The Intertemporal Structure Of Preferences
A report from the Malay Mail Online in Malaysia. “Haphazard construction of new property without regard for market forces was the reason for the existing oversupply of real estate, said an industry group. The Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector Malaysia (PEPS) said this when expressing support for the government’s decision to suspend approval for property valued above RM1 million. It said Bank Negara Malaysia has demonstrated that there was currently RM35 billion of unsold property of various types in the country, and that more effort must be made to ensure these are taken up before more are constructed.”
“‘PEPS views the causes of property market overhang to be developers’ indiscriminate building of properties, a lack of market studies and financial feasibility studies being carried out prior to building, no coordination on planning among local authorities and indiscriminate approvals. Other causes include the delay in gazetting of local plans that leads to uncontrolled development and higher cost as well as artificial demand created by members of the public for fear of losing out on choice properties,’ it said in a statement.”
From Free Malaysia Today. “The Consumer Association of Penang (CAP) has criticised the government for only recognising now what it had highlighted 28 years ago on the housing situation in the country.CAP president SM Mohamed Idris said it was good that the government had finally decided to freeze luxury property developments from Nov 1, 2017 due to a glut of such properties. According to reports, Second Finance Minister Johari Ghani had announced that the freeze will affect high-rise condominiums, shopping malls and commercial units.”
“‘CAP had warned of this scenario 28 years ago in our book ‘Housing for the People’. However, it fell on deaf ears till now,’ he said, adding that he had repeated the message many times since then. ‘The crux of the housing problem is that the country’s building resources were channelled not towards where people’s housing needs are, but towards where the market which could pay was.’”
“‘Such a problem has been manifested nationwide, leading to an over-production of unusable expensive properties that a large segment of the Malaysian population cannot afford. For example, the term ‘affordable housing’ is grossly misleading because it can range up to RM400,000 per unit,’ Mohamed said. ‘We have to consider that this serious housing policy flaw, resulting in a glut of unsold property units, can drive developers, the banks and the country to financial ruin.’”
From The Malaysian Insight by Carmelo Ferlito. “I read the recent article by Sheridan Mahavera, ‘No sign of housing market crash, say economists,’ in which some of the thoughts I expressed in an interview with Free Malaysia Today are reported. I need to clarify both my thoughts and what I believe to be some misunderstandings regarding the concept of crisis, crash and bubble. In particular, the first lines set the article’s tone and they open doors to misinterpretations.”
“Mahavera writes: ‘House prices are not expected to fall sharply next year, said economists who disputed speculation that the property market will crash due to a glut.’ These lines linked market crash and sharp price fall as if they were the same thing; such an approach to business cycles is misleading. From the perspective of economic theory, they are two distinct phenomena: a crash is an eventual consequence of a previous boom and its roots need to be found in the dynamic of the boom; the price fall is an eventual consequence of the crash, but its magnitude (sharp, light, …) depends on a series of factors that need to be closely analysed.”
“The appearance of an economic boom is always related to a modification in the intertemporal structure of preferences, and it is always related to a specific industry, whose expansion dynamics will drive upward the general economic system. Entrepreneurs’ mood is lifted up by positive profit expectations, usually focused on a specific industry, which recently was the property sector for the Malaysian case. It is therefore crucial to emphasize the central role of expectations as the driving force behind entrepreneurial preferences.”
“The signals an economist should look at are related in particular with the fact that the first wave of investments is always followed by a secondary wave of imitations and speculations. The pace of economic growth becomes particularly sustained when the primary wave of entrepreneurial investments is joined by a stage of secondary growth encouraged by the instincts of imitators in search of profit and driven by ‘fashion’.”
“Why are imitations inevitable? It is easy to imagine how the success of entrepreneurial initiatives is readily followed by imitators looking for success within what at first sight always seems to be a period of growth destined never to end.”
“Like the primary wave of investments, the second wave is generated by profit expectations, particularly the expectation that the current situation will not change. From a quantitative point of view, moreover, imitation (secondary) investments might even be greater than the first cycle of investments since they involve a larger number of individuals, whose expectations are ‘over-excited’ by the boom.”
“The positive sentiment, that becomes ‘incandescent’ at the end of the primary expansion stage, also plays a role in regards to the action of banks. In fact, precisely because of what happens during expansion, it is highly likely that banks make available ‘virtual funds’ that are not backed up by real savings, driven by expectations that the adaptation of consumer preferences (further saving) cannot but occur, precisely because of the enthusiasm generated by the boom.”
“It is well known that prices raise during a boom and tend to decrease during a crisis. But we do not have to mistakenly identify the crisis with the price fall itself. They are two separate phenomena, the second being a consequence of the first one.”
“A similar mistake is done by some economists when they identify overproduction as a crash, when instead it is an eventual consequence. Therefore, while we can imagine that the present dynamics in the property market in Malaysia will bring out a crisis (though a precise temporal estimation is a job for fortune tellers and not for serious economists), the potential effect on the price system cannot be precisely identified.”
“In fact, a big part of the final outcome will depend on subjective reactions by market actors. Will they expect a short and limited crisis? Or a long and widespread recession? The individual mood will play a big role in the developing of the crisis itself. People owning houses for investment might decide not to sell, expecting a positive upturn soon; or they might be caught in panic and running for liquidating their assets. These two different behaviours will have different consequences on price movements, while the crisis itself will remain as a matter of fact.”
“Finally the response from government, Bank Negara and the credit system will play another pivotal role: if these institutions will try to support the industry via credit expansions, the crisis will turn to be longer (like it is happening in Europe now) and the price fall will be hidden by centrally led inflation, setting the stage for fake recovery and a subsequent deeper crisis. On the contrary, if market forces will be let free to allow the production structure to realign itself to the new scenario, the price shock would be stronger, the crisis shorter, and the new economic fundamentals more sound and stable.”
“In conclusion, the analysis of the peculiar moment experienced by the property market in Malaysia can be successfully carried out only if supported by an understanding of the cyclic dynamics which characterize capitalistic development. Cycle stages and price movements are linked but distinct phenomena; while we can see a crisis coming, the subsequent price movements cannot be uniquely identified a-priori.”
‘Why are imitations inevitable? It is easy to imagine how the success of entrepreneurial initiatives is readily followed by imitators looking for success within what at first sight always seems to be a period of growth destined never to end.’
‘Like the primary wave of investments, the second wave is generated by profit expectations, particularly the expectation that the current situation will not change. From a quantitative point of view, moreover, imitation (secondary) investments might even be greater than the first cycle of investments since they involve a larger number of individuals, whose expectations are ‘over-excited’ by the boom.’
‘Happy Thanksgiving! Those warm summer nights are a dim memory, while the first signs of winter greet us when we walk out of our home. And when you head out of your home, you likely see a lot fewer folks in their homes, on the streets, and in our stores.’
‘November is traditionally the quietest month. Why do I say that? It is all about the flows! Sewer flows.’
‘And based on that sewer flow, it is likely that our permanent population is closer to 7,000 than it is to the 8,930 counted in the 2010 census.
‘While we’ve always had this great seasonal variation — there are typically 40 percent more people in town in July and August, than October and November. We used to have a lot more year-round residents and summer residents 10 and 20 years ago. Overall, annual flows are down 30 percent from 10 years ago and nearly 40 percent from 20 years ago.’
‘Another key data point continues to back up the contention we have far fewer year-round residents. Our school enrollment has also tracked this drop in sewer flows. Back in 1998, our public schools had nearly 1,500 students. By 2010, that number had dropped to 1,005.’
‘The past few years we’d average around 925-950 students. This year, we had a huge drop in elementary school enrollment, particularly in kindergarten. K-12 enrollment is now at 804 students — nearly a 46 percent drop from the late 1990s.’
‘What does all this mean? As I noted in the past, it demonstrates that the number of second and third homes in our community continue to increase.’
From the real estate section
Lack of inventory continues to drive higher price of homes in Nevada County
Liz Kellar
lkellar@theunion.com
September 19, 2017
“This county is driving out the middle class. They can’t afford to live here.”
— Jon Reshatoff, prospective home buyer
Reshatoff is one of many who have learned how a low inventory of real estate options on the western Nevada County market has impacted prices in recent years.
Reshatoff looked at Lake Wildwood, but concluded he couldn’t afford a home there priced in the mid-$200,000 range with homeowner association fees on top of that. And rural areas are overpriced, he said, because cash buyers are coming in looking for property on which to grow marijuana.
Even fixer-uppers are unavailable, or should be more accurately described as teardowns, he said.
Anything in the $200,000 to $300,000 range “is a shack,” Reshatoff said. “One house had no front door, people grew pot in it, it’s all boarded up and they want $300,000 for it. The roof is falling in … You stare at that house and automatically know it needs $100,000 in just repairs, just getting it liveable.”
Like other local buyers in a nearly nonexistent price range under $300,000, Reshatoff found himself competing with multiple offers and houses that sold in hours.
“I would see something I liked and by the time I called to make an appointment, it would be under contract,” he said.
2005 - Crack shack or million dollar listing? (SF, CA)
2017 - Pot house or $300,000 listing? (rural Nevada)
I thought this was what (rural Nevada) looked like.
https://www.youtube.com/watch?v=beWjk_Q6yZ4
I thought it was more like this.
Nevada County is not in Nevada…
i have lived in nv county. Its not that special.
“Nevada County is not in Nevada…”
Does it border the state of Nevada?
It’s adjacent to Sacramento in the foothills on the way to tahoe
Does it border the state of Nevada ??
A portion of it does yes…
“A portion of it does yes…”
Any Mojave or Great Basin Desert?
Hi desert north of Reno I believe.
No, there’s no high desert in Nevada County. It’s forest to the east, savanna and grassland to the west.
Henderson, NV Rental Rates Crater 10% YOY
https://www.zillow.com/henderson-nv-89014/home-values/
Wasn’t HBB debating the best way to measure whether people are living in all these high-price dwellings, last week? It seems that sewer flows is the best way to do it. Not electricity or water or evening lighting. And I guess hiring someone to check the place once a month isn’t going to contribute too much to the sewer flows.
This guy is counting overall people, not individual shack usage.
This is what’s been happening at Tahoe over the course of the past 30 years. It used to be hardworking families had small, cute rustic cabins, many without electricity even, and mountain men, hippies and regular folks alike could live cheaply and afford their own little place.
Now, it’s nothing but a speculative orgy of investment capital, and people like Larry Ellison, Michael Milken, etc., erect opulent fortresses with great walls around them, and use their financial and political powers to block access to the beach and lake which used to be public property. All of it has literally forced people out, and the charm is gone, replaced by those aforementioned ostentatious eyesores which wouldn’t be missed if a forest fire reduced them all to cinders.
If i was your landlord I wouldn’t feel guilty about forclosing on u.
If I were your tenant, I wouldn’t feel guilty about moving to a lower rent house and letting yours sit empty until you embraced the reality of falling rents.
1. Unions are, BY FAR, the largest political campaign dollar donors in American politics. OF ALL TIME.
2. They give 99-1 to democrats.
3. Yet they don’t seem to want to play by the democrat rules of identity politics.
Conservatives are more than happy to live under the same laws and taxes they want for everyone else.
Liberals/Progressives expect to exempted from the same laws and taxes they want for everyone else.
++++
Trade union politics derail N. Philadelphia apartment proposal
September 21, 2017 - Philly Inquirer
Nearly two-thirds of Philadelphia’s residents are nonwhite and 53 percent are women, but you wouldn’t know it from a visit to a city construction site. Despite decades of official hand-wringing over the lack of diversity in city trade unions, it’s still mostly white men who rivet the steel, pour the concrete, and install the shiny glass facades on our new buildings. In 2008 — the last time anyone was able to pry any numbers from union leaders — just 10 percent of their members were African American.
When the board rejected a developer’s proposal last week to build apartments in a vacant West Poplar warehouse zoned for industrial use, it didn’t merely condemn a blighted building to stand empty. Its 4-to-1 vote also killed an innovative agreement that would have created dozens of good-paying jobs for minorities.
Unlike the deal Kenney arranged, this one was reached directly between the community association, Richard Allen Homes New Generation, and the developer, Post Bros., specifically for the conversion of the massive Quaker warehouse and Ninth and Poplar. Post’s owners, Matt and Mike Pestronk, pledged that 50 percent of the construction crew for the $100 million project would be black, Hispanic, or Asian, and that 10 percent of the total workforce would come from the West Poplar area. The outcome thrilled the largely African American neighborhood, said Bruce Crawley, a former neighborhood resident who helped found the civic association and helped broker the agreement.
The catch is that Post would need to employ significant numbers of nonunion workers to meet those ambitious hiring targets because so few minorities have been admitted into Philadelphia’s insular building trades.
The deal did not sit well with the five-member Zoning Board, which is dominated by union officials, including Anthony Gallagher, business manager of Steamfitters Local 420, and Confessor Plaza, a field representative with Laborers’ Union Local 57. Until he was caught up in an FBI investigation last year, the Zoning Board was run by James Moylan, a close ally of John Dougherty, the head of the electricians’ union and one of the most powerful politicians in the city.
Of course, the board never explicitly said the minority hiring plan was the reason for rejecting the request. That’s not how things work in Philadelphia.
you’ll do better if u never use the liberal or progressive.
They are:
socialist
collectivists
nannyists
statist
globalist
I’m a free trader,not worried about the globe.
Hope 12% is enough enticement to get the overseas dough
Still perky here in 22151
The obama one Trillion dollar stimulus/bailouts did not go to shovel ready infrastructure jobs.
Ask yourself - after eight years and a TRILLION DOLLARS - where did the money go? American infrastructure is WORSE than ever.
The money went into public union coffers to keep them alive thru the obama years.
Anyone remember the “jobs saved or created” fake news obama stat?
The tidal wave is coming.
++++++
Is Your Money in a Reputable Bank? – Municipal Bankruptcies & More on the Way
IWB | November 22, 2017
Even to the casual observer, the financial condition of government budgets are under severe stress. Taxes have gone up consistently and have outpaced any meager adjustments in income for most taxpayers. No one can reasonably expect that municipal financing is assured by simply raising assessments and rates to keep their bloated bureaucracies solvent. Since the middle class has never recovered from the money centered meltdown, the average community struggles with diminished resources. Add into this equation the prospects of an even worse financial collapse, the question needs to be asked, just how municipal jurisdictions will cope with the reality that even more properties will go off the tax rolls.
A measure of last resort might well be bankruptcy, assuming your state allows for such relief. Chapter 9 – Bankruptcy Basics seem straight forward. “The purpose of chapter 9 is to provide a financially-distressed municipality protection from its creditors while it develops and negotiates a plan for adjusting its debts. Reorganization of the debts of a municipality is typically accomplished either by extending debt maturities, reducing the amount of principal or interest, or refinancing the debt by obtaining a new loan.”
List of Bankruptcy Filings Since January 1, 2010
All Municipal Bankruptcy Filings: 51
General-Purpose Local Government Bankruptcy Filings (9):
— City of Hillview, Ky.
— City of Detroit, Mich.
— City of San Bernardino, Calif.
— Town of Mammoth Lakes, Calf. (Dismissed)
— City of Stockton, Calif.
— Jefferson County, Ala.
— City of Harrisburg, Pa. (Dismissed)
— City of Central Falls, R.I.
— Boise County, Idaho (Dismissed)
“Ask yourself - after eight years and a TRILLION DOLLARS - where did the money go?”
The banking industry?
Looks like they already have plans wrapped up for their next taxpayer-funded bailout:
Markets
Bank Bets Tied to Government Bailouts Soar Up to 1,440% in a Year
Funds run by John Paulson, Bill Miller among winners as warrants rally
By Rachel Louise Ensign
Updated Nov. 6, 2017 5:46 p.m. ET
The U.S. banking industry is booming—a development that is bringing windfall gains to a small group of investors who had the gumption to buy esoteric bank securities when the outlook for financial firms and the economy was far less clear cut.
…
The Signs We Haven’t Seen Before in Australian Property
Published on Nov 23, 2017
“It’s been long time coming and with all the speculation in Australian housing as to what is going to prick the property bubble - it is always something you least expect! Interest Rates will Double - Martin Armstrong.”
https://www.youtube.com/watch?v=L70u7OcfnG0
Is the doubling of interest rates from .25% to .50% really that much of an earth shattering prediction?
If you have a million dollar+ variable rate mortgage, any interest rate increase is a problem.
zumper-zillow
are there any cities raising rents now?
the info from zumper scks
It seems like year after year of rapidly increasing rents will inevitably cumulate in a point where rents massively decline. This is a time-to-build effect, thanks to everyone who can fog a mirror piling into the opportunity to become a landlord and builders accommodating them by building a massive glut. Once the bubble pops, demand collapses at the same time the supply glut continues to worsen.
We saw the same thing in the run-up to 2007-2009.
“…while we can see a crisis coming, the subsequent price movements cannot be uniquely identified a-priori.”
I predict down.
No, not all all.
Sorry, my reply was to taxpayer.
It will be Canada.
Insane housing bubble plus insane debts.
And a few years ago - the Canadian banks had a law passed which basically gives them a built in TARP.
So - the bubble pops. Canadian debt implodes. The average Canadian becomes a debt slave (RECOURSE NATION) on assets that are worth a fraction. Debt everywhere in default and the Canadian banks get bail out.
There are going to be some cheap vacations to Canada in the next few years…
+++++
Whose Private-Sector Debt Will Implode Next: US, Canada, China, Eurozone, Japan?
Wolf Richter • Nov 22, 2017
The Financial Crisis in the US was a consequence of too much debt and too much risk, among numerous other factors, and the whole house of cards came down. Now, after eight years of experimental monetary policies and huge amounts of deficit spending by governments around the globe, public debt has ballooned. Gross national debt in the US just hit $20.5 trillion, or 105% of GDP. But that can’t hold a candle to Japan’s national debt, now at 250% of GDP.
And private-sector debt, which includes household and business debts — how has it fared in the era of easy money?
In the US, total debt to the private non-financial sector has ballooned to $28.5 trillion. That’s up 14% from the $25 trillion at the crazy peak of the Financial Crisis and up 63% from 2004.
But wait, Canada rules! Private sector debt in Canada has more than doubled, from C$2.2 trillion in 2006 to C$4.5 trillion, and private sector debt as percent of GDP has soared to 217%, within a hair of where Japan was in Q3 1993, before the credit bubble imploded. Also note how eerily similar the charts for China’s debt and Canada’s debt are:
Within this group of economies, when it comes to the next private-sector-debt bubble implosion, there are really two places to look: Canada and China. In Canada households are on the hook, being among the most indebted in the world. In China, the debt binge has spread across businesses and households alike.
In the US, the yield spread of Treasury securities has collapsed to lowest level since 2007, and even the Fed is fretting about it.
“The average Canadian becomes a debt slave (RECOURSE NATION) on assets that are worth a fraction. Debt everywhere in default and the Canadian banks get bail out.”
I like it, I love it, I want some more of it.
😁
If your celebration of Thanksgiving today includes being thankful to be an American, you are an alt-right, white supremacist, Nazi.
I learned this from the Southern Poverty Law Center.
Air Force One is parked down the road at the airport, President Donald Trump is right across the Intracoastal at Mar-a-Lago and my wife has an unpardoned Butterball that is starting to turn golden brown in the oven.
Yes my celebration of Thanksgiving today includes being thankful to be an American.
Wew lad, you are in the sweet spot! Happy Thanksgiving tooya, and to Ben, and all you folks here on the HBB!
Happy Thanksgiving to you and yours palmetto.
The roast is sitting in the oven, all the sides are done, and my brother and I are taking the dog hiking to the top of the Castle Rock now.
I don’t know how many more Thanksgivings we will be spending with the olds. I enjoy hearing them tell me how they don’t recognize America anymore as the country they grew up in, not because I like that, but because once they’re gone they’ll be less of them saying that.
the blog owner is slingin’ plates of crow and crater taters out of the kitchen so fast it’s almost cartoonish.
Where is AlbuquerqueDan when you need someone with a big appetite for crow?
brother and I are taking the dog hiking to the top of the Castle Rock now.
But… how will you get the dog up there?
Happy Thanksgiving, Ben and all of my HBB friends!
The dog loves high altitude hiking!
I learned this from the Southern Poverty Law Center.
Once the purge in the Democrat party is complete I fully expect whatever remains to veer even further to the left. How that will play out at the ballot box remains to be seen.
If it is a battle of extreme left versus extreme right, my money is on the latter, for obvious reasons…especially if Hillary is resurrected as a retread candidate.
I am deeply thankful to the educational system that now permeates America.
Long live No Child Left Behind.
I thought it was No Banker Left Behind?
There would not be a “No Banker Left Behind” if the “No Child Left Behind” policy was not first put in place to fully prepare the citizenry.
Dumb ‘em down, and profit.
San Francisco, CA Housing Prices Crater 7% YOY On Ballooning Excess Housing Inventory
https://www.zillow.com/san-francisco-ca-94109/home-values/
*Select price from drop down menu on first chart
“Market Temperature = Cold”
LOLZ!
Market inventory: Down 49%
Prices $/SF: up 8%
Still seems strong to me……
“‘CAP had warned of this scenario 28 years ago in our book ‘Housing for the People’. However, it fell on deaf ears till now,’ he said, adding that he had repeated the message many times since then. ‘The crux of the housing problem is that the country’s building resources were channelled not towards where people’s housing needs are, but towards where the market which could pay was.’”
28 years.
Just like in the US, easy credit and wasteful building was evident in the 1980s.
“the primary wave of entrepreneurial investments is joined by a stage of secondary growth encouraged by the instincts of imitators in search of profit and driven by ‘fashion’.”
“Why are imitations inevitable?”
Respectfully, if markets didn’t have twin peaks at the top, how could they ever go teats up?
I wonder how many other historically prominent bubbles were characterized by twin peaks before the point of ultimate collapse. The only episode I know well in that regard is the South Sea Bubble, thanks to Sir Isaac Newton getting sucked in and milked dry on the second teat.
Beware of the dry cleaner effect of twin-peaked bubbles!
Such a problem has been manifested nationwide, leading to an over-production of unusable expensive properties that a large segment of the Malaysian population cannot afford. For example, the term ‘affordable housing’ is grossly misleading because it can range up to RM400,000 per unit,’ Mohamed said. ‘We have to consider that this serious housing policy flaw, resulting in a glut of unsold property units, can drive developers, the banks and the country to financial ruin.’”
Too bad, and quite astonishing, that Malaysia’s housing problem is global in scope.
What’s astonishing to me is not only that the entire global housing industry and media were able to construct a narrative that wealthy people with boatloads of cash were chomping at the bit to buy expensive real estate in every corner of the world, but that they actually built it. This world is fooked.
It’s looking as though the next housing correction, which is evidently already underway, will come into the full light of the MSM on Donald Trump’s watch.
Can anyone who thinks they know comment on the likelihood of bailouts under the current political climate in case home prices continue heading south?
(palmetto raises arm and wildly flaps his hand) Ooooh, ooooh, me, me, teacher!
Bailouts? Need you ask? Of COURSE there will be bailouts, that’s a foregone conclusion, IMO.
Speaking of bailouts, for anyone who has a couple of hours to waste and enjoys going down the old rabbit hole, check out the latest craze sweeping the internets: locating and drawing on your secret government bank account that was created for you at birth (or, uh, maybe when you turned 18, the youtube experts are a little fuzzy on this). But the point is, WE”RE ALL SECRETLY MILLIONAIRES! Something about a “code” on your birth certificate and social security card. And the US is a corporation. And we’re all shareholders in the corporation. No, wait, actually we’re all CHATTEL! But we just don’t know it, and if we just follow the magic formular, WE”RE ALL FREE and have millions of bux,
Where it really gets good is where a number of the “experts” call this secret bank account a TDA. Swear to god, a TDA. And then a few knuckleheads actually attempt to access their non-existent TDA. (two people were arrested for attempting this and one is in jail) Yeah, TDAs (Treasury Direct Accounts) have been around for a long time and they’re no secret. My father had a TDA. So did I, briefly. The purpose is to buy and sell government securities, lol! But as far as I know, the only person who puts money in a TDA is the person who has the account and transfers the $$ into that account from their not so secret personal bank account.
No one loves a good conspiracy theory more than me. I wanna believe! Great stuff, though. Guaranteed hours of fun trying to figure out what these experts in the basement are talking about.
I wanna believe!
Me, too!
Become a sovereign citizen
I’m sure someone out there would be glad to arrange it for few hundred bucks, then there will be all kinds of trouble you can get yourself into.
“Become a sovereign citizen…”
Reminds me… what ever happened to Bill in LA?
I seem to recall that he got banned a short time after election day 2016. Don’t know the details.
I wonder if he still hides his gold in the pantry behind the oatmeal.
I actually owe Bill one heckuva apology for twitting him about bitcoin. A buddy of mine is doing quite well with it.
twitcoin…
So now you don’t think it is a ridiculous bubble?
‘he got banned a short time after election day 2016. Don’t know the details’
‘Trump Derangement Syndrome’
https://www.youtube.com/watch?v=4_idhCca2XM
As I recall he was advised to get on the Trump Train or some such thing. He chose the RageCage instead.
“The world doesn’t make sense” It’s a mental illness.
Likely to get worse for the afflicted.
“I actually owe Bill one heckuva apology for twitting him about bitcoin. A buddy of mine is doing quite well with it.”
The fall of Bitcoin will be one for the ages.
So now you don’t think it is a ridiculous bubble?
I do think it is likely a ridiculous bubble—but I also know that I have no idea of how to reasonably value it.
On the one hand, it does appear to serve a useful purpose, bitcoin specifically as a medium of exchange (with near-zero transaction costs in a world where the money changers have traditionally charged a significant cut), and blockchain in general has utility as well, as a shared distributed ledger, where transactions are recorded without requiring any central authority. So something that serves one or more useful purposes should have some value.
On the other hand, a new blockchain with a new critical mass of users and miners does not seem like that difficult a barrier to entry; these things are essentially trivial to create, though not as trivial to get a critical mass of acceptance. But with near-zero cost entrants and thus competition to serve identical purposes, with the potential for a large number of competing crytocurrencies, the value should not be all that high.
I just got one of those emails from a Nigerian lawyer. There’s $10 million bucks waiting for me there, just because of my last name.
Yippeeeee!
“…a number of the “experts” call this secret bank account a TDA. Swear to god, a TDA.”
Is that the same or different than a Bitcoin repository?
IIRC, Dodd-Frank put the kibosh on any more bailouts. Banks instead had to write a living will; that is, they have to write their own plan for dismantlement should they get in trouble again.
Of course, the Republicans have been wanting repeal Dodd-Frank for a while now.
IIRC, Dodd-Frank put the kibosh on any more bailouts. Banks instead had to write a living will; that is, they have to write their own plan for dismantlement should they get in trouble again.
And you believe those living wills will actually be activated, in the fact of cascading failures and associated systemic risk? I have less confidence in that.
“in the face of”
I have 3.5 yrs before I’m signing my son up for kindergarten. Can the Fed and its Global Capitalism partners keep prices inflated that long? Doubtful, especially with 90% of the properties in desirable neighborhoods around me being owned by aging Boomers.
There are some expensive neighborhoods with families our age, but they are laughable McMansion crap with no yards, no forests, vinyl or faux stone siding, front facing garages, and generally poor quality. I always laugh when I see someone soon up to pay 500,000+ for one of these stick boxes.
‘the Fed and its Global Capitalism partners’
Who would that be?
IMF? World Bank? ECB?
I wouldn’t call what the global banking cartel is dishing out for us “capitalism”—not by any stretch…
Same here. Tsunamis of fiat are not capital. You can’t print wealth. You can transfer it though to those with their mouths open under the firehose.
Other central banks, the corporations and interest groups that fund campaigns, and our “thought leaders” (chattering class).
REALTORS ™ are counted as an interest group.
“thought leaders”
I like it.
A man can dream.
Economics
Maybe Central Banks Won’t Always Be So Powerful
A Q&A with David Kynaston, who wrote the book on the Bank of England.
by Mark Whitehouse
November 9, 2017, 10:00 PM PST
The Old Lady of Threadneedle Street.
Photographer: Oli Scarff/Getty Images
The modern central bank is a uniquely powerful institution: It enjoys a large measure of independence from elected officials, yet makes decisions that can profoundly affect the livelihoods of millions.
From a historian’s perspective, there’s no reason to believe that it will always be so.
In his new 879-page history of the Bank of England, author David Kynaston recounts how the 323-year-old institution went from financing foreign wars to running monetary policy and overseeing the country’s financial system. It’s an intricate tale, involving the battlefield beheading of a deputy governor in 1695, the swearing in of staff as constables to fend off a feared Chartist attack in 1848 and the gradual rise of academics to the commanding heights. It’s also relevant to the present day, providing valuable context at a time when many are questioning the models and methods that central bankers use to manage the economy.
I spoke with Kynaston about the insights history might offer into the nature, conduct and future of central banking. Here’s an edited version of our conversation.
Mark Whitehouse: Economists have faced criticism since the 2008 financial crisis for being too focused on theoretical models — such as the ones that inform policy at central banks — and ignoring the actual history of how economies act and how disasters happen. What do you think they can learn from historians?
David Kynaston: When I was working on a four-volume history of London’s financial center (known as the City), I had the insight that the pre-1980s City was very much like a village, which could be treated in an anthropological way. It was quite an intimate space, the old square mile. Later, in one of my initial conversations with Mervyn King about writing a history of the Bank of England, he said that since the 2008 crisis, he’d noticed that the economists at the bank were starting to read my City history.
This is all a way of saying that human beings matter. Sure, financial institutions have become a lot bigger. But when a few years ago I was co-writing a history of HSBC, one of the things that struck me was how the really key decisions were taken by a quite tight-knit group of people at the top. So even at such enormous institutions, human beings still matter.
MW: You tell the story of an amazing transformation, from an entity set up to finance the Nine Years’ War to a public body responsible for managing the economy and overseeing the financial system. Does the emergence of a powerful, independent central bank seem inevitable to you? Have we arrived at the right model?
DK: It was a very slow transformation. On the eve of World War I, when the bank was well over 200 years old, it was still a long way off from what we see as a modern central bank. Only gradually, in a checkered sort of way, did the bank come to see itself as serving a public as well as a private function. It was a fairly haphazard process, partly driven by financial crises.
The bank now is arguably more powerful than at any time in its entire history. Is it the right model? One has to look at it holistically. It’s not just a question of economic utility. It’s also a question of democracy. There’s a feeling here that the high tide of independence is perhaps over. The whole take-back-control motif that we hear now is about taking back control from unaccountable people.
…
“I have 3.5 yrs before I’m signing my son up for kindergarten.”
You’re just getting started… provider.
I was an early Bitcoin believer and I’ve already withdrawn enough that providing is never going to be a problem for this generation or next. I’ve been anti consumerism for a long time, long enough that my wife had bought in now. We do value good public education, good youth recreation, and living in an area that went 70%+ for Trump. Not a lot of those in MD. It’s going to be Fallston or Churchville in my case. I’m still going to wait to get a fire sale price though. ⏳ Check out 3200 Glouchester drive fallston MD for a recent example.
lol@Liberace
That house is anything BUT anti-consumerism.
May you get what you deserve.
Not a lot of those in MD.
Don’t I recall you saying that your Baltimore purchase was one that you were planning to live in long-term?
Apollo Beach, FL Housing Prices Tailspin; Plunge 28% YOY As Speculators Dump Properties
https://www.movoto.com/apollo-beach-fl/market-trends/
HA, is that you again?
You draw such strong conclusions fro a market w 7 listings……. insignificant HA!
‘Alice’s Restaurant’ didn’t really begin as a “Thanksgiving ballad,” but through its enduring popularity just sort of became one.
Matt Dolloff, WZLX, Boston
Alice’s Restaurant - Original 1967 Recording
https://www.youtube.com/watch?v=m57gzA2JCcM
Happy Thanksgiving! :mrgeen:
Keeeeeeeeeeeeeeeyrank it up to 11, sit back and count your cash. It’s another lucrative month.
https://youtu.be/-SDfGBdql80
And here’s one for you Liberace…. https://youtu.be/l5aZJBLAu1E
Rental rates
I guess they’re reporting inflated numbers since “luxury” is all anyone builds anymore
We’ll know the Housing Bubble is history when Mad Money goes off the air.
Cramer: Bitcoin and junk bonds are bubbles, but stocks aren’t overvalued
- “Mad Money” host Jim Cramer pushed back against the theory that stocks are overvalued and pinpointed other areas of the market that are.
- From bitcoin to junk bonds, plenty of other assets have inflated in value, Cramer said.
- In fact, stock market values are some of the only ones that make sense to the “Mad Money” host.
Elizabeth Gurdus
Published 6:57 PM ET Tue, 21 Nov 2017
Updated 7:22 PM ET Tue, 21 Nov 2017
…
“The appearance of an economic boom is always related to a modification in the intertemporal structure of preferences, and it is always related to a specific industry, whose expansion dynamics will drive upward the general economic system. Entrepreneurs’ mood is lifted up by positive profit expectations, usually focused on a specific industry, which recently was the property sector for the Malaysian case. It is therefore crucial to emphasize the central role of expectations as the driving force behind entrepreneurial preferences.”
I don’t buy the ‘modification in the intertemporal structure of preferences’ claptrap. People are equally greedy during a bubble run up as they are during the subsequent bust. It’s just that it becomes quite difficult to make money by owning assets when knives are falling during the bust period. Hence the formerly eager investors dump assets in droves, accelerating the falling knives they are collectively trying to avoid.
“… expectations as the driving force behind entrepreneurial preferences.”
Bingo! Eliminate expectations and you eliminate the driving force.
Simple (except for the timing of this elimination of expectations; the timing is anything but simple).
Cypress Hill — Real Estate (1991):
https://www.youtube.com/watch?v=jZBT3EvlPwk
Happy Thanksgiving//////1
Don’t let the door hit ya where the Good Lord split ya.
FINANCIAL TIMES
Zimbabwe
Robert Mugabe offered immunity from prosecution after resigning
Army assures former Zimbabwe president that he can remain in Zimbabwe
Robert Mugabe, former Zimbabwean president, and his wife in a Rolls Royce in 2009. © AFP
12 hours ago
Joseph Cotterill and David Pilling in Harare
Robert Mugabe has been offered immunity from prosecution as part of a deal that led to his resignation as Zimbabwe’s president this week, paving the way for him to remain in the country that he ruled for nearly four decades.
George Charamba, Mr Mugabe’s spokesman, said that army generals who led a military takeover last week wanted to avoid a “dishonourable exit” for the 93-year-old. Mr Charamba added that there was no question of the former president being forced out of the country or surrendering his assets.
A security official familiar with details of the talks between the military and Mr Mugabe also said that there had been repeated assurances by the army that he and his family, including his wife Grace, would be allowed to remain in Zimbabwe.
…
I would boot your deadbeat @ss out of my house and then go drink a good beer.
Robert Mugabe was the winner of the country’s largest lottery. Amazing!
conspiracy kitty
https://www.youtube.com/watch?v=5dl7mJTjOZo&
Sarasota, FL Housing Prices Crater 17% YOY As Subprime Mortgages Fail
https://www.movoto.com/sarasota-fl/market-trends/
They should have Casual Friday at Buckingham Palace.
https://www.youtube.com/watch?v=-0trkDwWtpE