A Herd Mentality Has Resulted In Absence Of Value
A report from Baystreet in Canada. “Federal officials in Ottawa have announced new regulations that would make it more difficult for Canadians to qualify for uninsured mortgages – a move that will impact consumers with down payments of 20% or more. In a report to clients, Rob Sedran, an analyst at CIBC Capital Markets, said the banks are generally supportive of an ‘engineered slowdown’ of the housing market, as opposed to a downturn triggered by an unforeseen event. ‘OSFI hasn’t just tapped the brakes, it’s jumped on the brakes with both feet,’ said Rob McLister, founder of RateSpy.”
From Business Insider Nordic. “In the past two months, the sales of new apartments in Norway have declined by 33 percent compared to the same time last year, shows statistics from Economics Norway, an independent analytical group that tracks the country’s construction sector. In the capital Oslo – which has seen a heated housing market in the past years – the decline is nothing short of astonishing: 71 percent. ‘The number of unsold apartments in the capital are piling up,’ says Andreas Benedictow, chief economist at Economics Norway, to Norwegian daily E24.”
“The news follows a period of declining apartment prices in the Norwegian capital, which has been among the fastest-growing cities in Europe in recent years. No other Norwegian cities come close to Oslo’s decline, which is now dragging down the whole of Norway’s figures. A trend of declining house sales seems to be making its way to neighboring Stockholm, where, Veckans Affärer reported, dozens of apartments in attractive districts are now going unsold – a situation that was all but unthinkable until recently.”
From Muscat Daily on Oman. “Public opinion on the streets of Muscat. Do you think rents have really gone down? Are tenants calling the shots when it comes to rent negotiations? Dr Thashli, Physician and diabetologist: Yes, rents have come down but the reductions vary from place to place. While areas like Qurm and Madinat as Sultan Qaboos have witnessed substantial reductions other popular areas like Ruwi and Al Khuwayr have seen marginal drop. Tenants can bargain in areas where the drop is more.”
“With so many ‘For rent’ signs across the city, do you think the real estate market is likely to improve in the near future? Aiman al Musallami, Bank employee: No, I don’t think so. Though, things will stabilise but one can’t expect anything big unless the population increases. The reason is there are more houses and flats than people themselves.”
From The National. “Residential rents and sales prices in Abu Dhabi declined in the third quarter of 2017 on the back of economic tightening and the release of new housing stock, according to real estate consultancy JLL. Craig Plumb, head of MENA research at JLL, said the downwards trend would continue into the fourth quarter of 2017. ‘Rents are low across the board, which is good news for tenants,’ he said. ‘We expect this trend to continue, probably at the same rates, as we see no reason to suggest price stabilisation.’”
“He added: ‘Oversupply is not the problem in Abu Dhabi – it’s lack of demand, due to job cuts, corporate restructuring and reductions to housing allowance. So affordability for tenants is crucial and they are looking at cheaper options, of which good quality ones are not widely available. There are no signs of the market bottoming out yet.’”
From The Sun Star in the Philippines. “While a bubble remains uncertain, Professor Enrique Soriano, executive director at W+B Advisory warned that the country’s property sector is already on an overextended run for almost three years now, from the usual 10-year cycle. ‘Whatever gains we are making in the extended two-year-period is already a bonus for the property sector. But, any extension will always have some dangers…at some point, it will slide,’ said Soriano, who has witnessed the ups and downs of the property sector since 1987.”
“Soriano cited a herd mentality even among inexperienced real estate players, which has resulted in tougher competition, lousy project concepts or absence of value proposition, among other factors that make condo-selling difficult these days. An oversupply is happening when sales velocity is no longer as robust as before, he explained. Second, if buyers are already coming from outside Cebu or as far as Mindanao and third, if overseas Filipino workers (OFWs), who are mostly the main target buyers, are no longer buying. ‘We now have a tougher market,’ he said.”
From AFP on New Zealand. “Overseas buyers will no longer be allowed to purchase existing homes in New Zealand, Prime Minister-elect Jacinda Ardern said Tuesday, as she unveiled a raft of policy deals made with her coalition partners. The move to tackle soaring property prices was agreed during lengthy negotiations between the Labour Party leader and populist powerbroker Winston Peters to form a new government that also includes the Green Party.”
“Ardern announced plans to slash immigration and focus on regional development and job creation. ‘We have agreed on banning the purchase of existing homes by foreign buyers,’ she said, specifying that the new rules only applied to non-residents. Anti-immigration campaigner Peters, whose support was crucial for Ardern to form a ruling coalition in the 120-seat parliament, said a message has been sent that New Zealand was ‘no longer for sale’. ‘There is going to be a change and a clear signal sent internationally that New Zealand is no longer for sale in the way it has been. We’re happy with that,’ Peters said.”
The Australian Financial Review. “Big banks are set to announce tougher measures to crack down on high rise apartment purchases including blacklisting more than 100 Brisbane suburbs, doubling the minimum apartment to qualify for funding, evidence of rental cash flows and tough new valuation criteria. Lenders such as Adelaide Bank are introducing ‘minimum funding requirements’ requiring apartments to have their own bathrooms, kitchens, laundries and windows in key rooms, such as bedrooms and lounge rooms.”
“Others, such as Suncorp Bank, the nation’s fifth largest mortgage lender, are circulating a confidential list of 39 Brisbane postcodes covering more than 100 city and metropolitan suburbs where the new lending restrictions will apply. ‘Our settings have been adjusted for postcodes based on recent weakness in the investment unit market in Brisbane, with evidence of a reduction in prices,’ a Suncorp Bank spokesman said.”
“Nervous lenders are turning the screws on apartment buyers amid growing concerns about over-supply, falling prices, restrictions on foreign buyers and potential risk from combustible cladding widely used on high rise apartment exteriors. For example, new apartment sales in the Queensland capital have reportedly collapsed by more than 70 per cent in a year, prompting desperate developers to offer lucrative incentives to attract buyers.”
The Economic Times on India. “Talking to ET Now, Shubham Jain , VP & Sector Head - Real Estate, ICRA , says while cumulative sales volumes have really grown by around 40 odd per cent, out of a sample of 11 companies, only four companies have shown positive growth in volumes whereas other seven have still shown a declining trend. ‘Every year there is all this talk of how we are going to see a recovery. We do not see that. There is so much unsold inventory and at the same time, the government is talking about affordable housing. We all know what is happening with the bank and real estate developers. Are you seeing any signs of a recovery?’”
“Q: ‘Earlier, we have seen that companies, different investors were very aggressive when it came to buying land. They were taking huge loans and buying land. They were bidding quite aggressively. Do you think that the way these companies, these investors were thinking has changed?’”
“A: ‘Definitely. The trend of various companies investing into land bank has significantly declined over the last two-three years and there are multiple reasons for that because already there is so much of inventory in the system that they are focussing on completing the inventory and clearing off that inventory first before buying your new land and launching further new projects. Also investors are not there in the market at all. Earlier real estate used to be a very strong option for investors. Even for salaried class, who were buying second or third homes. But now with falling rental yields and very low appreciation in the real estate prices, I do not think that any one is looking at real estate as an investment option anymore.’”
Charlton, MA Housing Prices Crater 19% YOY
http://www.movoto.com/charlton-ma/market-trends/
“Charlton, MA Housing Prices Crater 19% YOY”
It seems you don’t compare $/sqft price between periods, which would be much more accurate.
Houses aren’t bought by the square foot.
“It seems you don’t compare $/sqft price between periods,”
Who dat?
‘blacklisting more than 100 Brisbane suburbs, doubling the minimum apartment to qualify for funding, evidence of rental cash flows and tough new valuation criteria. Lenders such as Adelaide Bank are introducing ‘minimum funding requirements’ requiring apartments to have their own bathrooms, kitchens, laundries and windows in key rooms, such as bedrooms and lounge rooms.’
As I’ve pointed out before, these were built to sell to Chinese people who never saw them and didn’t really care that they didn’t have windows or were just too small for actual living. Might as well tear them down.
It has occurred to me - no matter how wrong I might be - that all these Chinese “buyers” are likely not all individual buyers. Could be groups of Chinese buyers as sponsored by the Chinese government…of the government itself.
Are there the equivalent of hedge funds in China?
I have no proof of anything here. I just know it smells bad.
Are there really enough individual buyers in China who can afford to buy all this sh*t all over the world? Not bloody likely. Not even at 1.5 billion people.
Hmmm. Interesting theory. I’m skeptical but it would be a great way to manipulate the economy of another nation. Especially if you had a trade surplus and a bunch of their cash to burn.
But regardless, even though 90% of Chinese are just trying to feed themselves, that other 10% is still more than 100 million people. And since prices get set on the margin, you probably only have to buy a few thousand houses here and there to start having a significant effect on prices. You could mess with another country pretty hard if you wanted to play games with that.
Are there really enough individual buyers in China who can afford to buy all this sh*t all over the world? Not bloody likely. Not even at 1.5 billion people.
I’m sure they borrow the money from China’s enormous shadow banking sector.
‘The move to tackle soaring property prices was agreed during lengthy negotiations between the Labour Party leader and populist powerbroker Winston Peters to form a new government that also includes the Green Party.’
‘Ardern announced plans to slash immigration and focus on regional development and job creation. ‘We have agreed on banning the purchase of existing homes by foreign buyers,’ she said, specifying that the new rules only applied to non-residents.’
Well that’s one way to get rid of these speculators. Remember the Chinese dude who told people in New Zealand they needed to “work harder” if they wanted a shack?
Globalism bites the dust in another country. Who’s next?
Globalism is about greed, cheap labor and the control of all people.
Globalism won’t bite the dust in any country as long as its captured political adjuncts in the Establishment parties retain their stranglehold on the levers of power.
Good on the kiwis, hope to see foreigners get some tender loving in the US RE market. . . soon.
“Well that’s one way to get rid of these speculators. Remember the Chinese dude who told people in New Zealand they needed to “work harder” if they wanted a shack?”
For two years prior to the WWII D-day invasion there was a massive build-up of U.S. logistics and troops in Great Britain. The GIs had an ample supply of money compared to British troops, so they enjoyed everything material and their ladies too. Now the Chinese are doing it to everyone else around the globe.
Now the Chinese are doing it to everyone else around the globe.
They have their way with global real estate much more easily than with the global dating supply. But money does talk.
Democrats still don’t understand why they were schlonged and why DJT won in 2016.
And why DJT will win again, in a landslide, in 2020.
++++
This Is Rich: Democrats Fight To Protect A $1.8 Trillion Tax Break That Benefits The Top 1%
Investor’s Business Daily | 10/24/2017
Tax Reform: What do you call a tax break that delivers 88% of the benefits to upper-income families and subsidizes rich states at the expense of poor ones? If you’re a Democrat, you call it a sacred cow.
One provision of the Republican’s tax-cutting plan that has drawn intense opposition from Democrats is the elimination of state and local tax deductions for those who itemize.
Rep. Nancy Pelosi said it was “an insidious effort to raise taxes on middle class families … across America.” Sen. Ron Wyden said that “hardworking middle-class folks are not going to appreciate Congress double taxing them.” New York Gov. Andrew Cuomo called it “a pure tax increase.”
So what is it that Democrats are valiantly trying to protect?
This SALT deduction, as it’s sometimes called, will cost the federal government $1.8 trillion over the next decade, according to the Tax Foundation.
And the benefits go almost entirely to upper-income families.
As a result, 88% of the $1.8 trillion cost of this tax break goes to the 10% of families with incomes above $100,000.
In other words, this is one hugely regressive tax break.
In effect, then, the SALT tax break has turned into a massive federal subsidy of profligate liberal states, paid for by fiscally conservative states.
‘the benefits go almost entirely to upper-income families’
Not only that, mostly white, land owning people. And Mike has a new ex-prez on his side: Bush the second.
NeoCons = Progressives.
Both equal globalists, for those out there who care to get his or her knickers in a bunch. Whatever. Same difference.
To reiterate: Reagan’s biggest error bar none was Bush SR as VP back in 1980. Nothing else comes close.
What about Biden and McCain? Sittin’ in a tree? K.I.S.S.I.N.G. Yes, a child’s nursery rhyme seems appropriate for those two.
Ironically, New York Gov. Andrew Cuomo has no reservations about taxing me on money the IRS has already taxed. Sales Tax is not insignificant.
A year ago today:
Hillary ClintonVerified account @HillaryClinton
Donald Trump refused to say that he’d respect the results of this election.
That’s a direct threat to our democracy.
10:53 AM - 24 Oct 2016
https://twitter.com/hillaryclinton/status/790612127996403712
This just in:
‘Sen. Jeff Flake (R-Ariz.) will not run for reelection, The Arizona Republic reported Tuesday. Flake, one of President Trump’s most outspoken critics within the GOP, told the newspaper that he will drop out of the race because he feels out of step with the party.’
“There may not be a place for a Republican like me in the current Republican climate or the current Republican Party,” he told the paper.’
‘Flake’s decision comes amid Trump’s feuds with critical GOP senators. Earlier on Tuesday, Sen. Bob Corker (R-Tenn.), another Trump detractor who announced in September that wouldn’t run for reelection, blasted the president in television interviews. Trump responded with tweets, once again calling the Tennesee senator “liddle’ Bob.”
‘Former White House chief strategist Stephen Bannon has been gathering Trump loyalists and conservative grass roots forces in an effort to back primary challengers to senators, including Flake, who had been perceived as disloyal to Trump. Bannon endorsed Kelli Ward, who had been Flake’s leading primary challenger until he announced his retirement. Polls have shown Ward out-polling Flake in the primary match-up.’
The truth is liddle Jeff is getting schlonged in the polls by someone who has never been in office before. Buh-bye Jeff!
Yeah, but this was a bummer:
http://www.zerohedge.com/news/2017-10-24/kid-rock-says-hes-not-running-senate
I’m heartbroken, but I don’t blame him.
Bannon: 2
RINOs: 0
RINOs and democrat-liters don’t understand why Trump won.
Things were so nice and comfy in DC. Then Trump came in a ruined it for everyone!
They want things to go back to the way they were.
It ain’t going to happen.
7 things in Flake’s book that could haunt his re-election campaign
http://www.azcentral.com/story/news/politics/arizona/2017/08/02/…flake…/527657001/
Aug 1, 2017 - Jeff Flake, R-Ariz., already was bracing for a tough 2018 GOP primary. … He embraces the term “globalist,” which many Trump supporters hurl …
Jimmy Kemp II - Senator Jeff Flake is a globalist shill, a… | Facebook
https://www.facebook.com/senatorjeffflake/posts/10153661844796646
Senator Jeff Flake is a globalist shill, a modern day Benedict Arnold like all the other sellouts in Washington that would support an awful trade deal…
Traitor Jeff Flake Admits He’s “PROUD” to be a GLOBALIST - YouTube
Video for flake globalist
https://www.youtube.com/watch?v=Kt96X-OiLIk
Aug 2, 2017
Jeff Flake: ‘I’ll Take the Globalist Moniker, Thank You’ - Breitbart
http://www.breitbart.com/big…/08/…/jeff-flake-i-will-embrace-globalist-moniker-thank-you...
Aug 1, 2017 - Flake, who is up for reelection in 2018 and is vulnerable to a primary challenge, reportedly “embraces” that label in his new book, which bashes …
Liddle John McCain is a sad panda today.
Liddle, lol. I love Trump speak. Liddle, lyin’, schlonged, and my favorite, BIGLY!
“Jeff Flake Blasts “Reckless, Outrageous And Undignified” Trump; Announces Retirement From Senate”
He schlonged me bigly! I’m taking my marbles and going home to mother, sniff, SOB!
He’s so far behind in the primary polls I’m sure he can’t raise any money. He saw an embarrassing defeat ahead and quit.
Meh, he’s going with his gold plated health care and a nice pension, other benefits and will likely do a Hastert and pop up as a lobbyist.
Now I’m just waiting for McCain to shuffle off to that great defense contractor in the sky. Too bad Trump can’t give him a good thrashing on the way out due to optics.
“RINOs and democrat-liters don’t understand why Trump won.
Things were so nice and comfy in DC. Then Trump came in a ruined it for everyone!”
And there it is.
The Great Disruptor!
Wow, these neocucks just hate it when the Don gives ‘em a verbal pantsing.
Still not tired of winning
I was listening to the radio simulcast of NBC Nightly news on the commute home. The female reporter said that the reason Flake was leaving was because he didn’t want to work with the president in a toxic environment.
That’s nonsense. Flake is leaving because he’s going to get clobbered in a primary challenge, trailing 58% to 31% against Kelli Ward.
Flat out total mischaracterization by NBC Nightly News. Utterly unsurprising, the only thing that changes with that company is the level of hysteria against Trump. Sometimes high, sometimes higher.
I knew about it because they have been giving out the polls on local radio. The MSM has become less than worthless: you can’t trust anything from them anymore, and not just when it comes to the President.
Interesting, I see this as completely different than some posting here. I view senator Flake as a principled man. I am much more aligned with senator Corker than I’ll ever be with Trump. I hope even the most ardent Trump supporters will listen to senator Flake’s speech in its entirety:
https://www.youtube.com/watch?v=WpAZm5ouaBA
Housing my friend.
Round Rock, TX Housing Prices Crater 5% YOY
http://www.movoto.com/round-rock-tx/market-trends/
The female reporter said that the reason Flake was leaving was because he didn’t want to work with the president in a toxic environment.
That’s nonsense. Flake is leaving because he’s going to get clobbered in a primary challenge, trailing 58% to 31% against Kelli Ward.
Flat out total mischaracterization by NBC Nightly News.
If the issue is Flake’s motivation, you’d need to be a mind reader to assert that NBC is wrong.
We know what snowflake thinks. When I give an example of what’s wrong with US politics, I always cite the Arizona senators. Everybody knows how the people here feel about illegal immigration. Yet BOTH of our senators are gang of 8 amnesty nutjobs. And they never feared losing their cushy seats because the two party system made it impossible to get rid of them. Until now. The people being polled said enough. The business interests that keep these clown in DC hasn’t changed: the people have. These two asshats are a perfect example of a broken political process and what it takes to fix it.
Back in 2004 the first referendum to clamp down on illegals went to a vote. EVERY SINGLE statewide officeholder opposed it. Called it racist. It passed by a landslide and even got the majority of Mexican-American votes. We’ve had more since and again the establishment opposed, it always passed. Maybe you don’t remember what it was like in 2003? Every day, news reports of 80 or 100 illegals found in some sweltering truck trailer. Stash houses with 200 or 300 illegals in regular neighborhoods held by a bunch of guys armed to the teeth using them to get money out of relatives. Well that crap doesn’t happen anymore, no thanks to liddle jeff and that jackass McCain. And that’s just immigration. They can go pound that globalism with some sand too.
OneAgainstMany:: Interesting, I see this as completely different than some posting here. I view senator Flake as a principled man.
I like Trump’s bringing the sausage making in government out of the shadows so that people can see it. They know it’s there, yet the politicians claim, stone-faced, impervious to all evidence, that the perfumed kabuki performed before the TV cameras is the reality. Like the dutiful courtiers claiming that the emperor’s clothes were grand. They do it because they perceive it benefits them.
From an Economist article: “Walter Bagehot argued (approvingly) that Britain weaves duplicity into its statecraft. The constitution rests on a distinction between an “efficient” branch which governs behind the scenes, and a “dignified” branch which puts on a show for the people.”
This is a famous dichotomy from Bagehot. Leaders at a certain level I think need to have a certain disdain for the common man. They deal in herd movements, big pictures, and they deal in lives. Being too wrapped up in the minutiae of the maintenance man’s life serves no benefit, and can hinder them in doing what must be done. The only important things are that he continues to do his job, and when called upon, will offer his son for the infantry.
However, just because he and his son are not as smart, or cannot see the Big Picture, or does not wield as much power over others’ lives as the leader, doesn’t mean he doesn’t see the disdain. Vietnam showed us this, and people’s understanding of government has only been growing.
Trump has been able to somehow tap into the maintenance man and his son’s concerns. The median income in the US is about 30K. Median. Yet, as Michael Moore pointed on in his famous speech, the unemployed autoworker’s vote counts just as much as a millionaire’s.
The current system has stopped being responsive to Joe Blow. My thesis is that power naturally accrues into an oligarchy. It’s like gravity. This phenomenon is seen everywhere. The Founders wrote a Constitution attempting to prevent that, by pitting the ambitious against the ambitious. However, while they did understand the fecklessness and venality of politicians, they did not foresee the rise of vast business entities and other huge organizations, with revenues greater than that of many countries, being able to buy politicians to do their bidding. Politicians in large part are no longer concerned with Joe Blow - they can stay in office with the system they have. Or at least they could, before Trump.
Piketty’s core thesis is similar to this: “His thesis was also unusually simple — instead of a complex theory of social class or the vagaries of human culture, he merely predicted that the rich get richer until a big war or revolution resets things. His reams of historical data purported to bear this pattern out — the wealth and income shares of the rich tend to rise and rise, unless a calamity like World War II temporarily levels the playing field.”
I said “Trump has been able to somehow tap into the maintenance man and his son’s concerns” - “somehow”, because from the outset, I was amused by the concept of a “populist billionaire”. He talked bluntly about how he could control politicians with money (gasp!). We all know it happens but virtually all politicians are dead silent on this obvious fact. The dignified versus the efficient branches. For those who can see the corruption, the consolidation of power, the redistribution of wealth upwards (”the reverse robin hood effect”) the lack of responsiveness to various facts, Trump promised to upend the system. Or at least sprinkle a little bit of sand in the gears, which is the most I thought he would do. Trump’s personal fortunes are too deeply tied to the existing power structure for him to do more than shake the cart for his voters, rather than upend it.
I see Trump and Bannon (and Kid Rock’s rise in the polls) as an example of Piketty’s first shot. We have a pressure release system in this country, the electoral system and even that is heavily controlled, to only allow vetted candidates via the primary system (usually - see Trump). As long as that system stays at least somewhat responsive, we can evolve. If the entrenched power structure is unwilling to change and cede some of its power and wealth (and that is a very big if), the American populace is not a docile populace, like China or Japan, or Russia or Germany. It will push back.
Neuromance: The female reporter said that the reason Flake was leaving was because he didn’t want to work with the president in a toxic environment.
That’s nonsense. Flake is leaving because he’s going to get clobbered in a primary challenge, trailing 58% to 31% against Kelli Ward.
Flat out total mischaracterization by NBC Nightly News.
MightyMike:If the issue is Flake’s motivation, you’d need to be a mind reader to assert that NBC is wrong.
The point is that Flake does not have a choice about leaving. He is going to lose in the primary, badly, if he chose to run, per the polls. Choosing to ignore that fact, and stating what the reporter stated, is an inaccurate description of the reality of the situation.
So, perhaps she does not understand the situation. She is then ignorant. Or she does understand the situation and chose to lionize Flake and undermine Trump. Then she is a propagandist. These are the options.
It is likely true that Flake does not wish to work with the president, and does not like the environment which he perceives as toxic. However, he has no choice about leaving. The reporter ignored this fact.
‘have a certain disdain for the common man’
That’s putting it mildly. Remember before the election how articles on Davos or the like would try to work in the word “elite” as many times as possible? It used to be derogatory. Then they were wallowing in it, and the media too. After all, they were reporting on the “elite”!
All the while, pretending to be democratically elected, representing (not of) the people. How noble, royal even! Not bothering with their overall single digit approval ratings, they were elected again and again, upward of 90% of the time.
It goes beyond disdain to tell people who hadn’t had a raise for 30+ years they needed to forget about those factory jobs. Does congress get raises? Does congress have its own health care while we have this joke called Obamacare? Stand up to it and you are ignorant, deplorable.
How many here know the Mexican people despise NAFTA?
Something’s changing, and it’s global. These scumbags in their limos better be glad we have a political system for throwing out the trash.
It goes beyond disdain to tell people who hadn’t had a raise for 30+ years they needed to forget about those factory jobs. Does congress get raises? Does congress have its own health care while we have this joke called Obamacare? Stand up to it and you are ignorant, deplorable.
That wasn’t the definition of deplorable.
A day with Clinton fans: From jubilation to devastation
CNN
Published on Nov 9, 2016
Watch as the Clinton campaign and its supporters goes from full of hope to the agony of defeat in 36 hours.
https://www.youtube.com/watch?v=PDNXAlklkPk
They were so happy! Then…
“Too bad Trump can’t give him a good thrashing on the way out due to optics.”
Optics are good for Trump under any circumstances.
CNN Breaking News: Jeff Flake: McCain and McConnell React To Sen Flake’s Letter
https://www.youtube.com/watch?v=VSBZqt2iB1o
Waaah! Blubber! Sad panda-ness!
Then CNN launches into this crap about how historic it was that a “sitting” senator walked away! He was going to lose by a landslide, fools. That’s why he bailed. More dishonest BS. Pound sand snowflake!
Neuromance
Thank you for a thoughtful post. I appreciate that you quoted The Economist and Pikketty. I’ve read Piketty’s Capital in the 21st Century from cover to cover and I think he has some compelling points and has done a marvelous job at diagnosing the malaise that many are feeling at the growing income inequality. Obviously Trump has tapped into this. I head this echoed here about the disdain toward “the elites” or “globalists” or “hollywood” or “liberals.”
I agree that Trump tapped into a lot of anger, powerlessness, and frustration. The issue that I have with Trump is that his policy prescriptions (when they exist) are not very sound and are half-baked.
He is erratic and all over the place. I’m happy–much prefer–to discuss policies such as immigration (I posted yesterday Sullivan’s scathing critique of why Democrats risk losing again due to unwillingness). I was hopeful over a border adjustment tax as I think that is sound economic policy. But that got quashed. I was adamantly against the repeal of the ACA (I work in healthcare and I have strong thoughts on what needs to happen, but a repeal of ACA is not what I support)
A lot of Trumpism seems to be placating to his base through creating controversy after controversy. He serves up red meat to his base and stokes outrage.
Anyway, a major problem in this country is the lack of affordable housing. Median household income or GDP growth means less and less when housing (rental or buying) is being outpaced. Americans of all stripes are suffering from rising house prices. I’d like to see a policy that figures out how more affordable housing gets built. If the market can’t do it, the state should step in.
Jeff Flake: ‘It’s Not Enough to Be Conservative Anymore… You Have to Be Angry About It’
https://www.youtube.com/watch?v=tnZBGUH3K8k
Comments:
“Jeff Flake had to go. His people saw that he would have wasted his money if he ran. He is just the first, lots more to come. Corker is next.”
“He’s not running because he read the tea leaves and he can’t win. He’s a sore loser so he decided to lash out. He likes his cushy job, pontificating and not doing anything but promising over and over again, till the next election.”
“The American people mostly don’t give a crap about what someone says and if it hurts their feelings. Jobs, health insurance, education, and tax cut for small business. All of those things directly affect the majority of our country, not what someone says”
“JUST BECAUSE FLAKE KNOWS HE WILL NEVER GET RE-ELECTED WHO GOES ON FAKE MEDIA CNN AND OPENS HIS PATHETIC MOUTH AND GOES AFTER THE PRESIDENT!!!!!JEFF FLAKE IS THE SWAMP,THAT IS WHAT TRUMP WANTS OUT OF WASHINGTON!!! GOES ON THE WORST OF THE WORST OF THE FAKE NEWS MEDIA,JOKES AT CNN!!!!!”
“Have a nice life Flake - we don’t need a weak link like you.”
And you missed Lester Hole on NBC Screws lying to the nation(nothing new for Lester) with the Flake(job) narrative.
This is good for Arizonans and good for the nation. Next up. . . Corky Corker. We’ll get to you later Lester.
God bless President Trump. God Bless The United States Of America.
“Median household income or GDP growth means less and less when housing (rental or buying) is being outpaced. Americans of all stripes are suffering from rising house prices. I’d like to see a policy that figures out how more affordable housing gets built.”
With 25 million excess, empty and defaulted houses out there and another 35 million houses just beginning to empty as boomer mortality skyrockets, there isn’t a need for more housing.
Do you really believe wages will triple or quadruple to meet grossly inflated housing prices?
Of course not.
Housing prices will continued falling to dramatically lower and more affordable levels, meeting wages. It’s just the way the world works.
Mitch a politithugs favorite bitch McConnell is next.
Do you really believe wages will triple or quadruple to meet grossly inflated housing prices?
No, I don’t think this will happen. But I don’t think it needs to happen.
I’ll quote Piketty here:
“Such adjustments might be unpleasant or complicated; they might also take decades, during which landlords and oil well owners might well accumulate claims on the rest of the population so extensive that they could easily come to own everything that can be owned, including rural real estate and bicycles, once and for all.
It is important to understand that the interplay of supply and demand in no way rules out the possibility of a large and lasting divergence in the distribution of wealth linked to extreme changes in certain relative prices [of assets].”
In other words, this charade can go on for a long time. The rentier economy can continue unless their is an impetus for change. Households can continually spend an increasing amount of their paycheck which will crowd out other spending for a long time until something breaks the link. But in the meantime, the transfer of wealth can be monumental.
It will go on until it doesn’t. Just like in 2007 when housing prices cratered 40%. Remember…. Housing demand is at 20 year lows and falling.
‘during which landlords and oil well owners might well accumulate claims on the rest of the population so extensive that they could easily come to own everything that can be owned’
I’m a landlord. It’s a business. If you manage it well there’s a modest profit. Or you can lose your ass in a heartbeat. This guy is dumb.
Brilliant post, Neuromance. The entrenched politicians are desperately trying to cling to power with false narratives and bullshit that’s largely falling on deaf ears now. The media has lost all credibility. While people still watch the news, they do so with great skepticism. Every political article I read online is loaded with people fuming about the state of this country, how the media is a big old fat lying turd, and that both parties should be led to slaughter.
Ben said:
It goes beyond disdain to tell people who hadn’t had a raise for 30+ years they needed to forget about those factory jobs. Does congress get raises? Does congress have its own health care while we have this joke called Obamacare? Stand up to it and you are ignorant, deplorable.
MightyMike said:
That wasn’t the definition of deplorable.
The beauty of this is that regardless of what the dictionary or HRC says is the definition, those who were being insulted with it had the final say on what the definition was. In the end it was about the people who might have voted for her but didn’t due to statements like that. Somebody should have cared more about the point Ben makes. Rumor has it that Bill knew it was important but wasn’t listened to. As hard as this might be to believe, the Ds have no one to blame but themselves for Trump. So far the resistance to even considering that possibility is amazing to witness.
Anyway, a major problem in this country is the lack of affordable housing. Median household income or GDP growth means less and less when housing (rental or buying) is being outpaced. Americans of all stripes are suffering from rising house prices. I’d like to see a policy that figures out how more affordable housing gets built. If the market can’t do it, the state should step in.
The issue I have with this is that the government is, in part, the problem, and so to assume they will be the solution is dreaming. There are three major things driving higher home prices:
1. Impact fees (which are more and more necessary because of pressure public pensions are putting on City budgets);
2. Development limitations (height limits, slow processing, etc. limit development; and
UNRELATED TO GOVERNMENT
Cities have been major economic drivers over the past many, many decades (jobs, etc.). Inherently this creates higher density living environments…which ultimately leads to expensive land. With development restrictions (height limitations), this leads to supply constraints, but high land prices.
I would generally agree with your assessment. NIMBY-ism and zoning restrictions have created a scarcity of housing where the jobs are. We are in a bifurcated economy where the big cities and some close suburbs attached to those cities are the winners.
I do think tax policy has exacerbated the housing crisis. The MID is hurtful. The playing field should be level at least, either eliminate the MID or give renters an option to deduct their rent. Subsidizing home ownership seems to only inflate housing assets and help the real estate industry who earns commissions as a percentage of sale price.
I am all in favor of municipalities issuing a surcharge on unoccupied dwellings too. Some Canadian cities are going that route as they reckon with foreign buyers who are buying, but not living in, many units in their cities. I would also implement a progressive or at least a 2-tiered property tax rate that encourages development of affordable housing. Right now the tax incentives and economics of building are such that luxury and high end is what everyone is trying to build.
I think the impact of the MID is overstated.
Accordingly I think it should be eliminated–it won’t cause the “disruption” everyone is afraid of, but I also don’t think it will do much to home prices.
In CA, Prop 13 subsidizes second homes in CA. Ideally, prop 13 would be repealed, but that’s never going to happen. I’ll settle for reforming it so that it only applies to primary residences. So, unless you want to pay fully assessed value on your vacation home, you probably should sell it to someone who wants to live in it full time.
I’m not sure how I feel about the “surcharge on unoccupied dwellings”. If people want to own a home and keep it empty, that should be their right. HOWEVER, blight should be fined, and they shouldn’t be subsidized via prop 13 to own it.
The beauty of this is that regardless of what the dictionary or HRC says is the definition, those who were being insulted with it had the final say on what the definition was.
No, she coined the term. If it’s going to hung around her neck for eternity, then hers is the definition which should be used.
In the end it was about the people who might have voted for her but didn’t due to statements like that.
She said that half of Trump’s supporters were bigots. The polls later showed that she underestimated. The portion was around 60%. It’s unclear which sort of people might have voted for her if she hadn’t made that remark. If it was the bigots, it would be nice to hear them proudly proclaim that they are bigots and that they don’t like people saying that bigotry is deplorable. They shouldn’t be such sheep who refuse to express their true feelings. If it was the non-bigots, it doesn’t really make sense for them to get upset by her remark.
As hard as this might be to believe, the Ds have no one to blame but themselves for Trump.
Certainly Trump voters are to blame.
In CA, Prop 13 subsidizes second homes in CA. Ideally, prop 13 would be repealed, but that’s never going to happen. I’ll settle for reforming it so that it only applies to primary residences. So, unless you want to pay fully assessed value on your vacation home, you probably should sell it to someone who wants to live in it full time.
Just want to say that I agree wholeheartedly with repealing prop 13. With regards to taxing unoccupied dwellings, I think that is appropriate. I’m fine with someone owning an empty building, but as a matter of policy I think empty houses is detrimental to the fabric of a neighborhood. From a utility perspective, empty houses is not good policy. I’m fine if people want to accumulate 2nd, 3rd, 4th, etc. houses, but I think we should give incentivize families getting into their primary residence before we allow accumulation of residences.
As hard as this might be to believe, the Ds have no one to blame but themselves for Trump.
Certainly Trump voters are to blame.
But almost all of the “deplorable” ones were going to vote R regardless. Why couldn’t the Ds close the deal with the people who previously voted for Obama? If everyone who voted for Obama had voted for Hillary she’d have won.
I’m dead serious…no one to blame but themselves. And deep in denial. As illustrated here. But keep hating the deplorables and blaming them and see where it leads…
“That’s a direct threat to our democracy.”
Ha. Master’s of hypocrisy. America is finally waking up though! Now all we need is the country to read this blog antidote to the housing Kool-aid.
“What do you call a tax break that delivers 88% of the benefits to upper-income families and subsidizes rich states at the expense of poor ones? If you’re a Democrat, you call it a sacred cow.”
I mentioned this earlier…a guy I sat next to claimed to happily pay more in taxes (and said he wished that he was taxed more), but was against removal of the SALT deduction–which would have caused him to pay more in taxes.
Hypocrisy at its best.
I thought John Kelly was supposed to bring an end to the circular firing squad the Republicans in power have organize. But apparently this is not the case, as the carnage continues to multiply.
Lol @ circular firing squad. I needed that image, prof.
Has anyone called her a racist and a white supremacist yet?
++++
From AFP on New Zealand. “Overseas buyers will no longer be allowed to purchase existing homes in New Zealand, Prime Minister-elect Jacinda Ardern said Tuesday, as she unveiled a raft of policy deals made with her coalition partners.
“Ardern announced plans to slash immigration and focus on regional development and job creation. ‘We have agreed on banning the purchase of existing homes by foreign buyers,’ she said, specifying that the new rules only applied to non-residents.
Yeah, and a couple years back the Canadian REIC would fly into a fit screaming racist at anyone who suggested foreigners were bidding up shacks. Then the government tip-toed into some studies, decided to levy some taxes and restrictions and crater. Now regulators are slitting the markets throat.
It is just racist to stop even one third world “refugee” who wants to come to your country and get on the free sh*t army train.
+++++
Census Bureau: 44.6% in California Don’t Speak English at Home; 35.6% in Texas; 34.5% in NM (tr)
CNS News | October 24, 2017 | Terence P. Jeffrey
In California–which with a July 2016 population of 39,250,017 is the nation’s most populous state–44.6 percent of the people five years of age and older do not speak English at home, according to data released this week by the Census Bureau.
At the same time, according to the Census Bureau, 18.6 percent of California residents 5 and older do not speak English “very well.”
That ranks California No.1 among the states for the percentage of people in both of these categories.
Nationwide, 21.6 percent speak a language other than English at home and 8.6 percent speak English less than very well.
Texas ranked second for the percentage of residents five and older who do not speak English at home (35.6 percent). New Mexico ranked third (34.5 percent); New Jersey ranked fourth (31.7 percent) and New York ranked fifth (31.0 percent).
In case you weren’t aware.
“California Is America’s Poverty State”
http://www.laweekly.com/news/california-is-americas-poverty-state-7380756
Do you think that every family that speaks a language other than English at home is a refugee family? Maybe Big Government should force people to speak English at home.
My kids speak another language at home. If you spoke to my kids in English, you wouldn’t know it (they are completely bilingual). My wife and I only speak English.
My family has been in the SF Bay Area since the mid-1800’s. We were economically driven refugees then.
HOWEVER, that is different than “not speaking English at home”. My kids also speak English at home.
What is see here with many immigrants kids is that among themselves they speak English, but will speak their parents’ language to them (or a mix of it and English).
My kids speak another language at home. If you spoke to my kids in English, you wouldn’t know it (they are completely bilingual). My wife and I only speak English.
My family has been in the SF Bay Area since the mid-1800’s. We were economically driven refugees then.
It’s unclear if you’re trying to make a point, but none of this has anything to do with the issue.
I’m actually agreeing with you (shocking). We are not refugees, and have more than one language spoken at home.
HOWEVER, there is a distinction between having more than one language spoken at home, and not speaking English at all at home.
A high proportion of the latter CAN be an indicator of a high illegal immigrant or refugee population.
New Mexico has come very far since 1845, when (I estimate) 99% of its residents did not speak English at home.
What’s really changed is that politicians perceive that high house prices (and rents) are going to threaten their jobs, via voters to whom this is becoming more and more of a primary issue.
Being bilingual is a huge advantage, if for no other reason than the health benefits. Bilingual individuals are much less likely to develop Alzheimer’s and dementia.
Aside from that, bilingual (and bicultural) opens one up to the richness of the human experience. There is something about being able to switch between multiple language that seems to protect the intellect. I speak French and my wife and I are learning Spanish. We are enrolling our son in Mandarin dual immersion school. I really don’t get this aversion to non-English speakers. The data overwhelmingly show that the next generation of non-English speakers become fluent English speakers. The risk is that they lose their native language and become disconnected to their heritage.
Well aren’t you special.
No one cares about non+English speakers if they assimilate, support the US and contribute. But really they need English to do most is that.
Non-English speaking implies non assimilated. They are colonizers.
The reason that commonality of language within a group is important is that it promotes communication between people, which brings about understanding. Understanding is important within groups, no matter how large or small.
Non-English speaking implies non assimilated. They are colonizers.
Plenty of people speak English outside of the home and some other language at home. It’s been going in America for hundreds of years. That indicates that they’re becoming assimilated. Referring to colonization is bizarre.
My grandfather spoke and read Gaelic fluently. At the dinner table the conversation was in English, and correct English it was too. A Webster’s Unabridged was within his reach and usually it got opened, so that we could explore the exact meaning and usage of the words we had just spoken, if there was doubt or mistake.
And that is how it goes. First generation has limited English proficiency, 2nd is fluent (sometimes bilingual), and by the 3rd generation the original non-English language is gone. English isn’t going anywhere in the US. It is the de facto language of the US.
I’m not worried about communication. AI-powered smartphone translators make transaction communication possible. Bilingualism is good for the brain, but even monolinguals will be able to communicate with ease with technology
Massive stock market melt-up. How long can it continue?
As long as there is still plenty of cheap and easy money (really debt) still sloshing around out there…
++++
What Junk-Rated Netflix just Said about the Bond Market
Wolf Richter • Oct 24, 2017
Netflix just completed a $1.6 billion junk-bond offering. The 10.5-year notes are rated B+ by Standard & Poor’s and B1 by Moody’s – four notches into junk. But no problem. Those notes sold on Monday at a yield of 4.875%, or 256 basis points over the equivalent US Treasury yield, according to LCD of S&P Global Market Intelligence.
You’d think a company that has been publicly traded for 15 years, offers a popular service, and produces proprietary content that people want to watch would have figured out by now how to turn its business model into something that is self-sustaining. But no.
Cash flow from operations is becoming increasingly negative:
2015 full year: -$0.75 billion
2016 full year: -$1.47 billion
2017 Q1 – Q3: -$1.30 billion
So why can’t it find a self-sustaining business model? Because it doesn’t have to. It can always borrow the money instead of making it. That’s the logic. The bond sale on Monday came on top of a long series of bond sales.
In April, Netflix’s European entity sold €1.3 billion (currently $1.5 billion) of 10-year unsecured junk bonds in Europe at a yield of 3.625%. This is a textbook example of “Reverse Yankees” – euro-denominated bonds sold by US companies in Europe to benefit from ludicrously low costs of borrowing, including an average junk-bond yield that is below the US Treasury yield.
And that’s true – until it isn’t. When the stock crashes, that equation goes to hell. This can happen, as unimaginable as it may seem today. Then the company has trouble issuing more shares to raise the billions needed to redeem the debts when they come due and to cover its negative cash flows. And the whole circularity falls apart.
I dunno: https://fred.stlouisfed.org/series/BASE
‘In the capital Oslo – which has seen a heated housing market in the past years – the decline is nothing short of astonishing: 71 percent…Stockholm, where, Veckans Affärer reported, dozens of apartments in attractive districts are now going unsold – a situation that was all but unthinkable until recently’
Interesting that the MSM is apparently unaware of what’s happening in so many global markets.
“a situation that was all but unthinkable until recently’”
Falling housing prices is unthinkable only when one believes the lie that a house is an investment. The reality is houses are rapidly depreciating assets just like autos. Housing depreciation empties your wallet so paying more than production cost($50/sqft adjusted lower for age and condition) is an irrecoverable loss.
Realtors are liars.
I guess we’re doing the Eastern/Middle Eastern bubbles today, but I couldn’t resist posting this gem from Craigslist:
https://tampa.craigslist.org/hil/reo/d/luxury-tiny-house/6357999664.html
Take a good look. This is, essentially, a mobile home. And yet they call it a “luxury tiny house”. Talk about putting lipstick on a piglet.
You can get a much larger mobile home for a whole lot less, but you won’t get that barrel stove and all that faux granite.
“Luxury Tiny home. This model is 43×12 for over 500sq ft. Will build to suit. This model offers more luxury amenities you’d find in any luxury home. Model available for viewing by appointment. Models starting at $59,900″
The Big Tex trailer hitch sticking out of the end of it is kinda hard to miss. The corrugated metal in the bath is a nice touch.
“The Big Tex trailer hitch”
I know, right? But look what they did there, it’s an essential part of the structure on account of it holds up the A/C or exhaust unit or whatever that is. Creative!
I think there’s a real opportunity here, though. Trailer parks for hipsters. Only call them “Tiny House Intentional Communities”. Owner financing! Reasonable lot rent! Free Wi-Fi! Your own veggie garden by the deck!
Locate them close enough to urban areas and it’s a winner.
Locate them close enough to urban areas and it’s a winner.
NIMBY!
I’m not going to lie, I don’t hate this. Personally, I wouldn’t buy it, but I like the creativity. Someone has to start getting innovative and making housing at the lower level, whatever that looks like.
That’s a mobile home. Here in north Florida, there’s a TON of them. Cheap, too.
Palmetto, look at the outside pictures of the house. Is that some kind of swamp pond in the background? There must be a gazillion flying and crawling warm-weather critters invading that house.
I’m not gonna lie either, I like the IDEA of a $60K house. But I’d rather buy a real foundation house in Oil City. And those hipsters are in for a rude awakening if they try to form communes out of houses like these. Sure, it’s great if you can afford a $200K house but choose to live in a $60K house. But eventually all those hipsters will move away and the houses will then be sold to a low-income family where $60K is the max they can afford. Communities like this will be trashed, plain and simple.
“a low-income family where $60K is the max they can afford…”
The median income in the US is $30K. A $60K house is what they can afford.
The hitch is for the donkey…… DebtDonkey.
That’s pretty ironic, Mafia. Ask any Tiny Houser why they want to buy the $60K tiny house, and they all answer the same thing: they don’t like debt and with a tiny house they have only a very small (or no) mortgage payment. So, no major debt donkeying for them!
Donk,
Paying 5x for a garden shack or 5x for a run down 20 year old ghetto shanty is a distinction without a difference.
we demand a housing bubble app
it’s a right
marching now
Quincy, WA Housing Prices Crater 6% YOY
https://www.zillow.com/quincy-wa/home-values/
*Select median price from drop down menu below chart
Has Trump drained the swamp in Washington?
Of a five-point list of ethics proposals for Washington lobbying, only one has been fully implemented.
By THEODORIC MEYER | 10/19/2017 05:03 AM EDT
Shortly before Election Day last year, Donald Trump rolled out a package of ethics reforms that he promised to implement as president, using for the first time a now-famous phrase: “drain the swamp.”
A year later and nearly nine months into his presidency, Trump has failed to deliver on most of those reforms. Of a five-point list of proposals he unveiled to tighten the rules for Washington lobbying, only one has been fully implemented.
And rather than draining the swamp, many Washington lobbyists say business is better than ever. Spending on lobbying in Washington totaled almost $1.7 billion in the first half of the year, the highest since 2012, according to the Center for Responsive Politics.
“I don’t think that anything’s really changed,” said Brian Wild, a longtime Republican lobbyist and a former aide to House Speaker John Boehner. “If anything, the lobbying business is booming right now.”
http://www.politico.com/story/2017/10/19/trump-drain-swamp-promises-243924
Get your rage-ravaged skull on the TrumpTrain.
You must mean the Trump 757.
You can lease a 757 too. You’re going to have to get a job and work for it.
Trump got a job working for his wealthy father. Then his wealthy bankrolled him and the president got rich through “crony capitalism”. It’s not exactly hard work.
And proceeded to set up shop in your empty skull…. and he’s been living large in that empty space…… all rent free.
“You must mean the Trump 757″
No he means the TrumpTrain, Trump flies on Air Force One.
https://www.youtube.com/watch?v=-FkIJEmOyoA
You’re just making my point. Trump doesn’t ride trains. Neither do real Americans. Trains are big in communist places like Europe and Japan.
Gonna be selling shirts that feature the Hiliary logo and say
I’m (locked up) with her
Gonna make a mint. You want one Mikey?
Lock her up! Lock her up? That’s just another broken three word promise, along with build the wall and repeal and replace.
Have you supported fed gov cuts,if not Ben Dover
“In the capital Oslo – which has seen a heated housing market in the past years – the decline is nothing short of astonishing: 71 percent.”
American real estate investors needn’t worry about this scenario playing out here, as the Fed, Fannie Mae and Freddie Mac have your backs.
American real estate investors needn’t worry about this scenario playing out here, as the Fed, Fannie Mae and Freddie Mac have your backs.
Market forces are for the little people.
Irvine(northwood), CA Housing Prices Crater 11% YOY
https://www.zillow.com/northwood-irvine-ca/home-values/
*Select median price on dropdown menu under chart
I must say, this lovefest among these Mafia gangsters is some of the best self-serving sluttery I’ve seen since the Clinton crime wave leading up to the stunning defeat handed to Hillarious. McCain is FUBAR. A lying pigman.
https://www.youtube.com/watch?v=tnZBGUH3K8k
The MSM is running pretty hard with the Flake story.
So pathetic. Two cucks chirping at each other.
Another goes….. Buh bye!
While you were watching the World Series game last night, Team Goldman-Trump was busy passing new Screw the Customer legislation for the bankster industry. Keep your eyes fixated on the right hand that tweets vitriol, and ignore the left hand under the table.
Master of distraction, carnival barker extraordinaire.
Home equity loans set to soar along with home prices
excerpt:
About 10 million homeowners are expected to take out home equity lines of credit in the next four years, according to a new report from TransUnion.
That would be more than double the amount of originations between 2012 and 2016. This comes as the amount of available home equity has jumped to more than $13 trillion today from $6.3 trillion in 2011, the bottom of the last housing crash.
https://www.youtube.com/watch?v=PV_YAeXOSiw
are expected
Question, haven’t we already had a big run in home equity? The $6.3T wasn’t flat for 6 years then immediately jumped to $13T. We have been at $10T+ for several years now.
Why hasn’t there been major amounts of equity already pulled out?
Honolulu, Hawaii Housing Prices Crater 7% YOY
https://www.movoto.com/honolulu-hi/market-trends/
15 miles s of the Trump fed worker death machine😬 inventory is low w sugar coated 60 yr old shacks at all time highs
LOLZ abound in this article:
http://m.sfgate.com/expensive-san-francisco/article/San-Franciscans-moving-to-The-South-12300064.php