of his music during the past week - one of his very best is one few people know. It is below. IMO, “Swingin” is arguably the best song he ever came up with; certainly among his best.
Even casual fans should give it a listen. A beautiful song. Resilient. What really gets me is from approx. 4:17 to 4:55. Harmonica, piano and reverb - with an added shimmer from 4:38 to 4:55. Incredible stuff.
https://www.youtube.com/watch?v=I4vJM4L2D2U
“Off topic. Still bummed out about Tom Petty.”
I have an ex who literally worshiped TP, and I can stay with 0.98 confidence that her other half won’t be getting as much as a tickle for the next 120-days.
Is there a “How to broke buying properties you will never use” seminar these celebrates attend?
With Nick Cage and John Deep as guest speakers?
+++++
At Just 19, Kylie Jenner Buys Third Home
By Kathryn Hopkins - August 17, 2016 - Los Angeles Celebrity Homes
Most 19-year-olds are either living in less-than-glamorous college dorms or still stuck in their parents’ houses until they can afford to move out.
But Kylie Jenner isn’t most teenagers. The “Keeping Up With The Kardashians” star, who also has an eponymous makeup line, has bought her third home and the second one in Los Angeles’ exclusive Hidden Hills neighborhood, her broker Tomer Fridman of Sotheby’s International Realty confirmed.
She splashed out close to $4.5 million on the four-bedroom, four-bath home, which she will use as an office for her expanding makeup business, according to entertainment website TMZ. If she ever wants to take a break from work, then there’s a pool and a jacuzzi in the property, which boasts around 12,000 square feet of living space.
It won’t be her primary home as she is planning to move into a new $6.025-million house in Hidden Hills next door, where many other celebrities, including Jennifer Lopez, Miley Cyrus and Jessica Simpson, have homes. Her sister, Kim Kardashian West, and husband Kanye West also have a home in the area.
However, she will not have three homes for long. In June, Ms. Jenner put her Mediterranean-style starter home in Calabasas on the market for $3.9 million. She originally bought it a year ago for $2.6 million.
Reposting this from an email I got recently:
“SHARON OSBOURNE FLIPS ON NEW ORIGINAL WE TV SPECIAL, ‘SHARON FLIPPING OSBOURNE’ - PREMIERING FRIDAY, OCTOBER 6 AT 10:00 PM ET/PT”
“We all love Sharon Osbourne for her charming, cheeky and opinionated personality, but guess what?! She’s also an experienced house flipper! Sharon has flipped dozens of homes - big and small - and made millions selling to celebrities. Premiering Friday, October 6th at 10pm ET/PT, viewers will see an entirely new side of the television host and media personality on an original special, “Sharon Flipping Osbourne.”
“On the one-hour special, Sharon makes a deal with a couple in Los Angeles who were looking to sell their home but had no idea who would be knocking on their door to help! She offers to put her own money into the mix to update the house, but this means she’s in charge: from hiring the contractors, decorating with décor from her own warehouse to working with her favorite realtor. In the end, if they get an offer that works, she splits the profits with the seller…it’s flippin’ awesome!”
“What most people don’t know about me is that I flip houses, and I’m damn good at it,” comments Osbourne, who also serves as an Executive Producer along with her son, Jack Osbourne. “Most people don’t know how to get their max price, but I do because I’m Sharon F$&:@ing Osbourne.”
‘a couple in Los Angeles who were looking to sell their home but had no idea who would be knocking on their door to help!’
Right:
Knock knock.
Oh look, it’s that woman from TV years ago, what’s her name? And what’s that camera doing in our living room?
“SHARON OSBOURNE FLIPS ON NEW ORIGINAL WE TV SPECIAL, ‘SHARON FLIPPING OSBOURNE’ - PREMIERING FRIDAY, OCTOBER 6 AT 10:00 PM ET/PT”
Shoeshine boy moment!
Please tell me this is a hoax…. Please?
Healdburg, CA Housing Prices Crater 12% YOY
http://www.movoto.com/healdsburg-ca/market-trends/
Wow! With all those vacant homes kept off the market, who’d've thunk prices could nonetheless crater there!
Once again, these “crater” comments are simply incorrect. The link shows that the price per square foot has increased (not “cratered”) by an astounding 46% year over year. The size of the median home has decreased 32% since last year but price per square foot has skyrocketed according to the link provided. ($705 today versus $482 one year ago.) Again, please compare apples to apples.
“The size of the median home has decreased 32% since last year…”
Sounds as though sales of the high-end stuff have fallen off a cliff…
Again, please compare apples to apples.
We would love to. Please point us to a website that shows actual sales prices. Oh, that’s right, you can’t. They all stopped reporting this data over a year ago, when prices started CRATERING.
And once again prices fell 12% year-over-year. It’s not complicated.
racking up a balance sheet to rig your investments must be pretty d@m nice.
Remember….. 3% down payment mortgages are subprime by definition.
Englewood, CO Housing Prices CRATER 14% YOY
http://www.movoto.com/englewood-co/market-trends/
Once again, these “crater” comments are simply incorrect. The link shows that the price per square foot has increased (not “cratered”) by 5% year over year. The size of the median home has simply decreased but price per foot is still climbing ($221 today versus $210 one year ago.) Again, please compare apples to apples.
You can’t tell how much prices have fallen for homes that aren’t selling. All you know is that the prices are lower than what is being asked…
It’s also worth noting that on most of those price charts that the median price has been zig zagging for years, but that the trend has been upward. It didn’t take much searching, at any point during the bubble, to find a price chart for some zip code that at the moment had dropped. I’m sure there were plenty on say July 2014. The real question is did those houses continue “cratering” or did they resume bubbling up to dizzying heights?
He’s posting disingenuous crap like that for years.
Under a dozen or more different internet handles. I’ve got a list of them somewhere.
You are all so full of it https://snag.gy/pOUw3S.jpg
What’s in it for Zillow to hide falling prices? Wouldn’t lower prices in many markets pull in more buyers?
What’s in it for Zillow to hide falling prices? Wouldn’t lower prices in many markets pull in more buyers?
Please enlighten us as to why they stopped reporting the data.
Hello my friend.
Seattle, WA Housing Prices Crater 5% YOY
https://www.zillow.com/seattle-wa-98177/home-values/
It is difficult to get a man to understand something when his salary depends on him not understanding it. -Sinclair Lewis
Precisely.
He cycled through a series of jobs he thought would make him rich, Eric Paddock said. “He went to work for the I.R.S. because he thought that’s where the money was, but it turned out the money wasn’t there,” the younger Mr. Paddock said. “He went to the aerospace industry but the money wasn’t there either. He went to real estate and that’s where the money was.”
…ta-da!
I read yesterday the IRS said he netted $5 million in 2015 in gambling. On video poker and slots.
And I read that casino staff said he was a regular and was friendly.
You’d think that if he did it because of some kind of grudge, that he would have left note behind or maybe left something on Fakebook.
This whole thing stinks like last week’s fish.
And drank like a fish when gambling. Making 5 million pesos on video games is to my understanding mathematically impossible. Doing so while drunk as a skunk is even more unlikely.
If he didn’t make any money gambling, why did he declare it to the IRS?
His winnings are the casino’s losses, and surely they would have tracked his successes and/or failures for him to be considered for comp’d rooms.
If he earned the money in other legitimate ways (rental income–as I understand he had cash flowing assets since the early 90’s), why not tie the income to those other legitimate activities?
If he was doing something else and used gambling to launder the money, what else was he doing to make the money that he declared on his tax returns?
I do recall some guys that figured out some mistakes in video poker machines…which they exploited to make a bunch of money. But absent something like that, it seems highly unlikely that he would be able to make money consistently on machines that are designed to make you lose over long periods of time.
Slots are some of the worst odds at winning in any casino.
Video poker the same bad odds.
If you are very good - you can make $ playing real poker with real humans.
Video poker (jokers or better) has a close to break even percentage if you play perfection, hand after hand. And we’re talking thousands of hands a day to pull it off like this guy was doing at $125 a hand. Drunk? I can’t see it.
See my comment above - Steve Wynn said that this guy and his girlfriend never touched a drop of alcohol (at least in his casinos). His employees found this odd.
Thanks, Herr Schäuble, for a brutally honest assessment of the bubbly debt morass the global central banking cabal has created.
Financial Times
Wolfgang Schäuble warns of debt-driven global financial crisis
Central bank policies raise threat of bubbles, says outgoing German finance minister
Wolfgang Schäuble is moving to a new job as speaker of the German Bundestag
yesterday
by Guy Chazan in Berlin
Wolfgang Schäuble has warned that spiralling levels of global debt and liquidity present a big risk to the world economy, in his parting shot as Germany’s finance minister.
In an interview with the Financial Times, the Europhile who has steered one of the world’s largest economies for the past eight years, said there was a danger of “new bubbles” forming due to the trillions of dollars that central banks have pumped into markets.
Mr Schäuble also warned of risks to stability in the eurozone, particularly from bank balance sheets burdened by the post-crisis legacy of non-performing loans.
…
Does it seem like a day of reckoning lies in store when and if interest rates ever do rise up off the floor? And can that day be postponed indefinitely, through clever fooling games and delay tactics?
Financial Times
The QE retreat
BIS warns higher interest rates could derail global growth
Policymakers face delicate balancing act, says central bankers’ bank
The Bank for International Settlements places more weight on credit conditions than most central banks, which focus on inflation targets
© Bloomberg
September 17, 2017
by Claire Jones in Frankfurt
The world has become so used to cheap credit that higher interest rates could derail the global economic recovery, the Bank for International Settlements has warned.
After cutting interest rates to all-time lows and pumping trillions of dollars into markets to boost growth in the aftermath of the global financial crisis, central banks are now preparing to tighten their monetary policies.
The BIS, known as the bank for central banks because it is where they hold accounts, said policymakers face a delicate balancing act as they try to wean markets and businesses off extraordinarily cheap money.
…
If interest rates return to historic levels there will be worldwide sovereign debt defaults.
It won’t happen until it has to happen. And I suspect that I might be dead before that happens.
There is a preferred alternative to debt defaults, which is to gradually inflate the currency, thereby devaluing the debt. However, it almost seems like quantitative easing is a central bank financial engineering inflation creation project which has backfired spectacularly, thanks to the resulting overbuilding of every form of capacity imaginable, which is ultimately deflationary.