People Thought Their Investments Could Only Go Up
A report from National Public Radio. “Ten years ago this month, you may not have noticed the cracking and crumbling under you. Federal Reserve policymakers were offering reasons for calm, saying they expected strong consumer spending. But the Fed was wrong: In December 2007, an economic earthquake already was convulsing the country. It marked the beginning of the Great Recession. A Federal Reserve Bank of San Francisco study concluded the recession grew out of ‘an enormous speculative housing bubble.’” That happened when low interest rates combined with ‘lax lending standards, ineffective mortgage regulation, and unchecked growth of loan securitization,’ it said.”
“On Wednesday, Fed policymakers nudged up interest rates for the third time in 2017. The federal funds rate is now up from near zero to 1.5 percent. That remains far below the pre-recession level of 5.25 percent, but it’s closer to ‘normal’ — just like the economy itself. ‘There’s less to lose sleep about now than has been true for quite some time,’ Fed Chair Janet Yellen said.”
From Vice Magazine. “Remember that guy who made news for buying two pizzas with Bitcoin back in 2010? Had he held onto the Bitcoin and shelled out regular cash, he’d be well over $100 million richer today. Predictably, this news and its attendant promise of easy money has made Americans go insane. As CNBC reported Monday, citing an Alabama securities regulator, people are actually taking out mortgages to invest in Bitcoin, perhaps hoping to turn $20,000 into their entire retirement fund.”
“How does what’s happening with Bitcoin hew to the classic definition of a speculative bubble? ‘Some of the hallmarks to me involve the FOMO idea—the fear of missing out and never being able to get in. People see other people making a lot of money and they just want in on it. The housing bubble is a good example of that. People thought another person would always want to buy their house from them at a higher price,’ said Angela Walch, a law professor at St. Mary’s University in Texas who studies cryptocurrency and financial stability.”
“People are allegedly starting to take out mortgages to buy Bitcoin. Can you explain to someone who might be thinking about doing this why it’s a really bad idea?”
“‘I saw that headline, and that really frightened me, because taking out debt to invest is how people end up getting into trouble. That was at the heart, in many ways, of the financial crisis. People thought their investments could only go up, and when they went down, they couldn’t pay back the debt. If enough people do that and can’t pay back their debt that they borrowed to buy Bitcoin, the lenders can eventually be affected by that, and it can just spiral through the system,’ Walch said.”
The Press Democrat in California. “Sonoma County’s fire-ravaged housing market last month posted the most sales for November in 13 years, even as the median price rose slightly to a new record high. November’s median increased 14 percent from a year earlier. ‘We’re seeing the market push it up 15 to 20 percent on some of these listings,’ said Lori Sacco, managing broker for Vanguard Properties in Sebastopol.”
“In making offers, Pacific Union International senior vice president Rick Laws said he has seen buyers exceed sellers’ asking prices by more than $100,000. ‘There’s been multiple offers on nearly everything that goes under contract,’ he said.”
From KIVI TV in Idaho. “Dozens of people across the Treasure Valley claim they’ve lost millions of dollars, in some cases their life savings in what their lawyer said is a shady real estate Ponzi scheme, and now they said they hope to warn others not to fall victim. For five years, Frank Preston invested in property deals set up by Nathan Pyles and his company Shiloh Management. ‘For the first five years it went extremely well,’ said Preston. ‘ Preston stands to lose his life savings. ‘One million and ninety seven thousand dollars,’ said Preston.”
“But Preston isn’t the only one who claims he lost everything. ‘I’m upside down with Shiloh Investments roughly 750 thousand dollars,’ said Roger Button. ‘We currently had three investments with him each at 200 thousand,’ said Janelle Nelson. A lawyer representing some of the victims said he believes there are 100 people or more who lost money with Piles. ‘I would say it’s a classic Ponzi scheme,’ explained attorney Gery Edson.”
From Greenwich Time in Connecticut. “Since September, four Greenwich estates have fetched sale prices above $20 million. That contrasts to zero homes sold above that benchmark last year, and just one closing for more than $20 million in 2015. What happened this fall to prompt the uptick in high-end home sales? According to some real estate professionals, the answer is simple: pricing and the economy.”
“At one extreme, there’s a home on Lake Avenue listed for $26.5 million in September 2013 that was snapped up a few days later for $25 million. At the other end of the spectrum, a backcountry property on Old Mill Road languished for nearly three years before selling for $24 million, which was $15.5 million below its asking price.”
“Typically, the properties sold for millions, and in some cases many millions, less than their list price. The latest example is last month’s sale of Greenwich’s largest estate in the backcountry gated community of Conyers Farm. Originally listed in 2015 for $65 million, the price was reduced several times until it finally closed more than two years later for $21 million. The seller, billionaire Thomas Peterffy, had paid $45 million for it in 2004.”
“Those steep discounts don’t necessarily mean the properties lost value, according to Jonathan Miller, a real estate appraiser and consultant who provides Greenwich market analysis for Douglas Elliman. ‘The pricing of a lot of these properties reflects a different time. It’s not reflecting the current market,’ he said. ‘The discounts are very large because they’re discounts from prices that were never close to what the market conditions actually were.’”
Unemployment claims at a 45 year low today.
Ironically, Labor Force Participation Rate also at 40 year low. There’s 10 or 15 million more adults not working that don’t qualify for UI benefits, so we won’t discuss them.
That’s not irony, Ms. Morisette.
And the rate will keep declining as the population ages. Boomers born in 46 turned 62 (earliest age to start getting SS) in 2008. And in a magic coincidence the participation rate started decreasing in 2008 as well, and has been declining ever since as the number of boomers hitting retirement age grows. This will keep happening for another 10 or so years.
Unless you think 70 year olds should be working, this is a good thing.
https://fred.stlouisfed.org/series/LNU01300060
Low but creeping back up for workers aged 25-54.
https://fred.stlouisfed.org/series/LNU01324230
Flattening out for those over 55.
Incorrect. The LFP rate excludes those above 65 years old.
“94,785,000 Not in Labor Force; At 62.9%, Labor Force Participation Stuck Near 38-Year Low”
https://www.cnsnews.com/news/article/susan-jones/no-records-set-august-number-employed-americans-drops-participation-rate
LFP does include boomers. The article you cited even says so:
The number of Americans over age 16 who are not in the labor force – for whatever reason – remained stubbornly high in August, at 94,785,000. That is partly attributed to the rising number of retirements among Baby Boomers.
Labor Force Participation rate:
LFPR = Labor Force / Civilian Non-Institutionalized Population
where the Labor Force = Employed + Unemployed
To calculate the formula correctly, you must first understand the underlying definitions outlined by the Bureau of Labor Statistics.
The BLS is the Federal agency that reports on the labor force and its participation rate every month in the Jobs Report. Here they are:
Civilian Non-institutional Population - Everyone living in the U.S. who is 16 or older MINUS inmates of institutions such as prisons, nursing homes and mental hospitals and MINUS those on active duty in the Armed Forces.
Labor Force - Everyone who is classified as either Employed or Unemployed.
Employed - Anyone aged 16+ in the civilian non-institutional population who worked in the last week. That means they worked an hour or more as paid employees or 15 hours or more as unpaid workers in a family-owned business or farm. It also includes those who had jobs or businesses, but didn’t work that week because they were on vacation, sick, were on maternity or paternity leave, on strike, were in training, or had some other family or personal reasons they didn’t work.
https://www.thebalance.com/labor-force-participation-rate-formula-and-examples-3305805
Incorrect. The LFP excludes retirees, i.e, those above 65 years old.
If workers get discouraged and stop looking for the job, the labor force participation rate goes down. Also, if a person retires, the labor force participation goes down. Hence the difficulty of distinguishing between labor force participation rate declining due to the baby boomers retiring and a general overall bad economy.
This article explains it very well:
http://www.factcheck.org/2015/03/declining-labor-participation-rates/
However, Fujita concluded, “Almost all of the decline (80 percent) in the participation rate since the first quarter of 2012 is accounted for by the increase in nonparticipation due to retirement. This implies that the decline in the unemployment rate since 2012 is not due to more discouraged workers dropping out of the labor force.”
Many economists believe that the steeply declining labor force participation rate is a reason for concern, as Priebus said, even as the declining unemployment rate seems to paint a rosier picture.
In a speech on Aug. 22, 2014, Federal Reserve Chair Janet Yellen concluded that “the labor market has improved significantly over the past year,” but said that metrics, including 19 labor market indicators, suggest “that the decline in the unemployment rate over this period somewhat overstates the improvement in overall labor market conditions.”
Still, Priebus’ comment, tying the entirety of the drop in the labor force participation rate to “the Obama economy,” ignores some of the demographic and structural forces that have been driving the participation rate down for more than a decade, and that are expected to continue to drive the rate down for decades to come.
Incorrect. Those who are retired are excluded from the calculation. A 100 million unemployed people shouldn’t be a surprise given the disastrous economy we have.
A report from Shigeru Fujita at the Federal Reserve Bank of Philadelphia on Feb. 6, 2014, also sought to tease out the relative impact of various causes for the declining labor force participation rate……
However, Fujita concluded, “Almost all of the decline (80 percent) in the participation rate since the first quarter of 2012 is accounted for by the increase in nonparticipation due to retirement. This implies that the decline in the unemployment rate since 2012 is not due to more discouraged workers dropping out of the labor force.”
http://www.factcheck.org/2015/03/declining-labor-participation-rates/
Sounds nice but the calculation excludes everyone above 65 years old.
Think twice before carrying filthy water for the Fed. At least in these parts.
+1 Lots of forced retirements in 2008.
Just talked to an acquaintance. He’s 68 and plans to keep working until he’s 72. Only reason: he’s waiting for his non-working wife to turn 65 and be eligible for Medicare.
Shigeru Fujita at the Federal Reserve…
If you don’t have a bias and would like to seek the truth, I guess there is no better place to start than with a little Fed ass covering piece.
“at the Manhattan Institute, Diana Furchtgott-Roth who, in a Jan. 14 piece for RealcCearMarkets.com noted that “since 2000 the labor force participation rates of workers 55 and over have been rising steadily, and the labor force participation rates of workers between 16 and 54 have been declining.”
https://www.forbes.com/sites/realspin/2014/01/15/u-s-unemployment-retirees-are-not-the-labor-exodus-problem/#5408d45da350
An interesting question might be “Why would the Fed lie to us?”
But the Manhattan Institute would never lie? Not everything is a conspiracy, just different ways to interpret data.
People are retiring and hence are no longer in the labor force. Not everyone works until they are 65 either. My parents both retired long before 65 as did my in laws.
What I think is dumb for the calculation is using 16 as a the bottom age. How many 16 year olds are on their own working full time? It should be 18 at a minimum and more realistically 22 since that is when most college grads enter the workforce.
Or maybe split it out into 18+ for those who are not attending college and 22 for those who have a degree.
And with a hundred million people not working it should be no mystery as to why were in a deep recession.
Institute would never lie…
We discussed this thoroughly a couple of years ago. My perspective is that the Federal Reserve is gang of crooks who have pillaged the USA and “fed” the spoils to the already rich and connected. The rivers of money go to these connected who use it to impoverish the majority. The Fed causes wealth disparity to grow. The decline of our general economy is masked by increasing debt.
Yeah, my dad retired at 60. His life long Blue Chip employer was being cannibalized and when the musical chairs game stopped he didn’t sit down. He had a pension. Now I am in that age class. Job prospects for an old guy are rather limited based on the experience of my peers. Yet I know many (unexpectedly former) professionals who are working at the Big Box to make ends meet. This is why there aren’t enough of those entry level jobs for the young.
“The decline of our general economy is masked by increasing debt.”
+1 Amazing that credit continues to be extended to the dubious.
As soon as everything starts crashing watch interest rates go to zero and the QE spigot will opened all the way. Of course this means, as others here have said: welfare and socialism for the rich, rugged individualism for anyone who works for a living.
As soon as everything starts crashing watch interest rates go to zero and the QE spigot will opened all the way
Would this argue for holding long-term US treasuries?
RE: people starting to take out mortgages to buy bitcoin.
How many people is it? I’m thinking it’s 3 people that have done this and the MSM, being the MSM, hypes it as some national trend. This happens all the time. You’ll see a headline that says “XYZ Trend is taking off”. Then you read a little into the story and it turns out the trend is really 5 people in NYC doing something, and one of the 5 is friends with the reporter “breaking” the story.
RE: Idaho investors…meh. Real estate scammer is the 2nd oldest profession, lol. I have absolutely no sympathy for people stupid enough to fall for that. What always amazes me is how someone smart enough to accumulate $1M in life savings is idiotic enough to get conned by a real estate ponzi scheme
“What always amazes me is how someone smart enough to accumulate $1M in life savings is idiotic enough to get conned by a real estate ponzi scheme.”
Or any other type of Ponzi scheme (think Bernie Madoff).
People are just plain stupid.
Hey - Bitcoin is different…
peak here was 6/2005
house up the street is listed at old peak
minus 20% for inflation adjustment
new roof
carpet
etc
minus re commission
so they will lose 100K or so
I don’t see how they lose the 20% inflation adjustment, since housing itself is an inflation hedge.
‘Originally listed in 2015 for $65 million, the price was reduced several times until it finally closed more than two years later for $21 million. The seller, billionaire Thomas Peterffy, had paid $45 million for it in 2004′
Some inflation hedge.
If they purchased at the old peak, and they sell at the same nominal price, after sinking money into a roof and then pay a commission, they have lost money on a real basis.
Said another way.
Forget about the roof/commission/carpet.
If you buy a house for $100, and then net $100 10 years later, you broke even on a nominal basis, but lost 20% on a real basis since the $100 you got now, is worth ~20% less than the $100 you put into the property 10 years earlier.
Which gets back to the muscle car discussion. Ignoring the million dollar unicorns, the average schmoe stores a muscle car for decades at his expense and then feels smart when he hears it’s worth double or triple what it cost new. But he’s actually lost a lot of money compared to a real investment…and that’s the best case assuming he actually sells for what he heard it was worth. In reality he’ll just drive it in the time machine of his mind until he dies and then it’ll get blown out at an estate sale for far less than he imagined while his kids complain at the funeral about how he loved the car more than them.
“Lost money on a real basis.”
Well sure, they lost money on a real basis — IF they had invested the money in an interest-bearing account. But would they live while the money was breaking even on a real basis? The van down by the river?
Housing is an expense, rent or buy. Buying simply makes living less of an expense than renting, provided you’re in the house long enough.
*sorry that didn’t type right. They lost money on a real basis, *compared to* investing the money.
living less of an expense…
It’s ironic to consider paying half a million more for something “less”.
DebtDonkey
Washington, DC 20017 Housing Prices Crater 13% YOY
https://www.zillow.com/washington-dc-20017/home-values/
Don’t forget to select price from dropdown menu on first chart
e price was reduced several times until it finally closed more than two years later for $21 million. The seller, billionaire Thomas Peterffy, had paid $45 million for it in 2004.”
wow figure 60 mill at the peak as 2004 was 2 years shy of peak
Very long and depressing article about millennials, the economy, and housing:
http://highline.huffingtonpost.com/articles/en/poor-millennials/
RE the guy in Seattle, he was already poor, then he had a kid, but being the HuffPost, zero mention of personal responsibility and life choices.
Xers should rise up and kill *all* the baby boomers and millennials
I won’t give HuffPo a click. But lemme guess….it’s all Trump’s fault. And whatever wasn’t caused by Trump was caused by racism, sexism, xenophobia, Republicans (who as we know are all racist, sexist, xenophobes) and Fox News / Talk Radio.
Am I close?
Pretty close.
The conclusion. If only we had more socialism and if only we were in charge…we can fix this!
And they probably opposed the Trump MID reduction or elimination too.
You can’t fix stupid like this.
++++
Raise the minimum wage and tie it to inflation. Roll back anti-union laws to give workers more leverage against companies that treat them as if they’re disposable. Tilt the tax code away from the wealthy. Right now, rich people can write off mortgage interest on their second home and expenses related to being a landlord.
The ur-example is the Universal Basic Income, a no-questions-asked monthly cash payment to every single American.
Forcing politicians to listen to us like they do to the boomers—is the only way we’re ever going to get a shot at creating our own New Deal.
But pretty soon, we’ll actually be in charge. And the question, as we age into power, is whether our children will one day write the same article about us. We can let our economic infrastructure keep disintegrating and wait to see if the rising seas get us before our social contract dies. Or we can build an equitable future that reflects our values and our demographics and all the chances we wish we’d had. Maybe that sounds naïve, and maybe it is. But I think we’re entitled to it.
good heavens, tie the minimum wage to inflation and drive all of the prices up, requiring more wage increases.
2% increases doubles every 36 years, but I guess most people do not worry about that as long as they get their share of the money increase
Why do people think we are immune to galloping inflation?
tie the minimum wage to inflation and drive all of the prices up, requiring more wage increases.
you won’t get wage increases, you’ll get job decreases.
What you’ll get is automation.
What does it matter what the minimum wage is, if we allow millions of illegal immigrants to work for less than minimum wage?
What you’ll get is automation.
many jobs can’t yet be automated. further, many employers can’t afford to automate, even if it’s technically possible.
the cost/wage ‘push’ will simply push most off the cliff instead to higher wages.
Many natural born citizens work for less than minimum wage too.
many jobs can’t yet be automated. further, many employers can’t afford to automate, even if it’s technically possible.
You don’t need a lot of jobs to be automated for there to be an impact. Just some on the margin. Those displaced workers will compete for the not-yet-automated jobs, keeping their wages pinned to minimum wage, and keep upward pressure on unemployment.
You don’t need a lot of jobs to be automated for there to be an impact.
true.
Those displaced workers will compete for the not-yet-automated jobs,
not so much. new jobs will be created.
keeping their wages pinned to minimum wage,
false. higher production means more value for the dollar. wages will go up even as production increases. you’re trying to treat this as a zero-sum game. it’s not.
and keep upward pressure on unemployment.
false. there will be more, higher paying jobs from automation.
there will be more, higher paying jobs from automation.
Eventually, yes.
I am anti-government intervention, pro-automation, etc. Without the government artificially pushing up minimum wage, automation would come about naturally, and the effects that you note would happen organically over time.
HOWEVER, if government pushes up minimum wage, in the NEAR term automation will increase, increasing demand for minimum wage jobs…thus pinning wages to the minimum with higher unemployment.
HOWEVER, if government pushes up minimum wage, in the NEAR term automation will increase
not much. those burger flipping jobs that you and everyone else are talking about were on their way to automation long ago.
yes, it was sped up a little in places like seattle that increased the minimum wage. but in the big picture, more jobs were lost than automated.
employers can’t automate if they don’t have the funds, so many of them simply closed their doors.
government can’t ‘force’ automation any more than they can force higher wages. it simply doesn’t work. everything has to pencil out, but the stupid pollyticians don’t understand that.
thus pinning wages to the minimum with higher unemployment.
i’ve already explained WHY this isn’t so. but i have a feeling you’ll never believe me. that’s ok, maybe someone else out there gets it.
Rental Watch: Those displaced workers will compete for the not-yet-automated jobs,
What we’re seeing now is similar to what was seen at the dawn of the industrial age: The consolidation of the production of value (i.e. the things that people value).
For example, instead of a hundred farmers able to feed a village, it became one farmer, with a tractor.
Today, instead of 20 people shuttling items back and forth in an Amazon warehouse, it’s an army of robots and one person doing the final packing and distribution.
That consolidation of the production of value led to quite a bit of dislocation and strife. Unclear how it’ll play out this time.
~~~~~~~~~~~~~~
There are multiple factors other than debt burdens, hamfisted redistribution and financialization suppressing employment and wages today:
• Offshoring of jobs
• Mergers and acquisitions removing “redundant” jobs.
• Automation (don’t need file clerks when you have a database)
A perfect storm of factors. There are robust social safety nets it seems, which didn’t exist at the turn of the century. Also, plenty of soma flooding the populace in the form of opioids and the like. So it’s unclear if the current climate will result in social unrest that’s a bang or a whimper.
For example, instead of a hundred farmers able to feed a village, it became one farmer, with a tractor.
how exactly is this a problem?
when in china, friedman asked his guide why the men were using shovels instead of heavy equipment. the guide said “this way we have more jobs”. friedman said “oh, i thought you were trying to build something, not provide jobs.. if you want to provide jobs, why aren’t you handing out spoons instead of shovels?”
and then the communists wondered why their people were being paid so piss poorly. but of course, if they were using spoons they’d be getting paid even less. their time would be less valuable because they’d all be less efficient in their labor. but hey, there’d be more people working with spoons. more jobs, right? that has to be a good thing.
what the communists never saw was that by using heavy equipment, they’d be raising the value of labor throughout their country (the nearest ones to the project would see the biggest effect). they thought that the guys using the shovels and the ones that would have used the heavy equipment, should BE PAID THE SAME!
your hundred out of work farmers would be looking for work, true, but they’d be looking in a better economy. the tractor and the one farmer would have the effect of raising everyone’s standard of living by producing more with less.
i presume your hundred farmers needed to be farmers to sustain the village or they wouldn’t be farming. but now their labor is freed up to do other productive jobs.
Today, instead of 20 people shuttling items back and forth in an Amazon warehouse, it’s an army of robots and one person doing the final packing and distribution.
yes, and now those 20 people can go out and find other things to do in a growing prospering economy, rather than stagnating one. in the meantime, those mean old robots are raising the standard of living. they are raising the value of labor through increased efficiency.
you guys that are afraid of technical progress are a riot. your zero-sum thinking permeates everything you write. think about progressing productivity instead of protectionism.
That consolidation of the production of value led to quite a bit of dislocation and strife.
dislocation? you mean the exodus from the farm to the better paying factories in the cities? and what strife are you talking about?
over time in a free society, the cost of production will trend to zero. and that would be very beneficial to all of us.
you could stand to be a little more free market than you are, RW.
Neuromance, sorry i got you mixed up with RW, i’m getting bleary eyed. since i was already arguing with RW i sorta took it out on you. i assumed you were making arguments that you may not have intended to make. but there’s no way to edit the post now.
I had this discussion with my 10-year old daughter last week. We went to a coding workshop at her school, and on the walk back home, we talked about autonomous vehicles (”robot cars”).
She commented about all the people that were going to lose their jobs. And I said yes, they will, but everyone who was paying $20 for a car ride, would be able to get the same ride for only $5 (or less), and the extra $15 in their pocket meant they could do something else with the money…go to dinner, an extra movie, buy books, etc.
And the people that were no longer driving would find work in a job where people WERE spending their money. I get it.
The funny thing is, when people talk about autonomous vehicles, they always focus on the driver who is going to lose their job (and need to find a new one).
They never talk about all the poor, poor ER doc who won’t get paid huge amounts of money to patch together people who were severely injured when the drunk driver hit them.
Or hit to the crutch and wheelchair industry and autobody shops. Or thet poor insurance agent that no longer gets a commission for selling you auto insurance, etc., etc., etc.
My original post was not to claim that automation was bad, or that minimum wage was good, or that you are wrong in your world view. It was simply that all-else equal (ie. over very short periods of time) artificially raising the minimum wage increases automation, and weakens that natural process that drives wages higher over time. Again…in the NEAR term. Your point is also taken that some employers who can’t afford higher wages, or automation, simply go out of business…also destroying jobs.
your hundred out of work farmers would be looking for work, true, but they’d be looking in a better economy. the tractor and the one farmer would have the effect of raising everyone’s standard of living by producing more with less.
Eventually yes…but do you really think the guy with the tractor is going to share with all the out of work guys until they find or invent something else? At least temporarily 95% are going to have a lower standard of living. And they vote.
RW, obviously i agree with all you wrote in the beginning of your post. and your daughter is very lucky to have such a smart father. you did a good job of explaining things to her. you could also tell her when we go to fully autonomous cars we won’t need the highway patrol, auto insurance or stop lights. that and much more.
while it’s true that over the very short period, raising the minimum wage forces some automation, you neglected the other side of the coin. the other side of the coin is that such a move decreases the number jobs. that’s what i was saying in my first response on this thread. the bigger effect of the two is the loss of jobs. automation is a force in the opposite direction. that is, it works to increase wages, not pin them to a minimum. it also works to eventually bring more jobs through wealth creation.
so please keep in mind that job loss hurts the economy while automation helps the economy. but the hurt from government coercion/regulation is bigger than the help from automation. the overall effect from raising the minimum wage is bad, even though both good and bad things are happening.
but do you really think the guy with the tractor is going to share with all the out of work guys until they find or invent something else?
do you know what the root word ‘com’ in communism means? it means ‘to share’. communism’s selling point was ’sharing’.
there’s no reason for the guy with the tractor to share. what he earns rightly belongs to him only. the economic benefit of using the tractor doesn’t emanate from his good intentions, it comes from more efficient production. everyone benefits to different degrees from more efficient production.
At least temporarily 95% are going to have a lower standard of living.
yes, but much more temporarily than tyou think. and isn’t a higher standard of living worth a temporary wait.
And they vote.
the only answer to that is a good education. all we have now is indoctrination.
and isn’t a higher standard of living worth a temporary wait.
Sure. Unless you’re hungry today.
Sure. Unless you’re hungry today.
and more people are going hungry in venezuela than any even slightly capitalist country.
“Right now, rich people can write off mortgage interest on their second home and expenses related to being a landlord.”
It’s called a business expense, you know, that thing between revenue and profit.
Idiots.
Hey I know. Let’s eliminate all expense deductions for landlords. When their costs go up, rents are sure to plummet, right? I think I heard that on MSNBC the other night.
Nope, Trump isn’t mentioned.
It’s actually Trump’s generation’s fault. And the fault of soaring debts.
The article chronicles falling wages and other compensation by generation, focused on those who came of age in recessions, but also in general. All true.
The question is, why haven’t businesses been crushed by falling consumer demand? Soaring debts, until the debt mountain collapses on itself.
https://larrylittlefield.wordpress.com/2017/04/25/generation-greeds-last-economic-orgy-federal-reserve-z1-debt-data-for-2016-rising-housing-prices-census-bureau-data-on-worse-off-young-adults-falling-life-expectancy-etc/
The millennials aren’t going into debt fast enough to satisfy those who control the economy, other than on student loans. Not buying enough houses and cars with borrowed money they can’t afford to pay back.
The point of the tax reform bill is to have the government borrow more for them, running up a debt at the expense of their future old age benefits.
that is a sobering article and makes many good points. Millennials are earning recession wages and paying bubble costs.
Someone should point them to the Fed, the source of all the bubble prices
“Millennials are earning recession wages and paying bubble costs.”
Someone here quoted their father-in-law, “phuc ‘em.”
I train H1B millennial’s thus God’s will is made plain ..
Around the Internet, I’m seeing howling from all corners regarding the repeal of Net Neutrality. People are posting in a frenzy, lots of ill-advised commentary that’ll get visits from the FBI.
I thought, ‘Wow, these people get themselves worked up so much over a slightly more expensive and annoying web browsing experience, where were they when the bailouts and lack of prosecutions around the financial crisis were happening? You know, the stuff that’s actually field-stripping them of wealth?”
Henry Ford is reputed to have said, “It is perhaps well enough that the people of the nation do not know or understand our banking and monetary system, for if they did I believe there would be a revolution before tomorrow morning.”
It was a great read….and to giggle at the author.
Eight years of Hope and Change…and they see no correlations.
And their excuse for insane housing prices….ZONING.
You can’t fix stupid like this.
Oh, and living in a big city cost so much in rent. It is sooooo unfair. But you can walk home from the bars.
My first job? Erie, PA building locomotives on 3rd shift. I lived in a 1 bed room apartment with ZERO amenities.
No lattes. No walking home from the bar. No getting laid with a “Swipe right.” No gym. No pool. Not even a nightclub on the top floor. and at least 140 inches of snow every winter
Hard and dirty work.
Pretty good pay.
And a starting point.
“Oh, and living in a big city cost so much in rent. It is sooooo unfair. But you can walk home from the bars.”
Heh. That is pretty much the leftist view point these days. The #1 criteria for “livability” is how many bars and Ethiopian fusion restaurants are there within a 10 block radius.
My first place out of college did have a pool. An outdoor pool that was open Memorial Day to Labor Day. I didn’t rent the apartment because of the pool but I was excited to have it. Well, turns out in the 2 summers I lived there, I went to the pool maybe 10 times in total.
Maybe part of the problem is that way that article is set up. Scroll through giant print. Scroll across some baby-level stats. When I got to the “you need a guide, scroll on Becky and she’ll drop down the screen like some Atari game,” I gave up.
And the Millenials wonder why they don’t have any respect.
These problems have been building for a lot longer than 8 years. I remember reading about some of these trends, like moving to contractor work, back in the 80s.
And the practice of state governments requiring licenses for things that didn’t require them 50 years ago has been building for at least 25 years, regardless of who’s been in the White House or Congress.
Why is contractor work a bad thing?
In and of itself, contractor work isn’t necessarily a bad thing per se, and I didn’t say that it was. I contracted for a while and it was great for me.
But as the story correctly notes, many of these contractor positions come along with reductions in salary and benefits, along with the mentality that workers are just cookie-cutter cogs in a wheel.
Now, that might be just what a particular business wants or needs, but it cuts both ways - contractors have a lot less invested in a company and little incentive to help improve the bottom line.
I love how the same people lamenting lower wages for Americans are the same ones pushing for open borders. They never seem to put 2 and 2 together.
I’ve done contracting most of my adult working life. I want nothing to do with a traditional job. It pays better and I have much more freedom. Plus the tax code is set up to benefit people like me over a W2 employee. I’m essentially a business and get all the business tax benefits that a W2 employee doesn’t get for doing the exact same work.
I’ve often been asked if it’s scary not knowing where your next job will come from. And my reply is, about as scary as you knowing every day you walk into Conglomerate, Inc, could potentially be the day they announce 10,000 layoffs. There’s risk in all aspects of life and no full time job has any guarantees.
There is no loyalty between employees and employers or vice versa. But we pretend there is. We pretend everyone working at Conglomerate, Inc is part of a big happy family. Which is total BS. Employees work for to get money to put food on the table. Employers hire to get stuff done. If either side could achieve their goals without the employment, they’d run away from the “family” as fast as they could. If companies could have zero employees they would. If an employee finds $10M today, you think they’re going back to work with the “family” tomorrow? Nope.
With contracting there isn’t the “we’re all a family” lie. I get a contract for 6 months to do a job. I get paid for it. When it’s over I leave and on to the next job. It’s the purest form of the free market, without any of the HR nonsense or politics of the “family”.
If more people thought about contracting vs FTE objectively, without the MSM propaganda based fear, they’d come to the same conclusion.
Part of the issue is health insurance too. Individuals can set up their own retirements pretty well, but it’s tough to find a risk group to join for health insurance.
There’s a great big wide insurance market for individuals. Despite what the MSM may tell you, it existed long before Obamacare. All O-Care did was make it more expensive. But it’s available. And you don’t need to join any risk groups. You just buy a policy, no different than buying home insurance or auto insurance.
I remember when contract gigs paid well, 2-3x what a full time job did. Now the pay is about the same, but you don’t paid time off or any other benefits.
“When it’s over I leave and on to the next job. It’s the purest form of the free market, without any of the HR nonsense or politics of the “family”.”
And over time a network of people who would, assuming you did good work, vouch for you. I’m an engineer doing sales for a similar reason. After having a bout of “I’m a degreed engineer why am i in sales?” I gave up on the idea of going back to the 9-5 engineering grind when I understood I had the best of both worlds.
“You just buy a policy, no different than buying home insurance or auto insurance.”
I did this about 10 years ago when i took 9 months off and was surprised how easy and relatively affordable it was after hearing “you can no longer pool with anyone, how will you buy it?” Not sure how the ACA has changed that but it worked well then. (And I’ve been blessed with good health…)
I’m an engineer doing sales for a similar reason.
I’m an engineer whose favorite job was reporting to sales. It’s refreshing to work for an organization with plenty of spending money and no concerns for anything except customer results.
“I did this about 10 years ago when i took 9 months off and was surprised how easy and relatively affordable it was after hearing “you can no longer pool with anyone, how will you buy it?” Not sure how the ACA has changed that but it worked well then. (And I’ve been blessed with good health…)”
ACA didn’t really change the way you buy it. It just made it more expensive. But the process is basically the same today as it has been for the past 15 years that I’ve been buying my own insurance.
Only other real downside other than the prices, it now works like an employer plan. Used to be you could switch insurance providers whenever you wanted. Now there is only a 6 week open enrollment period (which ends Friday). Outside of this 6 week window, you can’t buy new policies or switch policies, unless there are exceptional circumstances like you get married, get divorced, have a kid, move to a new state etc. But generally speaking whatever you choose in open enrollment you’re stuck with for an entire year.
My plan this year (2018) by the way will cost $1070/mo for a family of 4 with a $7K deductible. Before the “Affordable” Care Act, a similar policy would run me $300-400 a month.
Thank you Obama and Democrats!!
“and no concerns for anything except customer results.”
Well, that can be a concern if you’re not well diversified in customer industry, but I’ve been fortunate to have a wide variety of industries represented. That, and most of my time in the field has been in the “free money” era.
The worst thing about sales? Sales managers. I’ve only had one in 20 years that I’ve respected. Mostly they get in the way.
The worst thing about sales? Sales managers. I’ve only had one in 20 years that I’ve respected. Mostly they get in the way.
My exposure to sales was in a company too small for that. I was reporting directly to the sales VP. And he didn’t care how I did my work for him as long as the customers stayed happy.
But a key ingredient to making that happen is that my R&D contact was a true guru…if I could get him the right data he could have a fix by morning and it stayed fixed. That means happy customers. So all I had to do was travel around and smile and gather data and do a few fixes myself here and there. Best job ever.
Right on. I had the best job as well reporting to the VP (of multiple departments) until he decided he didn’t want all of sales reporting to him. So he hired a sales manager and now it’s incessant calls about next steps, strategy, and when’s the PO coming. Problem is, the new guy only has a few direct reports. Ideal is working for the VP or a manager with more than 5 reports.
Total make-work position. And he certainly makes more work for me!
crime_is_uncontained
Eureka, NV Housing Prices Crater 7% YOY
https://www.movoto.com/eureka-nv/market-trends/
‘Ten years ago this month, you may not have noticed the cracking and crumbling under you. Federal Reserve policymakers were offering reasons for calm’
December 14, 2007
Everyone Involved Was A Willing, Foolish, Party
It’s Friday desk clearing time for this blogger. “Along with colored lights and Christmas trees, a sure sign of the holidays are the ‘New Price’ signs decorating thousands of neighborhood lawns. After putting houses on the market in the summer and getting no takers, many sellers are trimming costs in hopes of landing a winter sale. Dallas agent Lydia Player recently put under contract a North Dallas custom home that had been for sale for almost a year.”
“‘It was priced at $1.75 million, which we thought was OK,’ she said. ‘We had to reduce it several times. When we reduced it to $1.395 million, we got three offers immediately.’”
“‘You don’t need to wait around for six months to decide if your price is right,’ said Player. ‘If we don’t get an offer in the first few weeks, we need a price reduction.’”
“Three years ago, real estate agent Diana Cavigliano couldn’t get to new homes for sale, fast enough. ‘When I first started, houses sold in hours,’ Cavigliano says.”
“But the housing market isn’t what it used to be. Cavigliano says now you’ll find homes sitting vacant for months, forcing some homeowners to drop prices by the thousands. Frustrated by the flood of empty homes, Cavigliano started tracking single family homes for sale in Boise and Meridian.”
“With all the lower prices and loan options out there, first time homeowners can afford to be picky. ‘Everybody says well it’s a bad market, well it’s good for somebody, and that somebody could be you,’ says Cavigliano.”
“Thirty-year-old construction engineer Cao Xuan Lam has never imaged he could easily earn so much money after only one year of engaging in realty business in Vietnam’s Hanoi capital. Lam, previously owning two apartments in western-style blocks, has just made a profit of nearly 50,000 U.S. dollars from selling one.”
“‘Nothing can bring about huge benefits like real estate trade. So, I have spent all my savings and loans from relatives and banks investing in it,’ he said while scrubbing his newly-bought apartment’s white-washed wall.”
“For the year to date, Regina has seen total housing starts of 1,377, the highest year-to-date starts since 1983. As records continue to be broken, it appears there won’t be a downturn anytime soon.”
“‘Consumer demand is driving this (boom),’ said Alice Russell, executive director of the Regina and Region Home Builders’ Association. ‘I’ve had a number of calls from people interested in housing from (outside the province). I love it when people call (with inquiries) about this.’”
“Statistics from the Guangzhou and Shenzhen real estate markets are pointing towards a downward trend. Many citizens say they’re still taking a wait and see attitude after a series of government measures aimed at curbing speculation in China’s property market.”
“The average has plummeted by more than more than 20% percent. GM, Real Estate Company, said, As investors become fewer and fewer, the prices are being adjusted accordingly. Many developers are choosing to drop their prices. Another housing project has set its price at 5 thousand per square meter.”
“House Buyer, said, The price now is reasonable for me, but what if it continues to drop?’
“House prices across the UK fell at their fastest rate in more than two years last month as higher interest rates and tighter controls on mortgage lending prevented many buyers from getting on the property ladder, the Royal Institution of Chartered Surveyors says today.”
“Quentin Jackson-Stops, from Jackson-Stops & Staff surveyors in Northampton, said November had been a very poor month. ‘Winter has come early to the property market,’ he said. ‘The number of viewings of properties fell substantially during the month and only properties that are very keenly priced or in the very best condition and location are generating interest.’”
“House prices in Wales fell for the sixth successive month in November and at the fastest pace since May 2005, a survey has revealed.”
“But the RICS Wales director Cathy McLean insisted large falls in house prices still remained unlikely. ‘It is clear that the housing market continues to feel the strain of depressed market conditions,’ she said. ‘However…large falls in prices remain unlikely. Employment would have to fall sharply before enough supply entered the market to create a significant dip.’”
“With real estate figures showing the housing market is cooling off homeowners are taking desperate measures just to sell. Many, like seller Carl Becker, are being forced to cut prices by tens of thousands of dollars just to entice buyers. Becker is so keen he is selling his house for $50,000 less than its registered valuation.”
“ONE News found a three bedroom house in Christchurch going for $20,000 under valuation; a four bedroom home in Papamoa going for $35,000 below valuation; and a three bedroom house in Auckland’s North Shore priced at $65,000 less than its registered value.”
“‘It’s a buyers’ market, it’s a fact, and everybody has to work in the context of the market. So in this context here for me to move it I need to discount it more,’ Becker says.”
“Potential home buyers have far fewer choices when applying for a loan these days. Largely gone are the subprime, jumbo and other exotic options that were readily available during the housing boom.”
“‘The mortgage industry will not ever again be the way it was in the last four years,’ says Ajay Rajakhyaksha, head of U.S. fixed income strategy at Barclays Capital.”
“The political class’ infatuation with interfering in the mortgage lending marketplace has played a large role in the current so-called ‘crisis’ of sub-prime lending. Political pressure nonetheless mounted, and when compliant interest rates appeared on the horizon, the industry responded with myriad, sometimes even exotic, loan products.”
“What we have here, really, is the downside of risks assumed by borrowers, lenders and secondary market investors who bought securities backed by sub-prime mortgages. Everyone involved was a willing, if in hindsight foolish, party.”
“The best thing the Bush administration and Congress could do is nothing at all. Yes, nothing. Both borrowers and lenders who took untoward risks should now pay the financial consequences. Any government interference in the process would extend the pain and raise its cost in the long run.”
“Recently, a columnist from one of the California dailies posited an interesting premise on the subprime mortgage and housing crisis.”
“He wondered why do we consistently laud a drop in the prices of such things as food, electronics and transportation, but cringe when the price tags on homes fall?”
“Instead of being bombarded with 30-point type headlines about the pending disaster of falling home prices, he asked shouldn’t we be seeing stories of how low and middle-income families, who were formerly priced out of the market, are ‘finally getting their chance at the American Dream?’”
“This in fact may be one of the rare cases where there was far too little discrimination practiced by the lenders who accepted applicants with credit scores lower than my SATs coupled with an ability to manage money like a sailor on shore leave.”
“I would expect more sense however from people like Fed Chair Ben Bernanke and Treasury Secretary Hank Paulson. Both have sort of floated strategies that in my mind, and others’ as well, in essence reward people with bad credit histories.”
“At this juncture it won’t do much good to finger point, as there aren’t enough digits on both hands to include everyone who’s contributed to this mess, and, of course, lenders included.”
“But those who made their mortgage payments and worked to maintain decent credit histories shouldn’t be the ones to suffer as part of the solution.”
http://thehousingbubbleblog.com/?p=3876
” …lenders who accepted applicants with credit scores lower than my SATs coupled with an ability to manage money like a sailor on shore leave.”
“As CNBC reported Monday, citing an Alabama securities regulator, people are actually taking out mortgages to invest in Bitcoin, perhaps hoping to turn $20,000 into their entire retirement fund.”
And I am sure this kind of soundly underwritten use of mortgage borrowing is entirely legal, and the mortgages are federally guaranteed.
Sucking out home equity to buy bitcoin is a wonderful idea. Sucking out home equity to buy ANYTHING is a wonderful idea.
😁
December 14, 2007
The Workout Doesn’t Work Anymore
The Denver Post reports from Colorado. “More Colorado homeowners have gone into foreclosure in the first nine months of this year than in all of 2006, which was a record year. And in a sign of how tough times are, about two of every three Colorado homeowners who enter foreclosure are losing their homes at auction, compared with about one of every two last year. ‘We don’t think we have bottomed out yet,’ said Kathi Williams, director of the Colorado Division of Real Estate.”
“Public trustees in the state reported 28,960 foreclosures from January through September, versus 28,509 through all of last year. The state recorded 19,025 foreclosure sales at auction through the first nine months versus 15,112 in all of last year, according to the report.”
“‘We had 28 foreclosure sales today (Wednesday), and they all went back to the lender,’ said Debby Morgan, public trustee for Larimer County.”
“Mortgage lenders and servicers, buried under a rising mountain of delinquent loans, are taking three weeks to a month to approve ‘workout’ plans designed to keep borrowers in their homes or allow them to arrange a voluntary sale. ‘We were driving more people to the hotline. And those counselors weren’t able to get answers out of lenders,’ Wil liams said. ‘The value of the property continues to deteriorate, so the workout doesn’t work anymore.’”
The Rocky Mountain News from Colorado. “‘Last year, we had a small-city worth of foreclosures,’ said Zach Urban, who runs the Colorado Foreclosure Hotline. ‘It’s a crisis without end, it seems like.’”
“On Thursday, ForeclosureS.com reported that in the first 11 months of the year, Colorado had 16.3 real estate owned, or REO, filings per 1,000 households, down more than 22 percent from the same period in 2006.”
“But if that number is correct, it is because lenders are so swamped with foreclosures they can’t process them in a timely manner, said Urban and other experts.”
“‘I don’t think any dip in those numbers indicates a relief of the crisis,’ Urban said. ‘It’s an indication of how bad the crisis is. The scariest part is that if the mortgage lenders were more efficient, we would have even more people losing their homes.’”
The Coloradoan. “‘I don’t think anyone is prepared for what’s to come in the next year,’ said Urban. ‘This is something that’s a slow moving storm; it’s taking a lot of time to see the damage uncovered.’”
From Arizona State University. “In an environment of heightened economic uncertainty and continuous financial issues, the local resale housing market remained anemic at 3,280 sales, in comparison to 3,610 recorded sales in October 2007 and last year’s 5,040 sales.”
“The month of November brought the year-to-date total to 47,690 sales, which is well below the 62,415 for 2006 year to date and 104,360 sales for 2005 year to date.”
“‘Although there is a large inventory of available homes, buyers appear reluctant to take advantage of the market,’ said Jay Q. Butler, director of Realty Studies. ‘Many of the vacant homes are in submarkets that current buyers do not want…Thus, the 2007 resale housing market continues to show signs of increasing weaknesses that are well below the expectations of even a few months ago.’”
“The Scottsdale resale home market declined from 400 to 240 recorded sales, the median sales price decreased from last year’s $630,000 to $544,645. Glendale decreased from 350 to 235 sales, and the median sales price decreased from $247,000 to $215,000.”
The Arizona Republic. “Median prices fell to their lowest level in 2½ years as the number of housing resales slowed to a crawl in November.”
“The median price in the Phoenix area fell 7 percent to $240,000 in November, compared with $259,000 a year earlier. That’s the lowest median since $235,000 in May 2005, according to ASU.”
“‘When there is a lot of uncertainty, people become reluctant to make major commitments,’ said Butler. Would-be buyers fear they can’t sell their homes. They are waiting for prices to drop or can’t get financing, he said.”
“One bright spot is that homes continue to get more affordable, and the market for houses priced at $200,000 continues to increase. The percentage of homes sold at $200,000 or less increased from last year’s 16 percent to 29 percent in November.”
“Not under the Christmas tree this year for Southeast Valley homeowners: a deal to sell their homes.”
“November resale numbers show…sale prices also continued to fall throughout the Southeast Valley, except south Tempe. December is expected to be equally slow.”
“Butler said he wasn’t surprised by the ongoing market weakness but that most economists had thought that 2007 would be a better year at its outset. ‘It’s continuing to be a lot lower than we thought at the beginning of the year,’ he said. ‘We thought the year would end up a little bit better than it is.’”
“‘It’s the growing economic uncertainty, all the talk about ‘Are we in a recession or aren’t we in recession?’ Butler said.”
“Hub Blanchette saw this coming in July. Blanchette, Chronic Car Audio’s CFO, was walking out of an East Valley box store in the middle of the morning this summer and noticed the parking lot was deserted, save the employees’ cars.”
“It was a sign to Blanchette that the state’s surging economy was about to hit the skids. ‘The next day, we cut payroll by $100,000,’ Blanchette said. ‘If we hadn’t done that, we’d be under right now.’”
“The company has cut payroll twice since then, and plans another 25 percent payroll cut before the end of the month, Blanchette said. ‘If you don’t cut costs, you’re not going to have a job anyway,’ Blanchette said. ‘That’s the reality of the situation right now.’”
“It’s a reality born out each month in Mesa, as the city releases statistics that show sales tax revenue continuing to slip.”
“‘It started out with the housing mortgage thing,’ Blanchette said of the off-cited root of Arizona’s economic problems. ‘With the pay cuts and a lot of the ‘re-fis,’ their payments are up.’”
The Havasu Sun News from Arizona. “The already grim housing market suffered yet another setback Tuesday as officials announced that home construction plunged even further last month, sinking to its lowest level in nearly three decades. Officials says the downturn in building activity has begun to seep into other parts of the economy.”
“The latest snapshot of the city’s building activity, released Tuesday by the Development Services Department, showed that only three single-family building permits were issued in November, the lowest monthly total in at least 27 years.”
“Officials said city permit records only stretch back to 1980, making it difficult to pinpoint the last time construction was this stagnant.”
“‘I don’t even need to say anything,’ said Bud Schulz, executive director of the Colorado River Building Industry Association. ‘The numbers speak for themselves.’”
“Nonresidential construction, the lone bright spot for builders the past several months, fell dramatically in November. Commercial projects totaled about $1.4 million last month, down from $12 million in October.”
“Home construction has been in a tailspin since 2006, with single-family building permits hitting a 25-year low this past fiscal year. Those figures have tumbled even more in recent months, falling from 17 to 7 to 3 since September.”
“‘If this trend continues, then it will affect the entire economy of the city,’ Schulz said.”
In Business Las Vegas. “It was not a happy day. Mark Stark, CEO of Prudential Americana Group, one of the largest real estate brokerages in Las Vegas, said he was discouraged when he realized he had no alternative but to file Chapter 11 bankruptcy if he wanted to save his firm, which continues to operate while it reorganizes it debt.”
“‘I was bummed,’ Stark said. ‘I was bummed.’”
“When he took over 100 percent of the ownership of the brokerage in 2004 from his 25 percent stake, Stark said he never envisioned the Las Vegas housing market tanking like it did and making it impossible to make payments on one of the two loans totaling $22.5 million he took out to buy out his partners.”
“That’s quite a contrast from three years ago when Prudential Americana had an offer from Warren Buffett’s HomeServices of America to buy the firm. Stark matched the offer.”
“‘I would have gotten a huge check and with bonuses — it would have been $12 million to $15 million at the time,’ Stark said. ‘I said no, and the reason being is I had a belief as I do today. That is why we have done well in a tough environment, and we have hung in there.’”
“When he acquired the firm, Stark said he had a plan that if the market adjusted 30 percent, the brokerage would still be fine.”
“‘The market adjusted more dramatically than we anticipated,’ Stark said. ‘If you would have told me, this market would have gotten hit 67 percent in two years, I would have said you have no idea of what you’re saying. No one expected two-thirds of the market to go away.’”
“‘I don’t see what if anything we could have done differently to protect the company,’ Stark said. ‘We didn’t add a lot of bricks and mortar. We didn’t waste dollars. We were healthy. We were very profitable until the market went away.’”
“‘We have a core economy that is healthy, but we now have a timing issue,’ Stark said. ‘We have to work through this slop that has created challenges. This inventory will be eaten up because we have a core economy. This is not Detroit, Michigan.’”
“The No. 1 problem to deal with is perception, Stark said. There are great deals to be had in the market, but the perception of many is that prices will keep falling.”
“‘If you are waiting until the market gets better, then sellers have the idea of things getting better and they can hold more firm,’ Stark said. ‘Today, you can go out there and sellers aren’t so sure. If you wait, you are going to pay higher prices.’”
http://thehousingbubbleblog.com/?p=3875
“More Colorado homeowners have gone into foreclosure in the first nine months of this year than in all of 2006,”
That is saying something.
2006 was the year that my first landlord stopped making his mortgage payment while still collecting the full rent which went on with that one for about 5 years.
He wouldn’t have got away with that in the Centennial State. I knew of people who were foreclosed after about 12 months of not paying.
In NY six years was easy peasy.
“He wouldn’t have got away with that in the Centennial State.”
Down here in Region IV 2006 - 2012 was a free for all for the victimized robo-beaters.
Hell, in that very same subdivision where I set sail with my monthly cash for Deadbeat LL program a couple was foreclosed on and evicted in 2007 or early 2008.
A few months went by and friends of theirs asked for the keys and moved in (right about the time TPTB slammed the brakes on kicking people out to control inventory IMHO) they had the power and water turned on in their name and lived there for over 4 years rent free.
December 14, 2007
The Revolving-Door Flow Of Customers Has Vanished
Some housing bubble news from Wall Street and Washington. Bloomberg, “Citigroup Inc. will take over seven troubled investment funds and assume $58 billion of debt to avoid forced asset sales that would further erode confidence in capital markets. The biggest U.S. bank by assets will rescue the so-called structured investment vehicles, or SIVs, taking responsibility for their $49 billion of assets, the New York-based company said in a statement.”
“The decision to bring the SIVs onto the balance sheet marks a turnaround for Citigroup. In a Nov. 5 regulatory filing, the company said it ‘will not take actions that will require the company to consolidate the SIVs.’”
“‘After considering a full range of funding options, this commitment is the best outcome for Citi and the SIVs,’ Vikram Pandit, who was named CEO on Dec. 11, said in the statement.” “Citigroup said its decision was independent of the Treasury plan to create the $80 billion so-called SuperSIV that would buy assets from other funds that couldn’t finance their investments.”
“‘The need now has completely gone away,’ said Joseph Mason, associate professor of business at Drexel University and a former financial economist at the Office of the Comptroller of the Currency. ‘They were the only ones keeping it alive.’”
“Citigroup follows HSBC Holdings Plc, Societe Generale SA and WestLB AG in bailing out SIVs to avert fire sales of assets. ‘That was really the last major outstanding piece of the SIV problem,’ said Peter Crane, founder of Crane Data LLC. ‘The SIV problem is very close to resolution.’”
From Reuters. “‘It says the super SIV is dead in the water. That shows it was a bad idea in the first place and as with (British bank) HSBC they have realized they have to sort their own problems and not seek help from someone else,’ said Alan Webborn at SG Securities in London.”
From MarketWatch. “Interest in the fund has waned as several banks concluded they couldn’t wait for it to become operational, and decided to bail out their own SIVs.”
“SIVs are funds that use money borrowed under short-term agreements — typically commercial paper — to buy longer-term, higher yielding debt investments, which have included subprime mortgage-related assets.”
“As the credit markets have tightened in response to growing instability in the subprime mortgage market, SIVs have struggled to secure financing, which in turn has sparked concerns that they may have to sell their assets into a weak market.”
“The biggest concerted effort by central banks in six years to restore confidence in global money markets is showing little sign of success. Policy makers are reacting to more than $70 billion of losses announced by financial institutions this year and estimates of about $300 billion more on securities linked to subprime mortgages, collateralized-debt obligations and structured investment vehicles, or SIVs.”
“The rates banks charge each other for three-month loans held at seven-year highs for a second day after policy makers in the U.S., U.K., Canada, Switzerland and the euro region agreed to ease the logjam in short-term credit markets.”
“‘The market clearly doesn’t believe central banks can do anything about this crisis,’ said Nathalie Fillet, senior interest-rate strategist at BNP Paribas SA in London. ‘This is not going to be a magical solution to the problem.’”
“The concerted central bank effort to ease the liquidity crisis may do no more than shine a spotlight on the other problems faced by the financial markets — including a growing concern about fundamental asset quality.”
“While the move has undoubtedly eased tensions into year-end and will allow frazzled nerves some respite over the Christmas and New Year period, bankers and investors will return in January to face largely the same problems.”
“The central banks may have raised more questions than they answered. ‘The next leg of bad headlines will be real losses,’ credit analysts at Royal Bank of Scotland warned on Thursday. ‘Forget mark-to-market on CDOs, CDO of ABS, RMBS and the like, 2008 will see real losses.’”
“‘You have a slowing U.S. consumer,’ Jeffrey Immelt, CEO of General Electric said this week. ‘I’m not going to put a happy face on this…clearly consumer delinquencies in the United States are increasing.’”
“Analysts at UniCredit asked whether central banks had a realistic chance of fighting the crisis with the measures announced.”
“‘It is becoming more and more apparent that this is not the case,’ they wrote. ‘The stressed liquidity situation is not the reason for the crisis, it is just one symptom. The liquidity the central banks provide is absorbed quickly by banks that pile up cash on their balance sheets.’”
“This does remove pressure from the market to provide funding, and is highly welcome in stabilising those institutions that might face liquidity risk. ‘But funding a bank’s balance sheet is truly not the business of a central bank,’ they said.”
The Financial Post. “With the deadline for a restructuring proposal for $33-billion of asset-backed commercial paper hours away, a roomful of investment bankers and lawyers are still struggling to come out with a document that will enable investors to put a value on their holdings for the first time since the market melted down in early August.”
“Sources close to the investor committee overseeing the negotiations said that while some noteholders might get most of their money back, others will likely see losses of more than 50%.”
“‘There are some pretty bad trusts,’ said one source, adding that the worst of the losses are focused on just three or four trusts, including the now infamous Apsley, whose assets include nearly $1-billion of investments linked to subprime mortgages in the United States.”
The Associated Press. “The phones don’t ring off the hook any more at Spanish real estate offices, once the giddy beneficiaries of a sizzling property market. In fact, they hardly ring at all. And the revolving-door flow of customers has vanished.”
“Sharply higher interest rates, a glut of homes and newly jittery banks have come together to stall the engine that has driven one of Europe’s top-performing economies for more than a decade.”
“Promoters who just a few years ago could sell new homes just by showing crude blueprints, they didn’t even bother to build pilot houses or apartments, are now desperate. ‘The market has become paralyzed. Things are just paralyzed,’ said Javier Martinez de los Santos, manager of a realtor’s group.”
“Banks used to trip over each other competing to throw low-interest rate mortgage money at anything that moved. Interest rates have jumped nearly three points in as many years, however, which means much heftier monthly payments for homeowners because the vast majority of mortgages in Spain are adjustable-rate.”
“So banks worried over the prospect of defaults are now much more miserly, ending the once-common practice of financing 100 percent or even more of a home purchase, and raising the threshold for what people need to earn in order to qualify for a loan.”
“‘There is still demand. There are more people looking for a house now than before. The problem is the banks have turned off the spigot,’ said Jesus Duque, vice president of a Spanish real estate chain with 600 offices around the country.”
“Malena Garcia Mexia, a dance instructor in Torrelodones, 30 kilometers (20 miles) northwest of Madrid, knows all about it. She and her husband put their 3-bedroom apartment up for sale in November 2006 and have got nibbles but nothing serious.”
“‘People try to take advantage of the situation,’ she said, recounting how they’ve lowered their price three times only to have prospective buyers now ask them to come down as much as 20 percent more.”
“For U.S. homeowners, builders, bankers and realtors, the crash of 2007 will only get worse in 2008. Everyone from mortgage-finance company Fannie Mae to Lehman Brothers Holdings Inc. expects declines next year.”
“The housing market collapse has been anything but the ’soft landing’ that Federal Reserve Bank of San Francisco President Janet Yellen and David Lereah, former chief economist at the National Association of Realtors in Chicago, predicted for real estate at the start of 2007.”
“Median home prices declined in the U.S. this year, the first annual drop since the Great Depression, according to forecasts from the National Association of Realtors.”
“‘I’m not going to sit here and tell you it’s going to turn real strong next year,’ said Jim Gillespie, CEO of Coldwell Banker Real Estate LLC, the largest U.S. residential brokerage, according to Franchise Times. ‘It’s not going to turn real strong next year.’”
“Moody’s Economy.com Inc. says home sales will hit bottom next year, declining 40 percent from their peak.”
“‘I know we weren’t predicting things would get this bad,” said Frank Liantonio, executive VP for global capital markets at New York-based Cushman & Wakefield Inc., the largest closely held real estate services provider. ‘There were some signs there, but I don’t think anyone anticipated the level of dislocation that was actually created.’”
http://thehousingbubbleblog.com/?p=3874
‘The housing market collapse has been anything but the ’soft landing’ that Federal Reserve Bank of San Francisco President Janet Yellen and David Lereah, former chief economist at the National Association of Realtors in Chicago, predicted for real estate at the start of 2007.’
Ho ho ho.
December 14, 2007
The Ballooning Of Easy Credit Has Come Back To Roost
The Daily Herald reports from Illinois. “Andy Starck thinks it’s time to bust some real estate myths. Starck is CEO of Palatine-based Starck Realtors and has been in the industry in the suburbs almost 40 years. Here’s the way he sees things. Home prices might have dropped a little, but not precipitously. Anyone who buys a home now has little chance of suffering a loss. Sellers are becoming realistic and are dropping their asking prices. Buyers are not going to ’steal’ homes.”
“While trying to sell a house for a quick profit in a year or so would be a real gamble in this market, anyone who thinks they will be in a home for a few years should go ahead and buy, Starck said. ‘There are values out there,’ he said. ‘Be smart, find them. Let your Realtor help you find them.’”
“Starck offers all the usual reasons: The economy is broad based and expanding, Chicago is a transportation hub and there isn’t enough housing for the continuing demand. ‘It is not that Chicago is bulletproof, but we do have an overall lack of housing stock over time,’ Starck said.”
“Sellers are not going to take crazy offers, he said. Starck has seen offers $250,000 below the asking price on a $500,000 home.”
“‘It’s just not going to happen,’ he said. ‘Sellers are not desperate. They are reasonable and want to sell their homes and move on to the next ones.’”
“Starck said it is important to realize that what people say about the real estate market could be true in one area like Florida, but might not apply to Chicago. ‘It’s a great time to get a good value,’ he said. ‘And there are plenty of them and you can get the house you want. Three years ago, you had to take what was available and had to move real fast.’”
The Chicago Journal from Illinois. “The number of housing foreclosures in Chicago is steadily increasing and financial experts say the situation will get worse before it gets better.”
“The Chicago Department of Housing reports that foreclosures in the city in the first half of 2007 are up 35 percent from the same time period last year, increasing from 4,695 to 6,329.”
“Molly Sullivan, director of communications for the Chicago Department of Housing said foreclosures are most common in low-income communities with those who face catastrophic financial problems.”
“‘However, we’re also seeing in some of the higher end communities where people have just overextended themselves,’ she said. ‘They’re either purchasing investment properties, thought they could take advantage of the hot market, which is now cooling and they are no longer able to leverage everything they have and keep all the balls in the air.’”
“Michael vanZalingen, with the Neighborhood Housing Services of Chicago, said that while neighborhoods like the South and West Loops are not being hard-hit by foreclosures now, they could be in the future. In the those neighborhoods, he said, many condo and townhome owners purchased their units with adjustable rate mortgages, interest only mortgages and payment option arms.”
“He said many came in thinking they would sell their property within a few years of purchasing it and make when the principal came due. Many thought the market would continue to go up, he said.”
“‘And as we’ve seen over the last six months in Chicago, and I think we’re going to see over the next few years, housing appreciation is flatly declining and the markets are very soft,’ he said. ‘For those who had expected to sell or refinance … there is going to be a shortage of qualified buyers for their condos at the price they are looking for.’”
“He said because of the cooling market and so many defaults on loans, lenders also are tightening their underwriting standards. ‘Even if someone wanted to buy a condo, they are going to have trouble getting a loan even if they have very good credit,’ he said.”
The Sun Times from Illinois. “In what authorities say is a symptom of the excesses in the subprime mortgage market, 15 people are charged with fraud involving at least nine homes valued at more than $4 million.”
“The scam — led by a mortgage broker and a real-estate agent — involved ’straw buyers’ taking out mortgages on homes for more than the asking price, officials said.”
“Lenders offered the loans for 100 percent of a home’s price. To get the high-interest loans, borrowers only had to verify they had a job, but did not have to verify their income. Straw buyers…falsified their incomes and employment on loan applications, officials said.”
“The victims were the lenders and neighbors, whose property taxes could rise because of the inflated values, officials said. Most of the homes were in the South Loop, and many have fallen into foreclosure.”
The Evening News from Michigan. “Although the Eastern Upper Peninsula is viewed as a ’stable’ housing market, Chippewa County Register of Deeds Sharon Kennedy indicated there is no denying that times are less than good in real estate these days.”
“Kennedy said foreclosure filings so far in 2007 are about twice the average from recent years, with 81 on record so far this year. That is up dramatically from the 67 registered all last year and a recent average of about 40 repossessions per year dating back to 2001.”
“Foreclosures are just one side of an overall real estate market that has seen better days, according to realtor Garth MacMaster. He accounted for an apparent glut in properties for sale as the product of several factors.”
“MacMaster acknowledged the so-called ’sub-par mortgage crisis’ afflicting most of the country has rippled through the EUP as well. But a dramatically tighter credit market for real estate is just one of several trends he sees in the local market.”
“‘Different ones want to move up, but there are more people selling than buying,’ he said of the local situation.”
“A specialist in property both in Sault Ste. Marie and the Paradise area, MacMaster sees other trends making for a blizzard of ‘For Sale’ signs. One of those is a glut of seasonal property, caused in part by hard times downstate.’
“Speaking of the Paradise area, he said that advancing age has also inspired other part-time owners to sell. The upshot is a local glut in available properties and a drop in overall value. ‘Property values in the Paradise area have gone down because of the glut,’ he said.”
“The realtor said the local market is not immune to nationwide trends. He noted the ballooning of easy credit loans made a few years ago has come back to roost here, as it has across the country.”
“He said especially young new homeowners fell heavily for the 100-percent financing offered by lenders a few years ago. Heavily invested in adjustable rate loans, many of those new owners found the uptick in interest rates and job losses left them unable to make payments.”
“He said new owners with essentially no equity in a property have little incentive to hold onto the property. ‘They treat the house like a rental and walk away from it,’ he said. ‘They have no equity at stake.’”
“He said that nowadays, one to three people show interest in an average property. Not long ago, that number of 20-30 per available house, he said. ‘Prices have leveled off or dropped. They’re not appreciating, that’s for sure,’ MacMaster said.”
The Oakland Press from Michigan. “There is more bad news for Oakland County homeowners - but good news for those looking to buy. The median price of homes sold in November fell from $184,000 a year ago to $167,500.”
“RealComp reported 845 homes sold in Oakland County for the month of November, down from the 995 homes sold in November, 2006.”
“‘My position is that there has never ever been a better time to buy a home,’ said Marcia Dyer, presidentelect of the North Oakland County Board of Realtors in Waterford Township. ‘Michigan has always been a strong market, and what goes down will indeed come up.’”
“University of Michigan Professor Don Grimes annually contributes to a study on Oakland County’s economic outlook released each spring. ‘It’s taken a little bigger hit than we expected, at least in terms of sales,’ Grimes said of housing sales for the year.”
“‘My gut says it has gotten worse than we were expecting last spring,’ Grimes said. ‘We knew it was going to be bad; we just didn’t know how bad it would get. The big question is when will it turn around. I don’t know.’”
“‘Brokers may stabilize in 2009, but construction will go down because they have to get rid of the inventory of unsold homes,’ he said.”
The Journal Sentinel from Wisconsin. “Foreclosures were up 28.7% in Wisconsin during the first 11 months of the year as the resetting of adjustable-rate mortgages pushed increasing numbers of homeowners over a financial cliff, according to a report.”
“Many of those in foreclosure ‘bought a home they probably shouldn’t have bought,’ said Michael Holloway, owner of a real estate agency in Milwaukee that represents only purchasers. ‘I remember writing a newsletter three years ago that if you can’t afford a house on a 30-year mortgage, you shouldn’t be buying a house.’”
“Holloway said that he is as busy now as he has ever been in 23 years representing buyers. Sellers are willing to negotiate prices, he said.”
“‘What I see is a terrific time to buy if you don’t have to sell a house,’ Holloway said. Mortgage ‘rates are still low. You can buy a house for a fair value, but I don’t see people grabbing on to that. If you have to sell to buy it is a little tougher.’”
The Star Tribune from Minnesota. “Winter came early to the Twin Cities housing market. Closed and pending sales were both down about 20 percent for November, while prices posted their deepest year-over-year decline of 2007.”
“The number of closed home sales in the metro area was 19.3 percent lower than in November 2006, according to the Minneapolis Area Association of Realtors. The number of pending sales was down 21 percent. The median price of closed sales was $216,500, down 5.1 percent from November 2006.”
“At the end of the month, a record 30,126 homes were for sale, 32.6 percent more than two years ago.”
“With so many sellers competing for buyers, prices are dropping at an accelerated pace. In November, sellers on average received 92.4 percent of their original list price, down from 95.2 percent in 2006 and 97.2 percent in 2005.”
“The only encouraging signs for sellers are that affordability continues to improve and that certain segments and locations of the housing market are doing much better than others. A family with the median income for the area now has 141 percent of the income necessary to buy a median-priced home, assuming a 30-year fixed mortgage and a 20 percent down payment.”
“Steve Hyland, president of the Saint Paul Area Association of Realtors, said that he’s hopeful that falling prices will mean a stronger market come spring. ‘The market is slowing and will continue to slow down a little more during the winter months,’ he said.”
The Pioneer Press from Minnesota. “The selection is huge, the interest rates are low and eager sellers are paring their asking prices. And still, would-be homebuyers are about as enthusiastic as 10-year-olds at a gallery opening.”
“Would-be buyers are a little less willing to strike when they see their purchase might lose value in the short run.”
“Homes continue to sell, of course, as any agent will tell you. Take one gem on Lake Como. It sold last week after just 40 days - and after the $1.1 million asking price was dropped to $899,900. Realtors Mary and Jim Sommerfeld, who sold the house, won’t say what the Twin Cities couple who bought the home paid.”
“‘People have the feeling from looking at the headlines that homes aren’t selling. That’s really not true. If houses are priced according to the market, well prepared and decluttered, they’re selling,’ Mary Sommerfeld said.”
“Additionally, tighter financing hasn’t choked off sales. The jumbo loan is far from dead, mortgage lenders just aren’t able to bundle them for sale as mortgage-backed securities to investors as they used to, and the terms are less generous.”
From Minnesota Public Radio. “Bob and Joan Campbell love their cozy two-bedroom townhome near the Mississippi River on the south side of Brainerd. But for all this home’s charm, the Campbell’s needed more space to better accommodate their visiting children, grandchildren and great grandchildren.”
“They bought a four-bedroom condo in the spring in the nearby town of Baxter and put this place on the market.”
“‘When we bought the place over there we thought things were fairly good. And about the time we concluded the deal everything went to pot, so our timing was not good,’ Bob Campbell says.”
“At first the Campbell’s listed their home for nearly $180,000. After a few months they dropped the price to $169,000. Just a few days ago, their townhome finally sold after six months on the market. The winning offer came up short of what the Campbells asked for, but they’re happy with how things turned out.”
“Rona Karasik (who) heads up the gerontology program at St. Cloud State University…says even if a retiree’s house sells for tens of thousands of dollars less than it would have two years ago, it is still worth many times more than they paid.”
“‘If they’ve owned a home for a very long time, it’s probably still appreciated even in this softening market. But how much it’s appreciated has probably shifted downward in the last few years. So if they were planning to have $300,000 they may have less than that,’ Karasik says.”
“Karasik agrees with real estate officials who say older folks ready to sell their home should probably wait a year or so while the market sorts itself out.”
“Local real estate broker Kevin Goedker has dealt with more retirees selling their homes over the last year. He thinks one reason they feel pressure to sell now is because no one is sure how low the market will actually go. ‘If you’ve got a stock that’s going down, it’s probably better to get rid of it sooner rather than later. Because you never know when the bottom is,’ Goedker says.”
http://thehousingbubbleblog.com/?p=3873
Realtors are liars.
Lurkers and newbs, reread all the quoted realtor lies posted above.
How about one from the day before:
December 13, 2007
The End Is Nowhere Near In California
The North County Times reports from California. “Real estate agents and builders need to modify their business models in order to survive the current mortgage crisis, senior real estate executives said during a conference Wednesday. The suggestions ranged from copying car sales strategies to conducting more honest assessments.”
“‘The one thing I can tell about you Realtors is that you’re all liars,’ said Joseph Anfuso, president of Florsheim Homes, a builder in California’s Central Valley.”
“Anfuso told agents during a Wednesday real estate conference at the University of San Diego that they need to stop inflating or hiding sales numbers and swallow a hard dose of reality on their cash flow if they expect to remain in business as sales continue to plummet.”
“For real estate agents to survive this downturn, they need to know where their businesses are going over at least the next five years, said Jason Hall, co-owner of RE/MAX Associates in San Diego.”
“‘With fewer transactions, it’s going to be a professionals-only field….If you don’t know where your next five transactions are coming from, you won’t be around next year and should start thinking about what you used to do,’ Hall said.”
The Union Tribune. “Optimism was largely absent yesterday at the University of San Diego’s annual residential real estate conference. Survival through the next 12 to 24 months figured into almost every speaker’s perspective in the half-day session held on the Linda Vista campus.”
“Over the next year, home prices, which have dropped about 11 percent since their all-time peak median of $517,500 in November 2005, may drop further to approach the 17 percent peak-to-trough decline experienced in the last downturn from 1990 to 1996, said USD economist Alan Gin.”
“That is a relatively small correction considering that prices have jumped more than 250 percent in the past 10 years, he said.”
“Robert Kleinhenz, chief deputy economist for the California Association of Realtors, painted a relatively bleak picture through next year. The Federal Reserve, Kleinhenz noted, ‘knows the end is nowhere near’ on housing’s downturn, and positive mortgage-investor confidence is ‘a ways from happening.’”
“Joseph Anfuso, president of Florsheim Homes, said that when prospective buyers come window shopping at a development, ‘treat them like a rich grandfather, as if you’re in the will.’”
“In an answer to a question about the availability of jumbo loans for mortgages exceeding $417,000, Steve Atwood of National City Mortgage, said large money-center banks appear to be the only reliable source.”
“But their capacity to absorb many more such loans into their portfolios ‘is not going to last much longer.’ Previously, such loans were sold off as packaged securities on Wall Street.”
The LA Times. “In Stockton, real estate agent Cesar Dias believes there are fortunes still to be made. That’s why he leads the weekly Repo Home Tour, filling two 18-seat buses with prospective buyers eager to view foreclosed houses that can be snapped up at dramatically reduced prices.”
“Dias said that when he started the free tour in September, some residents criticized it as a tasteless marketing gimmick. But as headlines announce record foreclosures and weeds sprout in the yards of abandoned homes, their tune has changed.”
“‘We’re bringing in homeowners to get the grass green again,’ he said. ‘At this point, I wish the foreclosures would dry up. We could use an end to the free-fall.’”
“At the waterfront Stockton Arena on Dec. 1, about 500 anxious residents lined up at a foreclosure workshop to see loan counselors. Pete Ponce de Leon said he and his wife were barely keeping up with their monthly mortgage payments, which shot up from $1,700 a year ago to $2,500 now.”
“He said he cashed in two IRAs, sold his tools, sold a truck and was bracing for another rate increase this month. Along the way, he lost his job, and his lender refused to cut him a break. ‘Why don’t they just screw us all at once instead of a little at a time?’ said Ponce de Leon, who has found another job and hopes to renegotiate his mortgage.”
“Asked whether the higher payments took them by surprise, Ponce de Leon struck the same note as many other homeowners in trouble. ‘We just thought we’d be OK,’ he said, explaining that he and his wife had planned to use what they’d expected to be the rising equity in their home to refinance the adjustable loan at a lower rate.”
“It was a bet that backfired. Like homes almost everywhere else in California, the Ponce de Leons’ lost value and their interest rates kept going up.”
“Monaliza Botello said she was surprised when her father, who brings in $4,500 a month, last year secured a loan requiring a $4,000 monthly payment.”
“The idea was that Monaliza’s father would own the new $495,000 four-bedroom for a year or two, at which point she and her husband, could afford to buy it from him with a refinanced loan. But the three of them, who were all living there, fell behind in their payments, and Monaliza lost her dream home.”
“‘It still hurts,’ she said. ‘We were getting phone calls and notices from the lender: ‘If you give us the balance in full, you can keep the house.’ It was nothing like ‘Call us and we’ll see what we can work out.’”
“As home prices plunged, Botello’s cousin around the corner also went into foreclosure, as did her godmother — a real estate agent nearby. ‘Everyone was going, ‘We can’t refi? How can we afford this?’ she said. ‘Everyone was just shocked.’”
“Occupied by Monaliza’s family for just seven months, the Botello home in Lathrop, just south of Stockton, is on the market for $300,000.”
“‘Not to be callous about it, but what goes up must come down,’ Dias said, adding that he expected the market to boom again in a year or two.”
“Dan Noel and his wife were checking out homes for themselves. In fact, the Noels, who live in a one-bedroom apartment with two teenage sons, had already put money down on a home they discovered on a previous tour.”
“‘We’re so excited we can hardly contain ourselves,’ said Dan Noel, who said their full-price offer of $179,450 for the three-bedroom house beat seven others.”
The Orange County Register. “Real Estate Disposition Corp. tonight in Long Beach will peddle 22 converted condos from the Monterey Villas in Santa Ana. Nineteen are 2-bedroom, 2-bath units with opening bid from $179,000 to $209,000, or about half the old prices.”
“According to a February ‘06 news item from CoStar, ‘Pacifica Cabrillo LLC purchased the 272-unit apartment complex…in Santa Ana for nearly $51.73 million, or $190,165 per unit. The buyer intends to convert the apartment complex into condominiums.”
“SoCal bankruptcies were up 73% in the third quarter vs. a year ago. The rest of California’s bankruptcy courts saw 10,053 filings in the third quarter, up 69% in a year.”
The Desert Sun. “Home sales in the Coachella Valley continued to fall in October, with 564 properties being sold, or a 43 percent drop from last year. The median price also declined 7.9 percent to $350,000, according to DataQuick.”
“The only bright spot was the condo resale numbers, which grew 15 percent on sales of 138 units. However, the median price of condos dropped to $292,000, down 14.1 percent.”
“Patrick C. Veling, president of Real Data Strategies Inc. of Brea, says the monthly data ‘points out the flaw in using median price for anything except real macro analysis. ‘The statistical sample (of homes sold) is now small enough that the median price misrepresents what buyers and sellers are dealing with.’”
“The DataQuick data for October saw sales range from a low of $180,000 in Thermal to $7.2 million in Indian Wells. The median price per square foot also showed a drop of 12.7 percent to $204 across the valley.”
The Press Enterprise. “The Federal Reserve surprised the financial world Wednesday by announcing a plan to inject cash into the international banking system. Banks have been reticent to finance business investments in recent months because of the dramatic increase in foreclosures in this country, because many loans for new investment are backed by mortgages held by people on Main Street.”
“Inland Southern California saw 31,661 foreclosure-related filings in the third quarter, including defaults, foreclosure auctions and lender repossessions. That was one filing for every 43 households, more than four times the national average.”
“Redlands-based economist John Husing said the inclusion of foreign central banks underscores how serious Federal Reserve now views the meltdown of the subprime mortgage market.”
“‘It’s the issue we did not see,’ Husing said of the international credit crunch. ‘We thought that mortgages were all about the regional housing market. But, internationally, it’s much bigger and much scarier.’”
http://thehousingbubbleblog.com/?p=3868
“‘The one thing I can tell about you Realtors is that you’re all liars,’ said Joseph Anfuso, president of Florsheim Homes, a builder in California’s Central Valley.”
Bahahaha … their lies work so they keep on telling them.
Their lies work because their customers are the dumbest generation ever.
‘He said he cashed in two IRAs, sold his tools, sold a truck and was bracing for another rate increase this month. Along the way, he lost his job, and his lender refused to cut him a break. ‘Why don’t they just screw us all at once instead of a little at a time?’ said Ponce de Leon.’
OK Ponce, all together now!
‘We just thought we’d be OK,’ he said, explaining that he and his wife had planned to use what they’d expected to be the rising equity in their home to refinance the adjustable loan at a lower rate.’
‘As home prices plunged, Botello’s cousin around the corner also went into foreclosure, as did her godmother — a real estate agent nearby. ‘Everyone was going, ‘We can’t refi? How can we afford this?’ she said. ‘Everyone was just shocked.’
Watch out for that tree California. Now that we are seeing defaults “in the formerly hot markets”, people forget that foreclosures lower prices, more default, and so on.
Dumbest. Generation. Ever.
I remember a quote from way back that went something like this:
“It was our equity that we cashed out. I don’t see why we have to give it back.”
Bahahahaha … dumbest generation ever.
EVER!
“It was our equity that we cashed out. I don’t see why we have to give it back.”
I guess they don’t understand what a loan or collateral are.
“Monaliza Botello said she was surprised when her father, who brings in $4,500 a month, last year secured a loan requiring a $4,000 monthly payment.”
I guess this is what happens the lenders face no consequences in case of default.
Moar please. MOAR!
Another one bites the dust:
‘Paul Ryan Sees His Wild Washington Journey Coming to An End’
https://www.politico.com/magazine/story/2017/12/14/paul-ryan-retire-speaker-ready-leave-washington-216103
I’m sure that he’ll be handsomely rewarded by his corporate overlords for everything that he did for them. Now must be the right time to cash in.
Lots of finance and lobbying jobs will be available to him. I saw the other day that former Florida U.S. Senator Mel Martinez, who I wrote in 2008 urging a vote against the bailout (and received the most anodyne form e-mail in response), now works for JPMorganChase. It’s all good!
This is happening for a reason. Paul and others one step ahead of the sheriff. Bye, Paul! Don’t let the door hitya where the good lord splitya.
The sheriff? Nah, the global corporatist puppet-masters have another job for him to do. Nothing to see here, move along . . .
I gotta hand it to Trump. He is just crushing the high housing price blue state fools.
And now they can’t deduct their far left wing union dues anymore either!
They want bigger and bigger government? They want more and more socialism? They want more obamas and Hillaries?
Now they are going to pay for it.
++++
Study: New Tax Bill “Shafts” Working Entertainers But Stars Are Untouched
http://www.hollywoodreporter.com | Dec 14, 2017 | Jonathan Handel
Congressional Republicans agreed on a new tax bill Wednesday and, while details are not yet available, it is known that both the Senate and House bills that preceded it would eliminate middle-class tax deductions for agent and manager commissions, union dues, training classes and other business expenses, while preserving deductibility of those items and more for top-earning talent, who typically use a mechanism called loan-out corporations, which are unaffected by the proposed change.
As a result, some working actors would see their taxes almost quadruple, according to an analysis by the stage actors union Actors’ Equity.
“This bill is not policy, it’s payback,” said California Association of Realtors chief economist Leslie Appleton-Young, who has been monitoring and analyzing the legislation.
…because of their high expenses, working- and middle-class entertainers do itemize, and for them the tax bill looks to be a disaster. They lose the personal exemption and the deductibility of business expenses and SALT.
‘This bill is not policy, it’s payback,’ said California Association of Realtors chief economist Leslie Appleton-Young’
She sounds kinda testy.
I am sure she was all UPSET when obama said he was going to bankrupt the coal industry…
Another ho ho ho.
“God bless us - every one”
God bless our educational system. The envy of the world.
🤣
Not trying to defend our education industrial complex, but aren’t other countries citizens even more prone than ours to buy into bubbles and gambling? House prices in kiwiland are at bay area levels, but with a third world economy.
What is to keep these ordinary actors from forming an LLC so that all their expenses are “business Expense”?
HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA.
Best part about the tax cuts: I get more money
2nd Best party: watching the liberals squirm
We all lose the exemption…nothing to do with itemizing.
Haverhill, FL Housing Prices Crater 18% YOY As Housing Demand Plummets To Record Lows
https://www.movoto.com/haverhill-fl/market-trends/
Bad news for soyboys and beta schlubs:
https://www.theguardian.com/commentisfree/2017/dec/14/men-sex-survey-scientists-abs-biceps-gender-stereotypes
Thousands of years of evolutionary biology won’t be reversed because #MuhFeelings
+1 goon.
Those “troubling studies” of rating women’s body parts have already been done on women, many times over. It was authoritatively found that the most desirable women had a waist to hip ratio of 0.7. Across the board, regardless of race or nationality or time period. Even modern-prehistoric tribes in New Guinea liked 0.7.
A 0.7 ratio in women is an indicator of youth, health, and fertility. Muscular structure in men is indicative of the ability to father healthy young. Fact. Sorry, soyboys.
Liberals on Monday: #SCIENCE!!
Liberals on Tuesday: How dare you say that biology means anything? If a person with a pe - n ! s wants to be a girl, that is their right. And if you disagree you are literally worse than Hitler.
You’re talking like the transgender kid parents at my sons’ high school.
What genders are its parents?
Oxide,still hit holding silver?
Best mining stock ?
Paas ?
Every time you say “Paas” all I can think of is the annual Easter Egg dyeing kits. Shows what I know about precious metals.
(FYI to you lurkers, PAAS is Pan American Silver. It also means “platform as a service,” another crappy IT invention.)
Every time you say “Paas” all I can think of is the annual Easter Egg dyeing kits.
Me too.
Good gosh, I don’t invest in silver, although I probably should.
Investment? Meh. Maybe, but I see it more as an insurance policy/store of wealth. Junk silver will be especially useful in a SHTF scenario as it is in small enough denominations that it will be easy to use (same is true for ammo - will make a great currency, and also useful to ward off those who want to take your silver).
“Thousands of years of evolutionary biology won’t be reversed…”
The Economist science section has similar stories that suggest the beta(s) pay the monthly bills while the alpha(s) provide the swimmers when she is in reproductive mode.
House not too far from me just came on the market for 3,050,000 - a little out of my price range, lol. Anyway, bought by infestor back in 2015 for a flat 3mil. Its less than 2K sq ft on a 10K sq ft lot, but big ocean view on a fancy golf course. Still, it does not compute. Anyway, since that time the HOA fees have gone up more than 10% (getting close to a cool grand a month) and because its investor owned the prop taxes went from 15K/yr to 21K/yr. In this same development which first debuted at the height of bubble 1.0 lots that were going for 1.2M were going for half that in foreclosure about 3-4 years later.
That is some seriously dumb money, and there is so much of it out there - people who are buying bitcons or shares in gourmet grilled cheese companies. Nothing but fraud from sea to shining sea.
Medfield, MA Housing Prices Crater 10% YOY
https://www.movoto.com/medfield-ma/market-trends/
Last year Connecticut raised taxes to balance the budget. Also last year, Aetna, announced it was leaving the state after 150 years plus of being HQed in Hartford. This happened after GE announced it was leaving CT several years ago. And with it of course, taking thousands of highly paid, highly skilled employees who will no longer be paying any taxes to CT.
This year, only 1/2 way through the fiscal year and already they are already $208M in the hole.
So the solution of course is to spur growth by cutting taxes and attracting new businesses right? No silly. It’s a Democrat run state. The solution is to increase taxes even more.
The stupidity on the left….it burns.
At this point, GE is no big loss, really. Many of those thousands of highly paid, highly skilled employees will no longer be paying taxes to anyone, because they’ll be looking for another gig. Hope they sold their house in CT, though. They’re gonna need the $$.
Take note when a major corporation moves to another state. Could be a sign of trouble.
You mean like how California corps are fleeing? And they think this tax reform bill is a problem.
More like how members of Congress are fleeing. GE is having a bit of difficulty, at present. They won’t be able to afford being in Mass, either. Who leaves Connecticut to relocate to Mass? Jeebus.
https://money.usnews.com/investing/stock-market-news/articles/2017-09-27/lights-out-has-general-electric-co-ge-hit-bottom
Likely Malloy (CT Governor, and a humorless prick if there ever was one) knew there was trouble coming, since he didn’t try too hard to keep GE.
https://www.nytimes.com/2017/11/02/business/ge-corporate-jets.html
30 year old Mayor of New Britain….maybe running for gov in 2018????
https://www.nbcconnecticut.com/news/local/New-Britain-Mayor-Erin-Stewart-Elected-for-3rd-Term-455986803.html
http://variety.com/2017/biz/news/dustin-hoffman-2-1202641525/
Over/under on the total number of accusers with Hoffman? I’m thinking 15…he’s been a famous actor in Hollywood for a long time.
Procter & Gamble, Kellogg’s drop USA Gymnastics sponsorship after sex abuse scandal
http://www.dailynews.com/2017/12/14/procter-gamble-kelloggs-drop-usa-gymnastics-sponsorship-after-sex-abuse-scandal/
“The moves come against the backdrop of longtime former U.S. Olympic and USA Gymnastics team physician Larry Nassar of pleading guilty to federal child pornography charges and state sexual assault charges in Michigan.”
“More than 140 former gymnasts and young athletes also allege in civil lawsuits filed in several states that Nassar sexually assaulted them as teenagers or younger and that USA Gymnastics and three of its former chief executives as well as former U.S. national team directors Bela and Martha Karolyi created a culture of abuse within the sport that enabled Nassar’s abuse.”
“Olympic champions Gabby Douglas, McKayla Maroney and Aly Raisman, three of the stars of Kellogg’s 2012 national tour shortly after the London Olympics, have recently confirmed Nassar sexually assaulted them at major international competitions like the Olympic Games and World Championships as well at the Olympic Training site on the Karolyi’s Texas ranch.”
“SCNG reported earlier this year that USA Gymnastics reached a confidential out of court settlement in California prior to this year with a former Olympic gymnast who alleged she was repeatedly sexually assaulted by Nassar as a teenager.”
“sexually assaulted them as teenagers or younger”
Hoffman is finished… a criminal if two of those accounts are accurate.
He should have taken that advice and went into plastics instead.
One my all-time favorite films … not sure how it would be received if it came out today, probably deconstructed with post-modernist ideology and ruined for everyone. “Mrs. Robinson, you’re trying to seduce me. Aren’t you?”
#MuhAmenities:
http://www.picpaste.com/20171214_151131.jpg
David and I wired this pool and spa this week. We piped all the PVC down to the lights, used the crimper and acorns to ground each corner, the stair railing, and the metal ladder into the deep end. The PVC all runs into the planters behind the spa at background. Lots of “brick watching” i.e. watching the brickies build up each course of the planter then hurrying to install our lights, receptacles, and spa timer and emergency stop. Here seen from the roof of 2nd floor amenities (fitness center, yoga room, etc) where today we pulled in our jetline for all the random sh*t on the roof. David piped all of the amenities electrical room by himself, and it looks really, really nice.
I’ll never work in an office again unless I’m building that office
What’s the light blue stuff on the ground?
looks like insulation
Yes, but insulation on the ground outdoors? To keep the concrete from freezing?
Foam. When they pour the concrete it will all be covered. I’ve never worked on a pool that wasn’t buried in the ground before this. It’s on the 2nd level above future restaurant/retail.
This is the first building on one of the largest open patches of open dirt in central Denver. 2 more 300+ unit apartment buildings just like this one, an office, and a hotel, on the site of the former University of Colorado Medical School, will be built here.
https://www.youtube.com/results?search_query=the+replacements+for+sale+live+at+maxwell%E2%80%99s+1986
Sparkie….. If you ever run into a spec where you’re required to encase Al conduit, advise your engineer he’s rolling the dice. This week we had to parallel an existing ductbank that required partial demo with a new one. Crawled out the hoe ram, started chopping concrete and was shocked to find aluminum conduit. Randomly, the conduit just basically dissolved presumably from contact with the concrete. Plain out holes here and there. I’ll post a pic later.
PS- Those acorns don’t meet NEC if you’re burying them for a ground ring. Cad weld only.
Hammond, OR Housing Prices Crater 13% YOY
https://www.movoto.com/hammond-or/market-trends/
instead of business cycles we now have FED cycles.
Hey IT peeps whats your take on this……
Author: Garrett M. Graff 12.13.17 03:55 pm
How a Dorm Room Minecraft Scam Brought Down the Internet
https://www.wired.com/story/mirai-botnet-minecraft-scam-brought-down-the-internet/
Interesting. It was kind of inevitable as all these cheap devices get connected to the internet. I’m not surprised that it was gamers that came up with it. I just thought the last part was funny where they figured out the ad clicks use for it. What’s better than revenge? Money.
“I just thought the last part was funny where they figured out the ad clicks use for it. What’s better than revenge? Money.”
Yup, $100k/month… chicks for free!
And many of the network providers maximize their profits by dynamically increasing their customer’s bandwidth per demand.
‘A draft statement former FBI Director James Comey prepared in anticipation of concluding the Hillary Clinton email case without criminal charges was heavily edited to change the “tone and substance” of the remarks, a Republican senator said Thursday.’
‘Some of the edits proposed to the May 2016 draft, obtained by The Associated Press, appear to soften the gravity of the bureau’s findings. Comey, for instance, initially wrote that the FBI believed that Clinton and her aides were “grossly negligent” in their handling of classified information, language also contained in the relevant criminal statute.’
‘But the text was edited to say they were simply “extremely careless” in their use of a personal email server, a phrase Comey adopted for his July 5 public announcement that the FBI would not be recommending charges.
Comey’s ultimate statement also omitted language asserting that the “sheer volume” of information classified as secret at the time it was shared made it reasonable to believe that the former secretary of state and her aides were grossly negligent.’ In addition, while Comey initially said it was “reasonably likely” that “hostile actors” had gained access to Clinton’s email server, the text was edited to say that such an intrusion was “possible.”
‘Though the FBI had not yet interviewed Clinton, then the Democratic candidate for president, at the time the statement was drafted, FBI officials had already determined that criminal charges were probably not warranted and had begun thinking about how to present that conclusion to the public.’
‘In a letter to FBI Director Chris Wray, Johnson said edits to Comey’s original remarks “appear to change the tone and substance.” He asked the FBI to identify the officials who had proposed the changes.’
‘The letter comes amid the disclosure of politically charged text messages sent by one of the agents on the case, Peter Strzok, in 2015 and 2016. Strzok, who was in the room as Clinton was interviewed, was later assigned to special counsel Robert Mueller’s team to investigate potential coordination between Russia and the Trump campaign.’
‘He was removed from that team last summer following the discovery of negative text messages about Donald Trump.’
https://www.apnews.com/074e7d62cbde455c8e72478aac1740b4/Senator:-Comey’s-remarks-on-Clinton-probe-heavily-edited
I wonder why we weren’t told about this last summer? And did you know only 300 of the 10,000 texts have been released?
How about that Peter Strzok? The He-Man, G-Man!
https://www.flickr.com/photos/expd/38147565895/
Guy said he could smell Trump voters when he went to Wal-Mart in Reston, VA. Kinda like Harry Reid complaining how the tourists in Washington have BO. I guess when you live and work in a place that smells like azz (DC) you become inured to it.
‘Top Republicans are turning their focus to FBI Deputy Director Andrew McCabe as they scrutinize a host of anti-Trump texts exchanged between two bureau officials, raising questions about one in particular that seemed to reference an “insurance policy” against a Trump presidency.’
‘That text was revealed on Tuesday night when the Justice Department released hundreds of messages between FBI officials Peter Strzok and Lisa Page, who were romantically involved and at one point worked on Robert Mueller’s Russia probe.’
““I want to believe the path you threw out for consideration in Andy’s office - that there’s no way he gets elected - but I’m afraid we can’t take that risk,” Strzok texted on Aug. 15, 2016. “It’s like an insurance policy in the unlikely event you die before you’re 40.”
“This [text] is the one that concerns me the most,” House Judiciary Committee Chairman Bob Goodlatte, R-Va., said, one day after Deputy Attorney General Rod Rosenstein defended the Mueller probe in testimony before Goodlatte’s committee.’
“Andy is presumably Andrew McCabe … and this text is very troubling because it suggests that they’re doing something, they have a plan to take action to make sure that Donald Trump does not get elected president of the United States at the highest levels of the Federal Bureau of Investigation.”
‘Chairman of the Senate Judiciary Committee Sen. Chuck Grassley, R-Iowa, also raised concerns about that message, penning a letter Thursday to Rosenstein — who oversees the special counsel probe since Attorney General Jeff Sessions recused himself earlier this year.’
“Some of these texts appear to go beyond merely expressing a private political opinion, and appear to cross the line into taking some official action to create an ‘insurance policy’ against a Trump presidency,” Grassley wrote Thursday. “Presumably, ‘Andy’ refers to Deputy FBI Director Andrew McCabe. So whatever was being discussed extended beyond just Page and Strzok at least to Mr. McCabe, who was involved in supervising both investigations.”
“Any improper political influence or motives in the course of any FBI investigation must be brought to light and fully addressed,” Grassley wrote. “Former Director Comey’s claims that the FBI ‘doesn’t give a rip about politics’ certainly are not consistent with the evidence of discussions occurring in the Deputy Director’s office around August 15, 2016.”
‘That text was just one of 10,000 messages the Justice Department was reviewing between Strzok and Page — and hundreds turned over to Congress that contained anti-Trump and other politically charged comments.’
http://www.foxnews.com/politics/2017/12/14/republicans-turn-focus-to-fbis-mccabe-over-texts-on-insurance-against-trump.html
I watched parts of the House Judiciary Committee questioning of Rod Rosenstein. I could be wrong, but I think Rosenstein is getting a bum rap. He was the one who recommended to Trump that Comey be given the gate. He brought the text messages to the committee for all to see and then took the heat. What it looks like to me is that he’s doing a deliberate takedown of the FBI, via the Mueller investigation, so that there can be no doubt about who and what this organization is. And he’s going to keep bringing the text messages in batches to the Committee for review and then sit down for the outrage. By the time he’s done, the FBI will have no credibility and as a result, no viability.
Effectively, he’s the AG of the US at this time. And frankly, he’s not doing too shabby of a job. I get that people think he’s a stonewalling weasel, but how bad can it be if he’s dragging out the dirty laundry? He’s not fooled by the dem Congresscritters blowing smoke up his posterior, either.
There’s more going on here, I think. I just hope I’m not giving him too much credit.
Dems turned FBI into KGB.
That’s Obama’s legacy.
What do they really do? FBI is more like the FBE (Federal Bureau of Entrapment). Anyone remember Abscam? Sometimes I wonder if we would have a whole lot less crime in this country if the FBI didn’t exist, because it seems more like they cause it or invent it than handle it. Get some poor loser all jacked up about something or other, pretend to be on his side, set him up to do some dastardly deed and then boom, kill him or come down on him.
And then there’s Lavoy Finicum, murdered in cold blood.
Are there any good people in democratic party? We all know about the pervs, the rapists, the corrupts, the shills, the fake indians…..now wife beater too?
“Carper’s deposition did include an admission that he gave his wife a black eye and spanked the children during the 1981 deposition, according to a report from New Journal.
“I slapped Diane one time,” Carper said in the deposition. “It was a stupid thing to do and I … regret it now. It caused some discoloration of her left eye and some puffiness.””
He spanked his children during a deposition? Wew, lad.
Hillary getting chucked into the van and a piece of metal falling out of her pants leg.
https://www.youtube.com/watch?time_continue=38&v=YzZl9j580tM
It never gets old.
https://www.youtube.com/watch?v=gbQaJrqekqU
Too late to get in on Chieng coin at ground level?
The Rise of Bitcoin and Other Stupid Meme Currencies
Clip12/14/2017
Ronny Chieng’s investigation into Bitcoin’s runaway valuation inspires him to create his own cryptocurrency — even if he doesn’t understand how it works.
“Every day it seems the stock market goes up triple digits… is it now, or will it soon become a worry for the central bank that valuations are this high?”
After a bit of double talk interspersed with gobbledygook, Yellen uttered the money quote:
”There is nothing flashing red there or possibly even orange,” on asset valuations…
Victor Dergunov
Bitcoin: The Big Short Is Coming
Dec. 15, 2017 1:46 AM • coin
Summary
- Bitcoin’s price has exploded in recent weeks, and with the most recent ramp up certain warning signs are beginning to emerge.
- As the price in Bitcoin has moved up seemingly exponentially in recent weeks many retail investors appear to be using cheap credit to accumulate expensive Bitcoin.
- Another troubling signal is coming from Asia, where South Korea and other governments are beginning to express genuine concern about the escalating “Bitcoin Mania”.
- Futures trading offers many favorable aspects for Bitcoin long-term, however, one big negative short-term implication is that Bitcoin can now be shorted on a mass scale.
- I certainly would not take out a mortgage to buy bitcoin at this level.
“- Futures trading offers many favorable aspects for Bitcoin long-term, however, one big negative short-term implication is that Bitcoin can now be shorted on a mass scale.”
On the other side of this statement, anybody who shorts bitcoin (or anything else) will have to cover if the price rises too far against his short.
This covering is done by buying - buying during the price rise. This buying to cover a short during a price rise adds to the price rise.
I will give u some tulips for some bitcoin.
HARP add
Low down
No credit
No appraisal
= kaboom
the tables are turning
Andrea Ramsey, a Democratic candidate for Congress, will drop out of the race after the Kansas City Star asked her about accusations in a 2005 lawsuit that she sexually harassed and retaliated against a male subordinate who said he had rejected her advances.
http://www.kansascity.com/news/politics-government/article189931704.html
Can’t find any body/leg shots of Andrea.