The Battle Lines Are Drawn
A weekend topic starting with CBS New York. “How will local homeowners be impacted by federal tax reform? As CBS2’s Carolyn Gusoff reported, the Tri-State Area may already be feeling the impact in its real estate market. New homes are being built in affluent Roslyn, but who will buy them if high property taxes are no longer deductible and mortgage deductions vanish, too? ‘A lot of incentives to buy a home it looks like will be taken away,’ realtor Maria Babaey told Gusoff. She said it appears the rush is on to close deals before tax reform deal is done. ‘A lot more transactions, a lot more activity – offers that are being accepted,’ she said.”
“Realtors say the plan, as is, would hit luxury homes in high taxed suburbs the hardest. For example, one $2.5 million home has a $40,000 property tax bill, which would not be deductible. It’s not just luxury homes. Average property taxes in Nassau County are close to $20,000. ‘It will be a dramatic change. People will feel it literately double,’ Laureen Harris, president of the Association for a Better Long Island, said. She predicts a geographic housing recession – the inability to sell, a reluctance to buy, and lost equity. ‘Your house is going to be worth less. It’s going to result in an immediate housing crisis,’ said Harris. ‘It is decimating. It is very, very serious and it’s going to be overnight.’”
The San Francisco Chronicle in California. “In Alameda County, where the median home value is about $783,800, about 99 percent of people who bought today would take the deductions. However, that drops to 78 percent under the House bill and 55 percent under the Senate’s. Although most people in the Bay Area would still benefit from the deductions, limiting them ‘might impact your decision to buy a more expensive or less expensive home. The size of the mortgage interest deduction can be significant for a lot of households,’ said Skylar Olsen, senior economist from Zillow. If you limit the deduction ‘your willingness to outbid at the high end drops.’”
“That could put downward pressure on high-end home prices. But ‘it would not take away one of the major drivers’ of Bay Area real estate, ‘which is is constrained inventory in the face of incredibly strong demand,’ Olsen added.”
“Richard Green, a real estate professor at the University of Southern California, calculated that if Congress got rid of the mortgage interest deduction entirely, it might reduce the U.S. homeownership rate, currently around 64 percent, by about a half a percentage point, but prices could fall by 10 to 11 percent. ‘You have high-income people outbidding lower-income people for the same house because they get a bigger tax break,’ he said. If you remove the deduction, they would still buy a home, but pay less for it. If you cut the maximum deduction in half, ‘you might knock (prices) down 5 percent. Given that they are rising 3 or 4 percent (a year) it wouldn’t be noticeable,’ he said. It could even be good if it makes housing ‘a tad bit more affordable.’”
The Mercury News in California. “The decision to not lower the cap on deductible mortgage interest might not thrill large swaths of the country, but in the Bay Area, where the median price of a new home now stands at $752,000, the move will be most welcome. Note that this change would only apply to new mortgages, so Bay Area residents who are already homeowners have nothing to worry about; under the House plan, though, house-seekers would pay more to the tax man for a half-million-plus loan. The real-estate lobby has been fighting hard to stop it from happening.”
“The California Building Industry Association released a statement asking that the $1-million cap not be messed with, saying ‘in states such as California where the median price of a home is $533,000, it is essential for homeowners to be able to deduct the full amount of the mortgage interest deduction. We are concerned that the limits to the deduction in the Act will create a depressive effect particularly in California which could lead to a nation-wide housing recession.’”
The Desert Sun in California. “Ron Parks, a real estate agent with HOM Sotheby’s International Realty, said removing the mortgage interest deduction piles on to a bigger source of anxiety for his clients: Whether they will be able to list their new house on Airbnb without a hitch in light of local cities’ new restrictions on short term rentals. ‘If we put a noose on the pipeline of people wanting to buy second homes,’ Parks said, ‘it’s going to hurt the housing market.’”
“In Indian Wells, vacation homes account for 42 percent of the market. In Rancho Mirage, Palm Desert, La Quinta and Palm Springs, the analysis found that vacation homes are between a quarter and a third of total housing stock.”
“Jim Franklin, a real estate agent with Berkshire Hathaway Home Services, said the proposed legislation would impact people that split their time between the coast and the desert. He also thinks removing the deduction could dissuade retirees from buying a home in Greater Palm Springs. ‘It’s not a vacation home. It’s a retirement home,’ Franklin said. ‘They rent it out, pay the mortgage, because they would be crazy to wait ten years to buy it, because the price would go up.’”
“Some buyers don’t get a mortgage at all. ‘We find that the majority of our clients in the over $500,000 range actually purchase their homes with cash,’ said Jesse Huskey, a real estate agent with The Gurney Group. ‘We might see a leveling off of prices for a short while, but that’s a good thing if you ask me,’ he said. ‘The sky isn’t falling and neither is the housing market.’”
“With that said, markets along the California coast will find the lower cap harder to swallow than less expensive markets inland. In the San Jose metropolitan area, where the median home price tops $1 million, 75 percent of new mortgages this year to date were north of $500,000, the Wall Street Journal reported. In Los Angeles, 44 percent of new loans fell into that category.”
“And while economists at the nonpartisan Tax Policy Center in Washington, DC say the mortgage interest deduction does little if anything to raise home ownership rates and creates an incentive to build more expensive homes, trade groups for real estate agents and home builders argue that the cap will dampen home ownership. Across California, a third of homes have a mortgage over $500,000, according to an analysis by the National Association of Home Builders.”
“‘For us in California, we need to hang onto everything we can possibly hang onto in order for people to qualify and buy a house,’ said Gretchen Gutierrez, CEO of Desert Valleys Builders Association.”
From American Banker. “The battle lines are drawn between those seeking to protect the mortgage interest deduction (MID) and a legislative effort to greatly reduce the use of the MID. Hopefully, this is a battle that taxpayers will win over the housing lobby — the loudest supporter of keeping the deduction intact.”
“The housing lobby’s effectiveness is measured by its success at garnering subsidies. But the proposed House bill, the Tax Cuts and Jobs Act, would be a shot across the industry’s bow. The stage is now set for a crucial debate between two competing visions: the House plan — which would disincentivize the MID by raising the standard deduction and capping loans qualifying for the MID at $500,000 — and Senate tax reform legislation that effectively would leave the deduction intact.”
“From the perspective of taxpayer cost and federal budgeting, it’s no contest which plan is better. Since 1994, the cost of the MID, the separate real estate tax deduction (also downsized in the House plan), and other single-family tax subsidies has totaled over $2.5 trillion and in fiscal year 2017 were estimated to cost $141 billion. This does not include the many hundreds of billions in subsidies over the same period provided to or by Fannie Mae, Freddie Mac, the Federal Housing Administration, Ginnie Mae and others, and the $6.7 trillion in taxpayer mortgage debt guaranteed by these same agencies.”
“What did the U.S. taxpayer get for this massive level of rent-seeking? First, the U.S. homeownership rate today is 63.9% — statistically no different than the average rate of 64.3% since 1964 (excluding the bubble years). Second, these policies directly caused the 2008 financial crisis — a catastrophe for the U.S. and world economies.”
“It is worth noting the ‘man bites dog’ nature of NAR’s admission that the MID drives home prices up higher than they otherwise would be. While this certainly explains the NAR’s past and current support for the MID, it is a damning admission for a group that purports to promote homeownership and ‘affordable housing.’”
“In terms of the merits, federal subsidies for homeownership like the MID get capitalized into higher prices, encourage the taking out of more debt, promote the buying of larger, more expensive homes, and price homes out of reach of lower-income buyers. Recent research at the Federal Reserve confirmed these points and found ‘when house prices are allowed to adjust in response to the elimination of mortgage interest deductions, the homeownership rate actually increases.’”
“According to NAR, existing home sales have been in a seller’s market for 61 straight months and there are no signs of this abating anytime soon. A seller’s market is commonplace even at the higher price end of the home market. This includes San Francisco, where homes selling for more than $4.6 million have less than 2.5 months inventory along with similar conditions for the highest price points for metro areas such as Seattle and Los Angeles. Areas like Boston, Denver, New York City and Washington D.C. have a seller’s market except for price points in excess of $1.5 million to $2 million.”
“Jerry Howard, chief executive of the homebuilder association, told The Wall Street Journal that the House legislation is ‘a bad bill for housing.’ In reality, it’s a good bill for American taxpayers and homebuyers.”
‘But ‘it would not take away one of the major drivers’ of Bay Area real estate, ‘which is is constrained inventory in the face of incredibly strong demand,’ Olsen added.’
You’ll always have the big shortage going for ya!
“incredibly strong demand”
In spite of the fact housing demand is at 20 year lows, 30 year low in CA. The flat out lies by these pukes is downright stunning.
Demand seems to be strong in Nor Cal. I listed a house on Thursday, had 2 offers on Saturday, signed the deal on Monday. 99.2% of asking. Sacramento foothills.
Your handle should be Pinocchio.
You keep denying real estate can be a great investment. This is right from the public record on the house I sold a month ago.
DATE EVENT PRICE
09/13/17 Sold $450,000
12/07/09 Sold $285,000
I’ll post the numbers on the current one when it closes on Jan. 2.
DebtDonkey
Littleton, CO Housing Prices Crater 9% YOY
https://www.movoto.com/littleton-co/market-trends/
Just before that they talked about how this would reduce demand. And then said it wouldn’t take away the major drivers of the bubble prices…which was demand.
‘It is worth noting the ‘man bites dog’ nature of NAR’s admission that the MID drives home prices up higher than they otherwise would be. While this certainly explains the NAR’s past and current support for the MID, it is a damning admission for a group that purports to promote homeownership and ‘affordable housing.’
And it benefits mostly rich, white people. Where’s the progressive-ness?
“…the Tri-State Area may already be feeling the impact in its real estate market. New homes are being built in affluent Roslyn, but who will buy them if high property taxes are no longer deductible and mortgage deductions vanish, too?”
So is the REIC openly admitting that the purpose of their preferred tax policy is to help rich white guys afford to by luxury homes?
“rich white guys…”
Massive debt does not make one rich, it is a pretense, an imitation of richness.
It makes some of us rich.
😁
“We are concerned that the limits to the deduction in the Act will create a depressive effect particularly in California which could lead to a nation-wide housing recession.’”
Translation: Since price equals value and value is interpreted as wealth taxpayers need to continue to subsidize high prices else enormous quanties of wealth will be poofed out of existence.
Maintaining the lofty value of the luxury housing where wealthy California progressives reside is a national policy priority of paramount importance.
Silverton, OR Housing Prices Plummet 14% YOY On Cratering Housing Demand
https://www.movoto.com/silverton-or/market-trends/
The sea is angry today my friends.
The waves are crashing like house prices in Silverton, OR.
Stop replying to yourself, Housing Analyst.
Jeff isn’t HA, but I suspect Karen may be HA.
I suspect that Ol’Bubba may be a drag queen.
Interestingly, it is Ol’Bubba that posts under two user names on this board.
As does Rental Watch.
(hint, hint).
Some advice for those posting under two aliases: be patient. You might wait a bit to see if your first post appears under your first alias before you post the same info under a second alias.
I’ve only used the Ol’Bubba handle on this board, and I’ve been posting here since 2005.
Nope…one name, and one name only for me–never changed…been posting under the same name for a long time.
Another Pinocchio
Hello my good friend.
Seattle, WA 98117 Housing Prices Crater 9% YOY
https://www.zillow.com/seattle-wa-98177/home-values/
Everybody is HA to you, jp. He’s really in your head.
Sorry Charlie - here’s just a short list of HA’s recent aliases:
Mafia Blocks
The Crushin’ Russian
TheFabulousMoolah
Tarara Boomdea
Jesus Navas is my Lord Savior
LOLLOL@Lola
BoBo Brazil
Classy Freddie Blassie
Haystacks Calhoun
Happy Humphrey
Gorilla Monsoon
Senior Housing Analyst
Housing Analyst
Scratch me from the list.
I don’t think HA uses female names.
I am wrong if he’s TheFabulousMoolah…
Mwah,
Tarara 💋
They won’t scratch you from the list. Your denial merely confirms your guilt.
“I don’t think HA uses female names.”
I thought about dropping Mafia and going with Donk Craterton but it’s taken already.
Denial? Guilt? What the hell.
This morning I Zillowed-up the, uh, value of my house and learned that this “value” has increase by a factor of 23 since I decided to buy it 44 years a go.
I attribute this financial miracle to one of two possibilities:
Possibility Number One: I am a financial genius.
Possibility Number Two: I am surrounded by financial morons.
I like to think it is due to the first possibility but deep down I know that it isn`t.
When you take out the fake economy of the housing bubble and a very few way overvalued companies…there is not much there.
Except poverty, debt, misery and bankruptcy
+++++
California economy a measly 37th, behind Michigan and Ohio
Karin McQuillan - American Thinker - November 11, 2017
California likes to boast that its booming economy is the sixth largest in the world – as calculated by its own state government. In contrast, rust belt states like Michigan and Ohio are seen as pathetic economic has-beens by the self-congratulating liberal elite.
Not so fast, says Carson Bruno in Real Clear Markets. Adjust for cost of living, which is 36% higher than the national average, and California comes out behind Mexico:
Using the cost of living adjusted data from the International Monetary Fund and adjusting California’s GDP data provides a better snapshot of California’s economic standing in the world. Doing so shows that California is actually the 12th largest economy – a drop of 6 spots – and actually puts the state below Mexico.
A full 50% of the California economic growth miracle comes from a few dozen Silicon Valley firms – think Apple, Google, Facebook. It’s a banana republic of high tech.
Because of the high taxes and onerous government policies that keep housing down and costly illegal immigration up, the middle class is fleeing the state. More tech workers are leaving California than are moving there.
California has the highest state income tax, the highest sales tax, the highest gas tax, property taxes 95% higher than elsewhere. Small businesses that make no profit – that is, zero profit – are still taxed.
Lastly, while California has the biggest unadjusted GDP among the states, it is also earns another distinction: the highest poverty rate in the nation.
California has 33% of the entire nation’s welfare cases – more than the next seven states combined.
[T]he producers are leaving the state and the takers are coming in. Many of the takers are illegal aliens, now estimated to number over 2.6 million. The Federation for American Immigration Reform estimates that California spends $22 billion on government services for illegal aliens, including welfare, education, Medicaid, and criminal justice system costs. … [I]llegal aliens in California contribute only $1.21 billion in tax revenue, which means they cost California $20.6 billion, or at least $1,800 per household.
Illegal aliens improve the quality of life for the elite, who rely on them for personal and household services of all kinds. For the rest of society, not so much.
The California economy is big, and its taxes are astronomical, yet the government is still hugely in debt. Some cities have pension liabilities that eat up their entire budget, with nothing left for current expenses.
“California comes out behind Mexico”
Sounds about right, after considering cost of living, low wages and outrageous home prices and rents.
This is the chart that drives policy (incumbency rate): https://www.opensecrets.org/overview/reelect.php
Illegal aliens improve the quality of life for the elite, who rely on them for personal and household services
Remember the story of Rand Paul being assaulted while mowing his lawn? Everybody missed the fact that Rand Paul was mowing his own lawn, you know, one of those jobs that Americans won’t do.
Heh. That’s a great point, never thought of it like that.
I can see the NY Times headline now:
Rich Republican Doctor Steals Job from Hispanic Immigrant
I don’t know how many times I’ve seen smug liberals post on FB or Twitter how CA is the 5th largest economy in the world. Oh and those backwards goobers in Georgia and Alabama only make 1/2 as much money.
When I point out that their cost of living is also 1/4 of CA’s and therefore, 1/2 the income = better off relatively speaking, the reply, 95% of the time is RAAAAAAACIST!!!
One of the secrets of government GDP calculations is that it includes government spending. California’s taxes its residents mightily and spends bigly, thereby inflating its GDP.
If you Google “housing’s contribution to GDP” you will learn (among other things) that:
“Including owners’ imputed rent (an estimate of how much it would cost to rent owner-occupied units) in GDP has long been a standard practice in national income accounting. Were owners’ imputed rent not included, an increase in the homeownership rate would cause GDP to decline.”
If California housing generates a lot of imputed rent due to the outrageously high prices of houses then the miracle of increased GDP is magically generated.
This says more about the lofty rental rates than it does about overvalued housing. If rental rates were to fall, then GDP would fall much more than if prices on houses were to fall for purchase since residential construction is only 3-5% of GDP in national accounting.
There are so many aspects of official GDP calculations which are fraudulent and bogus. It’s really a worthless metric.
“One of the secrets of government GDP calculations is that it includes government spending.”
It’s only a secret to people who never sat in a college macroeconomics course.
Y = C + I + G + (X – M)
Y = GDP
C = Consumption
I = Investment
G = Government Expenditure
X = Exports
M = Imports
The vast majority of Americans have never sat through a college macroeconomics course.
Of those who have, the vast majority have forgotten almost everything they learned.
College macroeconomics courses do not teach people to think critically about these things. The fact that government spending is a part of official GDP figures is not something most people ever really think about the implications of. It’s just a formula they learn to pass a test to obtain a piece of paper to secure a job.
And this is only one of the many problems with officially calculated GDP.
The obvious result of insane public unions and insane property taxes.
The answer is not more tax breaks for the rich.
++++++
She predicts a geographic housing recession – the inability to sell, a reluctance to buy, and lost equity. ‘Your house is going to be worth less. It’s going to result in an immediate housing crisis,’ said Harris.
“…worth less.”
Typo noted:
… worthless.
It is the same with the “war on poverty”
The US has spent trillions of dollars - yet the poverty rate is HIGHER than in 1964.
So what did all this money do????
Buy votes from the free sh*t army.
+++
“What did the U.S. taxpayer get for this massive level of rent-seeking? First, the U.S. homeownership rate today is 63.9% — statistically no different than the average rate of 64.3% since 1964 (excluding the bubble years). Second, these policies directly caused the 2008 financial crisis — a catastrophe for the U.S. and world economies.”
once one bubble cracks it will be a domino effect on other asset classes.
Usually, an economic recession leads to a downturn in housing values. The Great Recession was lead by the housing bubble busting. This is why the downturn was so deep and why it took so long for a recovery.
I see no signs of an economic recession today, thus it is unlikely housing.values will drop until that happens. Case-Schiller prices show that to be the case.
DebtDonkey
Miromar Lakes, FL Housing Prices Crater 18% YOY
https://www.movoto.com/miromar-lakes-fl/market-trends/
Across California, a third of homes have a mortgage over $500,000, according to an analysis by the National Association of Home Builders.”
But this is “good” debt right ?
the mainstream financial media are reading scripts.
The best!
😁
Until you get schlonged…
The other third is underwater, thus not counted.
“But this is “good” debt right ?”
Oh, yeah, especially because it’s front loaded! Ever look at the amortization schedule of a mortgage? When you factor in that the average person lives in a house 7 years, there’s a boatload of interest paid, and not much principle.
😁
Total leftist garbage. The deductions go away but tax rates are reduced. Nobody in the MSM ever mentions the tax rate reduction.
And the standard deduction goes up! Effectively it’s not like the MID is being taken away; more like it’s being given to renters and owners alike.
What it does is get the govt out of the business of deciding what activities are better than others. The govt has no business incentivizing people to buy a house or buy an elecric vehicle or donating to charities or any of the other items.
The only legitimate deductions should be medical expenses. Those are things that can’t be helped and it’s not a choice to get sick. But everything else, buying a home, having kids, adopting kids, donating to charity….those are choices. If someone wants to make those choices, terrific. Buy a house, buy a Tesla, have kids, donate as much as you want to your favorite cause. But you shouldn’t be rewarded financially by the govt for doing so.
Heres my issue with medical expenses. This country has a 40% obesity rate. Not overweight, but obese - the worst thing you can be. And it will only get worse. People have screwed up priorities, eat poorly (admittedly a lot of good food has gotten expensive and been replaced by frankenfoods), dont exercise - but all those clowns have “smart” phones. But even if you’re poor you can eat simple foods and exercise to maintain good health - I know its possible. So a lot of peoples health problems ARE their faults. Add in drugs, tobacco and alcohol abuse and if aliens beamed them and the fatties out of here this country would look pretty damn good.
In addition, I think the government needs to attack the disease and not the effects in health care, and thats end the fraud in medical care, especially billing - some people getting a free ride while others get financially raped, arbitrary pricing, etc. Coming up with ways to finance the fraud doesnt address the problem - kind of like all the stupid programs to finance home loans for people who have no business owning a home which posters here complain about every day.
So, a large number of people will have heart attacks in their 40’s and 50’s and will be dead by the time the ambulance arrives. You have about a ten minute window before it’s too late. I know a few people who died this way.
This country has a 40% obesity rate. With that in mind its very hard to be obese in NYC between the walking, cracked sidewalks, traffic, elevated subways where only a few have elevators or escalators, you have no choice but to get a decent amount of exercise daily.
Older buildings have laundries in the basement but you still have to haul it down then back up.
You rarely see obese people in the subways that take up 2 seats….but when you do its mostly LAWYERS, no kidding collars so tight they turn red big briefcases on wheels But in the burbs everything is much flatter. and you can park very close so no need to huff it.
So here is the dilemma, being obese you have 2 choices to change your lifestyle on you own or by surgery. and surgery is not cheap…..just watch my 600 lb life its staggering how big these people get and some can still function.
I though a solution would be to raise minimum wage at least $1 to $1.50 per hour then take it right back out to pay for a basic health care plan. (like SS) so everyone who works will pay something, and if your employer paid for your insurance then you keep the increase.
As an RN, I take care of patients every day who have undergone bariatric surgery. Obesity is incredibly complex and to pin all the blame on the individual for lack of self-control (e.g., diet and exercise) is not supported by the current research. The best comment I read on this recently was from a Linked-In writer:
Libertarians and fanatical anti-regulation types love to claim that individual responsibility is paramount, and I suppose that means the growing percentage of obese people in our society are all at fault, and deserve the shame our culture heaps upon them. I tend to believe otherwise, that outcomes are driven by inputs, and right now, the inputs in our society are making us very, very sick.
Can we face up to this fact without dehumanizing or victimizing the people who now comprise more than a third of the US population? Is talking out loud about this issue even allowed? (I think I’m about to find out…)
It certainly feels taboo, because these are real human beings we’re talking about, and our society relentlessly shames overweight people as lacking will power and failing to conform to ideal body images projected in popular culture.
But come on, America’s obesity epidemic has been building for decades, and it’s only getting worse. When will we call it what it really is: A public health crisis, driven by outdated and dangerous policies around food subsidies and health care?
“… outcomes are driven by inputs, …”
Bahahahahahaha … I’ll say, in that the input of lots of food generates an output of lots of weight.
“… and right now, the inputs in our society are making us very, very sick.”
Bahahaha … naw, it’s the input of lots of food that is doing the trick.
“But come on, America’s obesity epidemic has been building for decades, …”
As in maybe one calorie at a time?
“… and it’s only getting worse. When will we call it what it really is: …”
Such as what, a nation of dummies perhaps?
Bahahahahahahahahahahahahahahahahaha.
The author answers the question:
First and foremost amongst those failed policies is our society’s approach to food — how we grow it, how we market it, and certainly how we eat it. In short, we subsidize cheap calories — in particular sugar and corn syrup — and we’ve forsworn nutrition for convenience. Food companies, driven as all businesses are by profit and policy inputs, are literally rewarded for selling as much of their product to us as they can, regardless of the consequences. It feels an awful lot like our approach to energy — just as we’re hooked on cheap and environmentally damaging carbon-based fuels, we’ve built an entire economy on cheap and physically destructive food, and there are extraordinarily powerful forces at work insuring things stay that way.
Obesity and being overweight is so much more complicated than “calories in, calories out.” There is the microbiome, hormonal system, sleep plays a huge role, genetics, educational level of the individual, walkability of the environment, stress, the food environment, marketing, and individual choice.
“… and individual choice.”
It’s interesting that you listed this last. In my opinion it should have been listed first.
No, it’s there at the end because that is where it belongs. It’s probably the least important factor, and the fact that people think weight is primarily about willpower is what is so destructive because it is so ingrained in pop culture, but the science doesn’t support it.
http://nymag.com/scienceofus/2017/07/eat-less-move-more-perpetuates-myths-about-weight-loss.html
To help you with your enlightenment I uncovered an article (that even contains a video!) that has the title “7 Healthy Foods That Cost Less Than $1″
Enjoy.
http://time.com/4855542/cheap-healthy-foods/
“… the science doesn’t support it.”
Bahahahaha … you should try stand up.
“Obesity and being overweight is so much more complicated than ‘calories in, calories out.’”
It really isn’t. Show me a person who continuously burns more calories that he/she ingests and I will show you a person who will lose weight.
https://www.google.com/search?q=fat+people+eating&source=lnms&tbm=isch&sa=X&ved=0ahUKEwizt6SN2rnXAhUD5WMKHR-3AloQ_AUICigB&biw=1360&bih=651
From your link …
“’It is almost impossible to have enough [willpower] because there are so many foods we have to resist every day, and it takes many acts of willpower to resist something,’ Mann explained in a recent interview with Science of Us. ‘It’s not like resisting the cookie on your kitchen counter is just one quick act of resistance. As long as it’s there, it will keep requiring new acts of resistance over and over again.’ Besides, in the long term, no amount of willpower will help you continue to choke down kale smoothies and wake up for dreadfully early runs if you hate doing both.”
You decide to either do it or you don’t. If you need to say “no” to the cookie on your kitchen counter then that is what you do. If you need to say “no” to the cookie every day then that is what you do. If you need to exercise then that is what you do.
It is not all that complicated.
Show me a person who continuously burns more calories that he/she ingests and I will show you a person who will lose weight.
Your argument is a little bit like saying “A restaurant is popular and makes a lot of money because a lot of people frequent it.” It doesn’t explain why this is the case. In other words, what causes a person to ingest more calories and burn fewer of them. Your argument is basically people are fat, lazy, and stupid, and hey, look at all these fat people eating junk food! That’s reductivist and is not supported by the data.
A panel of experts convened by the National Institutes of Health determined that “one third to two thirds of the weight is regained within one year [after weight loss], and almost all is regained within five years.” [28] More recent review finds one-third to two-thirds of dieters regain more weight than was lost on their diets; “In sum,” the authors report, “there is little support for the notion that diets lead to lasting weight loss or health benefits [5].”
https://nutritionj.biomedcentral.com/articles/10.1186/1475-2891-10-9
Obesity Systems Diagram:
http://www.shiftn.com/obesity/zoom-map.html
Er, no. While there are people with injuries/illnesses that limit/prevent exercise, they still control their diet - to the point that they should never even get close to obese.
I found a theme song for all the losers - because they make excuses. Maybe the weak can petition to have it replace the national anthem, it seems we’re headed to becoming a failed state anyway.
No one is to blame by Howard Jones
https://www.youtube.com/watch?v=V-A6WH1kQLc
“A panel of experts convened by the National Institutes of Health determined that “one third to two thirds of the weight is regained within one year [after weight loss], and almost all is regained within five years.”
And this is due to what? More calories ingested than are burned, perhaps? If there is another explanation I’d like to learn what it is.
“there is little support for the notion that diets lead to lasting weight loss or health benefits [5].”
Again, if more calories are injested than burned then there will be a weight gain. If dieting does not lead to lasting weight loss for a person this is because the person chose to go off the diet.
Again, if more calories are injested than burned then there will be a weight gain. If dieting does not lead to lasting weight loss for a person this is because the person chose to go off the diet.
There you go, over-simplifying again. Or are you posting injest?
“And this is due to what? More calories ingested than are burned, perhaps? If there is another explanation I’d like to learn what it is.”
You remind me of this timeless chestnut:
‘Your argument is a little bit like saying “A restaurant is popular and makes a lot of money because a lot of people frequent it.”’
Not quite the same; a more relevant version follows.
Calories in less calories out is an outdated model. It doesn’t take into effect the thermic effect of food, fiber, nor does it take into account satiety and hunger which are driven by the hormonal system.
Your understanding of obesity reminds me of this quote:
“they offer high quality food”
The analogy was one of energy balance and exploring the cause behind why certain people (e.g. restaurants) have different outcomes than others. But you’re on the right track when you mention “high quality food” as that is one of the key aspects of energy balance.
Here is a good discussion of why the simple accounting model is insufficient in a complex biological system:
NNAMDI: Many of us have been led to understand that weight gain or loss is simply a matter of willpower, our ability to restore balance to that equation of the calories that go in our bodies and the calories that we use and go out. You’ve done a lot of research that suggests our basic understanding of that equation is off kilter. How so?
By eating this way, we can basically ignore calories and let our body-weight control systems do the work.
LUDWIG: … Very few people can lose weight over the long term with low-calorie diets. And those who can’t are blamed for lack of discipline and willpower. So, according to an alternative view, weight is controlled like body temperature and a range of other biological functions. Eating too much refined carbohydrate has, by this theory, raised insulin levels and programmed our fat cells to suck in and store too many calories. When this happens, there are too few calories for the rest of the body. So the brain recognizes this and triggers the starvation response. We experience that as becoming excessively hungry and our metabolism slows down. … Eventually we succumb to hunger and overeat. So a better approach, if this theory is correct, is to address the problem at its source by cutting back on the foods that are over-stimulating our fat cells: the refined carbohydrates like grains, potato products, concentrated sugars, especially the refined grains. And by eating this way, we can basically ignore calories and let our body-weight control systems do the work.
NNAMDI: Is it oversimplification to say that your research suggests we’re getting hungrier because we’re getting fatter?
LUDWIG: [No,] that’s right.
Ludwig and co-author Mark Friedman wrote about this in a New York Times article last month headlined “Always Hungry? Here’s Why,” saying that the “simple solution” ingrained in people who want to lose weight “is to exert willpower and eat less.”
By the way, the research shows that past a certain point of weight gain, weight loss surgery has shown to be the most effective intervention.
“…nor does it take into account satiety and hunger which are driven by the hormonal system.”
Sounds like a fancy explanation for lack of the self-control to avoid consuming calories in excess of the rate at which your body burns them.
Harvard T.H. Chan School of Public Health professor sees it differently:
Q. That’s very different from the conventional wisdom that weight loss boils down to calories in, calories out.
A. Yes. An analogy would be like trying to treat a fever with an ice bath. Imagine going to the hospital with a very high fever and the doctor says, “Fever is just a problem of heat balance — to much heat in the body, not enough heat leaving the body.” That’s true from a physics standpoint. So the doctor decides to put you in an ice bath. That will work temporarily. An ice bath will break your fever. But imagine what’s going to happen. Your body is going to fight back furiously with severe shivering and blood vessel constriciton and you’ll feel miserable. You’ll want out of that ice bath as soon as possible. For that reason, ice baths are not a popular treatment for fever.
Q. So in this analogy, how do you treat the underlying cause?
A. A much more effective approach is to lower the body’s temperature set point, which is done with medicine like aspirin. Put biology on your side by eating the right way, and weight loss occurs naturally as a fever would break if you treat the underlying cause of the fever.
When I was 22, just going without eating for 18 hours would make me lose a couple of pounds. 48 years later, that doesn’t happen any more. What does diet have to do with that?
There is one exception: when I get a head cold and a low grade fever for a couple of days I still lose 2-3 lb no matter what I eat, just like decades ago.
http://ace.mu.nu/archives/364573.php
on a weight lost technique that works
OneAgainstMany… even the paleo crowd cannot answer a simple question: why how did this county get so obese so fast, in the past 40 years? Look at moves and TV shows from the 1970s. People were THIN. They weren’t eating low-carb, they weren’t intermittant fasting, they weren’t eating ketogenic or lifting weights.
And people were thin in a very different way than they are today. Slim hips, small chest, just overall flatter. Funny thing is, people were stressed, and poor, and didn’t sleep, and were couch potatoes in the 1970s and early 80s too. What happened?
It can’t be that simple (calories). Throwing this into the mix:
Peter Attia: What if we’re wrong about diabetes?
When I was 22, just going without eating for 18 hours would make me lose a couple of pounds. 48 years later, that doesn’t happen any more. What does diet have to do with that?
Lots of things could be going on here. I can just speculate on a couple of things:
1) You are older. It is well established that metabolism slows as we age and our calorie needs are less. We also tend to lose fat free mass ( FFM) which reduces our metabolism. I can’t remember what each decade does on average to muscle and metabolism, but strength training seems to slow the decline of muscle mass and mitigate the metabolism decrease somewhat. Suffice it to say, the older you are, the more difficult it is to lose weight. Also, men have an easier time losing weight than women.
2) Often times when people lose weight on a paleo or Atkins type diet–or even an intermittent fasting diet–they are dramatically cutting their carb intake. They selectively deplete their liver glycogen and muscle glycogen. This in turn causes them to lose a significant amount of water weight. This rapid weight loss is often mistaken for true loss of adipose tissue (e.g. fat). When a normal carbohydrate diet resumes, then glycogen stores are repleted and hydration ensues, and pounds come back on.
I read ALL medical deductions are eliminated.
“And the standard deduction goes up! Effectively it’s not like the MID is being taken away; more like it’s being given to renters and owners alike.”
The standard deduction is going up, but I believe the personal exemption is going poof, so it’s somewhat of a wash there.
+1
And people were thin in a very different way than they are today. Slim hips, small chest, just overall flatter. Funny thing is, people were stressed, and poor, and didn’t sleep, and were couch potatoes in the 1970s and early 80s too. What happened?
There are a lot of hypotheses that are going on here that are coalescing around a consensus. My personal opinion is that it has to do with a dramatic increase in simple (added) sugar intake. The data I’ve read in the medical journals show that activity levels have roughly stayed the same over the decades, so all those people who are bemoaning “kids who play video games and watch TV” are probably wrong. The research shows that diet is by far the largest determinant of weight. Intere
I personally blame soda and non-nutritive sweeteners, but obviously not just soda. Obesity is multi-factorial. The amount of cheap, plentiful, addictive, processed foods that are readily available is like a tsunami. I think they have done a number on our collective health. This is why I support an added sugar tax, and definitely a soda tax.
Harvard med school lists these as causes:
Many factors influence body weight-genes, though the effect is small, and heredity is not destiny; prenatal and early life influences; poor diets; too much television watching; too little physical activity and sleep; and our food and physical activity environment.
My personal opinion is that it has to do with a dramatic increase in simple (added) sugar intake.
I agree. I lost a lot of weight when I first went to China. Then gained some back when I came back to the USA. Then noticed the pattern continued as I went back and forth. General calories consumed and activity level was not that different. I concluded that it had to be sugar or wheat. And as I’ve paid more attention this year back in the USA full time I’ve concluded that it’s the sugar. Bread every day doesn’t do to me what sugar every day does every day.
And back in the 1970s we had some sugar around but it was mostly just special occasions. Not every day like our lifestyles later evolved into.
And sugar has stealthily been added to almost every food. It’s in places like bread, pasta sauces, peanut butter, cereal, dried fruit, yogurt, etc.
NYT did a great article over the weekend on the absurd amount of sugar in the most popular breakfast cereal in the US: Honey Nut Cheerios. Things like pancakes, muffins, yogurt, granola are often staples of US breakfast and they are laden with sugar. I liked this tweet highlighted in a Vox article:
Dessert translation of breakfast foods:
muffin = cupcake
smoothie = milkshake
granola = streusel top
yogurt = ice cream
waffle = cookie
I agree re: sugar. A friend lost a lot of weight over the last couple of years by cutting out sugar.
The personal deduction has been $4350.
The standard deduction has been $6000.
The former disappears.
The latter is doubled to $12000K
So there’s some tax savings there (+1650), but not much, for those who do not itemize.
The rest of the savings comes from deductions in the actual income tax rate. For a considerable some, sizeable reductions of 3%.
The big loss for these folks is the loss of HSAs. Triple tax free is going to disappear. Which is a real loss, considering that ObamaCare has not been eradicated.
The big issue I have with the tax proposal in its current form is the outsized cuts are going primarily to the top 20%, in other words, the very wealthy. If we’re going to rack up the deficit even more, it shouldn’t be to give wealthy large tax cuts while some middle class get a break and others pay more. There may be some benefit to simplifying and chopping tax breaks here and there, but the benefit of the plan skews very high to the wealthy.
The analysis I read from Tax Policy Center shows the top 20% getting an average tax break of $11,760, while the middle quintile (40%-60%) get a break of a measly $260.
The only thing that should have been done is the most obvious and simple:
1. Cut the income tax rate by 2-3% for everyone while reducing the size of government through attrition.
But that won’t happen, because it reduces government’s overreach and its ability to social engineer the masses.
Individual liberty again suffers here.
But who gives a damn? Better that I can participate in class warfare than be free.
The top 20% pay 95% plus of the collected federal income tax.
Yes, but that only looks at the federal income tax and ignores the payroll tax and all other taxes, including state and local taxes. This is a talking point that obfuscates the truth. Here are some important facts:
The richest one percent of Americans have 21.7 percent of total income and pay 23.8 percent of total taxes.
The poorest one-fifth of Americans have 3.3 percent of total income and pay 2.0 percent of total taxes.
Each income group’s share of taxes is quite similar to each group’s share of total income.
Contrary to popular belief, when all taxes are considered, the rich do not pay a disproportionately high share of taxes.
Although each income quintile pays combined federal, state and local taxes that are roughly equivalent to their share of the nation’s income, this by no means indicates our tax system is fine as is. In a truly progressive tax system, millionaires and billionaires wouldn’t be paying roughly the same tax rates as working families earning $100,000 per year.
https://itep.org/wp-content/uploads/taxday2017.pdf
Who cares? Payroll taxes are pay as you go, ie you get back what you pay in. So The Poors pay SS tax and they get the benefit back when they retire. In fact the poorer you are the better SS is for you. Same with Medicare.
As for state and local taxes, the states with the highest tax rates are the most liberal ones. That’s your problem not mine.
Point still stands that that 20% of the population pays for virtually all public spending, while the other 80% complain.
Point still stands that that 20% of the population pays for virtually all public spending, while the other 80% complain.
Let’s examine this:
How much of income do 20% of US taxpayers receive? 60.2%
How much of taxes does top 20% of US taxpayers pay? 64.6%
How much of wealth does top 20% of US taxpayers have? 85%
Conclusion: While the top 20% do pay a significant amount of total spending, they don’t really pay more than their share relative to the income they receive, and they certainly pay less relative to their wealth. The extreme disparities are at the top 4%, top 1%, and top 0.1%. This is not my definition of “fair share.”
“Payroll taxes are pay as you go, ie you get back what you pay in.”
Uh…that’s not what ‘pay as you go’ means. Rather, it means that current workers pay for the retirements of current retirees, rather than building savings over the course of working years to fund retirement (what private defined benefit plans are required by law to do under ERISA). This creates problems when the number of retirees is proportionally large compared to the number of workers (i.e. the situation at hand, of Baby Boomer retirements).
It seems the 1% would benefit the most from the GOP plan.
Op-Ed What a surprise: another tax plan to help the super rich
Scott Lemieux
November 3, 2017
3:00 AM
After some delays, House Republicans finally released their tax cut plan Thursday. The Republicans had trouble coming up with a proposal for the same reason they had trouble coming up with a replacement for the Affordable Care Act: Outside of the Republican donor class, their goals are deeply unpopular. The Tax Cuts and Jobs Act reveals that President Trump and Speaker of the House Paul Ryan are, in different ways, utter frauds.
Despite a few sops to middle-class families with children, the bill redistributes wealth upward. The big cut in the corporate tax rate and the elimination of the alternative minimum tax overwhelmingly benefit the wealthy. The 4.6% cut for marginal income between $470,700 and $1 million for married couples benefits only the affluent. The gradual elimination of the estate tax will exclusively benefit extremely wealthy heirs.
…
The personal exemption is 4050 and the standard deduction single is 6350.
But right, not much difference except for coupled with kids or other dependents.
….couples or single parents, for that matter…
Average property taxes in Nassau County are close to $20,000. ‘It will be a dramatic change. People will feel it literately double,’ Laureen Harris, president of the Association for a Better Long Island, said. She predicts a geographic housing recession – the inability to sell, a reluctance to buy, and lost equity. ‘Your house is going to be worth less. It’s going to result in an immediate housing crisis,’ said Harris. ‘It is decimating. It is very, very serious and it’s going to be overnight.’
$20,000 a year. That works out to $384/week. Every week. $1,666.67 a month. Every month. For real estate taxes.
Holy fricken’ moley.
Those public union pensions WILL BE PAID.
When we moved my in-laws from NJ to CA I was stunned to learn their property taxes in NJ were 5.35% of assessed value. It’s like having 1.5 extra mortgages….and they owned their home free and clear of any other obligations.
It is for the children.
Seriously, that is what public union goons think when they retire at age 50 with 90% tax free (faked disability) and OT spiked COLA pension for life with free medical.
“Average property taxes in Nassau County are close to $20,000.”
It’s the same for expensive parts of California. Prop 13 but local assessments are added on and increasing. Plus, given the state’s massive unfunded pension obligation, state/local taxes will be headed north, just as the SALT deduction goes away or gets capped.
Good.
The people of California voted favor of it. Let them pay for it.
” It’s going to result in an immediate housing crisis,” said Laureen Harris.
For whom will it be a crisis?
It will be problematic for people who make their living from the sale of housing - it will smack them on their personal income and cash flow statements.
It will be problematic for people who own houses in high cost/high tax states - it will smack those folks on their balance sheets, and to the extent the changes impact their tax refunds, it will also smack them on their income and cash flow statements.
One thing that often gets overlooked on this blog is that over 60% of households are owner occupants. If real estate values decline, then over 60% of households will take a hit to their net worth.
An owner occupant SFR is a liability not an asset.
It was all fake net worth to begin with.
I think it’s called counting your chickens before they hatch.
“Past performance is no guarantee of future results”, as the small print on all “investments” says.
“If real estate values decline, then over 60% of households will take a hit to their net worth.”
That would be bad, because everyone knows that buying houses and then just waiting is a surefire way to make a bundle of money.
And we’re talking about $20,000 of taxes on literally a 60×100 lot. Suffolks not much better but its insaaaaane. Taxes when I moved in were under $7k/year in 2008 and will likely hit 10k by next year. Yet school enrollment is declining… you’re right 2banana, the goons will get their $!
Remember - it’s for the children!
But it is for the children!!!!
https://www.youtube.com/watch?v=Qh2sWSVRrmo
Back in the Obamacare date debate days, it was established that some people would be better off and some would be worse off. The number that would be worse off was relatively small. Only about 5% of the population that bought insurance on their own, and made too much money to get subsidies. And the reasoning was, well, that 5% suffering is a good tradeoof since everyone will benefit (in theory, which of course was total BS, but assuming it was true). OK, so 5% suffer, 95% benefit.
And the MSM/Left basically said, screw you 5%, you will suffer and that’s that.
This is the exact same scenario with the tax bill. The only people who will truly be hurt is about 5%. Upper middle income earners with big property taxes and mortgages living in CA and NY. Yet somehow if this 5% suffers for the benefit of everyone else, it’s the end of the world.
Why the difference? Well because members of the MSM fall into today’s 5% while none of them fell into the O-Care 5%. They all have health insurance covered by CNN, NYT, WaPo, etc.
If the Republican party were smart (I know, I know), someone would point this out. But the GOP is so incompetent it has a hard time finding water while boating.
I have a feeling those arguments will come out very strongly just in time for the mid term elections.
The dems are boxed into a defend the ultra rich and rape the middle class argument.
Trump is going to crush them.
I’ve given up on Trump’s ability to play 6 dimensional chess. And the GOP is so useless and worthless…..
It will go like this:
Trump: Hey so some rich people in CA will pay more, what can you do.
MSM: Did you know that firefighters in CA will pay more? Did Trump just say eff off to our first responder heroes?
GOP: Did we mention we don’t really like Trump? We love our heroes. We really do. OK no more tax bill.
After their failure to repeal OCare I don’t hold out much hope for anything. At least Trump has been gutting regulations, and that’s no small feat. And Gorsuch. But other than that…..meh. Still 10000X better than the old hag.
After their failure to repeal OCare I don’t hold out much hope for anything.
Yup, don’t expect anything to change.
Kensington, MD 20895 Housing Prices Crater 12% YOY
https://www.zillow.com/kensington-md-20895/home-values/
*Select price from dropdown menu under first chart
Realtors are liars.
…. And every closing a crime scene.
“Given that they are rising 3 or 4 percent (a year) it wouldn’t be noticeable,’ he said. It could even be good if it makes housing ‘a tad bit more affordable.”
So long as real estate always keeps going up, the impacts of tax reform on home prices will be barely noticeable and possibly even beneficial.
Good thing that real estate always goes up!
‘They rent it out, pay the mortgage, because they would be crazy to wait ten years to buy it, because the price would go up.’
Eliminating all of the federal subsidies driving up home prices, including interest rate normalization, would go far to end panic buying among people who are afraid they will soon be priced out forever if they don’t hurry up and buy today.
How does the he know the prices will be up in 10 years.
I purchased a home in 2010 in Rancho Mirage for 75% less than it would have sold for in 2005.
“Recent research at the Federal Reserve confirmed these points and found ‘when house prices are allowed to adjust in response to the elimination of mortgage interest deductions, the homeownership rate actually increases.’”
Well d’oh. You’d think the used home sellers could use the extra business.
Taxes
Get the Housing Industry Out of the U.S. Tax Code
We have unintentionally designed a system that drives people into debt to buy houses, making the economy more fragile.
by Jared Dillian
November 6, 2017, 9:00 AM PST
Housing and taxes are a bad match.
Like a lot of people, I have a mortgage. Unlike a lot of people, I am in a big hurry to pay it off. Most people want to pay interest to the bank, which they can then deduct from their income for tax purposes. I have never understood why you would want to pay money to someone so you can get some of it back.
In effect, mortgage interest is subsidized, meaning you end up paying a lower effective interest rate. A 3.75 percent mortgage becomes approximately a 2.8 percent mortgage, and there are a lot more houses you can afford with a 2.8 percent mortgage. That’s the point. The tax code is designed to incentivize people to buy houses. Not just any houses, but bigger, more extravagant houses — built by homebuilders. We have unintentionally designed a tax code whose intent is to drive people into debt to buy houses, making the economy more fragile. We should instead think about ways to make it more anti-fragile.
…
OneAgainstMany, care to comment on this discussion?
Try not to get stucco.
“Lawmakers and the housing lobbyists seem to think there is some kind of stigma associated with renting. They talk about societal benefits to homeownership, not the least of which is building equity in an asset. So, since we’re talking about assets, let’s compare residential real estate with other assets, such as stocks and bonds.
Homes are not liquid. In the best of times (like now) you can sell them in a few weeks, and the closing process will take another 45 days or so, but you’re looking at a couple of months at least for you to get your money. You can sell a mutual fund, and have the proceeds transferred right into your checking account. It may seem a bit paranoid to be worrying about housing market liquidity in 2017, but people have short memories. Lots of folks (myself included) listed their homes for sale in 2010, and were stuck. It wasn’t a question of what the homes were worth, but rather the idea that you couldn’t extract your equity no matter the price. Whenever you invest in something, liquidity should be the first consideration, not the last.
Furthermore, homes have carrying costs that can be quite large. Maintenance needs to be done. Roofs need to be patched. Hot water heaters need to be replaced. In a bad year, this could amount to several hundred basis points as a percentage of the price of the house. Furthermore, the house depreciates. Not as quickly as a car, but without care, the house will lose value over time. And then there are the unknown unknowns, such as the insurance you buy may not cover every natural disaster, as homeowners in Houston recently learned.
Recent history seems to demonstrate that housing prices tend to go up, but that’s dependent on lots of factors such as geography, the local economy, demographics and monetary policy. Even then, you can’t expect homes to appreciate much more than economic growth, and certainly not after taking into account wear and tear.
So, sure, it’s nice that homeownership forces people to build equity in an asset, even if it is a profoundly crappy asset, because left to their own devices, they probably wouldn’t save anything at all. But, ideally, wouldn’t we want people diversified across a range of assets, instead of having all their eggs in one basket?”
“Lots of folks (myself included) listed their homes for sale in 2010, and were stuck. It wasn’t a question of what the homes were worth, but rather the idea that you couldn’t extract your equity no matter the price.”
If the Fed hadn’t ridden to the rescue with QE3 targeted on housing price reflation, guys like this would have had to ultimately sell or walk away from a home valued under post-Housing Bubble fundamentals. But true price discovery was forestalled by the Bernanke Put. And the short squeeze brought in hordes of investors and buckets of funny money to get prices right back into the Bubble zone.
Which now means everyone has been taught to buy the dip rather than being careful around the red hot stove. Hijinks to ensue.
I think that means that now the consequences of allowing nature to take it’s course will be too horrible to accept willingly (we were willing to accept them in 2008 but TPTB weren’t…and now it’s worse). Therefore the decision at the highest levels will now knowingly be to allow the dollar to be destroyed rather than accept honest price discovery that takes down TPTB.
lol.
So the medium of exchange is wooden nickels, pesos and CraterTaters?
The USD has been around for 200+ years. It’s not going anywhere.
“Therefore the decision at the highest levels will now knowingly be to allow the dollar to be destroyed rather than accept honest price discovery that takes down TPTB.”
I suspect the PTB will maintain the dollar until most of the Baby Boomer entitlees are dead and gone, then unleash 1970s style inflation…if they can.
The USD has been around for 200+ years. It’s not going anywhere.
I’d like to believe that. But every decision we’ve witnessed since 2008 has been to save the banks no matter what. What makes the dollar immune to being thrown under the bus to save the banks?
Again, what is the medium of exchange… Wampum and beads?
The dollar isn’t going anywhere.
“Again, what is the medium of exchange… Wampum and beads?”
Bitcoin, anyone?
I’m not at all optimistic about Bitcoin’s potential as a medium of exchange. And it’s fundamental value as an asset class seems more dubious than Beanie Babies. I’m not sure how one can explain its meteoric rise without resorting to the psychology of financial manias.
FINANCIAL TIMES
Opinion Bitcoin
The environmental costs of bitcoin are not worth the candle
To make the cryptocurrency more sustainable, vested interests would have to be confronted
Izabella Kaminska
November 6, 2017
The recent spike in the price of bitcoin to more than $7,600 has delighted cryptocurrency speculators and early investors the world over. Many consider the windfalls as vindication of their belief that bitcoin is not just an experimental currency but a viable asset class in its own right.
Adding credence to that view was the decision last week by one of the world’s top derivatives exchanges, CME Group, to launch bitcoin futures in the fourth quarter of 2017.
Yet there is an irony here. The further bitcoin mutates into a price-defying asset class, the less useful it becomes as a medium of exchange and, worse still, the more expensive and energy intensive it becomes to maintain. This is an awkward situation for investors who are supposedly becoming more aware of the implications for environmental, social and corporate governance (ESG) when making allocation decisions.
When I recently asked a room of approximately 50 students how many had heard of bitcoin, almost all raised their hands. Asked how many had bought bitcoin, about a third of them raised their hands. But when I asked how many had used bitcoin actually to buy something, only one raised a hand.
That people would prefer to hang on to their bitcoin than spend it is not surprising given its soaring value. This clingy behaviour is an instance of Gresham’s law, which states that bad money always drives out the good, and that if there are two forms of commodity money in circulation, the more valuable one will disappear as it is hoarded.
But these days there are other reasons to hang on to your bitcoin. The era of costless bitcoin transactions is long gone. For some time, fees have ranged from $3 to $6 per transaction, depending on the network’s available capacity. The situation makes small, day-to-day payments, from coffee purchases to bus ticket sales, increasingly impractical.
In energy terms, meanwhile, a recent analysis by the Motherboard site estimated that a single bitcoin transaction requires 215 kilowatt-hours of electricity to process. That is the equivalent of what an average American household consumes in one week.
Add this energy wastage to the reputation bitcoin already has for opaque governance, cyber crime and dark market trade, and you can see how, from an ESG perspective, bitcoin proves an even more controversial investment than a holding in a developing-world, commodity-extracting company.
In that light, CME’s plans to list bitcoin futures might not be enough to dissuade responsible investment managers from shunning the asset class in ESG-friendly indices in the long term. Remy Briand, head of ESG for index creator MSCI, says: “If we assume that consumption will continue to increase roughly in line with the bitcoin price . . . then we could end up in a situation within a few years where the electricity consumption of bitcoin mining would be equivalent to a country like the Netherlands or Switzerland.”
…
I don’t think a house should ever be viewed as an investment. It is a consumption item first and foremost. Any savings that one gets is the imputed value of the foregone rents. But housing upkeep is terribly expensive, especially for larger and more expensive houses!
Having said that, I think that it is beneficial for a person to own their home. But before you jump on be for saying this, I mean they should own their house outright and not having a mortgage. This will probably come across as ludicrous to many, but I don’t think people should buy a house until they can pay cash or they could afford to liquidate other investments to pay off their house. If that means they can never buy a house, then so be it. Or maybe they should just swallow their pride and adjust to multi-generational living (e.g. live with relatives) so they can save aggressively to be able to afford a place one day.
But I do think that it is beneficial to a neighborhood to be comprised of owners who own their homes outright. In general, I think ownership can cause people to become more invested in the community and the overall condition of their dwelling. As the old saying goes, no one ever washed a rental car. I don’t think renters have the same sort of stewardship over their house as someone who owns it. I’m not a cheerleader for saddling up people with a mortgage, but I do think ownership is good for a society.
Nice in theory, but very difficult to achieve.
It is especially difficult for local populations that cannot keep up with escalating costs due equity locusts ruining local economies.
Locals cannot withstand the onslaught of Californians who consider $300K to be chicken feed. They cannot withstand the onslaught of well-heeled newcomers who buy Teslas because they think they are cool.
Chew on that one for a while…before you opine about buying houses with cash.
If you believe in what you say, then make purchases in line with what local economies can handle and not with your desire to show off or be “socially responsible”.
Which, incidentally, you are not being if you have no qualms about destroying the lives of others who live elsewhere, because you can.
“They cannot withstand the onslaught of well-heeled newcomers who buy Teslas because they think they are cool.”
That’s my BIL..and I don’t think he paid cash for it, either.
Trust me, I know how terrible it is to have “others” who push up prices of local real estate. I live in Southern Utah and we constantly have southern California’s who continue to cash out in CA and are pushing up the prices for locals here. It totally distorts the market for first-time home purchases because all the builders cater to these retirees and CA residents who are cashing out who want the sun amazing outdoor climbing, biking, hiking, national parks, while simultaneously escaping the madness of CA.
I think sensible regulation could curtail some of this. Professor has proposed a lot of good, no-nonsense ideas (20% downpayment, payments on mortgages must be no more than 30% of income, etc.).
By the way, I don’t have a Tesla. My father has a Tesla 100D and yes, he did pay cash for it. I won’t buy one until I can pay cash for one.
“I live in Southern Utah and we constantly have southern California’s who continue to cash out in CA and are pushing up the prices for locals here.”
It’s trickle down from the all-cash Chinese investors who have priced out the locals in California.
“By the way, I don’t have a Tesla.”
Clearly you aren’t my BIL, who lives in Northern Utah.
He tends to go for debt-funded purchases, but so long as his health and employment hold up, he is good for the payments.
We should instead think about ways to make it more anti-fragile.
Someone is channeling their inner Nassim Taleb. This guy sounds like a man after my own heart!
“We have unintentionally designed a tax code whose intent is to drive people into debt to buy houses, making the economy more fragile. We should instead think about ways to make it more anti-fragile.”
I agree with this statement except for the word “unintententionally”.
Er, unintentionally.
Spot on. The big margins for investment banksters are to push high-cost debt risk out onto the sheople, knowing that they have free too-big-to-fail insurance from Uncle Sam to make them whole when the house of cards next collapses.
Regardless of whether the GOP ultimately caves in to REIC demands to maintain their special subsidies in the tax code, they have done a great service by training an MSM laser beam on how many trillions of U.S. tax dollars get routinely porked down the real estate rat hole.
Which will sent down the memory hole ASAP.
Tame Impala — Nothing That Has Happened So Far Has Been Anything We Could Control:
https://www.youtube.com/watch?v=Gkp05lmogIM
In my mind and in my car
We can’t rewind, we’ve gone too far
MTV Launch (August 1, 1981 EDT)
https://www.youtube.com/watch?v=unVqWMDNYGA
I posted my place for sale on Pillow almost two years ago, there is no way to make it 5 acres instead of 1, this makes a huge difference in the pestimate.
No big deal, you can read my description, RIGHT?
Well, according to my friend it says “off the market” and gives a number to a realtor I don’t even know and have not hired.
Can I sue Pillow for wasting my time and being deceptive, it says on my page that it is for sale by owner.
Or you could lower the price to.narket and actually sell the place…….
It’s funny how those who claim that real estate is “illiquid” never test their claim by lowering the price to where a willing buyer is forthcoming.
I just re listed and posted a “my other” phone number (publicly) this time, they called me back on my private number + my other, scary,
I’m sure the house will sell now
I must have done something right this time.
Nobody ever contacted me on my e-mail except Pillow, got lots of calls on my LISTED phone number from realtors,
most of my friends got flooded and have their own problems, I will ask them to check my listing because this is becoming funny.
I have re listed before, seems I didn’t have enough bedrooms to “deserve”
being on the website, sigh.
It is really a “trick or treat” website
Parker, CO Housing Prices Crater 6% YOY
https://www.movoto.com/parker-co/market-trends/
Deal of a lifetime 3 bedrooms just $5000 you heard right $5K 50 benjaminzzz
https://www.facebook.com/groups/517307528331981/permalink/1708520502544005/?sale_post_id=1708520502544005
https://www.bloomberg.com/news/articles/2017-11-10/mcconnell-joins-ryan-in-walking-back-false-promise-on-tax-bill
I’m wondering how the GOP’s No Billionaire Left Behind / Trust Fund Baby Entitlement Act will go over with Middle Class voters whose taxes go up?
I liked Matt Levine’s tongue-in-cheek commentary on the absurdity of how the GOP plan is treating inheritances for tax purposes:
This is I have to say sort of an odd tax system on first principles. If you work for a living and make a million dollars, you will be taxed at fairly high rates. (The top rate for ordinary income will remain 39.6 percent.) If you don’t need to work, and make your money by investing, you will be taxed at lower rates. (The top rate for capital gains is 20 percent.) But if you inherit your money, you won’t be taxed at all.
When we last talked about the estate tax, I criticized Wilbur Ross’s complaint that “It’s bad enough that you have to die, you shouldn’t be fined for doing so”:
Of course we should fine people for dying! You tax — or fine — behavior that you want to discourage. Taxing a thing reduces the amount of that thing. “The power to tax is the power to destroy.” If we are going to get serious about defeating death, the first thing to do is to tax it heavily.
That was a little bit facetious, but only a little bit. For one thing, there is some empirical evidence that the estate tax really does disincentivize death. For another thing, the alternative to taxing death — a thing we want less of — is pretty much taxing work — a thing we want more of — and so raising taxes on working people in order to lower taxes on dying people seems like an inefficient tradeoff. But also, of course, the estate tax isn’t really a tax on dying; it is a tax on inheritance. Encouraging work increases an economy’s output; discouraging work decreases it. But encouraging inheritance can’t increase output; it’s not like there is an untapped supply of rich childless uncles who will be put to productive use if only the estate tax is repealed.
“…the alternative to taxing death — a thing we want less of — is pretty much taxing work — a thing we want more of — and so raising taxes on working people in order to lower taxes on dying people seems like an inefficient tradeoff.”
Since the Republican plan is to keep taxing the crap out of Middle Class workers’ paychecks in order to pay for tax breaks for golf course owners and such, small wonder a record number of working aged Americans aren’t working.
95,385,000: Record Number Not in Labor Force; Participation Rate Falls to 62.7%
By Susan Jones | November 3, 2017 | 8:43 AM EDT
(CNSNews.com) – The economy added 261,000 jobs in October – the most since President Trump took office — and the nation’s unemployment rate dropped another tenth of a point to 4.1 percent, the Bureau of Labor Statistics reported on Friday.
But a record number of Americans – 95,385,000 – were not in the labor force in October, and the critical labor force participation rate dropped four-tenths of a point to 62.7 percent, a disappointing show, as 76,500 Americans left the civilian labor force.
The previous “not in the labor force” record of 95,102,000 was set in December 2016, the final full month of the Barack Obama presidency.
…
If rules and math count, Senate tax plan is DOA
by Max Brantley
November 10, 2017
SETH HANLON/TWITTER
New York magazine explains why the Senate tax legislation is dead on arrival unless there’s a Senate rules change.
The bill would increase the deficit enormously, so much so that it requires a filibuster-proof vote under the so-called Byrd rule. Can’t happen. Democrats won’t join a bill that gives a windfall to the wealthy.
Will Republicans change the Byrd rule? Or will people like Sen. Tom Cotton insist on budget neutrality as they do when the discussion is money for hurricane victims in the Northeast, not tax cuts for billionaires?
…
Yeah, where are all those deficit hawks now? At least Senator Corker has said he is pushing for a tax plan that plan that is deficit-neutral:
Conservatives have long railed against the nation’s now-$20 trillion debt. But now that they’re desperate to pass a tax bill, many Republicans’ repulsion to red ink is fading fast. Yet some deficit hard-liners are holding the line, insisting that tax cuts be paid for, either by axing deductions or with stiff spending cuts.
The debate is causing some hard feelings within the GOP.
Sen. Bob Corker (R-Tenn.) recently questioned the deficit cred of one of the House’s proudest fiscal hawks before he left to become Trump’s budget chief, Mick Mulvaney. In his new gig, Mulvaney is now insisting it’s okay to increase the deficit with tax cuts, because an expanding economy will eventually pay the bill.
“Our OMB guy, I say this with humor, what happened to him?” Corker said in an interview. “Do you understand what I’m saying? He used to be the fiscal hawk.”
https://www.politico.com/story/2017/10/16/trump-tax-plan-deficits-243759
Politics
Senate Plan Could Increase Taxes on Some Middle-Class Workers
Both the Senate and House tax bills would make the child tax credit more generous. While the Senate version is somewhat more favorable to the middle class, both would disproportionately favor high earners.
Andrew Burton / Getty Images
By JIM TANKERSLEY and BEN CASSELMAN
November 10, 2017
WASHINGTON — Mitch McConnell, the Senate majority leader, acknowledged on Friday that the Republican tax plan might result in a tax hike for some working Americans, saying he “misspoke” days earlier when he said that “nobody in the middle class is going to get a tax increase” under the Senate bill.
“I misspoke on that,” Mr. McConnell, a Kentucky Republican, said in an interview on Friday with The New York Times. “You can’t guarantee that absolutely no one sees a tax increase, but what we are doing is targeting levels of income and looking at the average in those levels and the average will be tax relief for the average taxpayer in each of those segments.”
The Senate bill unveiled on Thursday would raise taxes on millions of middle-class families, according to a preliminary New York Times analysis. The plan would also disproportionately benefit high earners and corporations. Still, middle-class earners would fare better under the Senate proposal than its counterpart in the House, the analysis found.
…
Boosting the child tax credit by 600 won’t make up for losing the exemptions.
It’s for the children.
November 9, 2017 3:54 pm
GOP Plan Retains Tax Break for Golf-Course Owners
By Eric Levitz
Donald Trump repeatedly promised that he would not benefit from his own tax plan. Congressional Republicans repeatedly pledged that they would finance a “middle-class tax cut” by closing “special interest” loopholes — especially those that benefit the affluent.
These were always transparent lies. From the beginning, it was clear that the GOP plan would deliver a windfall to the Trump family, through its abolition of the estate tax, a giant cut in the rate for pass-through companies (like the Trump Organization), and a massive reduction in the corporate tax rate (which will primarily benefit wealthy shareholders). Meanwhile, the Republicans never did much to conceal that their plan would deliver more benefits to their preferred special-interest groups than to the middle class.
….
Kind of like when Trump’s treasury secretary, Mnuchin, said this:
As I’ve said all along, the objective of the president is that rich people don’t get tax cuts, and we’re perfectly comfortable explaining to the American people how that works and we’ll give plenty of examples.
Obviously that is not true. The wealthy get the biggest tax cut from this plan. One might even claim that this is a tax cut specifically targeted towards the wealthy.
Propaganda has a way of stating the exact opposite of the underlying reality
The top tax rate stays the same, every other rate is reduced. So of course that means a tax cut for the rich.
I love leftist logic. It is something to behold.
“… leftist logic …”
Now THAT is funny.
What about the alternative minimum tax rate? Isn’t that the effective tax rate for lots of high earners?
By your oligarchy protectionism logic, the AMT stays the same under GOP tax reform.
The Post’s View Opinion
This little-discussed part of the GOP tax bill proves what it’s really about
President Trump on the South Lawn of the White House on Nov. 3. (Andrew Harrer/Bloomberg)
By Editorial Board
November 12 at 7:47 PM
REPUBLICANS INSIST that their tax reform is designed to help the middle class and curb the use of tax loopholes. But a little-discussed provision tells a different story. That provision is the repeal of the alternative minimum tax, which would serve the interests of wealthy taxpayers — and tax avoiders.
For taxpayers who itemize, the AMT is a small annual hassle. About 5 million taxpayers end up paying more because of the tax; many others would no doubt welcome a break from the annoyance. But the AMT serves a purpose: It prevents wealthier taxpayers from using deductions and loopholes to shrink their tax liability to little or nothing. It asks tax filers to run their numbers twice — once under the traditional code and once under a separate structure designed to ensure everyone pays a minimum rate. If the latter results in a higher number than the former, the taxpayer must pay extra.
The AMT hits very few households making below $200,000 a year. By contrast, the majority of households earning between $500,000 and $1 million annually pay the AMT. It does not hit the super-wealthy as hard, forcing only a fifth of households making above $1 million a year to pay more, in part because it excludes dividend and interest income, from which the super-wealthy disproportionately benefit. Even so, the public knows of at least one high-profile, high-income AMT payer: Donald Trump, whom the AMT obliged to pay $31 million in 2005, the one year for which the public has seen his summary tax information.
…
AMT comes into play often because of lots of deductions…the largest of which is the SALT deduction.
If you eliminate the SALT deduction (and lots of other loopholes) the likelihood of triggering the AMT goes down considerably (the AMT calculation doesn’t allow the use of the SALT deduction).
What do you think about the prospect that SALT deductions stay but the AMT goes away?
I get hit with the AMT. I guess I am one of those “very few households” at the lower level. I take the standard deduction and have 5 exemptions. My wife and three children. I do not itemize. Have rented for 26 years so have zero SALT deduction nor property tax deduction. Not complaining but just stating fact as most people talk about ATM as hitting the rich because they have all of these deductions. I’m proof positive that is not the case.
They can retain the tax breaks for golf courses until the cows come home. Golf is dying. All over Florida there are golf courses in the retirement communities that are just shutting down either due to lack of interest, or because the fees are so high people migrate to cheaper courses. The companies that own them let them to seed, hoping to sell off the land for further development within the community.
You bring to mind a local story that was recently in the news, about Golfmail (the golf resort developer’s version of blackmail):
Poway’s StoneRidge shuttered following lopsided vote
SAN DIEGO, CA November 8th, 2017
This is the club house entrance to the Stone Ridge Country Club on Wednesday in Poway, California. The property owner lost his bid to develop the property and has shut down the golf course. (Eduardo Contreras / San Diego Union-Tribune)
J. Harry Jones
Poway’s StoneRidge Country Club was shuttered Wednesday, just hours after voters overwhelmingly rejected a ballot initiative that would have rezoned part of the 117-acre property to allow construction of up to 180 luxury condominiums.
“We’re closed. It’s over,” said a StoneRidge employee in the clubhouse shortly after dawn Wednesday who declined to give his name. Others in the clubhouse could be seen packing boxes.
Measure A failed by a margin of 62 percent to 38 percent. Roughly 1,600 ballots remain to be counted, according to the San Diego County Registrar of Voters, but even if every one supported the measure, it would still fail by a significant amount.
Even before the final ballot tallies were released Tuesday night, StoneRidge owner Michael Schlesinger, through a representative, issued a lengthy statement announcing the closure of the course and his disappointment.
“This is a sad day for us,” he said. “Today, our employees lost jobs they have enjoyed for over 20 years and Poway just lost 60 years of history.”
…
Every time I run by a golf course with its pristine manicured lawn I have to fight the urge to run through it. That lush grass would make for great cross-country races or nice soccer fields.
“Every time I run by a golf course with its pristine manicured lawn I have to fight the urge to run through it.”
Every time, eh. You come across to me as a very strange person.
You of course would see it that way, because all good bankers know that a golf course is to be used for only one thing: making business deals!
I can confirm this, as my uncle was an executive at AT&T back in the 1980s, and he told me how many deals were sealed out on the links.
Every time, eh. You come across to me as a very strange person.
I’m a long distance runner. I run, a lot. About 100 miles a week, so admittedly I’m strange. Most runners in my local club are a bit odd.
my pension is asking for a bigger contribution thx to zirp.
Somebody has to pay for the massive Fed-engineered Wall Street bailout.
I think you have it wrong its maybe partially doe to zirp, and pension spiking…..but i think its due to too many people quit smoking or never started and got healthy and are living far longer then the actuaries planned on.
The idea if retiring at full pension at 55 or even 60 would be fine if you were a 3 pack a day smoker. The system was designed to work 30 years and pay out for 15 not 30 and 30.
Got shrinkage?
The Republican Tax Bills Are About to Shrink
plans are over-budget and can’t pass the Senate on a party-line vote without major changes, analysts say.
Russell Berman
6:00 AM ET Politics
When Republicans in the House and Senate unveiled their tax bills to great fanfare over the last two weeks, they glossed over a small but critical detail: Neither of them, as written, can pass Congress with GOP votes alone.
Both proposals are over-budget, analysts say, and would require significant revisions to abide by Senate procedural rules. Republicans likely will adjust their plan by making some of the biggest tax cuts expire in the next decade, a change that limits the legislation’s potential for economic growth and would force lawmakers to confront potential tax increases years in the future.
The tax cuts were already set to expire within a decade. This is nothing newsworthy. It’s what was done with the 2001 and 2003 tax cuts as well. But it has to do with Trump so it’s the mostest worstest thing ever. And unprecedented!!!!!
FINANCIAL TIMES
Global Market Overview Markets
US tax cut doubts unsettle dollar and world stocks
Brent oil slips but still records fifth straight weekly gain
November 10, 2017
Dave Shellock
…
Hot topic
US fiscal policy remained the chief focus for most in the markets after Senate Republicans on Thursday unveiled their version of a draft tax bill that differed markedly from the House’s proposals.
“The notable difference between the two bills is the timing of the corporate tax cut and the Senate version has the cuts kicking in in 2019,” said Derek Halpenny, analyst at MUFG.
“The delay to the tax cut by one year is certainly a key one for the markets. Many Republicans are also very opposed to the removal of local and state tax deductions. And that’s before we get to those opposed to the simple fact that $1.5tn of debt will be the end result of this plan.”
…
Is that$1.5 trillion a one-off, or an annual amount added to the budget deficit?
How can members of the GOP, the party of fiscal Puritanism, look themselves in mirror and support this tax bill?
My understanding is that it is over 10 years vs. the status quo.
$150,000,000,000 added annual increase to the national debt is a mere flesh wound.
For perspective, the average deficit over the prior 10 years was $840B per year.
I’d prefer the tax bill to add $0 to the deficit.
But if it’s the choice of reducing the MID, taking out the SALT deduction, reducing the deductibility of debt at the corporate level, and adding $150B to the deficit…or status quo, I’d choose the former.
The benefits of encouraging less debt at the individual and corporate level, and elimination of the Federal Government subsidizing state spending are pretty important to me.
“…$20,000 of taxes…”
Yep. I’m impressed with that number. So you are in your home next door to the $20k and your taxes are only $13K. What a relief. And fortunately, your taxes are capped at 3% in Miami. Again, what a relief.
What could go wrong, here? Do you remember when 70 years of age was considered old? Why mention this? Let’s say you are a retired pilot living in an expensive enclave. Instead of dying at 70 you are still going to the gym at 80. (In my parents’s case it was 90) From age 70 to 80 their taxes rose 30 % (3% x 10 years.) What do think it did to their fixed income?
So crunch the numbers. How much do YOU have to put aside if you are still around at 86? What if you live to 103 and your husband lives to 105?
If you plan well your fixed income should grow by at least 3% a year as well. Not sure what your point is.
So crunch the numbers. How much do YOU have to put aside if you are still around at 86? What if you live to 103 and your husband lives to 105 ??
The Republican tax plan repeals an itemized deduction that applies to healthcare expenses. … Under current law, individuals who spend over 10% of their income on medical expenses are allowed to deduct part of those costs from their taxes. The proposed new bill would remove that deduction.Nov 2, 2017
“How much do YOU have to put aside if you are still around at 86?”
It would be nice if you could purchase a deferred annuity that kicks in if you survive to 86, or maybe 90, as insurance against longevity.
One of the things that I liked about the Simpson Bowles plan (specifically it’s plan to make SS solvent indefinitely) was that it increased the SS benefit for folks who lived past 85.
I still think they should dust off that plan and make it the basis for this tax reform.
“I still think they should dust off that plan and make it the basis for this tax reform.”
I admire your idealism, but apparently ideals have little to do with what is going into the tax plan.
maybe i wasn’t so far off after all…..
What’s more, a survey released in November by MillennialPersonalFinance.com found that 44% of people with an advanced degree would give up their degree if their student loans would be forgiven by doing it.
https://moneyish.com/ish/the-most-worthless-graduate-degree-in-america-is/
Only 44%?
There is much work left to be done.
I guess some have useful Masters degrees and PhD’s
And lots have paid off student loans.
But here is my catch, since you gave up your degree you can never apply for jobs that require a valid BA or MA degree since yours was cancelled. Its no different then a manager throwing in the towel at a fight.
You will be debt free to start your new career at starbuxxx.
a house is basically a great retirement account.
I love for the lying MSM talks about “wealthy corporations” benefiting from a cut in the corp tax rate. LOL.
Didn’t the MSM spend years telling us who corporations aren’t people? So if they aren’t people, how exactly do they benefit from a tax cut? Oh right. People own corporations. And people work for corporations. So when eeeeeeevil wealthy corporations get a tax cut, it’s those employees and owners that get a tax cut.
I guess corporations having more money to invest won’t help anyone other that eeeeeeeeevil rich (racist) people right? When corps invest, nobody benefits other than racist white people. No non-racist, non-rich, non-white people work for any corporation in America. Right
More trickle down then, eh?
WALL STREET JOURNAL
Selling a House to Millennials? Bring a Camera, and Fake Eyelashes
November 9, 2017
Emily Glazer
“As millennials by homes in greater numbers, new wrinkles are emerging in an age-old process. Gone are the days of popping a champagne cork once the purchase and mortgage forms are signed. Today, more first-time buyers rush to share their newfound status as homeowners across social media.”
“That has led some to craft elaborate photo shoots in or outside a first home. These often feature props such as ‘First Home’ Signs or heart-shaped hand poses around new keys. Others are captured dancing in their bedrooms or giving piggyback rides through the front door.”
“‘It’s kind of like a domino effect: I see a lot of people, a lot of circles of friends, buy houses around the same period of time…because they are seeing their friends make home purchases,’ he said.”
Millennials…LOL.
Seriously who gives a f00k what the narcissist fools do?
“‘It’s kind of like a domino effect: I see a lot of people, a lot of circles of friends, buy houses around the same period of time…because they are seeing their friends make home purchases,’ he said.”
No, it’s kind of like the, lemming effect, performed by the dumbest generation of totally dumbed-down ignorant pukes ever spawned.
(And I am so glad.)
😁
USA TODAY
Renting homes is overtaking the housing market. Here’s why
November 12, 2017
Bob Sullivan
“Single-family rentals — either detached homes or townhomes — are developing faster than any other portion of the housing market. These rentals outpace both single-family home purchases and apartment-style living, according to the Urban Institute.”
“Almost all the housing demand in recent years has been filled by rental units,” says Sara Strochak, a research assistant with the Urban Institute. She also states that single-family rentals have gone up 30% within the last three years.
When did the rise in single-family rentals start?
“The housing bubble collapse and the recession that followed shattered the decades-old tenet of American wisdom that you can’t go wrong buying a home. Most of the housing market fallout from the Great Recession has finally receded — foreclosures and underwater mortgages are back to traditional levels and housing values have recovered in most places. But one thing hasn’t recovered: Americans’ unquestioned desire to own a home.”
Lefists at 10am….why are the evil Republicans giving tax breaks to the rich?
10.01am. How dare they take away the $1m mortgage deduction that is only used by rich people? This is an outrage.
This is literally the MSM right now.
They aren’t taking away the MID. That discussion was just for show.
SAMUELSON: Strong case to be made for ending mortgage deduction
8:00 p.m. ET Nov. 12, 2017
WASHINGTON — If you want to understand why the tax code is so hard to overhaul, consider the case of the mortgage interest deduction. The issue is so sensitive that the House and Senate are dealing with it in completely opposite ways.To its many defenders and beneficiaries, the mortgage interest deduction symbolizes and subsidizes the American Dream. It promotes home ownership, which gives people a stake in stronger neighborhoods and safer streets. And home ownership is the ticket to the middle class.
By allowing homeowners to write off their mortgage interest expenses — thus reducing their taxes — the government purportedly encourages all these good things. The cost in lost tax revenue is considered money well spent. In 2017, that would be $64 billion, according to the Office of Management and Budget.
Case closed? Not exactly. For years, many economists have argued that the standard narrative about the deduction is mostly a self-serving fairy tale. The reality, they say, is that the subsidy promotes oversized homes and higher real-estate prices. Upper-middle-class households are the main users of the deduction, which barely — if at all — raises the home ownership rate.
“People are being bribed by the government (through the mortgage interest deduction) to buy exceptionally big homes,” says economist Jonathan Gruber of the Massachusetts Institute of Technology. In effect, there’s a subsidy for McMansions. Homeowners rely more on debt, because some interest expense can be written off.
Gruber and other academics studied Denmark, which also has a mortgage interest deduction. In 1987, the Danes reduced the deduction’s generosity. If the deduction increased home ownership, a reduction should have diminished it. That didn’t happen.
…
Portland(King), Oregon Housing Prices Crater 14% YOY On Record High Housing Inventory
https://www.zillow.com/king-portland-or/home-values/
Percent of retail real estate loans that are delinquent by metro area, as of September 2017
Cool map.
Phoenix, Denver, Detroit, St. Louis, Kansas City and Pittsburgh = BAD.
What is that huge patch of SoCal, inland from LA/SD, in the light red zone (10% - 25% delinquency rate)?
That’s San Bernardino county, AKA “the inland empire”, though most of it is barren desert wasteland. I suspect most of the delinquencies are in cities closer to LA like San Bernardino and Victorville.
Interesting that the most expensive locales (Seattle, Bay Area, LA, San Diego, DC, New York, Boston, etc.) seem to have the lowest delinquencies.
Not surprised at all about Denver, a city with near coastal prices but with flyover wages.
Independence, MN Housing Prices Crater 11% YOY
*Select price from dropdown menu under first chart
https://www.zillow.com/independence-mn/home-values/
“She predicts a geographic housing recession – the inability to sell, a reluctance to buy, and lost equity. ‘Your house is going to be worth less. It’s going to result in an immediate housing crisis,’ said Harris. ‘It is decimating. It is very, very serious and it’s going to be overnight.’
Dorothy
I don’t like geographic housing recessions - they are dark and creepy!
Scarecrow
Of course, I don’t know, but I think it’ll get darker before it gets lighter.
Dorothy
Do - do you suppose we’ll face the inability to sell?
Tin Man
Mmmm - we might.
Dorothy
Oh -
Scarecrow
A reluctance to buy?
Tin Man
A - some - but mostly lost equity.
Dorothy
Lost equity!
Scarecrow
A reluctance to buy!
Tin Man
And the inability to sell!
Dorothy
Oh! Lost equity, reluctance to buy and the inability to sell! Oh, - my -
Dorothy, Scarecrow, Tin Man
Lost equity, reluctance to buy and the inability to sell!
Dorothy
Oh My!
Wall Street peops are trotting out the hobgoblin of a 15% stock market selloff if tax reform fails. I am not buying it… seems like a scare tactic to force Congress to act.
#Business News
November 10, 2017 / 4:42 AM / 2 days ago
Doubts about Trump tax cuts weigh on Wall Street
Noel Randewich
(Reuters) - Wall Street ended marginally lower on Friday, with losses in Intel and Apple as investors worried about the future of promised corporate tax cuts following dueling plans unveiled by Republican lawmakers.
The S&P 500 and the Dow Jones Industrial Average ended the week lower for the first time in nine weeks.
U.S. Senate Republicans released a tax plan on Thursday that differed from a version put forth by the House of Representatives on several key fronts, including putting off corporate tax cuts for a year.
Expectations of lower taxes, one of President Donald Trump’s key campaign promises, have helped drive the S&P 500 up 20 percent since the 2016 presidential election.
Failure to cut corporate taxes would increase concerns about Trump’s ability to pass legislation and could shake markets that have been banking on lower tax rates to boost company earnings.
The S&P 500 on Friday stood at 18.1 times expected earnings, the highest since 2004, according to Thomson Reuters Datastream.
Arrow Funds Director of Research John Serrapere put the chances of successfully passing meaningful tax cuts at 50 percent, and he warned that failing could trigger a correction of as much as 15 percent in stocks.
“There’s not a lot of confidence. I‘m not pessimistic, but there are a lot of pieces that need to be put together,” Serrapere said.
…
“…the $6.7 trillion in taxpayer mortgage debt guaranteed by these same agencies.”
That’s a lot of tax dollars used to pump up the price of U.S. homes to levels that many working Americans will never be able to afford. All in the name of Affordable Housing.
What a pretty mess the unholy alliance of real estate industrial complex insiders and their DC swamp buddies have created!
Financial Times
North America Property
Prices of houses in Los Angeles hit a new high
The tech sector is expanding rapidly and contributing to a historic property shortage
View From Santa Monica Boulevard, Los Angeles © Getty
November 10, 2017
A.K. Thomson
When Emma and Aric Jennings moved to start new jobs in Los Angeles last year, they were confident the proceeds from the sale of their Brooklyn townhouse would give them plenty of property-buying options. But when Emma, a 12-year Google employee, and Aric, the head of a start-up, began looking in the beachfront city of Santa Monica, near their new offices, they quickly realised they would have to broaden their search.
“I don’t remember a single Santa Monica property that met our requirements and was within our budget,” says Emma. “It’s really gotten out of control.”
Welcome to LA: the US’s second most populous city after New York is experiencing a property boom fuelled by a historic housing shortage now fully exposed by the growing economy, a rapid expansion of LA’s tech sector and a surge in foreign buyers.
The mix has helped push the cost of homes to new highs. In September, the median price of single-family homes sold in the county was a record $575,000, according to Corelogic, the data and analytics company, 9.5 per cent higher than a year earlier.
Andrew LePage, analyst at Corelogic, says that the higher end of the market has risen so quickly that it has blurred the traditional understanding of what price tag constitutes high-end in LA.
“Five years ago, there would have been no debate about whether to consider a $2m house luxury,” he says. “Today, that is a very subjective view.”
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“I don’t remember a single Santa Monica property that met our requirements and was within our budget,” says Emma. “It’s really gotten out of control.”
Hmmm. I’ve had customers like that in tech. Usually meant their requirements were unrealistic for their budget.
From a random (scam) solicitation to my phone:
Act of Congress Promises To Trigger New Cryptocurrency Mega Boom As Soon As December 31st
A new “pro-crypto” law - called H.R. 835 - is now making its way through congress, and is promising to push cryptos into the mainstream.
This new law could mark the first sign that the U.S. government is ready to throw its full weight behind cryptocurrencies.
And this official approval will give millions of investors, small businesses, and even banks the push they need to take cryptos seriously.
It could all happen as soon as December 31st.
But it has little to do with Bitcoin, or Ethereum, or any of the big-name cryptocurrencies you’ve heard of.
Instead, sitting at the center of one of the greatest wealth creation events of all time is an incredibly lucrative class of currencies called “penny cryptos.”
Every week dozens of these penny cryptos are doubling in value, and many of them are shooting up 1,000% or more.
But they are hard to find, and not always easy to trade.
That’s why Teeka Tiwari, widely regarded as one of the world’s preeminent crypto trading experts, is making his next 4 “penny cryptos” targets available to readers ahead of the December 31st event.
Those four recommendations are worth watching…
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home prices must be kept high to keep tax revenue from falling again.