Asking For Trouble
A report from the New York Post. “A pair of top Obama-appointed bank regulators still serving in the Trump administration could spark another mortgage meltdown by lowering credit standards and encouraging risky lending practices. Democrat Mel Watt, who is serving a special five-year term as head of the Federal Housing Finance Agency, is pushing the mortgage-lending giants he regulates — Fannie Mae and Freddie Mac — to offer home loans to deadbeat borrowers with shaky credit, setting up conditions for another housing-market crash, industry officials warn.”
“Meanwhile, the other Obama holdover — liberal Democrat Richard Cordray, who continues to head the Consumer Financial Protection Bureau through 2018 — has launched an unprecedented crackdown on credit reporting bureaus for allegedly widespread errors and bias, leading the industry to strip some negative information from credit reports used by home lenders, which analysts fear could blind them to default risks. ‘We are dumbing down the requirements all over again,’ warned former chief Fannie credit officer Ed Pinto. ‘It’s the definition of insanity’”
From the Daily Camera in Colorado. “When it comes to a helping hand on housing, Boulder County’s well-to-do are getting a bigger boost from the feds than less well-off residents, according to a new report from online rental marketplace Apartment List.
High-income households received triple the federal dollars that low-income households did in 2015, according to the study, and nine times more funds than those of middle incomes. It’s a pattern being repeated all across the country, Apartment List found. Nationally, the total dollars spent on MID for high-income households ($60.6 billion) in 2015 was double that spent on Section 8 ($29.9 billion).”
“‘When you look at where the benefits are going,’ said Apartment List Housing Economist Chris Salviati, ‘it is a pretty striking figure.’”
From Reuters. “Global central banks, which fret about high asset prices, could take a page from the Bank of Canada which is helping cool an overheated housing market by raising interest rates even as inflation undershoots its 2 percent target. Like Canada, major central banks such as the U.S. Federal Reserve, European Central Bank and Bank of Japan set monetary policy based on an inflation target.”
“But too rigid a focus on inflation can lead to bubbles in financial and housing markets, jeopardizing hard-won recovery in countries where central banks have kept interest rates at historically low levels. ‘That is an important example of a responsible central bank acting on concerns of financial stability,’ said Stephen Roach, a senior fellow at Yale University’s Jackson Institute of Global Affairs and Morgan Stanley’s former chief economist. ‘Central banks that keep policy at crisis settings just because inflation remains below target are asking for trouble.’”
From CBC News in Canada. “CBC News has uncovered some revealing trends in Ontario government revenues that provide significant insights into the provincial economy. The fiscal-year-end numbers are contained in an annual document called the Public Accounts of Ontario. The 2016-17 version tells a story of an overall economic boom, but with some uncertainty about how widely it’s being felt.”
“For the first time since the recession in 2009, the province’s revenue from personal income tax actually went down. ‘This is highly unusual,’ said Sheila Block, senior economist with the Canadian Centre for Policy Alternatives, a left-leaning think tank. ‘We don’t see a drop in personal income tax revenues generally at any point except when we’re in a recession.’”
“The crazy rise in house prices across southern Ontario in 2016-17 was a big money maker for the government. The Public Accounts show the province earned $2.73 billion in land transfer tax, a 29 per cent jump from the previous year. ‘The government cannot rely on this type of increase; it’s not sustainable,’ said Robert Hogue, senior economist at RBC. ‘We’ve seen a significant correction in the housing market.’”
From Domain News in Australia. “Auction selling conditions in popular near-city areas were generally upbeat at the weekend but real estate agents say house prices in Sydney’s struggling outer western suburbs are starting to pull back. Sydney’s outer western suburbs are recording the lowest clearance rates of all the suburban regions – and it showed at the Professionals’ auction of a three-bedroom house at 35 Paxton Street, Belmore. Agency principal Michael Sabongi said the listing attracted no bidding and was now likely to sell privately at a price below the vendor’s expectations.”
“He said prospective buyers in the west had been ‘very, very nervous’ at weekend auctions after widespread media reporting of new data showing declines in the rate of Sydney house price growth. ‘Buyers are not able to borrow as much and it is affecting the market,’ Mr Sabongi said. ‘If the vendors want to sell, they have to meet the market or they have to take their property off the market. It is one of two things.’”
“He said the average house price in Belmore had been sitting at $1.15 million to $1.2 million: ‘We are now going to pull back to $1 million to $1.1 million or to $1.15 million. You will be able to get a house for that money, whereas you could not get one before.’”
“Buyer’s agent Paul Osborne, the founder of Melbourne-based Secret Agent, said the Sydney and Melbourne residential property markets shared similarities with large Canadian cities. ‘The Vancouver and Toronto property markets have been impacted as interest rates have headed up,’ he said. ‘Prices have started to fall quite noticeably in Vancouver and Toronto. It is hard to know whether that is where we are heading or whether we are just going to track sideways for a period of time.’”
“Mr Osborne suspects that prices for some B and C-grade properties in the inner suburbs of Sydney and Melbourne could pull back by more than 10 per cent in the coming months: ‘Confidence is a little more fickle than it has been in the past, so you start to see a bit more failure at auction. Then the buyers are looking at these failed auctions and are thinking: ‘Well maybe we need to revisit what we are prepared to pay for a property.’ It is a vicious circle.’”
The Sacramento Bee in California. “The summer’s overheated housing market in the Sacramento region has given way to a slightly cooler and saner experience for buyers this fall. The time that houses spend on the market has lengthened, prices have softened, and the inventory of homes for sale has grown. ‘Now is a great time to be a buyer, mostly because the summer bump is over and homes are sitting longer and prices are more negotiable,’ said Barbara LeBrecht, a broker with Weichert Realtors’ Galster Group in Fair Oaks.”
“During the peak buying season this year, homes were selling at a record pace. Many houses spent just days on the market before getting snapped up. Well-priced listings saw multiple offers, and would-be buyers found themselves on the losing end of bidding wars.”
“Another telling statistic is the high number of price reductions in the market these days, LeBrecht said. In one 24-hour period this week, she said, 287 new homes were listed for sale and sellers dropped their asking prices on 199 homes. Ryan Lundquist observed a similar set of changes across the four-county region that includes Placer, Yolo and El Dorado counties. He, too, said it was a sign of predictable seasonal decline.”
“‘Overall the market has a slower feel compared to a few months ago (and) values have begun to soften in many areas,’ Lundquist wrote. In many neighborhoods, he said, ‘homes are tending to have less offers, less traffic, and even sell for slightly less than the highest prices from a few months back.’ ‘News like this sometimes freaks people out because they think the market is tanking,’ the appraiser wrote, ‘but like clockwork the market almost always softens during the fall.’”
‘homes are tending to have less offers, less traffic, and even sell for slightly less than the highest prices from a few months back.’ ‘News like this sometimes freaks people out because they think the market is tanking,’ the appraiser wrote, ‘but like clockwork the market almost always softens during the fall.’
Do you always have summers like this?
‘During the peak buying season this year, homes were selling at a record pace. Many houses spent just days on the market before getting snapped up. Well-priced listings saw multiple offers, and would-be buyers found themselves on the losing end of bidding wars.’
A real market for shacks should never experience this. It’s clearly speculative behavior. Maybe you’ll get another year or two, who knows? Or maybe you’ll be in a multi-year downward spiral before you know it. Boy, isn’t this phony wealth effect worth all the risks?
I’ll let you know how the Sacramento foothills fair this winter. We sold one house last month (listed in late June, under contract 15 days later, closed in September).
Now we are selling the exact same model, listing it next month. It will be interesting to see how the differences in timing effect the sale.
Austin, TX Housing Prices Crater 5% YOY
http://www.movoto.com/austin-tx/market-trends/
‘could spark another mortgage meltdown by lowering credit standards and encouraging risky lending practices’
This article is worth reading in full. Note that the MSM hasn’t touched all the shenanigans these clowns have been up to for years.
What could go wrong?
The obama legacy.
And democrats still don’t understand why they lost.
*********
In his remarks, the former North Carolina lawmaker, who once demanded Freddie back home loans for welfare recipients in his district…
What’s more, Watt has instructed Fannie and Freddie, who went bankrupt last decade after guaranteeing too many risky loans, to back home loans for borrowers whose household debt consumes up to 50 percent of their income. “Flexibility to allow for higher DTIs (debt-to-income ratios)…
The FHFA chief has also ordered Fannie and Freddie to back home loans for “borrowers who do not have credit scores,” he told brokers, a pool that includes undocumented immigrants and deadbeats.
So far as I can tell, the Trump folks are perfectly content with this vestige of the Obama administration. Otherwise they would be taking steps to end it, no?
‘perfectly content with this vestige of the Obama administration’
Jingle is counting on it to save his biscuits.
Trump can’t fire them. He has to wait for their terms to end.
These are supposed to be non partisan positions.
As we have seen with obama and the IRS, EPA, etc - there is nothing untouched by the corruption of obama
Mel Watt was appointed to a 5-year term in January 2014. Cordray’s appointment goes through mid-2018.
I don’t think the “Trump folks” could get rid of them even if they wanted to.
It will be telling if either of these guys were re-appointed (which I severely doubt).
These are appointed “non partisan” positions and Trump cannot fire them.
He has to wait for their terms to expire.
Kinda like how the IRS, FBI and EPA used to be non partisan before obama weaponized them to go after political enemies.
Not a smidgen of corruption…
So, bookmark this page for 5 years from now, when people are dissecting the next housing crisis and trying to pin the blame on the GOP (since it happened on their watch).
Obama’s appointees are driving the housing finance bus at the moment.
Don’t lend money to people who can’t pay it back. Don’t buy something that you can’t afford. These are basics.
We shouldn’t be changing the rules so people who were previously considered NOT creditworthy magically become creditworthy at the stroke of a pen.
And changing the rules repeatedly for years. We learned last week the GSE’s are going to dump appraisers.
If credit didn’t expand, it would be the end of a lot of things. Nobody in a position of power wanted to face that music in 2008 and nobody in such a position wants to face it now.
Left destroys everything they touch. Most of it is based out of pure criminality - guess who owns the housing that these unqualified people are buying? But a lot of it stems from the fact that theyre evil and project that onto others and consequently hate humanity. Reference Antifa, Soros, Hillary, Obama, even Weinstein as they try and destroy the health care system, the education system, gender roles (boy scouts on death watch), the housing market and anything else they can think of.
“Prices have started to fall quite noticeably in Vancouver and Toronto.”
….. and it’s not just Vancouver and Toronto. Look out below.
Jingle,
Did you finalize those escrows yet?
https://myabishai.files.wordpress.com/2017/08/0d42b-129174456211834256.jpg?w=687
I don’t blame Jingle for protecting his identity, but I am curious about the places he needs to sell. I’ve been looking hard at the Folsom/El Dorado Springs area lately and what I’m seeing is that you can get a pretty nice house (by my standards) in the 600k or so range. But there is a lot of price compression around the 488k FHA/VA limit and a lot of crap has risen to close to that price. So it’s a situation where you get twice the house if you are willing (and able) to spend a little more.
Meanwhile I still live in the land of 900k 2br apartments and 1.3M decent townhouses.
Ok, I’m really confused about the whole jingle thing. Wasn’t Jingle originally posting as Paladin back in 2006? Wasn’t his name Todd or something and he uncovered all this mortgage fraud and went to the feds or some authorities about it? And then morphed into Jingle and went all-in as an investor/landlord?
Or what did I miss here?
Mr. Hyde/Dr. Jingle.
And now he’s selling–so he’s not quite permanently “all-in”, and I doubt he’s buying today (except perhaps his permanent residence).
Just because you can see fraud in a market and madness in pricing doesn’t mean that you are unable to also see opportunity after the crash.
I get it. If you can’t beat ‘em, join ‘em is what I figured. Plus he certainly had the experience and connections and information to find the opportunities. I probably would have done the same thing.
Believe me, I don’t care what anyone says, renting can really bite the big one during times like these. Don’t get me wrong, I’ve been both an owner and a renter and for the most part, either way hasn’t been too bad for me over the years, until this last episode. A real fire drill, in the hottest part of a Florida summer, and during the hurricane, no less.
Now I’m ready for the toe-tag house where I can just settle in for the duration. But I want a deal, not this retail crap.
BTW, the foreclosure heat maps on Zillow are breaking out with the blue measles.
The thing is, knowing what I know, the whole process of buying a house, no matter how cheap, would feel like being gang-raped by all the entities involved, all with their hands out, looking to shave their fee off the transaction. It’s not even so much the seller (unless it’s a bank) that bothers me, I don’t care if they get their money. It’s all the other crap: the bank, the title company, the goobermint, the appraiser, the inspector, and all the other entities with their hands out and their mouths firmly attached to the teat.
“I get it.”
No you don’t, or at least I hope you don’t.
If you come back here bragging up your deal of a lifetime donkey house and “oh, oh, oh my God it’s gonna make me rich” then you will have caught it.
Even if you come back with “prices are justified because there is such a shortage”.
If you do “I just can’t take it anymore, I want to know what prison cell I’m going to die in” you will have fallen, but not gotten it.
I don’t understand what your point is here, Skye. I assume you have shelter that you control. What’s wrong with that?
“have shelter that you control”.
That’s a great line.
I’ve come to the point where I recognize that housing (shelter) is a basic need, and once you go beyond the basics you enter into the realm of a consumption good.
You can stay at a Motel 6 or you can stay at the Ritz Carlton. They are both a place to rest your head for the night.
You can take the bus, or you can drive a Rolls Royce. They are both means of transportation.
If you rent a place to live, you don’t have long term control over it, as Palmetto says, and the control of the space can be taken away at a very inconvenient time.
If you own a place to live, you don’t have the ability to easily relinquish the cost of controlling it as you do when a lease comes to its end. You have carrying costs and transaction costs to deal with.
Have shelter that you control. Great way to conceptualize it, Palmy.
“shelter that you control…”
Oh no, I’m not against that!
I’m against normal housing costing several multiples of what my brain says the organic price should be, but isn’t because of speculators.
Following on that I’m against the soup that has probably quite nice people thinking the path to wealth is owning a shelter which they couldn’t actually pay for.
For a multiple of reasons I’m against mania in general, mostly because it necessarily involves a loss of reason.
I’m against living deeply in debt, having done that for a couple of decades myself. You end up with less!
I’m against the massive expansion of credit, which makes everything more expensive for this poor pilgrim trying to compete with cash.
I also had a very bad rental experience, so I’m against that too!
Anyway, I am against my friends falling in a hole, so good luck finding a reasonable solution. I think I did but it required some going where the crowd didn’t want to go.
“I think I did but it required some going where the crowd didn’t want to go.”
I think I did but it required some going where the crowd didn’t want to go.
Be fearful when others are greedy and vice-versa, so Buffett says.
Today is not a day to be greedy, but fearful.
I’m fortunate to control the shelter in which I live, which also happens to afford my children excellent public schools, a short commute for my wife and myself, and tremendous weather and access to the outdoors. I have no complaints.
That said, if I were renting today, and were faced with buying the home I live in today (at today’s prices), or trying to figure out how to make it work continuing to rent, I’d continue to rent.
I’ve come to realize that control of one’s shelter is very important, especially if you work from home.
You don’t have to own to control. For example, a property manager who lives on site is very much in control if he/she likes where they live. They usually live rent-free in exchange for the work they do, and they have a lot of say in who gets to live in the complex/park/building that they manage. If they’re any good as a manager, they can pretty much stay where they are for a good long time, unless the property changes hands and even then, the new owner will keep them on if they have a good track record.
A renter who has a good relationship with their landlord often has a certain amount of control and can stay put for a long time, but sometimes things change, something happens to the landlord or their family or a decision is made with respect to the property portfolio and the renter is out and what was once a stable situation is no longer.
Even “owning” doesn’t guarantee control, unless you own outright. And even then, the state and local government can upend your life, as they did to some homeowners in New London, CT:
https://en.wikipedia.org/wiki/Kelo_v._City_of_New_London
And as always, if you don’t pay taxes on your property, it’s gone, sooner or later.
Homeowners who live in a HOA are subject to HOA rules and regs that govern things like keeping the lawn and landscape up to some sort of standards, painting the house, how many vehicles you can have, where you can put your garbage cans, who can live in the house, or how many people can live there, etc. Right there’s a major loss of control, even though you “own”.
I agree with Skye “going where the crowd didn’t want to go.”
Why do you post under two names?
Who are you asking about the two names?
I mostly post as palmetto. I’ve used a couple of other names in the past, but usually briefly and as a joke. And I usually identify myself, except for one time when I was pissed at a poster.
I’m really confused about the whole jingle thing…”
No you’re not confused. I did post as Paladin during 2006 & 2007 when I was working with the FBI to uncover all the mortgage fraud. That was a trying time and I invested a lot of effort into what became a black hole of bureaucracy. We made some progress, but the fraud was so pervasive, it was impossible to properly corral.
I think I began posting as Jingle Male in 2008 or so. The Paladin posts were about a completely different subject and the Jingle Mail posts were moving into the idea of actually buying some of the houses which were sitting around vacant and foreclosed. Contrary to a lot of opinions on this blog, I thought is seemed like a good time to buy houses. I don’t think many on this blog have ever suggested it is good to buy a house, but I can tell you, there are great times to buy a house.
I found this blog in 2005 because I was thinking of buying a new house and could not make sense of the frothy market. The HBB helped me to understand what was going on and for that I will be forever grateful. When I sold a house in 2013 that I purchased in 2009, I sent Ben $1,000 for his part in creating the HBB.
“…and tremendous weather and access to the outdoors.”
Okay… you have piqued my curiosity. Where?
Thanks for the clarification. The mortgage fraud thing must have been very frustrating for you. Frankly, I don’t think the FBI gives much of a sh*t about anything justice-related, unless they’re going after some piker. No wonder you didn’t get much of anywhere. Many citizens are in the same boat with regard to injustices and illegal activities both large and small.
Nothing wrong with making money off your investment. I made money selling my house at the top of bubble 1.0 and I don’t apologize for it.
Okay… you have piqued my curiosity. Where?
CA, south of SF, on the peninsula. 45 minute drive to the ocean, few hours to Yosemite, 30 minute drive to camping in the Redwoods, Tahoe in 4 hours for skiing. Not too dry, not overly humid. Usually a handful of cold spells in the winter where there is frost in the morning, and a handful of weeks that break 100 in the summer, but that’s about as bad as it gets.
If I get on my bike, I can be into the foothills and away from houses within about 20 minutes.
Definitely not like where I grew up (with 200+ acre dairies all over the place), but if I want to get there, it’s 1.5 hours north.
“…and tremendous weather and access to the outdoors.”
Okay… you have piqued my curiosity. Where?
If he’s got access to the outdoors, he must not be currently incarcerated.
“CA, south of SF, on the peninsula.”
Thanks.
I was raised in San Jose, and I’d live in Morgan Hill or Watsonville if I could pull it off, but I’m working with one real income and chewing on college expenses right now.
“….I am curious about the places he needs to sell.”
The houses average about 3,000 SF. They were built in 2006 and sold to bay area speculators/flipper, mostly Filipino people from the SF East Bay. I purchased them in the downturn for an average price of $275,000 (some others bought for under $250,000 after me). The first one sold for $450,000 ($150/SF) last month. I have held them for 7 or 8 years and enjoyed great cash flow. They rented for about $2,200/month so about 125 times monthly rent or 10.4 times annual rent.
I am entering retirement age and we are selling so we can move to San Diego and buy a condo. We will rent for the first year and see how the market is down there.
Hi SW,
We sold one house last month, are under contract on another one this month and are putting a third one on the market soon, looking to close in 2018. It is going to be difficult to replace the cash flow, but we are moving to San Diego in 2019 and my first rule of owning real estate is to live in the same area where I own it.
We purchased the houses in 2008, 2009 and 2010 (close to the bottom, but many people got better deals in 2011 & 2012 than I did). We paid about $90/SF on average, buying from banks and short sales.
A lot of people on this blog have suggested I was a fool to buy these properties. I can tell you today everything about these investments is working out better than I predicted.
Did you have to put much work into them?
They were all new houses, some had never been lived in. The buyers bought to flip to the next greater fool…..but turned into classic FBs. The maintenance costs were minimal, but I did install a few backyards for about $2,500 each, excluding my own labor.
The early tenants were people walking away from their own houses. They were great residents. My average occupancy term has been over 4 years. I give people good deals and never raise their rent. People stay. Most have since bought houses again.
“The early tenants were people walking away from their own houses.”
Sure hope the historians get this right.
RMS, here is a bit more for the history books:
The people who walked away from their homes were regular people who got caught in the updraft created by the mortgage fraudsters.
The Filipinos from the SF Bay Area were greedy fools who had 80/20 financing and listed the properties for re[sale the minute they purchased them. Many times, they were spoon fed hype by Filipino UHS who urged them on….and with $0 down, it appealed to them without much thought. They did not care that a 3,000 SF house in the Sacramento foothills cost $750,000….($250/SF) because they were led to believe they could sell them for $900,000 the next month.
The people I rented to were school teachers, veterinarians, and other working class people who innocently purchased a house in good faith in 2006, not realizing the mortgage fraud had driven the prices to unsustainable levels. They bought $400,000 houses that a couple of years later went to $200,000. It was a massacre of innocents when the collapse came. The fact they walked away (jingle mail) was hard, but nothing for which I personally blamed them. They were stellar residents and most went on to buy again in 2012 or so as their credit recovered.
Remember…… A housing ‘recovery’ is falling prices to dramatically lower and more affordable levels by definition.
Realtors are liars.
Yeah, not just realtors. Lying scum media, lying scum banks, tech firms, pharma firms, lying scum FBI and CIA, lying scum all over the place.
Especially the media. Every last fookin’ word is boolsheet. Got Vegas?
https://www.youtube.com/watch?v=iNbp-mkKPCI
“FBI and CIA”
“Got Vegas?”
https://www.youtube.com/watch?v=F-t8PngHgWY
I love that clip. Takes me back to the good old daze.
‘We are dumbing down the requirements all over again,’ warned former chief Fannie credit officer Ed Pinto. ‘It’s the definition of insanity’
At what point were the standards un-dumbed? DTI up to 45 percent from the historical 25 or 30 percent, so young people could pay more on their lower incomes?
How about cutting it to 15 percent, so they’ll end up paying less and have money left over for the soaring property taxes, collapsing infrastructure and services they’ve been bequeathed.
I like the idea of slowly creeping up the down payment requirements for GSE loans–how about 0.25% every quarter (3% becomes 4% in a year…8% in 5 years, 20% in 17 years)…eventually they will be noncompetitive and no longer issue new loans.
The private market would have plenty of time to react. With high enough down payment, I really don’t care at all about DTI levels.
create credit out of thin air and loan it out. How complicated is it?
This is how people control.
Panama Papers journalist killed by a car bomb in Malta.
Globalists gonna globe.
The murder might have been related to her most recent work investigating Maltese corruption, which potentially implicated the country’s prime minister. I am dismayed at this quote, appearing in the Guardian:
“Malta’s president, Marie-Louise Coleiro Preca, called for calm. “In these moments, when the country is shocked by such a vicious attack, I call on everyone to measure their words, to not pass judgment and to show solidarity,” she said.”
https://www.theguardian.com/world/2017/oct/16/malta-car-bomb-kills-panama-papers-journalist
You know, I’m sick of mainstream politicians invalidating legitimate public anger and demanding solidarity. That spirit didn’t save the journalist and it won’t save anyone following in her footsteps and the politicians who espouse it don’t even really believe in it themselves.
. ‘The government cannot rely on this type of increase; it’s not sustainable,’ said Robert Hogue, senior
But the gov workers will be protected
How many gov agencies and employees r require to chronicle housing b.s.?
what happens when you create more currency than real wealth?
An inverted yield curve as short term gains outpace long term investment.
Albany, OR Housing Prices Crater 9% YOY
http://www.movoto.com/albany-or/market-trends/
On the one hand, I’d like to watch that Hillary interview with the Australian journalist. On the other hand, I watch about two minutes and couldn’t take it anymore.
You can choose not to see it, especially when it has slithered over to the other side of the world. You cannot unsee anything you have watched.
‘I was running downstairs in heels with a cup of coffee and fell backwards!’: Hillary Clinton appears on British TV show to promote her book hobbling on crutches and wearing a protective boot after BREAKING her toe
PUBLISHED: 08:47 EDT, 16 October 2017
Read more: http://www.dailymail.co.uk/news/article-4984972/Clinton-apologetic-missing-BBC-interview.html#ixzz4vjqefW8T
Follow us: @MailOnline on Twitter | DailyMail on Facebook
I didn’t watch…cannot stand the needy, publicity-obsessed woman. Hillary Kardashian.
Surely she must have done more than break a toe. I’ve broken numerous toes on various occasions. No boot or crutches required.
Drama queen Hillary.
Methinks all the medication is fueling her media dependency.
I want to see the video.
‘I was running downstairs in heels with a cup of coffee and fell backwards!’
Read more: http://www.dailymail.co.uk/news/article-4984972/Clinton-apologetic-missing-BBC-interview.html#ixzz4vm1KBz2O
Follow us: @MailOnline on Twitter | DailyMail on Facebook
South Haven, MI Housing Prices Crater 16% YOY
https://www.zillow.com/south-haven-township-mi/home-values/
‘The crazy rise in house prices across southern Ontario in 2016-17 was a big money maker for the government. The Public Accounts show the province earned $2.73 billion in land transfer tax, a 29 per cent jump from the previous year. ‘The government cannot rely on this type of increase; it’s not sustainable,’ said Robert Hogue, senior economist at RBC. ‘We’ve seen a significant correction in the housing market.’
‘For the first time since the recession in 2009, the province’s revenue from personal income tax actually went down. ‘This is highly unusual,’ said Sheila Block, senior economist with the Canadian Centre for Policy Alternatives, a left-leaning think tank. ‘We don’t see a drop in personal income tax revenues generally at any point except when we’re in a recession.’
Recessions always start during booms. The booms cause recessions. That’s econ 101.
I have to wonder if all of the government-sponsored reassurance and free insurance and reinsurance serves to drive overconfidence up to a level that ultimately makes the eventual recession all the worse, thanks to resulting massive overinvestment in worthless excess capacity.
Exhibit A: How much concrete did China pour in three years?
Wonkblog
How China used more cement in 3 years than the U.S. did in the entire 20th Century
By Ana Swanson March 24, 2015
…
The Financial Times
China Economic Slowdown
The Chinese chronicle of a crash foretold
The skyscraper curse suggests China’s real estate market is the biggest risk to the global economy
February 24, 2016
by Jamil Anderlini
The highway leading to the birthplace of Mao Zedong in central China is lined with forests of half-built or empty apartment towers. On your way to pay homage to the Great Helmsman you can visit the spot where, less than three years ago, an ambitious local billionaire flew in on his private helicopter amid great fanfare and broke ground on what was meant to be the world’s tallest building: the 838m Sky City. Today the excavated foundations lie submerged in a makeshift fish farming pond.
Economists have long pondered the so-called skyscraper curse, the uncanny correlation between construction of the world’s tallest building and an accompanying financial crash. From the end of Roaring Twenties America to the bursting of the credit boom in the sands of the Gulf, the Empire State Building (started in 1930), Sears Tower (started in 1970), Petronas Towers (completed in 1996) and the Burj Khalifa (completed in 2009) have foretold or coincided with crises — apparent signs that irrational exuberance can manifest itself in physical form.
Today, some analysts describe the Chinese real estate market as the single most important sector in the global economy — and the biggest risk factor. This is less fantastic than it sounds when you consider that in two years — 2011 and 2012 — China produced more cement than the US did in the entire 20th century.
Because of this, the fate of everything from Hong Kong financial institutions to German carmakers to Australian miners is now in the hands of homebuyers in places like Changsha, the city where Sky City was supposed to be built.
In recent years, overbuilding has been encouraged by local officials, who collect large portions of their revenue from land sales. The results can be seen across China: from ghost cities looming out of the frozen Manchurian plains to the fringes of Lhasa, where Tibetan nomads graze yaks in the yards of empty luxury villas.
China’s economy is extraordinarily reliant on investment, which accounts for nearly half of the country’s gross domestic product. But slowing investment in Chinese real estate in the past two years has contributed to a collapse in global prices of commodities and declining growth in raw material exporters such as Australia, Brazil, South Africa and Indonesia.
China roiled global markets last year as its leaders tried to stop a stock bubble from bursting and its economy from stalling
The building boom of recent years has led to enormous excess inventory but the true scale is impossible to estimate because developers and local governments are offered incentives to under-report the problem. Despite a slowdown in 2015, real estate investment in China rose by 1 per cent, even as average house prices in the 70 largest cities fell.
Similarly, Chinese commodity imports in volume terms increased last year, as price collapses caused a large import contraction in value terms.
In other words, China’s economy has slowed by a couple of percentage points and global commodity prices have plummeted even before any correction in the country’s property sector begins in earnest. An outright decline in real estate investment, which is surely coming, will also have profound implications for the rickety, debt-laden Chinese financial system. Analysts estimate that more than 60 per cent of Chinese bank loans are directly or indirectly tied to real estate.
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‘We don’t see a drop in personal income tax revenues generally at any point except when we’re in a recession.’
Is this a roundabout way to say a recession is already underway?
Is this a roundabout way to say a recession is already underway?
Nah, just means it’s different this time.
“Nationally, the total dollars spent on MID for high-income households ($60.6 billion) in 2015 was double that spent on Section 8 ($29.9 billion).”
“‘When you look at where the benefits are going,’ said Apartment List Housing Economist Chris Salviati, ‘it is a pretty striking figure.’”
The MID is welfare for the wealthy, which is why it is here to stay.
And the only reason this kind of stuff can happen is because the benefit of the MID is obscured by the tax code…it’s not directly debated, it’s hidden from the public eye.
We are in dire need of radically simplifying the tax code and taking out ALL these freebies.
Despite all the hand-wringing, I don’t think taking away the MID would alter the housing market in any meaningful way. Sure, the marginal buyer might be effected, but not if they actually do the math and realize how little of a benefit it actually is to them. It’s simply not that big a deal. And those that get big breaks (the wealthy), would still buy a home regardless.
I don’t think taking away the MID would alter the housing market in any meaningful way. Sure, the marginal buyer might be effected, but not if they actually do the math and realize how little of a benefit it actually is to them.
That’s a big “if”. I suspect it could easily be turned into a huge emotional political issue. Good luck educating the masses on how little benefit it actually is to them when you’re fighting the whole REIC/financial world to try to get the message out.
You do realize that if the MID was taken away as a talking point, that the REIC would be the first to start coming up with new talking points, including noting my exact points about the standard deduction.
It’s a more complicated talking point, but something the REIC would definitely use to continue to sell homes.
Necessity is the mother of invention.
The MID is welfare for the wealthy, which is why it is here to stay.
That’s probably why it’s rarely mentioned by people who derive a lot of satisfaction ranting about welfare. Trump said recently that he may make changes to welfare programs. I have a feeling that MID won’t be affected.
Wow, that comment sure takes the cake, esp this part, ‘I don’t think taking away the MID would alter the housing market in any meaningful way.’
After having gone through every single ad below 120,000 in the QCA, I just spent awhile going through some of the over $120,000 ads at Realtor Dot com, lemme just say, you. have. no. clue.
The MID, is everything. For Every price range.
The standard deduction for married couples filing jointly is $12,700, so you need to borrow at least $250k to even utilize the MID. Otherwise it is worthless.
If you live in a high tax state, that number might be lower, but even then the value of the deduction is based on your marginal tax rate.
So, if you are in the 15% tax bracket (second lowest), the value of the deduction is only 15% of the interest cost.
So, if you make $75k per year, and borrow $150k, and happen to itemize (which isn’t very likely), the value of the MID is (at a 4% rate), precisely $75 per month.
It’s just that people don’t do the math or understand the tax code. People hate taxes, and so advertising that you can save taxes by utilizing the MID is effective.
The standard deduction for married couples filing jointly is $12,700, so you need to borrow at least $250k to even utilize the MID. Otherwise it is worthless.
Unless you also have a lot of other charitable donations. Think church people…
It sure would be a shame if people had to decide between continuing to subsidize pedophile priests’ scotch habits, or controlling their own shelter in a good school district.
Oh, decisions, decisions.
trying to make a paper fiat currency wealth is no sound strategy for and economy.
“Diane Yentel, president of the National Low Income Housing Coalition, which advocates for more affordable housing, said the ability to deduct interest on mortgages as large as $1 million means the provision benefits mostly upper-income households. ‘We’re paying about $10.5 billion a year to subsidize the homes of some of the wealthiest people in the world at the same time that we have hundreds of thousands of people with no homes at all.”
I’m conservative in most ways, but all these give-me’s for the wealthy are really pissing me off. Seems obvious to me anyway its a case of pretty damn financially comfortable politicos helping their wealthiest sugar daddies. If (and that’s a big if) when we see DT’s before and after presidential net worth, we’ll see once again who really benefits from proposed so-called reform tax bill to lift all boats - and I bet there’s plenty of Dems opposing it publicly while privately relishing the personal windfall.
Trickle down in modern times is about as effective at best helping the middle class financially as say clipping supermarket coupons builds wealth - a dribble down the leg for the little people after zipping-up.
‘We’re paying about $10.5 billion a year to subsidize the homes of some of the wealthiest people in the world at the same time that we have hundreds of thousands of people with no homes at all.”
No one is “paying” anything. It’s a deduction, not a credit. It’s people being allowed to keep money they earned, rather than having to hand it over at gunpoint.
I’m all for eliminating the MID, but sick of people using misleading terminology to sway opinion.
This is a dishonest distraction. We certainly all are paying a much larger amount to subsidize the massive low interest rate credit expansion.
Precisely. And it’s a crime magnet and there’s already too much crime in housing.
I see no compelling policy reason why the MID should exist. It artificially props us housing prices and is a drag on the public resources. This stat really puts into perspective the lopsided nature of how tax benefits are skewed the the wealthy.
At the very least, the MID could be eliminated at, say, 2x the median house price. Even if you do believe the MID helps home ownership, it should only apply to a modest place to live, not McMansions in the burbs.
There is no reason the Federal Government should be subsidizing housing through the MID, and there is no reason the Feds should be subsidizing state spending through the SALT deduction.
Even though I benefit from both, I would like both eliminated.
Golden Valley, MN Housing Prices Crater 13% YOY
http://www.movoto.com/golden-valley-mn/market-trends/
#MuhRussia BTFO in article published TODAY:
http://thehill.com/policy/national-security/355749-fbi-uncovered-russian-bribery-plot-before-obama-administration
yes, but will Mueller fold up his tent? I doubt it. I’m really sick of this crap, the media keeps shoving it in our faces and nothing, I mean NOTHING happens, except Jeff Sessions beefing up civil asset forfeiture and penalizing opiod addicts.