December 5, 2017

When Everyone Is Doing It, You Can’t Put Everyone In Jail

A report from the Toronto Star in Canada. “During a preliminary budget presentation at Toronto City Hall on Thursday, city manager Peter Wallace tried again to warn us about the threat posed by betting everything on the health of the real estate market. If anything, the costs for the city could go up if the market collapsed. A real crash in housing would likely mean a deep recession, with people losing their jobs and businesses failing. Imagine a scenario where land transfer tax revenue dropped by 40 per cent. A crash could actually be worse, because the volume of sales would almost certainly go way down, meaning not just lower payments but fewer of them.”

“A sudden need to find tens or hundreds of millions of dollars is going to be a world of hurt. ‘We’re gambling on the real estate market,’ Councillor Gord Perks told the Star this week, repeating a warning he has issued in the past. It’s a gamble on which his colleagues keep doubling down.”

From Reuters on Canada. “Toronto home sales were down in November from a year earlier. The average selling price for all homes types was down 2 percent at C$761,757 compared to C$777,091 in November of last year. Prices were also down 17 percent from the April peak. New listings rose 37.2 percent from a year earlier, when supply was below historic averages, while active listings more than doubled to 18,197 from 8,639 as properties sat on the market longer.”

From Malta Today. “During the conference organised by the newly set up ‘Property Malta’ last Thursday, the most important issue is whether Malta is experiencing a bubble in the property industry and the resounding reply was simply ‘no’. Those present at the conference were regaled with some staggering statistics. The declared gross value of property sales in contracts made during 2016 was over €2.50 billion. The industry creates 15% of added GDP in Malta. One out of every 9 employees in Malta works in the industry and related services: 37,275 jobs, equivalent to 11% of the working population of Malta.”

“Attributing all this economic activity to ‘greed’ - in contrast with other sectors of the economy where, apparently, people are not greedy (!), is nonsense.”

From Buy Association on the UK. “Homes are selling for an average 3.86% less than the asking price, with sellers in Wales having the least realistic expectations. Last month, it was revealed by Rightmove that more than a third of sellers had been forced to drop their asking prices in October – equivalent to £2,392. But buying agent and market commentator Henry Pryor said he was not worried by the state of the housing market, and believes the fluctuations are an overdue correction that will be welcomed by some. He also said than his clients had actually paid as much as 11% less than asking price.”

“‘The housing market is a double-sided coin,’ he said. ‘On the one hand, there are rising house prices; but on the other side of the coin there is the buyer, for whom lower prices are a good thing. This national obsession with ever-rising house prices is not something I subscribe to.’”

From Punch Nigeria. “Property developers as well as estate surveyors and valuers have said the real estate industry is still in recession despite the rebound in the economy. Some of them, who spoke with our correspondent, said many houses were still vacant and there was still high rate of default on rent payment by tenants. ‘No one wants to start a project that won’t be taken up. Prices have also nosedived and because of the challenges of having to spend more time and resources selling one property, our income has been affected and it has been challenging for estate surveyors and valuers and others too,’ said Victor Alonge, CEO Nelson Thorpe Alonge, a firm of chartered surveyors and estate surveyors and valuers.”

From Bloomberg on Hong Kong. “Hong Kong’s red-hot housing market shows no signs of cooling anytime soon. Prices in the city have climbed 11 per cent this year, defying skeptics waiting for the bubble to burst and government attempts to rein in the world’s most expensive housing market through a raft of taxes and mortgage curbs. An average 20,000 new private residential units come to market each year, barely enough to cover the 20,000 mainland Chinese who become permanent residents each year - allowing them to avoid the punitive stamp duties slapped on foreign buyers - let alone anyone else.”

“Cash-rich developers are pulling out all stops to entice buyers. At its Cullinan West project, Sun Hung Kai Properties is offering buyers finance of as much as 120 per cent of the purchase price: 90 per cent toward buying the new property, and 30 per cent to pay down their existing mortgage. Aggressive bids by mainland developers keen to build up land banks have pushed Hong Kong prices to records. Non-local developers account for 68 per cent of all government land purchases this year, according to Colliers.”

“In February, two mainland companies paid a record HK$22,118 (US$2,834) per square foot for a waterfront site. Those costs will ultimately result in higher apartment prices once developments are completed, causing neighbouring property owners to raise their own expectations. ‘People translate a land sale into the final built price, and when it is way above the market everyone will raise their own prices,’ says Denis Ma, head of Hong Kong research at consultancy Jones Lang LaSalle.”

From Reuters on China. “Gravity-defying property prices in China have spawned widespread home-loan fraud as buyers fear missing out on what seems like a sure bet. Real estate agents, valuation companies and banks themselves are party to the scam. When Zhu Chenxia bought a flat early last year from Lei Yarong in the up-market Nanshan district of China’s southern metropolis of Shenzhen, the two women drew up three purchase agreements to cover the deal. Only one was genuine.”

“Details of the deception are contained in a court judgment from a subsequent dispute between Zhu and Lei over the transaction. Remarkably, Zhu herself disclosed the fraud to the court when she gave evidence that showed the pair had conspired to cheat the bank and the government. Hu Weigang, a senior partner at Guangdong Shen Dadi Law Firm, would like to see the law enforced on the mainland as it is in Hong Kong, where creating a bogus document can lead to jail. But, he acknowledges, the scale of this cheating makes it virtually impossible. ”

“‘When everyone is doing it, you can’t put everyone in jail,’ says Hu, who specializes in real estate litigation.”

From the Australian. “‘The Boxing Day sale of real ­estate’ is how David Beard opens his Australian Property Tour of Brisbane apartments going cheap, largely as a result of defaults by foreign buyers. Inspired by the oversupply of apartments in the Brisbane market, Mr Beard saw an opportunity to bring local buyers to developers desperate to sell completed units.”

“The first port of call was a ­masterplanned community at Hamilton on Brisbane’s northside. On offer were one, two and three-bedroom apartments with access to a fully equipped gymnasium and 20m swimming pool, for a 10 per cent discount on the retail price. In the case of a two-bed two-bath unit, buyers were looking at $513,000, down from $569,000.”

“‘Every industry has its Boxing Day and today is ours,’ Beard said, as 58 people boarded the bus for the five-hour mystery tour. ‘We don’t work for any of the developers, but I can assure you we’ve spent a lot of time putting these deals in place. The prices available today won’t be available tomorrow.’”

“It was on to Bowen Hills, but as Mr Beard pointed out, nothing was for sale. Hours after he negotiated a 19 per cent discount on several new apartments, an investor jumped in and snapped them up, leaving Australian Property Tours with a hole in its itinerary. ‘Brisbane just can’t get it right in the apartment market,’ said Mr Beard. ‘There’s either an oversupply or an undersupply, and once the current stock goes, probably by the end of next year, there’s not going to be much coming on to the market at all.’”

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Comment by Ben Jones
2017-12-05 10:04:15

The China article is worth reading in full.

Comment by Anonymous
2017-12-05 11:03:45

“…across China, unqualified borrowers use fake documents to secure mortgages…”

Comment by Mr. Banker
2017-12-05 11:16:27

And everybody associated with these mortgages is allowed a dip of their beak.

Comment by BlackSwandive
2017-12-05 13:17:28

That doesn’t square with the “all cash” Chinese buyer.

Comment by Mafia Blocks
2017-12-05 13:34:00

It was a narrative. They never existed.

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Comment by redmondjp
2017-12-05 22:04:59

You are 100% wrong HA. You should try living in Bellevue, Republic of China.

Comment by Carl Morris
2017-12-05 15:16:38

I think the all cash buyers tend to be those buying outside of China and the mortgage fraud is mostly the domestic buyers.

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Comment by OneAgainstMany
2017-12-05 20:58:03

Aren’t the all-cash Chinese buyers wealthy business types (millionaires & billionaires) who may have gotten their gain questionably and are trying to move it out of the country?

Comment by Carl Morris
2017-12-06 11:28:05

Aren’t the all-cash Chinese buyers wealthy business types (millionaires & billionaires) who may have gotten their gain questionably and are trying to move it out of the country?

I’m sure there is plenty of that. But as I’ve gotten to know some upper middle class Chinese people there are a lot who made significant money by being at the right place at the right time in the last 20 years, whether in real estate or business. Most of them aren’t crooks and they don’t have huge amounts to spend, but even if it’s only a few hundred thousand or a million tops if you put lots of them together and let them spend it wherever they want they can really distort the real state markets of other countries. As shown on our west coast, and Canada, and Australia.

As far as I can tell they are just looking to reduce financial risk by diversifying investments, same as any of us would in the same situation. The fact that they can make an investment that also can get their kid into a good free western school if they decide to move is just icing on the cake.

Comment by Professor 🐻
2017-12-06 06:57:17

How long will it take for this house of canards to collapse?

Comment by BlueSkye ⚓
2017-12-05 11:46:41

“In 2016, the rise in property prices boosted total household wealth in 37 of China’s most developed cities by 24 trillion yuan, almost twice the value of total disposable income of 12.9 trillion yuan…”

Imagine the “value” of your house going up twice the amount of your yearly take home pay in one year. You and everyone else in town.

I guess it’s not quite as spectacular as it sounds when the price was 100 x your gross to begin with.

Comment by Ben Jones
2017-12-05 10:06:59

‘U.S. luxury homebuilder Toll Brothers Inc’s quarterly profit and revenue missed analysts’ expectations on Tuesday as it sold homes at prices lower than its own estimates, sending the company’s shares down 8 percent in morning trading. ‘

Comment by OneAgainstMany
2017-12-05 20:59:45

It seems like luxury will be the first hit in the coming downturn.

Comment by 2banana
2017-12-05 10:19:36

It is amazing the good things that happen when a President enforces the LAW.

Think of all those apartments and houses that will now be available to US citizens.

Think of all that voter fraud that won’t happen.


Border arrests plunge, deportation arrests soar
AP - December 5th, 2017

SAN DIEGO (AP) — The federal government, in the most complete statistical snapshot of immigration enforcement under President Donald Trump, says Border Patrol arrests plunged to a 45-year low while arrests by deportation officers soared.

The Border Patrol made 310,531 arrests during the fiscal year that ended Sept. 30, a decline of 25 percent from 415,816 a year earlier and the lowest level since 1971.

The numbers released by the government Tuesday show that deportation officers are taking Trump’s call for an immigration crackdown to heart, even without the funding increase that the president has sought from Congress for more hiring.

ICE said that deportations totaled 226,119, a decline of 6 percent from the previous year, but that number masks a seismic shift away from the border. ICE often takes custody of people at the border before deporting them; the sharp drop in Border Patrol arrests means fewer people to remove.

ICE said “interior removals” — people deported after being arrested away from the border — jumped 25 percent to 81,603 from 65,332 the previous year. They rose 37 percent since Trump’s inauguration compared to the same period a year earlier.

Reasons for the precipitous drop in border arrests are unclear but Trump’s election may have deterred people from trying.

Comment by Anonymous
2017-12-05 11:10:30

“Reasons for the precipitous drop in border arrests are unclear but Trump’s election may have deterred people from trying.”


Comment by taxpayer
2017-12-05 11:36:58

IKE did a better job w 1/10 th the staff
point rifle south, pull trigger
jose goes away

Comment by oxide
2017-12-05 13:05:02

I’ve been thinking… IMO the most effective act would be to end chain migration full stop. Possibly birthright citizenship.* I would gladly grant path-to-citizenship for the DACAs in exchange for the RAISE act, provided the DACAs re-apply (too many were rubber-stamped).

I’m not too threatened by ~600K English speakers. In the end, they are probably no worse than the blue-collar folks I grew up with. But those DACAs could import millions, including the parents. That is what need to be prevented. I’m also curious to see what ending chain migration would do to the mail-order bride market.

*I really wanted to keep birthright citizenship for another reason, but now i see that it’s being abused. All you need is one illegal immigrant to have one baby and that’s enough to import an entire clan.

Comment by Jessica
2017-12-05 19:02:02

NAIVE! I’ve been around the DACAs and a lot of them have an attitude- and rightly so. They have been designated a privileged class by the US government and been given loads of free stuff courtesy of the American taxpayer. How does this benefit the US citizen? It doesn’t - and it won’t and it can’t.

Think you can grant citizenship to minimum 800k DACA recipients and control chain migration???!! Who believes that?

How will the US enforce them not bringing in their parents/uncles/cousins/nephews/nieces/inlaws.. ? What happens when Trump leaves office? Will the next President/congress be against all the relatives coming in too?

Remember how outraged everyone was by Obama’s rewriting (illegally) immigration law with his little pen? So now we are going to rubber stamp his illegal act?

We are walking the plank to our deaths after each administration - how can people not see this?

Kate Steinle - RIP.

Comment by oxide
2017-12-05 20:27:30

IIUC, the RAISE act gets rid of chain migration (or it limits chain migration to a spouse and minor kids) and the diversity lottery. It might also require e-verify. I believe that 600,00 - 800,000 new citizen DACAs is a small price to pay to prevent millions more chain migrations over the next generation, not just Latin Americans, but Indians and Asians too.

Just for kicks, I’d institute a ceiling for visas too. Once you reach the limit, no more come in until somebody leaves. And put the ceiling at the number of legal visas already out. So the overstays are automatically over the limit. And NOBODY else gets in until they leave.

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Comment by OneAgainstMany
2017-12-05 21:05:41

If there is one thing we are learning about immigration, it’s that the optics matter a good deal. The threat of a wall may be a much more important deterrent than its actual construction. I think jawboning the illegal immigration rate down may be DJT’s most significant achievement in office.

Comment by Jessica
2017-12-05 21:58:23

If drastic measures are not taken, we will lose this country.

It is that bad.

Comment by oxide
2017-12-06 05:51:00

The problem with jawboning down the illegal immigration rate is that the next Democrat will simply jawbone it back up.

In fact that’s what everyone had been doing for the past 15 years. They jawboned abut “comprehensive immigration reform,” but they didn’t have to really care about it because they know that open borders was the status quo. Now that Trump has kicked in enforcement and put his foot down on Dreamers, suddenly the status quo isn’t what they want.

Comment by Ben Jones
2017-12-06 06:38:24

See, this is the “nothing ever gets better, we shouldn’t expect it to or even try” crap. Well I live on the border and it has gotten better.

Comment by Mafia Blocks
2017-12-06 10:37:44

It’s called Sad Donkey Syndrome.

Comment by 2banana
2017-12-05 10:25:29

Democrats will fight tooth and nail to keep the MID - used nearly only by the wealthy.

Democrats will fight tooth and nail to keep the Cadillac Tax provision of Obamacare which will crush the middle class.

It is going to be a landslide…even without the democrat sexual assault and rape scandals.


Democrats are now the party of the rich — so why not tax the rich?
Washington examiner | 12/3/2017 | Steven Moore

While this narrative is probably good for Maddow’s ratings, the data show that it is not accurate; Census findings from 2016 show that the Democrats are actually the party of the rich.

Democrats represent nineteen of the twenty-five congressional districts with the highest median income. The remaining six seats held by Republicans are all swing districts being targeted by the Democrats in 2018. This is not surprising, since these twenty-five districts gave Hillary Clinton 62.6 percent of the vote on average – 14 percentage points more than her share of the national vote.

In contrast, Republicans hold 59 percent of the middle class congressional seats, as middle class is defined by the Pew Research Center. Republicans also hold 44 percent of the lowest-income congressional seats.

Republicans are looking for revenue to lower taxes for the middle class, and are taking a political beating for defending tax cuts for the rich. The rich, however, are increasingly voting for Democrats, whose policies under Obama gave us lower than 1.5 percent annual economic growth on average and a declining middle class.

One of the most burdensome taxes to middle class Americans is the so-called Cadillac Tax provision of Obamacare. Scheduled to be implemented in just two years, this 40 percent surtax on healthcare plans above a certain threshold would eventually hit all 178 million Americans who receive healthcare benefits through their employers.

A study by the City University of New York School of Public Health shows that the Cadillac Tax will most negatively affect Americans earning an income between $38,550 and $100,000 (in 2009 dollars) annually – a big chunk of the middle class. On average, it will take 5 percent of their income – between $1,900 and $5,000.

Comment by 2banana
2017-12-05 10:41:00

Wow. That was fast.

Sen. Al Franken, D-Minnesota…tick-tock


Rep. John Conyers announces retirement, endorses son to run for seat
CBS News - Dec 5, 2017

Embattled Rep. John Conyers, D-Michigan, has announced Tuesday that he is retiring and has endorsed his son, John Conyers III to run for his seat. Conyers’ lawyer confirmed that the retirement is effective immediately.

“My legacy can’t be compromised or diminished in any way by what we’re going through now. This too shall pass,” said Conyers on a local Michigan radio station Tuesday morning.

Conyers has already stepped down from his leadership position as ranking member on the House Judiciary Committee late last month. He will now be leaving the seat he’s held since 1965.


New accuser: Conyers ran hand up thigh in church
Detroit News Washington Bureau - Dec. 5, 2017

Washington — Another woman who worked for longtime U.S. Rep. John Conyers is accusing him of touching her inappropriately “by stroking and rubbing my thighs” and appearing naked before her.

Grubbs described a time that Conyers slid his hand up her skirt while she was sitting next to him in the front row of a church.

Comment by tresho
2017-12-05 10:52:51

This too shall pass like a kidney stone.

Comment by Mr. Banker
2017-12-05 11:08:43

I’m thinking razor blade.

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Comment by taxpayer
2017-12-05 11:38:18

so another black marxist

Comment by oxide
2017-12-05 16:57:23

appearing naked before her

I know Taxpayers made a joke about ugly womyn in Congress, but just pause for a moment and try to imagine how this all must have looked. Imagine Conyers naked, Matt Lauer naked, Franken’s tongue, Weinstein begging you to give him a little attention …

I think I’d take the ugly womyn in Congress over any of them.

Comment by Ben Jones
2017-12-05 17:11:44

As I pointed out the other day, much of this stuff is beyond groping. Doing it while getting a photo taken? Touching a woman in church! Lauer with the sex toys.

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Comment by BlueSkye ⚓
2017-12-05 17:34:50

The many faces of power and corruption.

Comment by tj
2017-12-05 17:38:43

and immorality.

Comment by Rental Watch
2017-12-05 17:40:12

I’ve heard that in some traditional corporate environments that a superior asking out a subordinate for coffee is frowned upon.

It takes the MSM, Hollywood, and politicians to get into the real depravity. What was it that Geraldo said about Matt Lauer? That the media is a “flirty business”? Sorry…a wink and a smile from across the room is flirting. Locking someone in your office and then dropping your pants is criminal.

Comment by BlueSkye ⚓
2017-12-05 18:06:01

I’ve been in the big corporate world for many decades. Some, I’m just saying some, of the women who get into these situations are quite disturbed themselves. Such are dangerous to work around. Over the years I’ve refused to travel with or stay in the same hotel with a few that had “trouble” written all over them.

Comment by Professor 🐻
2017-12-05 19:42:19

Time to drain the swamp of sex abusers…all of them, of both parties.

Comment by Professor 🐻
2017-12-05 19:48:55

“Some, I’m just saying some, of the women who get into these situations are quite disturbed themselves.”

My first boss and one of my female peers were kickin’ it. It was one of the most politically toxic work situations I have ever experienced. Her husband found out, which led to a divorce in short order, just after the couple had completed building the largest do-it-yourself contracted McMansion that I have ever seen. Don’t know how the aftermath played out, as I changed jobs shortly after discovering the ugly situation.

Comment by tresho
2017-12-06 06:27:06

When I interviewed for various jobs I always tried to talk to some of the other employees just to get an impression of what the job was really like. If I got the whiff of a bad workplace, bad attitude, toleration of bad behavior, outright lunacy, I would withdraw my application.

Comment by Rental Watch
2017-12-05 18:48:30

And Conyers is endorsing his son for his seat…nothing like a little nepotism.

From 2010…son certainly doesn’t sound appalled at his dad hitting on a married woman.

Seems like a mature fellow. Let’s add him to the clusterf— in DC. Perfect.

Comment by Professor 🐻
2017-12-06 07:00:04

“…nothing like a little nepotism.”

Apparently the swamp is ride with it…in both sides of the aisle, no less.

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Comment by Professor 🐻
2017-12-06 07:01:11


Comment by rms
2017-12-08 21:56:00

“…nothing like a little nepotism.”

Fannie and Freddie come to mind. Hehe.

Comment by ibbots
2017-12-05 11:26:08

“One of the most burdensome taxes to middle class Americans is the so-called Cadillac Tax provision of Obamacare.”

How can it be a burden if it isn’t even in effect yet?

The Affordable Care Act’s high-cost plan tax (HCPT), popularly known as the “Cadillac tax,” is a 40 percent excise tax on employer plans exceeding $10,200 in premiums per year for individuals and $27,500 for families. The tax is scheduled to take effect in 2020.

We get the most robust plan available, i.e. no co-insurance, low out of pocket, PPO, etc., and our premiums don’t exceed the thresholds for the tax. And we have all of 2 employees in our plan.

Comment by In Colorado
2017-12-05 14:00:03

Not to mention that since most middle class folks are on cr@ppy HD plans they won’t ever come close to the Cadillac threshold.

ACA has some big issues, but I don’t think this is one of them. There is no way your typical employer will spend $27K to insure an employee and family. As costs rise the deductibles will just keep growing.

Comment by OneAgainstMany
2017-12-05 21:15:51

This is the best data visualization that I have seen as to how the tax cut would affect a broad section of households:

What The Tax Bill Would Look Like For 25,000 Middle Class Families

Comment by Ben Jones
2017-12-05 10:25:32

‘Brisbane apartments going cheap, largely as a result of defaults by foreign buyers’

Oh dear…

Comment by 2banana
2017-12-05 10:27:18

but…but…Chinese with suitcases of money…

Comment by redmondjp
2017-12-05 11:26:50

Those suitcases are still regularly appearing in the greater Seattle area.

Comment by BlackSwandive
2017-12-05 13:25:13

Those suitcases are few and far between, and they only prefer certain neighborhoods. Go any direction and the suitcases are nowhere to be found.

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Comment by Mafia Blocks
2017-12-05 11:57:01

suitcases of borrowed money so it’s kinda true.

Comment by BlackSwandive
2017-12-05 13:26:14

Borrowed or stolen.

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Comment by Senior Housing Analyst
2017-12-05 10:30:06

Littleton, CO Housing Prices Crater 21% YOY

Comment by BearCat
2017-12-05 10:30:24

If the Hong Kong market is doing so well, why are the developers “pulling out all the stops to entice buyers”? Shouldn’t the buyers be writing begging letters and offering more than asking?

And as far as the rule of law goes, well we know there was plenty of fraud in the last US bubble involving many buyers, sellers, appraisers, and loan officers. How many people went to jail? The Cole & Crips? Anyone else?

Comment by 2banana
2017-12-05 10:43:41

The 2banana “Write me a letter telling how you will take of squirrels” leading housing indicator tells me they are lying….

Comment by Ben Jones
2017-12-05 10:45:50

September 14, 2017

Blinded By A State Of Euphoria

A report from the Sydney Morning Herald in Australia. “I have a ‘liar loan’ – a mortgage based on less than absolutely factual information. I’ve pretty much always had liar loans. And I recently obtained a ‘liar credit card.’ So what? Given readers’ (and therefore the media’s) love of stories that combine housing and doomsday scenarios, investment bank UBS received saturation coverage with its idea that $500 billion in ‘liar loans’ are a hanging over the Australian housing market, set to come crashing down on the economy at the first hint of trouble and damn us all to hell.”

“How many people want to do the work to supply detailed financial information about their mortgage application and, apparently, admit they lied? Something isn’t adding up. And there’s the particular case of the ANZ which received the worst result: ‘Of those who took out loans with ANZ in 2017 (directly or through a broker), 55 per cent of respondents stated their application was completely factual and accurate (implying 45 per cent of customers misstated their application), down from 66 per cent in 2016.’”

“The most obvious point is, when applying directly to your bank, the bank should know more about your finances than you do anyway. For my ‘liar loans,’ all my income and spending washes through the bank cheque account. I’m Australian – near enough is good enough.”

Comment by 2banana
2017-12-05 10:55:51

Leverage and debt work both ways.

We have a generation who have never experienced a recession or even a down turn.

They are going to get crushed.

And remember - Australia is a RECOURSE nation.

Near enough is good enough for the debt collectors and repo men…

Comment by junior_kai
2017-12-05 13:23:03

Plenty of states were recourse, we saw how the rule of law got pizzed on in the GFC. Same thing will happen in Oz - too many in the current generations arent used to living within their means or being held responsible for their actions.

A civilization run by spoiled children does not bode well for the future.

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Comment by tj
2017-12-05 17:06:06

A civilization run by spoiled children does not bode well for the future.”

no kidding. and that’s what we’ll have if the ‘crats start winning elections again. just look to the original ‘lord of the flies’ for a preview of the future if that happens.

spoiled, stupid children like antifa would be in control. there would be lots of ‘piggies’ and many regrets. but it would be too late. there would be no honorable adults landing ashore to save anyone. the worst would play out.

Comment by In Colorado
2017-12-05 10:56:46

If Oz is a recourse loan country, and I believe it is, then while it might be a liar loan, it will haunt the borrower long after the foreclosure.

Comment by Mr. Banker
2017-12-05 11:11:29



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Comment by BlueSkye ⚓
2017-12-05 11:51:37

“haunt the borrower…”

If you are going to bet on a housing bubble, bet everything (and bury the rest).

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Comment by In Colorado
2017-12-05 14:03:50

And have a foreign passport and an out of country job waiting for you for when the debt collectors come to garnish your wages.

Comment by 2banana
2017-12-05 10:50:03

The Great QE Unwind (Oct 2017)…

The Quiet Bank of Japan Taper (Dec 2016)…

The Even More Quiet ECB Taper (April 2017)…

Anyone seeing a perfect storm coming?

“Hangover Time” is going to pop mucho housing bubbles.


Bank of Japan Tapers (Quietly), QE Party Over
by Wolf Richter • Dec 4, 2017

After years of blistering asset purchases, the Bank of Japan disclosed today that it held a total of ¥521.6 trillion in assets as of November 30, including Japanese Government Bonds (JGBs), gold, corporate bonds, Japanese REITs, equity ETFs, loans, etc. That is quite a pile, so to speak. It amounts to about 96% of Japan’s GDP.

Now something else has been happening: Starting in December 2016 – the month the Fed raised rates and a few months after some Fed governors started to kick around the idea publicly that QE should be unwound – the BOJ began to curtail its asset purchases.

In terms of percentage change, the tapering is even clearer. In early 2014, the BOJ exploded its balance sheet by 47% year-over-year. In November 2017, the year-over-year increase was just 10.8%:

But it seems that the BOJ thinks that this might be about enough. And it has tapered its purchases.

Similarly, the ECB began tapering in April 2017, reducing its monthly purchases from €80 billion in prior months, to €60 billion. And on October 26, the ECB decided to taper further, reducing its monthly purchases to €30 billion.

So the QE booze that the financial markets of those three economies — and of the rest of the world — have gotten drunk on is running low and will soon run out. And then it’s hangover time.

Comment by Neuromance
2017-12-05 20:42:28

The central banks of the world have quietly seized a great deal of social wealth by expanding their balance sheets (i.e. printing money) and firehosing it at the FIRE sector.

Despite the rosy indicators (they’re directly juicing the indicators they’re watching), the rise of populist and nationalist political movements suggests despite the dashboard appearing rosy, people are clamoring for change.

Recall Obama’s straying from the script back in 2008: “Obama was caught in an uncharacteristic moment of loose language. Referring to working-class voters in old industrial towns decimated by job losses, the presidential hopeful said: “They get bitter, they cling to guns or religion or antipathy to people who aren’t like them or anti-immigrant sentiment or anti-trade sentiment as a way to explain their frustrations.”

I think the labor force participation rate dropping for under 55’s and going up for over-55’s (just about doubling for the 75-79 age group) is a clear indicator that the “expert redistribution” has not had the social effect desired, though it sure did get Bernanke and Geithner and a few other architects of this, cushy sinecures.

Comment by BlueSkye ⚓
2017-12-05 10:53:58

“A real crash in housing would likely mean a deep recession, with people losing their jobs and businesses failing…”

The real shame about lost bubble jobs is that they were ever created in the first place. The sooner we stop wasting money and materials on malinvestments the better off we will be.

Comment by Ben Jones
2017-12-05 11:08:55

I just got this in an email:

“Sabal Capital Partners Announces Closing of $1 Billion in Freddie Mac Small Balance Loans in 2017. High-Volume Deal Flow Throughout 2017 and Efficiency of Firm’s SNAP™ Lending Platform Brings Sabal to $1 Billion Milestone, Solidifies Lender as One of Freddie Mac’s Most Prolific Partners”

“Sabal Capital Partners, LLC, a diversified financial services firm specializing in real estate, lending and banking, today announced the firm has closed $1 billion to date in Freddie Mac Small Balance Loans in 2017. The milestone was achieved through fast-paced, high-volume deal flow throughout the year, enabled by the firm’s proprietary SNAP™ lending platform, which has disrupted the small balance loan sector with unparalleled efficiency and velocity. Sabal’s $1 billion achievement represents the closing of approximately 400 Freddie Mac small balance loans year-to-date.”

“Freddie Mac’s Small Balance Loan Program offers financing for qualifying multifamily properties with loans ranging in value from $1 million to $7.5 million. One of Freddie Mac’s first and most prolific lender partners in the program, Sabal Capital Partners is recognized for accelerating the loan process through its SNAP™ servicing portal.”

“Introduced in 2014, Sabal Capital Partners’ SNAP™ enables highly effective automation for key aspects of the loan servicing process. All of Sabal’s 2017 loan transaction pipeline has been processed through SNAP™.”

“Sabal Capital Partners also announced the recent completions of multifamily loan portfolio transactions. These include a $65.5 million portfolio encompassing 20 total refinance loans for multifamily properties comprising 430 units in California and a $51.5 million portfolio of ten-year fixed rate loans for a total of 729 apartment units set within 14 properties in Missouri. Additionally, Sabal closed an $8.3 million portfolio encompassing five-year hybrid loans on eight separate apartment properties in Illinois.”

“The fourth closed is a record-breaking $129 million portfolio of 34 refinance loans encompassing 863 apartment units in Bronx, New York. The portfolio is the largest single Small Balance Loan (SBL) transaction processed through the Freddie Mac SBL program since its inception in 2014.”

“SNAP™ Servicing portal provides companies with a web-based, security-controlled interface where parties can review and track loan servicing, request disbursements, flag and monitor inspections, and create an electronic history for a loan. Designed with the unique needs of the servicing business in mind, SNAP™ increases the speed with which disbursement requests are fulfilled, and minimizes traditional paperwork by capturing all pertinent information online.”

Comment by Anonymous
2017-12-05 11:20:59

“…One of Freddie Mac’s Most Prolific Partners”

I’m not sure this is a good thing for us !

Comment by Ben Jones
2017-12-05 11:27:02

Government backed cash-out refi’s on apartments are essential to an affordable housing market!

Comment by 2banana
2017-12-05 11:30:34

What could go wrong?

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Comment by junior_kai
2017-12-05 14:13:48

Was just skimming the report on the Consumer Financial Protection Agency (another fraudulent slush fund for dems) from back in the day, came across some gems:

With the implicit guarantee of the Federal government, which became an explicit guarantee once they were placed in receivership, Fannie Mae and Freddie Mac were able to fund themselves at lower costs than their competitors and gain substantial market share. In essence, they were chosen by the government to be a winner and responded as one might expect, by wielding their political influence to avoid the further regulation that was called for by many Republicans.

Some have blamed the financial crisis on the presumed private-sector perspective of “privatizing the gains, and socializing the risk,” but none fit this model more than Fannie Mae and Freddie Mac.

Full text under “Dissenting Views” at

Comment by BigV
Comment by BlueSkye ⚓
2017-12-05 11:56:17

Looks to me like the “house” has no foundation. The Ohio Valley snow storms will fill the carport right up. What’s not to love?

I wonder if byeflorida is still in his mother’s basement.

Comment by 2banana
2017-12-05 12:06:32

1. The house in in NW Louisiana

2. Taxes approx $294 (2017)

Now THAT is an oil city plan.

Comment by oxide
2017-12-05 13:33:59

Nominal first bid: $27K.

On a serious note, this is probably a viable property to execute an Oil City plan — for a rugged MGTOW type who wants to homestead.

For about $150K, you could buy the acre of land, tear down the house, and build a new elevated structure over the exiting utilities, plus some outbuildings and setup. The acre is more than enough to grow veggies and chickens (possibly hogs), there are probably fish in the lake, and there are probably retail jobs in Vivian 10 miles north or 20 miles south in Shreveport for incidentals.

I’m sure there are better properties out there, but this isn’t awful.

Comment by Mafia Blocks
2017-12-05 14:06:37


Are Oil City chickens grass fed like yours?

Comment by oxide
2017-12-05 15:18:39

Probably not. In an environment like that the chickens are probably bug-fed, as nature intended.

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Comment by Anonymous
2017-12-05 13:51:08

Only 23 hours until building closes! Don’t be left out!!

Comment by BigV
2017-12-05 14:03:34

Oh no, I might get left out!

Comment by jeff
2017-12-05 21:46:57

It looks like something bad happened there, I would need to see those walls with Luminol on them to check for blood splatter.

Comment by rms
2017-12-06 00:27:36

“Does anyone want to bid on a house in Oil City?”

Ever wonder about the kids who are raised in this kind of home?

Comment by Carl Morris
2017-12-06 11:35:50

Ever wonder about the kids who are raised in this kind of home?

If you grew up in a poor area there’s nothing wrong with that home that some 409 and elbow grease can’t fix. All sorts of kids grow up in homes like that.

Comment by BigV
2017-12-05 11:44:38

realtoRs are liars.

Comment by Apartment 401
2017-12-05 12:21:11

Millennials respond to poll stating the greatest threats to the country are from inside, not outside, the country, and the greatest one is wacism :(

If Antifa thinks they’re gonna start a civil war (see also the failed LARP revolution of 11/4/17) it will be the shortest war in history.

Bring. It. On.

Comment by In Colorado
2017-12-05 14:13:09

Yeah, but the Pro-Dem millennials mostly live in blue states, because living in a big liberal city is soooo awesome.

Comment by Puggs
2017-12-05 14:36:39

“If you want your Hep A ridden city streets than you can keep your Hep A ridden city streets.

Progressive inner city euphoria.

Comment by steadykat
2017-12-05 16:23:40

“Yale sociology professor Elijah Anderson, who has written extensively on Philadelphia’s urban environment said the plexiglass window sets up “a symbol of distrust” in neighborhoods where many African Americans live”.

Plexiglass is racist:

Comment by goedeck
2017-12-05 16:55:44

Cue Jim Quinn (theburningplatform).

Comment by BlueSkye ⚓
2017-12-05 17:50:01

How about the councilwoman Cindy drives around Philly with her windows down and the doors unlocked for a year before she starts to school people.

Comment by tresho
2017-12-06 06:43:43

I prefer spelling the term “racis” to emphasize how it’s been turned into a cliche.

Comment by Carl Morris
2017-12-06 11:40:18

the plexiglass window sets up “a symbol of distrust”

They’re right. It is a symbol of distrust. But the money wouldn’t be spent for no reason.

I don’t like plexiglass either when I encounter it. But I accept that it’s probably needed. My question is whether they think the person behind the plexiglass is one of “them”, or is an “other” from somewhere else? That’s the real issue, IMO. When I encounter someone behind plexiglass I don’t assume that they are different than me and feel they need to be protected from me.

Comment by trader jack
2017-12-05 12:49:20

assuming that the fed goes on with the 2% inflation scenario it might actually be worth buying a house today.
$100,000 today would be $200,000 in 36 years, you would be free of mortgage payments for 11 years which would put $100,000 in your pocket, and $200,000 in home equity
If you rented at $1,200 a year it you have cost you $43,000

depreciation and maintenance would be 5% a year or $180,000
so in effect you would be $100,000 ahead less the taxes of $36,000, plus the effect of the tax deductions on your income tax.

That 2% inflation will kill us over the long run.

Comment by taxpayer
2017-12-05 13:00:35

more like 1% for repairs etc.

why should the fed have a positive inflation target?

Comment by Carl Morris
2017-12-05 13:11:54

why should the fed have a positive inflation target?

Because a debt based currency works fine as a medium of exchange but must not be allowed to be seen as a good store of value. Otherwise people will hoard it instead of plowing it into real wealth, circulation stops, and the system dies.

Comment by BlueSkye ⚓
2017-12-05 15:53:12

That plus outright theft.

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Comment by tj
2017-12-05 17:13:09

why should the fed have a positive inflation target?”

you’re right. they shouldn’t. none of their little brains have a clue about what’s really happening.

Comment by Professor 🐻
2017-12-05 19:20:28

Positive inflation target=
- nonfiscal taxation
- systematic real dollar national debt reduction
- War on Savers
- incentive to invest in risk asset purchases (stocks, commodities, houses, Bitcoin etc.)
- incentive to spend savings before inflation consumes them.

Comment by Mafia Blocks
2017-12-05 13:21:43

Typical depreciation is $3/sqft/yr. Figure $6k/yr on the average house.

Comment by OneAgainstMany
2017-12-05 21:33:02

“On average, renting and reinvesting wins in terms of wealth creation regardless of property appreciation, because property appreciation is highly correlated with gains in the traditional financial asset classes of stocks and bonds.”

Comment by taxpayer
2017-12-05 12:58:53

since 1850’s the average expansion was 40 months
how many std dev are we past that?

Comment by Professor 🐻
2017-12-05 19:15:19

The sky is the limit, and eternity is the time horizon.

Comment by Senior Housing Analyst
2017-12-05 13:25:25

Lexington, MA Housing Prices Crater 18% YOY

*Select price from dropdown menu on first chart

Comment by BlackSwandive
Comment by Professor Bear
2017-12-05 15:14:33

Yet another reason the Fed should never, ever follow through with rate hike plans, as a a sudden drop in the stock and bond markets could result from normalizing interest rates. And just imagine how much Bitcoin could drop if dollar-denominated investments started paying market-based interest rates once again!

The risks from a big stock or bond market drop ‘are high and rising,’ government watchdog says
Published: Dec 5, 2017 3:55 p.m. ET
Stability risks remain in the medium range, Office of Financial Research says in annual report
By Greg Robb
Senior economics reporter
Getty Images
The Office of Financial Research is an independent bureau within the U.S. Treasury Department.

Risks “are high and rising” from the potential for a sudden drop in the stock and bond markets, according to the Office of Financial Research, the government agency tasked with looking for threats to the economy from the financial sector.

Some investors have been financing long-term asset with short-term loans and therefore a correction could trigger financial instability, according to the OFR annual report issued Tuesday.

The report highlighted vulnerabilities to cybersecurity incidents, obstacles to resolving failing systemically important financial institutions and structural changes in markets and industry as three key threats to the financial system.

Comment by Neuromance
2017-12-05 20:52:36

Can they keep suppressing interest rates indefinitely I wonder? They have to lower the cost of renting money, and they do that by putting more money out there. They can do it on demand, as they’ve proven, as well as raise interest rates, as Volcker did in the 80s, on demand.

These policies of course have been quite lucrative and successful for certain groups. OTOH, there are consequences they might not like to doing it indefinitely. Even staid, aging Japan is becoming more nationalist.

Comment by Senior Housing Analyst
2017-12-05 16:11:11

Holualoa, Hawaii Housing Prices Crater 18% YOY As Chinese Owners Default

Comment by Professor 🐻
2017-12-05 20:50:03

Sweet! The vanishing Chinese investors will leave behind many CR8Rs.

Comment by Ben Jones
2017-12-05 17:16:53

‘Sun Hung Kai Properties is offering buyers finance of as much as 120 per cent of the purchase price: 90 per cent toward buying the new property, and 30 per cent to pay down their existing mortgage.’

Somebody is hitting the sake a little too hard. Of course this implies the buyers are multiple shack gamblers.

‘People translate a land sale into the final built price, and when it is way above the market everyone will raise their own prices’

So if the developers are paying way too much, everybody assumes all the other airboxes are worth way more!

Comment by Ben Jones
2017-12-05 17:23:28

‘Every industry has its Boxing Day and today is ours,’ Beard said, as 58 people boarded the bus for the five-hour mystery tour. ‘The prices available today won’t be available tomorrow.’

‘…once the current stock goes, probably by the end of next year, there’s not going to be much coming on to the market at all.’

The end of next year and prices will be up tomorrow? BTW this was the pre-construction condo market that was built almost exclusively for Chinese buyers. What’s strange is we heard about “settlement risk” around a year ago. Then we read they weren’t defaulting. And now we have bus tours of speculators looking at the defaults. It’s Australia! Close is good enough.

Comment by BlueSkye ⚓
2017-12-05 17:57:05

Boxing Day is a month away…

Comment by In Colorado
2017-12-06 09:04:59

Known in the USA as the “day after Christmas sale”.

Especially funny is that the Brits, who for years mocked the US’s Black Friday sales, with its fistfights and stampedes, have now adopted it as well, thanks to Amazon who began the practice over there and now everyone does it. I even saw an article in the UK media explaining why Black Friday seems to float around year by year, explaining that it is tied to the American Thanksgiving holiday.

The one difference they still have over there is that the day isn’t a paid holiday, so the shoppers don’t line up before the crack of dawn to get the “doorbusters” and instead hit the stores at the end of the workday.

Comment by azdude
2017-12-05 18:11:08

dilly dilly!


CAveat emptor!

Im a wildcater now!

Comment by Rental Watch
2017-12-05 17:35:41

Lookie here…a new way to gamble on home prices–get a co-investor!

They put in 50% of the down payment…and get 35% of the upside!

Who is doing this?

From their FAQ:

“Our funding comes from institutional investors, including pension funds and university endowments.”

So, we get government sponsored lenders, and government subsidized investors…what could go wrong?

Comment by Senior Housing Analyst
2017-12-05 17:45:21

San Jose (Evergreen), CA Housing Prices Plunge 9% YOY On Rising Mortgage Defaults

*Select price from dropdown menu on first chart

Comment by jeff
2017-12-05 18:45:20

Are you a denier?

Comment by jeff
2017-12-05 18:53:15

I would have gone with wolfote.

Suburban NY police tell residents to avoid hybrid coyote

Updated 9:38 am, Tuesday, December 5, 2017

CLARKSTOWN, N.Y. (AP) — Police are cautioning residents to stay away from a large hybrid coyote that’s been wandering around a New York City suburb.

WCBS says the animal in Rockland County is part coyote and part wolf — known as a “coywolf.”

The “coywolf” is larger than most coyotes - up to 75 pounds. They have different coloring, with more gray in their coats.

Experts say people who encounter a coywolf should make a lot of noise and wave their arms to make themselves seem bigger.

Clarkstown police say they would summon a licensed trapper or even shoot the animal if it were acting aggressively.

Otherwise, it will likely just go back into the woods.

Comment by Neuromance
Comment by In Colorado
2017-12-06 08:56:40

I believe I have seen such creatures along the front range, far too large to be a coyote but also comfortable in a suburban setting. Perhaps it was something else, but the first time I saw one I did do a double take.

Comment by jeff
2017-12-05 19:09:56

GOP tax bill spells potential trouble for Conn. home-owning

By Dan Freedman Updated 11:56 am, Tuesday, December 5, 2017

“For Connecticut, this tax bill is particularly onerous,” said Michael Barbaro, president of Connecticut Realtors. “If you take away the ability of people to write off taxes and mortgage interest, you’ll start to see increased migration out of the state. This is just disastrous for us.”

Comment by tresho
2017-12-06 06:46:42

This is just disastrous for us.” Could not have happened to a better disaster zone.

Comment by BlueSkye ⚓
2017-12-06 07:00:16

Lying Realtors and their faithful make it wound like high real estate taxes and high state income taxes are a bonus to people who have to live and work in the state, as long as they get their IRS deduction.

Very simply, when the Feds stop subsidizing house prices, house prices will have to come down.

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