They Jump In Before It Gets Out Of Hand Even More
It’s Friday desk clearing time for this blogger. “Housing prices in the Flagstaff area continued to climb in 2017, sticking with a five-year trend of increasing median home sales prices. Realtor Stephen Brighton said Flagstaff is ‘basically at the top’ of the housing market again, noting the median price in 2017 was only $4,000 lower than in 2006, at the height of the housing bubble. Tammara Prager, the president of the Northern Arizona Association of Realtors, sad the high demand and low supply creates ‘a seller’s market below $450,000.’ However, for those who can afford to buy, housing values continue to climb, making it a good time to invest in a home, Brighton said. ‘People want to know the market is going up,’ he said.”
“Echoing shades of Reno’s bubble years, the Biggest Little City saw the largest spike in the country for homeowners borrowing against the equity of their house. The Reno metro area saw an 80 percent increase in home equity line of credit or HELOC originations during the third quarter of 2017, according to ATTOM Data Solutions. The numbers don’t come as a surprise, said Cory Henderson, a loan officer at Reno-based Mann Mortgage. ‘What’s pushed it is the appreciation of the last two years,’ Henderson said. ‘The market is not nearly as underwater as it was three years ago and all that untapped equity is being accessed by homeowners, which is a trend that will continue this year.’”
“The San Diego County median home price finished the year at one of its highest points. ‘People hear that housing prices are going up and they want to jump in before it gets out of hand even more,’ said Alan Gin, economist at University of San Diego.”
“There were 484 newly built homes sold in December, above the monthly average of 251 sales throughout 2017. The median for a newly built home was $606,250, down from a high of $792,250 in June.”
“There is optimism coming from some involved with economic development. With a larger-than-normal year for housing starts, and some see some positive momentum for Newton. If there is one negative, it could be a short-term oversupply of housing and commercial space. ‘I think we are on the verge of good things and some good times,’ said Ron Harder, a long-time real estate developer in Newton. ‘I think there will be a glut of places for a while. … But it is a chicken or an egg. Do you build first, or when people need them. If jobs appear, the house will be there.’”
“Julianne C. Ward, a real estate agent in Greenwich, speculated that homebuyers are more at ease with today’s market and with themselves. ‘People are more comfortable purchasing a home now, versus last year,’ she said. ‘People have money to spend — of course, they always had it, but now they have a little more. They are also confident in the economy, and prices are going down.’”
“Peter Hastings, principal at Hastings Real Estate in Wilton, noted that the luxury market is not without lingering difficulties. ‘There are too many houses in the luxury market,’ he said.”
“The housing market in Calgary this year will likely look much like it did in 2017, according to a forecast by the Calgary Real Estate Board. CREB’s 2018 forecast says stricter lending criteria introduced this year by Ottawa, coupled with slightly higher interest rates, should put downward pressure on prices. Ann-Marie Lurie, CREB’s chief economist, says that while Calgary is officially out of the economic downturn, the housing market continues to face challenges.”
“‘So even though sales activity increased last year, there was still just too much supply,’ she said, noting the condo market in particular has a glut of inventory.”
“London is becoming a ‘buyer’s market’ for househunters, according to Hometrack, as it revealed sellers are having to accept larger discounts for their properties. Analysis found that the gap between asking and achieved prices in the capital has increased from 0.5pc in 2014, when annual house price growth was as high as 20pc, to an average of 4pc today as demand has weakened. In some areas of central London, buyers are snapping up property with a 10pc discount from the asking price. This is also the case in Oxford, Cambridge and Aberdeen.”
“New figures show that housing prices in Norway are actually only falling significantly in Oslo, where they’d soared with double-digit increases. ‘The revised accounting method shows a stronger upturn in prices in Oslo through 2015 and 2016 and that they peaked earlier than what’s been reported. The peak didn’t come in April but in February of last year, according to the new numbers, and the downturn after that has been a bit steeper,’ said economist Øystein Børsum at Swedbank.”
“Egypt’s government plans to pour tens of thousands of new housing units onto the market in each of the next few years, but it’s not clear how easily the country can absorb them. Because of years of restrictions on sending cash abroad, Egyptians have been snapping up apartments and villas in new desert developments, confident that housing prices have nowhere to go but up. This rush to buy real estate has created a vast pool of housing, but it is unclear who will want to buy or rent them when their owners decide they want to cash in on their investments. Row upon row of houses now stand empty.”
“Measured in U.S. dollars, housing prices in Egypt dropped substantially after the government devalued the currency by half in November 2016. Wael Ziada, head of investment company Zilla Capital, estimates that prices have fallen to about $800 per square metre from $1,000 before the devaluation. ‘This is something companies will never tell you. They will not go below their headline prices,’ said Ziada. ‘What they may do is allow for a smaller down payment and a longer period so that the effective price will go down.’”
“Rents in Oman are expected to fall again in 2018, according to property experts, following the announcement of new visa rules that ban expat workers from specific professions, coupled with an oversupply of properties. Cluttons showed that rents in the country hit an all-time low in 2017. The Cluttons report shows that the market fell by 25 percent on average in 2017, but in some parts of the region around the capital, Muscat dropping more that 50 percent.”
“A report by Knight Frank shows Nairobi’s prime residential market has witnessed a price correction in recent years, as vendors adjust their price expectations. This is following a period of unprecedented growth from 2010 to 2012 when annual price growth exceeded 30 per cent annually. ‘New construction of prime residential properties is continuing apace in Nairobi and the abundance of supply ensures availability for those seeking bargains,’ Knight Frank Kenya managing director Ben Woodhams said.”
“Mass housing units are standing empty because there are no customers to take them up. Sophia Shaningwa, who is the Minister of Urban and Rural Development, made these revelations at a ground-breaking ceremony for the construction of 200 houses in Oshakati. ‘Today, as I am speaking, I am still stuck with houses that I cannot get customers for. I want those houses gone as in yesterday already, but if there are no customers there is nothing that I can do,’ said Shaningwa.”
“‘That is where our market is. And we are not going to fool ourselves that our market is of people with [the ability to spend] over N$500,000 to millions [on a house]. The people simply don’t have money,’ said Shaningwa.”
“China has been rife with investment frauds in the decades since its economic reopening led to a boom. But online versions have the potential to reach more people in a country with more than 700 million internet users, many of whom now conduct most of their financial transactions on smartphones. Investors in online products are often drawn by promises of high rates of return. Just four months ago, a Beijing court handed down a lifetime prison sentence to the founder of a $US9 billion online lending platform called Ezubao that authorities now say had been a Ponzi scheme.”
“Last summer, Chinese police arrested the head of Fanya Metals Exchange, which offered investment products promising double-digit returns, after it lost $US6 billion of investor money. One month later, investors in a company called Shanxinhui lost billions of dollars and many hundreds of protesters took to the streets. Kimi Wang, who watched the protests in Nanjing from a nearby government building, said he had deposited about $USUS79,000 into Qianbao. All of it, he said, was gone.”
“Many investors in Qianbao were told that the more money they put in, the higher the returns would be. Wang borrowed from an online cash lender and friends in order to add to his investment. It was the equivalent of seven or eight years of income for Wang, who does odd jobs like drive for the ride-sharing company Didi Chuxing. The damage, he said, is widespread. ‘Every Nanjing local has a relative or friend that used Qianbao,’ he said.”
“Sydney’s year-on-year house price growth has stalled to a 15-month low as a triple whammy of lending restrictions, increased building supply and first-home buyer concessions sparked price falls in pockets of the city. The lower north shore has gone from a vendor’s market to one where buyers wield more power, according to Belle Property real estate agent in Lindfield Geoff Dean. ‘When the market was booming and going [from] strength to strength, people were panic buying without giving it a thought,’ Mr Dean said.”
“Sydney home prices look set to fall for the fifth consecutive month as the current market downturn gathers momentum. Much of the recent slowdown has been the result of bank restrictions on loans to investors, particularly interest-only loans and those involving deposits at less than 20 per cent of the property’s value. The market wasn’t about to crash and was instead moving through a controlled slowdown that would only impact recent buyers, said CoreLogic head of research Tim Lawless. ‘Only the people that bought around the middle of last year or later will have seen a fairly subtle decline in the values of their property,’ Mr Lawless said.”
“The ringleader of a group that tried to rip off more than $20 million linked to pricey properties on Fort Lauderdale’s Las Olas Isles and Miami Beach was sentenced Wednesday to 15 years in federal prison. Marco Laureti, 46, of Sunny Isles Beach, also owes more than $8.3 million worth of restitution to the affected banks for his role in the crime. Laureti’s two days of testimony in his defense during his trial were ‘a festival of lies,’ prosecutor Randy Katz told the judge, urging him to give Laureti extra time for lying on the witness stand.”
“The former mortgage broker and real estate agent headed up a sophisticated fraud that involved filing fraudulent mortgage applications and closing statements, using straw buyers to purchase properties and paying kickbacks to people who helped them commit the crimes. The fraud centered mostly on multi-million dollar condominiums at 45 Hendricks Isle in Fort Lauderdale, as well as Laureti’s $6.9 million home and other properties in Miami-Dade County and Palm Harbor, north of St. Petersburg. The defense said Laureti did not intentionally commit fraud and had planned to make a lot of money by selling the properties and repaying the bank loans.”
‘Today, as I am speaking, I am still stuck with houses that I cannot get customers for. I want those houses gone as in yesterday already, but if there are no customers there is nothing that I can do’
It’s kind of embarrassing that places like Kenya, Egypt, Namibia can build plenty of shacks while Californians complain they can’t get it done.
‘There were 484 newly built homes sold in December, above the monthly average of 251 sales throughout 2017. The median for a newly built home was $606,250, down from a high of $792,250 in June’
Oh dear…
“She said banks should ensure that low-income earners also qualify for mortgages.”
What kid of Magic Dust do they have for that?
Does it make the low-income earners high-income earners or does it make the high house prices low house prices?
Does it make the low-income earners high-income earners or does it make the high house prices low house prices?
Neither. Simply assume houses always go up and it no longer matters if income matches the price. It’s just a bitcoin you can live in that can make its own interest payments.
“The people simply don’t have money,” said Shaningwa.”
Now she tells us.
“‘People hear that housing prices are going up and they want to jump in before it gets out of hand even more,’ said Alan Gin, economist at University of San Diego.”
Did he opine on what people want to do when prices are going down?
“There were 484 newly built homes sold in December, above the monthly average of 251 sales throughout 2017. The median for a newly built home was $606,250, down from a high of $792,250 in June.”
That’s a pretty big haircut for six months’ time! 23.4% if my calculation is correct.
PS We signed a lease for another year. If this early evidence a downturn gathers momentum, our landlords may discover that they missed their best chance to offload an aging money pit.
We reluctantly paid the 14% increase for another year. I never had the chance to negotiate further. The PM (a master at passive-aggressiveness) did not return my phone calls. I expect yet another anxiety filled year at the end of which we will move again, and I may lose my pets. These last eleven years have sucked. I haven’t been this angry about anything in a long, long time.
Hopefully this will be the year that rents and home prices finally start trending towards affordability. It could come about as a result of the Fed’s taking away the punch bowl, as nobody wants to hold on to falling knife investment properties in a rising rate environment.
Let’s hope.
Try not to catch yourself a falling knife.
You Thought Yesterday Was Bad For Mortgage Rates?
by: Matthew Graham
Feb 2 2018, 7:13PM
If you thought yesterday was bad for mortgage rates, you’re probably not going to be a big fan of today either. And since today is the end of a week, we could similarly say you won’t like this week if you didn’t like the previous example. That’s been true all year so far. And hey! Those week’s add up to a month (we’ll give yesterday and today a pass and consider them to be in the first month of 2018) so we can also say if you didn’t like the last month of 2017, you’re really going to hate the first month of 2018.
So what’s going on? Nothing outside the ordinary. The only problem is that “the ordinary” has involved bond market participants looking for almost every opportunity to sell bonds, thus pushing rates higher. Today’s focal point was the big jobs report in the morning. This data traditionally packs a big punch but it hasn’t been a big market mover recently. That appeared to change today, but the rate spike had more to do with the fact that traders were intent on pushing rates higher anyway and simply waiting to make sure the jobs data didn’t throw a wrench in the works. Granted, there was no way to know this would happen before it happened, but in any event, our default stance has been to assume rates will continue higher until they give us clear evidence to the contrary. Needless to say, we’re nowhere close to amassing any such evidence after days like today.
Rates are now officially at the highest levels in more than 4 years. The average lender is in the mid 4 percent range when it comes to quoting conventional 30yr fixed rates for well-qualified borrowers.
…
“Rates are now officially at the highest levels in more than 4 years. The average lender is in the mid 4 percent range when it comes to quoting conventional 30yr fixed rates for well-qualified borrowers.”
Which is still a stunningly low rate.
It’s a New Normal, for the New Era we have entered!
We just renewed for another year as well. LL proposed a token increase, but agreed to our counter to stay pat at the current rate.
My LL is a greedy bitch. She sounds like a piece of work, looked her up - child endangerment, animal neglect.
There are many deficiencies in the place which quickly became apparent - paint peeling (epoxy over flat), no division between zones ($600/mo. at 78 degrees in the summer with both on), drawers installed crookedly so they stick when opened too far, sink so old there’s no spray, dirt backyard, etc. An amateur half-done renovation - she called a halt on spending, according to the neighbors’ gossip.
We turned down the place initially. We ran out of time and under pressure (family member ill), went back and took it two weeks later.
The PM has an air of quiet suffering which I suddenly find amusing and will work to increase from here on in
I’ve been fixing minor repairs myself, as is always our custom; that’s over.
This is not bringing out the best in me; I think I’ve snapped. I’m thinking about leaving sardines in the curtain hems when I leave (they can have the curtains.)
“The PM has an air of quiet suffering which I suddenly find amusing and will work to increase from here on in
I’ve been fixing minor repairs myself, as is always our custom; that’s over.
This is not bringing out the best in me; I think I’ve snapped. I’m thinking about leaving sardines in the curtain hems when I leave (they can have the curtains.)”
LOL. Renting from private parties does suck. One thing I think I agree with Bill in Wherever about is that big corporations suck less. They seem to fix things in an expeditious manner and spend the money to keep the properties up to snuff.
“…child endangerment, animal neglect…”
I wouldn’t stick around…
Obviously, zero outlay is her goal.
I always felt if I could buy a $6 part and install it myself with instructions from youtube, why should I call the LL and cost them $$. I’ve always tried to be decent, and gotten nothing but crap in return.
Let the “I don’t show up for less than a hundred” handymen visits commence.
Let the “I don’t show up for less than a hundred” handymen visits commence.
Good luck getting them to come out.
That’s been our battle. I’m like you — it’s easier and cheaper when you consider the cost of our time to just fix little stuff ourself. And if we didn’t, the likelihood of it actually getting addressed is slim to none (tons of deferred maintenance on our rental as well)
We’ll see, but I’m afraid you’re right - over two and a half years and I’ve never called them for anything.
Greed is a terrible thing.
“Good luck getting them to come out.”
I have a simple rule of thumb on this stuff.
If it’s an inexpensive job that I can do myself, with no risk to the value of the property if I don’t, then I handle it without notifying the landlord.
If it’s an expensive job with costly consequences if not addressed, then we let the landlords know. They, in turn, follow a similar strategy: Fix it themselves if they can do so quickly and cheaply, and otherwise take care of it through their home warranty.
The trick is to understand when it is in the landlord’s interest to carry out a costly home renovation or repair, which is basically when a failure to do so would cause the damage and future repair cost to escalate.
The trick is to understand when it is in the landlord’s interest to carry out a costly home renovation or repair, which is basically when a failure to do so would cause the damage and future repair cost to escalate.
This assumes they’re rational and understand/care about the long-term cost.
I agree with your strategy, but in my case, the LL doesn’t seem to understand their own best interest.
That is good of you. Unfortunately, goodness seems to be rarely reciprocated.
Our first landlord here was a very good guy. It was downhill all the way after that.
Just an aside for my fellow conspiracy theorists - my husband just left for work at Mandalay Bay (he’s retired from a NYC inspector job, it gets us a good healthcare plan and he likes to work.) He was bitching about Laura Loomer skulking around and accusing the security staff (of which he’s one and was there that night) of being complicit in the shooting. They’re very angry at the implication but I’d bet she probably didn’t say that exactly (IDK). I replied sure, we all know nothing more was going on there but a lone gunman. He said yes, that’s true (he’s not into this stuff.) So the debate’s on when I see him in the AM.
Paso Robles, CA Housing Prices Crater 8% YOY
https://www.movoto.com/paso-robles-ca/market-trends/
‘On top of increasing prices, selection continued to be slim for buyers who were looking for a home at or below the median sale price. According to the Northern Arizona Multiple Listing Service, there are 15 homes in the city priced at or below $375,000. Of those homes, 11 are in Presidio in the Pines, in various stages of construction, Brighton said. Of the four other homes, two are in Sunnyside, one in Lower Greenlaw and one in Bow and Arrow. “And that’s it,” Brighton said.’
I realize almost none of you know the significance of this, but it should be noted there are hundreds, maybe more, of mobile shacks in Flagstaff. Old, weather beaten trailers. And yeah, they were priced up into the hundreds of thousands in the past and apparently are again.
Do they sell taco$ in the Flag? … Seem$ like an ea$y $olution to $olve their $ales i$$ues …
http://www.chron.com/homes/article/Houston-area-realtor-tacos-selling-home-12542835.php?google_editors_picks=true
LOL….Good one hwy….
Same here Ben. It’s ridiculous.
https://www.zillow.com/homedetails/140-S-Dolliver-St-Pismo-Beach-CA-93449/15456050_zpid
The price history on that shanty is so long the bust prices dropped off:
01/17/18 Price change $399,000-11.3%
01/03/18 Price change $450,000+12.8%
01/03/18 Listed for sale $399,000+11.1%
01/25/16 Listing removed $359,000
12/11/15 Listed for sale $359,000+20.1%
06/09/15 Listing removed $299,000
04/21/15 Listed for sale $299,000-10.7%
01/22/15 Listing removed $335,000
01/21/15 Price change $335,000-4.0%
12/01/14 Listed for sale $349,000
08/12/14 Listing removed $349,000
07/07/14 Price change $349,000+39.6%
05/02/14 Listed for sale $250,000+66.7%
12/11/13 Sold $150,000-62.0%
12/11/13 Price change $395,000+58.0%
12/04/13 Price change $250,000-36.7%
11/21/13 Price change $395,000+58.0%
11/18/13 Price change $250,000-36.7%
10/10/13 Price change $395,000+58.0%
10/09/13 Price change $250,000+4.2%
03/09/13 Price change $239,900-4.0%
01/07/13 Price change $249,900-16.4%
01/06/13 Price change $299,000
12/10/12 Price change $299,000+19.6%
12/08/12 Price change $249,900-16.4%
12/02/12 Price change $299,000-3.5%
10/05/12 Price change $310,000+24.0%
04/30/12 Listed for sale $249,900
A few of those lines of data seem particularly noteworthy:
01/17/18 Price change $399,000-11.3%
01/03/18 Price change $450,000+12.8%
…
12/11/13 Sold $150,000-62.0%
…
04/30/12 Listed for sale $249,900
It’s as though the current f-d owner thinks that by rejiggering the list price at levels all over the map and changing it by drastic amounts at a time, they will somehow attract a greater fool to purchase at far above market value.
Home selling aint’ fishun’.
Home selling aint’ fishun’.
Sounds like he’s wiggling that line pretty hard.
Here is another take on the listing price history since 4/30/12:
These are the prices for which the home was listed with no sale, from lowest to highest:
$239,900
$249,900
$249,900
$249,900
$250,000
$250,000
$250,000
$250,000
$299,000
$299,000
$299,000
$299,000
$299,000
$310,000
$335,000
$335,000
$349,000
$349,000
$349,000
$359,000
$359,000
$395,000
$395,000
$395,000
$399,000
$399,000
$450,000
So it seems like the market value may lie somewhere between the $150,000 sale price in 2013 and $239,900, the lowest price at which the home was listed but never attracted a buyer.
I know this park well…We stay across the street all the time…Have for many, many years…This location is top shelf as far as a small beach town goes…Although, there has been large investment going on in downtown Pismo…Tens of millions of dollars…
My favorite place;
http://woolyspismobeach.com/
Dave,
Do you stay at the campground?
Yes. Pismo has been building quite a bit after years of nothing.
Sam
Yes Sam. Have for 35 years going all the way back to the Sand Dunes days with the buggies and Quads. It’s our favorite place.
Pismo Beach and all the clams we can eat!
https://www.youtube.com/watch?v=qSzTDK5TAfY
LOL. Good one Ibbots
“…and then a right turn at Lajola…”
LOL!
Housing my good friends…. Housing.
Henderson(Foothills), NV Housing Prices Crater 13% YOY As Mortgage Defaults Skyrocket
https://www.zillow.com/foothills-henderson-nv/home-values/
https://snag.gy/m5EzRB.jpg
That’s a mobile home in a park where you do not own land. So, the value is in the actual space you rent each month? That makes absolutely no sense whatsoever. That’s not even real estate.
That’s a mobile home in a park where you do not own land ??
Its best not to open pie hole when you don’t know what you are talking about…Now, go figure out why I said that to you…
Is that the brain tumor or the hemorrhoids talking?
If we drive by that area, can we see you yelling at little kids to get off your lawn which is all of 8 square feet?
Betcha you got that drool thing going just like Kennedy too, lmao.
why I said that to you…
It’s called TRIGGERED
Check the facts Jack. Then talk to me.
But then again, facts don’t matter to Trumpeters like you BS
I don’t care if the person owns the postage stamp lot or just has “rights”. I’m only pointing out the antisocial disorder.
There is a globe full of land where 95% of it goes undeveloped.
Land is essentially worthless dirt. If you’re paying more than 500 to $1,000 an acre you’re paying too much.
Apparently you have no clue…it’s a double wide with a wet bar. You can’t just tow any old trailer into PIsmo Beach. You should know this.
You talking to me dude ??
I think Dave got started on the weekend’s drinking early today.
No I didn’t your just another Tumper who does not like “facts”. So “off with you to” Zerohedge.
Are you on this blog to fight with people, scdave? That’s what it seems like. Day in and day out you are attacking people. What’s the deal with you, anyway?
I rarely post toad. Been on this blog far longer than you.
You made a statement that was inaccurate but want to feel like and make everyone to think you know better.
“That’s a mobile home in a park where you do not own land. That makes absolutely no sense whatsoever. That’s not even real estate.”
So, like Blue Skye, Puggs & Karen I told you all to “check your facts”. All I hear is “crickets”. I have forgotten more then all of you know about real estate.
Housing my friend. Housing.
San Francisco, CA 94110 Housing Prices Crater 7% YOY
https://www.zillow.com/san-francisco-ca-94110/home-values/
https://snag.gy/m5EzRB.jpg
You seem completely unhinged.
scdave aka “the defender of trailer parks”
“the defender of trailer parks”
Another ignorant post. Check the facts Jack. But, that Assumes you have the ability to do so which is highly suspect.
I rarely post toad…
Fact is you rarely post anything but.
Just ignore him, Blue. He obviously gets off on these attacks.
You guys sound like bickering women. And bickering liberal women, at that. Is that what you want?
“bickering liberal women”
Now that’s a low blow.
So, like Blue Skye, Puggs & Karen I told you all to “check your facts”. All I hear is “crickets”.
This is getting hilarious. Not sure how to check the facts on this one.
Come here and let me smell your breath?
I would think Flagstaff being mostly/partially a 2nd home market that the tax law would drive down the prices. I guess not.
Ben, did you go to school at Northern Arizona University? Regardless, do you have an opinion on the place? One of my kids may go there…
No, I don’t know anything about NAU.
That is crazy. I graduated from NAU in 91. Nice town.
Did you find the opportunity to ski while in school there? My son likes skiing…
If you want access to some great skiing, check out University of Utah or Utah Valley University.
I was at the airport in Denver, and I saw people with skis. Vail, I queried? Utah… better skiing and snow.
Another son was accepted at the U, but he doesn’t ski.
I went to high school 10 minutes from Sundance. Not a terribly expansive ski resort, but good enough for me. I frequently ditched school and drove up the canyon to catch a half-day. There is something salutary about being in the mountains on a cold day when the sun is shining.
The Great QE Unwind + DJT new tax laws + higher interest rates = The Tipping Point
God Bless DJT
********
Fed’s QE Unwind Accelerates Sharply
by Wolf Richter • Feb 1, 2018
The Fed’s balance sheet for the week ending January 31, released this afternoon, completes the fourth month of QE-unwind. And it’s starting to be a doozie.
According to this plan, balances of Treasuries and MBS will shrink by $420 billion in 2018, by an additional $600 billion in 2019, and by additional $600 every year going forward until the Fed deems the level of its holdings “normal.”
In total, since the beginning of the QE Unwind, the balance of Treasuries has plunged by $30 billion, to hit the lowest since August 27, 2014.
For the QE Unwind, only Treasuries and MBS matter. And the Fed is shedding them — after everyone had said for years that it could never shed them. The Treasury market may be finally paying attention: The 10-year yield closed today at 2.78%, the highest since April 2014.
Put in this light, it seems like the bond market crash could morph into a slow burn that plays out for many years… similar to the 1966-1982 period (16 years long bond market crash).
Bitcoin or real estate - same con
******
The defense said Laureti did not intentionally commit fraud and had planned to make a lot of money by selling the properties and repaying the bank loans.”
‘When the market was booming and going [from] strength to strength, people were panic buying without giving it a thought’
Just like San Diego, Geoff. Funny how universal this behavior is.
Panic buying at the lower end continues in some areas. I guess it doesn’t stop until the low end going up meets in the middle with the high end going down.
Some good bargains on the high end, if you can afford it.
It’s kind of the way it always happens. Around here, the outlying areas are now inflating much, much faster than the prime areas as there’s a rush to buy in the “drive until you qualify” areas.
I remember when the last bust go rolling, there was a surreal period where asking prices in a sh!hole town were on par with houses in a much nicer area. That’s when you know it’s truly over, especially for the sh!thole areas. Those are the speculators who get burned to the ground.
*got rolling
sh!hole town ??
Is that Trump-Talk ?
“drive until you qualify”
Temecula and Murietta, both in Riverside County just north of the San Diego County line, were the last near-San Diego housing markets to inflate before the 2007-2009 housing collapse, as San Diego workers who can’t afford to live inside the county often opt for cheaper housing in these outlying areas in exchange for a three hours+ round trip daily commute.
I imagine this is playing out similarly in the present episode.
“Some good bargains on the high end, if you can afford it.”
Alas, a lot of what is now called “high end/luxury” used to be middle class/upper middle class, especially in the major metros. A cute little 2000sq ft craftsman reduced from $3mil to $2mil is still not even close to affordable.
Even that Pacific Palisades mansion last month with a 44% price cut still sold for $4mil+, a ton of money in price and in taxes. So not only are there way more mega-mansions than there are rich people, average houses have become “luxury” too.
The years of compounding double-digit increases is going to be truly shocking to unwind. Ben posted a Compton house price history with a 482% increase since the last crash. That’s going to require an 83% price cut to unwind, in Compton. The luxury houses, when they meet the reality of the infinitesimally small number of people who can actually afford to buy and maintain them, will need even bigger cuts.
I follow some of the housing markets in New England (one in Connecticut and one in Rhode Island) that have mansion type houses. Those houses are taking some heavy hits. While the run of the mill mid 20th century built stuff (split levels, ranches) is out the roof for what it is.
And in fact, some of the Brady Bunch stuff is pretty close in price to more gracious, spacious homes. However, those homes have the future liability of higher maintenance. So rather than pay a little more for something that is twice the house and twice the value, they’ll stick to a grossly overpriced POS on half an acre or less.
people were panic buying without giving it a thought
I remember people lining up and camping out, for days and even weeks, to buy a new, still unbuilt house, sight unseen in San Diego county. Some people earned a living by standing in line for you. They’d have tents. It was like Black Friday, but for houses.
And that was over 20 years ago, before things really got crazy.
“The former mortgage broker and real estate agent headed up a sophisticated fraud that involved filing fraudulent mortgage applications”
rampant.mortgage.fraud.
‘China has been rife with investment frauds in the decades since its economic reopening led to a boom. But online versions have the potential to reach more people in a country with more than 700 million internet users, many of whom now conduct most of their financial transactions on smartphones.’
Savvy.
‘Kimi Wang, who watched the protests in Nanjing from a nearby government building, said he had deposited about $USUS79,000 into Qianbao. All of it, he said, was gone.’
Easy come, easy go, eh Kimi? It’ll only take you 7 or 8 years of driving a cab to get back to even, but what the hey! Save up for a ticket to the US, we’ll really clean you out.
Gambling with borrowed money. Just like US debt donkey home pretenders.
😁
It appears to me that many Chinese will lie, cheat and steal in order to look “prosperous” - more so than other cultures. Their government, their products, their cities, everything is one big scam it seems. It makes me doubt the supposed intelligence of the Hans as having such a high IQ; its reported that they test better in the US than in their native china, which again makes me wonder if they’re just good at cheating and this is another example of the lack of ethics.
Japanese seem to be quite the opposite. Now is this because in an island culture there’s less ability to hide your misdeeds or escape punishment? Or is it because of the style of government China has had for generations which has had little regard for life or liberty? I know when I buy a product I seek out Japanese made ones as I know the quality will be high and avoid chinese stuff as it will likely be junk.
“…and avoid chinese stuff as it will likely be junk.”
Isn’t it amazing how true this still is?!
And they’re starting to sell in the US non Chinese brand cars that are made in China.
Let the buyer beware.
https://cars.usnews.com/cars-trucks/cars-made-in-china
And good luck trying to find anything not made in China on Amazon - it’s the new Ebay IMO - I have been looking for 12VDC LED floodlamps or worklamps for my riding mower recently - “over 2000 results” on Amazon, with 99.99% of them being cheap, no-name Chinesium (with nearly all of them having 4.5 star or better reviews).
God help us!
It’s a weird thing, those reviews. Real Paper Tiger stuff.
I will say that, in some of the videos by US citizens living in China, I don’t see much trash or graffiti or homeless. The streets are clean and everyone seems nicely dressed, too. A lot of similarities with the former middle class of the US. I also don’t see a lot of obese folks with tatoos and flesh hanging out of tank tops. On the other hand, there are those shots of people wearing pajamas in public that Ben has posted. I guess that’s where Hillary got her oven-mitt fashions from.
It’s either 1920s America or 1960s America, I still can’t tell for sure. Except for the bubble…maybe that says 20s? But yeah…a mfg powerhouse with most of the urban population only one generation off the farm. A little low on sophistication but working hard and money to spend.
There isn’t the safety net or social tolerance to allow for much homelessness. Plus there are cheap places to live if you are poor.
It’s either 1920s America or 1960s America, I still can’t tell for sure. Except for the bubble…maybe that says 20s? But yeah…a mfg powerhouse with most of the urban population only one generation off the farm. A little low on sophistication but working hard and money to spend.
I don’t think it’s either. The culture is completely different, and that matters far more than the other things you mention. It isn’t America at all.
Asian Immigrants and What No One Mentions Aloud
https://educationrealist.wordpress.com/2013/10/08/asian-immigrants-and-what-no-one-mentions-aloud/
Here’s the business model. Out-of-stae-tuition is three times normal tuition. Colleges now want mainland Chinese, no locals please.
The business of higher education is business, not education.
Who do you think attends NYU?
I can believe it. One of my least favorite things about Chinese culture is that when lining (queuing) up is required, everybody tries to cheat. It’s part of why traffic there sucks so bad. If you can aggressively screw everyone else over to get to the front you’re not a jerk…you’re clever. And everyone else tries to do whatever you just did. It makes lines and traffic laws almost pointless.
The article just makes education sound like a giant version of standing in line for something.
“…everybody tries to cheat.
…The article just makes education sound like a giant version of standing in line for something.”
Having taught college classes full of Chinese nationals for a number of years, your comments describe the many of them who showed a lack of any interest in the subject and a free willingness to copy their friends’ assignments verbatim, including exams, in order to complete course requirements. I’ve never encountered so many brazen cheaters in any other life situation.
‘People hear that housing prices are going up and they want to jump in before it gets out of hand even more,’ said Alan Gin’
Click!
Realtors are liars.
….. and every closing a crime scene.
do u have crater taters with your crow?
Brand New and Super Empty Hotel/Casino in Las Vegas (Lucky Dragon)
Lucky Dragon Las Vegas is a brand new boutique-style casino resort designed to create an authentic Asian cultural/gaming experience.
https://www.youtube.com/watch?v=X5T4sxMEQB4
Lucky Dragon Las Vegas faces Foreclosure???
The title really says it all… we stopped down to the Lucky Dragon in Las Vegas. This hotel/casino opened in Dec of 2016, and has not made a loan payment since September.
https://www.youtube.com/watch?v=qydnHpIQNOs
Wow I had no idea. I was thinking about changing my clinical practice to target more mainland Chinese folks seeking medical care. I watched a video on the lucky dragon to learn about how they target chinese people (having the signs in Mandarin first, then the English below it). Now they’re bankrupt?! bad omen
Wealthy Mexicans are known to travel to Houston for specialized medical care (surgery, etc.)
And poor Americans are known to travel to Mexico for surgeries too.
Buyer beware
is it a good time to btfd?
It is always a good time to btfd.
It is always a good time to borrow money in order to btfd.
Always.
With borrowed money, of course!
It’s a good time to avoid fomo by btfd and hodling, for sure.
Bitcoin is bottoming, expect a 70 percent surge: Trader
Bill Baruch
Published 4 Hours Ago CNBC.com
Bitcoin sell-off marks buying opportunity
The old saying goes, “buy when there’s blood in the streets,” and that’s what I’m doing with the recent bitcoin price action.
Bitcoin traded to a low of $7,700, this level is a loss of 25 percent on the week and 40 percent on the year. That $7,700 low is ironic because it is the same level that it broke above and began a parabolic ascent in mid-November.
I am watching a key level at $8,650 and a continued close above that could signal immediate upside potential. The next level of resistance is $10,000, and a break back above that should bring further buying to the table, suggesting near-term upside to $14,500, a 70 percent jump from its current price.
https://www.cnbc.com/2018/02/02/bitcoin-is-bottoming-expect-a-70-percent-surge-trader.html
Bitcoin hit a low of $7,540, then went absolutely parabolic to $8,579. It had to be a glitch of some sort. I remember those sorts of inexplicable moves when crude oil was in the death throes after its massive climb to $145.
Bitcoin is resting at ~$8,700 right now. My guess is it’s going to sell off hugely again at any moment. The trend is most definitely down, and $8,700 is eye-popping still, given this:
$8,749.46 Bitcoin price
+$7,745.00 Since last year (USD)
+771.06% Since last year (%)
its a great time to buy. tippy toe back in.
Still resting:
$8,729.00 Bitcoin price
−$71.00 Past hour (USD)
−0.81% Past hour (%)
Got brass balz?
Testosterone pumping up bitcoin bubble
Cryptocurrency craze overwhelmingly male just like countless past bubbles
Tue, Jan 30, 2018, 07:00
Proinsias O’Mahony
Data showed that 96.7 per cent of the visitors to one bitcoin-related website were male.
The bubble in bitcoin and other cryptocurrencies is almost unique in terms of price gains. Excluding the Dutch tulip mania of the 17th century, no other bubble in financial history can compare. In one respect, however, today’s cryptocurrency craze is just like countless other past bubbles – it’s an overwhelmingly male affair.
Duncan Stewart, director of research at Deloitte Canada, last month noted Google Analytics data showing that almost all – 96.7 per cent – of the visitors to the bitcoin-related Coin Dance website are male. While an unscientific way of measuring the matter, the Coin Dance figures are “backed up by other surveys, attendance at conferences, and my own interviews with millennial investors in North America and Europe,” commented Stewart. “I have been to multiple bitcoin and cryptocurrency conferences, and they have all been around 95 per cent male.”
The stats are relevant for two reasons, he argued. Firstly, they add weight to the argument that bitcoin is a testosterone-fuelled bubble, driven by animal spirits rather than cracking fundamentals. Secondly, they are a reminder that market bubbles in general may be a male phenomenon.
https://www.irishtimes.com/business/personal-finance/testosterone-pumping-up-bitcoin-bubble-1.3367036
Secondly, they are a reminder that market bubbles in general may be a male phenomenon.
Maybe the purely financial plays are largely male, but the home buying bubble has a lot of women pushing it (as both used house sellers and buyers.)
I always think about this expose that captures the zeitgeist of the romanticism behind housing:
HGTV depends on the dream that has been with us since the saltboxes of New England and the Spanish bungalows of Southern California and the Leisuramas of Montauk: that if you can just get the right house — the one that looks like your friends’ houses look, only a little bit better — your family will pour into it, like thick cream into a pitcher: smooth, fluid, pleasing. Who could get a divorce in a house with so many lush towels rolled up in the master bathroom? Who could raise a sullen teen when there is a “great room” where the family can gather for nachos and football on the big screen?
http://www.vulture.com/2017/09/the-ugliness-behind-hgtv-never-ending-fantasy-loop.html
“The Memo” is out. The main takeaway is that the FBI concealed information from the FISA court to get a warrant to spy on Trump.
Here’s the broader implication: any unrelated cases that involved agents from the FBI or attorneys with the DOJ named in the memo (or involved but not named in the memo) are now open to question. What a clusterfark.
Attorneys rushing to the courts in DC to file on behalf of their clients.
FBI concealed information = dirt made up and paid for by the democrats and the obama administration in order to destroy a political rival by using the courts and national surveillance assets.
Let that sink in for a moment.
The massive corruption of the obama administration.
In a nutshell, yes, but the unintended consequences are major. The choice is to tie up the courts for years, or reverse all the cases involving the people named.
Notice the media isn’t saying what in this memo was a “threat to democracy”.
Threat to democracy?
Anything that shows the massive corruption of the obama administration and the fake legacy news media efforts to cover it up.
What does that even mean, “threat to democracy”? It drives me batty when I hear this, considering the US is NOT a democracy to begin with.
However, there is a constitutional crisis occurring. We have a sprawling agency that doesn’t even have a Federal mandate, was never created by any law, purporting to be the “seat of government”, controlling, threatening and dictating to the co-equal branches of government. How did that happen? Dissolve it. The only difference we’d ever notice is that the US would be a much pleasanter place to live.
Is it a coincidence that the FBI and the Federal Reserve were both gifts of Teddy Roosevelt?
Federal Reserve was a gift from Woodrow Wilson.
https://www.federalreservehistory.org/essays/federal_reserve_act_signed
I see where Teddy urged AG Bonaparte to form an investigative unit, and this was accomplished by Bonaparte while Congress was adjourned.
Congress has been spineless for a long time.
I like Teddy, though. Sorry to hear of his role in this.
The threat to democracy is the left thinking that the unrestrained, unaccountable security state is its friend.
“in order to destroy a political rival by using the courts and national surveillance assets.”
Weaponizing the FBI kinda like weaponizing the IRS against a political opponent?
Come on.
Next thing you’ll be telling me they are trying to make it cool to demonize an entire group of people like white men.
Why this is all Looney talk and was only done by, well you know who it was done by.
Speaking of looney talk, Jimmy “The Weasel” Comey is out with another incoherent tweet. I’m not even going to bother posting it. The guy is in outer-space, which would account for the behavior of the agency while it was under his leadership.
what’s interesting is that the UK looks to have been the bad state actor in the whole issue. Doesn’t surprise me, though.
As far as Russia, from what I now know about Uranium One and other stuff, it looks as if Putin and/or Putin’s people were playing both ends against the middle. Russia is no friend of the US. Maybe some day, but not now. I think Trump realized this a while ago. Seems like Trump was the only one NOT involved in Russian conspiracy. I have some serious questions about Jeff Sessions and his relationship with Ambassador Kislyak. I’m not so sure his only contact was two brief meet and greet social occasions that just happened to “slip his mind”.
Well, whatever.
Kissimmee, FL Housing Prices Crater 12% YOY As Housing Demand Plummets To 20 Year Low
https://www.movoto.com/kissimmee-fl/market-trends/
crater!!!!
‘the Biggest Little City saw the largest spike in the country for homeowners borrowing against the equity of their house. The Reno metro area saw an 80 percent increase in home equity line of credit or HELOC originations during the third quarter of 2017…‘What’s pushed it is the appreciation of the last two years,’ Henderson said. ‘The market is not nearly as underwater as it was three years ago and all that untapped equity is being accessed by homeowners, which is a trend that will continue this year.’
From that article:
‘Here are the top five metropolitan statistical areas based on their percentage jump in number of new home equity lines of credit opened during the third quarter of 2017.’
Reno, Nevada: 80 percent
Fort Wayne, Indiana: 74 percent
Peoria, Illinois: 46 percent
Bremerton, Washington: 45 percent
Dallas, Texas: 43 percent
reno gets a lot of the disgruntled ca transplants cause it so close. home prices are ridiculous up there.
I guess oj was up in some prison past fernley for awhile.
“The Reno metro area saw an 80 percent increase in home equity line of credit or HELOC originations during the third quarter of 2017…‘What’s pushed it is the appreciation of the last two years,’ Henderson said. ‘The market is not nearly as underwater as it was three years ago and all that untapped equity is being accessed by homeowners, which is a trend that will continue this year.’”
No dollar will be allowed to escape. Not one.
Is there any restriction in what the people of Reno can spend their HELOC money on? Can they get boats and boob jobs? If they are spending the $$ on home improvements, wouldn’t they get a straight home equity loan instead of a HELOC?
No restrictions. Starting in 2018 though, interest paid on a HELOC is no longer tax deductible. That may be one reason why there was a surge in HELOC’s in the final quarter of 2017 since they’d be grandfathered in I believe.
I checked some airfare recently into Reno for a Tahoe trip. Prices were considerably more than going into Sacto or Oakland for some reason.
interest paid on a HELOC is no longer tax deductible ??
That’s not totally correct as I understand it. If the HELOC is used for improvement to the house the interest is deductible.
And not to mention that not a single one of these HELOCs are supported by an actual appraisal. Zero appraisals..
all u need to do is jump on zillow bro.
Reno, NV is in the biggest bubble of any place in the United States. It was last time, too, and was one of the biggest busts. $15 per hour is considered a good job there.
‘the Biggest Little City saw the largest spike in the country for homeowners borrowing against the equity of their house. The Reno metro area saw an 80 percent increase in home equity line of credit or HELOC originations during the third quarter of 2017′
Is it a given that the U.S. taxpayer will have to bail out these debt-drunk profligates again after the next recession wipes them out (again)?
Or might things turn out differently, now that Obama and Gentle Ben area gone?
Public union goons getting gobs of taxpayer monies to live in self segregated luxury apartment at below market rates while the remaining parts of the long term democrat/union control city (bought and paid for by public union goon campaign donations) crumbles for the rest of the taxpayer fools without public union salaries/benefits and pensions.
And they see nothing wrong with this.
++++++
There’s a brilliant $150 million ‘Teachers Village’ in Newark
Melody Hahm - Yahoo Finance - February 1, 2018
There’s a luxurious 400,000-square-foot complex in downtown Newark with a consignment store, nail salon, fitness center and cupcake shop. At first glance, it might appear to be a glossy page out of a playbook to revitalize the city.
But, the former parking lots were transformed with a very specific demographic in mind. The six buildings actually make up Teachers Village, a new development of three charter schools, a daycare facility, residential apartments marketed to and subsidized for teachers, and retail space that accommodates 20 different businesses.
With the help of state tax credits and investments from high net worth individuals and institutional investors like Goldman Sachs, TD Bank and Prudential, RBH Group embarked on a mission to create a space where teachers could live comfortably without feeling burdened by the cost.
Reduced rates for teachers
Teacher’s Village has 204 residential units ranging from studios averaging at $1,000 per month to two-bedrooms that go for $1,900 a month. Seventy percent of the rooms are specifically reserved for teachers and priced 10%-15% cheaper than the aforementioned market rates.
The remaining 30% of the units are open to all others (who have to pay full price). This was part of the financing arrangement, likely to hedge against too many vacancies and underwhelming demand from teachers.
On paper, teachers appear to have it easy with short work days and summers off.
In Baltimore, a former tin can manufacturer has been gutted and transformed into 40 units for teachers, complete with exposed brick walls and bamboo floors.
Last year, the city of San Francisco committed $44 million in public funds toward building 100 to 150 affordable housing units for teachers.
Teachers are required to live at their homes for a minimum of five years and will be fined if they sell or transfer the property before then.
After its success in Newark, RBH Group is venturing outside New Jersey to develop similar residential units for teachers across America. Beit has even trademarked the name Teachers Village. Currently, RBH has two projects under construction — one in downtown Hartford, Conns., and one in East Humboldt Park in Chicago. Neither development incorporates schools in the complex like the one in Newark.
“Having schools is not a traveling part of our model. But there will be a value-added component at each of our Teachers Villages. We’ll offer all kinds of coursework for the communities that we build in. Our vision is that you can sit in a European-style piazza, sipping on a cappuccino and learn in one space,” said Beit.
sell everything!
Why the sudden freak-out over higher rates? The Fed has only been saying they were going to do this for, what, ten or so years already?
This is why the Dow is plunging
by David Goldman
@DavidGoldmanCNN February 2, 2018: 4:35 PM ET
Stocks were pummeled on Friday, capping the worst week in two years. Here’s what’s going on.
1. Concerns that the Fed will raise rates
Stocks have been rising steadily since the election in part because the economy is so strong. Unemployment is historically low, and there are more open jobs than people to fill them.
Companies are starting to pay workers more to retain existing employees and attract new hires. Businesses will eventually have to raise prices on the stuff they sell to afford their growing payrolls. In economics, that’s called inflation.
Though the economy has been growing steadily for almost nine years, inflation has remained stubbornly and mysteriously low. The Federal Reserve combats inflation by raising its interest rates. The central bank has been unable to significantly raise its interest rates over the past decade, fearing it could stymie the economic recovery and perhaps cause prices to fall.
The Fed planned on raising interest rates slowly this year — just three times in 2018. But if inflation picks up, the Fed could raise rates more often and more steeply than it had planned.
2. Rising interest rates
When the Fed raises rates, the cost of borrowing money increases. That means companies have to pay more for their loans, which cuts into corporate profits. It also means Americans will pay more for mortgages and loans.
Another reason the stock market has risen so much over the past year has been the steady growth in corporate profits. Companies are healthy, and investors have rewarded them by pushing up their stock prices.
When interest rates rise sharply, stocks often fall. Investors worry that businesses’ profit parade will slow down.
3. Worries about the bond market
Stocks have also been on a tear because they have been one of the only investments with a decent return. U.S. Treasury bond yields have been so low that many stock dividends are paying better.
But stocks are a higher-risk investment than bonds, which are backed by the United States Treasury. If bond yields start to rise, investors will want to take some of their money out of stocks and put it into safer bonds.
Sure enough, bond yields hit a four-year high Friday. The recent tax bill has forced the Treasury to borrow more money, which will put more bonds into play. A supply glut could devalue bonds. Prices and yields move in opposite directions, and bond buyers will want a higher yield (and lower price) to make it worth their investment.
Inflation is bad for bonds, too. If borrowing costs increase, bond investors will want more return — a higher yield.
Attractive yields on a safer investment have made stocks suddenly less attractive.
4. Ugly politics
Politics has played a part in stocks’ steady march higher, too. The Republican tax cut is great for corporate profits. Investors have rewarded companies’ promises of bigger stock buybacks and dividends by raising their stock prices. Business confidence is on the rise, in part thanks to the Trump administration’s push to cut regulation.
On Friday, the controversial release of a once-classified memo about the Russia investigation gave investors pause. Turmoil in Washington could be bad for business. It could create a logjam in Congress.
It’s not top of mind for investors, but it’s adding to their concerns.
5. Too far, too fast
Stocks have been rising pretty much in a straight line since November 2016, and that’s not exactly healthy. Stock market analysts believe the stock market is long overdue for a 5% pullback or even a 10% correction.
…
Dow slides past 500 points.
About. Freaking. Time!
Buying opportunities ahoy!
we need some dovish comments from new fed head asap! wheel him out now before the close.
Here ya go…
Fed’s Williams tries to ease market fears the central bank will turn aggressive on rate hikes
Published: Feb 2, 2018 4:32 p.m. ET
Central bank has told the market rate hikes will be gradual and needs to ‘stick to that plan,’ San Francisco Fed President says
By Greg Robb
Senior economics reporter
Bloomberg
San Francisco Fed President John Williams has been mentioned as a candidate for vice chairman of the central bank’s board of governors in Washington.
The U.S. central bank should stick to the plan of gradual rate hikes even though the economy has shown such ‘buoyancy’ recently,” said San Francisco Fed President John Williams on Friday.
In a speech to the Financial Women of San Francisco, Williams insisted the Fed should not “have a knee-jerk reaction to all this positivity” about the economy.
Raising rates too rapidly could knock the expansion off track “and that’s the last thing I want to see happen,” Williams, who is a voting member of the Fed’s interest-rate committee, said.
In December, the Fed penciled in three rate hikes for 2018. Signs of wage gains in the January unemployment report won’t push the Fed to tighten at a faster pace, most economists said.
Still some Fed watchers are now forecasting the central bank might have to hike rates further and faster than expected, especially given the weaker dollar, rising oil prices, and fiscal stimulus from the Republican tax cut.
The 10-year Treasury yield hit a 4-year high after the strong January wage gains. As a result, stocks plunged, with the Dow Jones Industrial Average (DJIA, -2.54%) falling as much as 600 points and the S&P 500 (SPX, -2.12%) dropping around 2%.
In his speech, Williams noted that inflation appears to “finally” be turning higher toward the Fed’s 2% target, but added he did not think the economy was overheating.
“For the moment, I don’t see signs of an economy going into overdrive or a bubble about to burst, so I have not adjusted my views of appropriate monetary policy,” he said.
…
It will take a hell of a lot more than this for it to be a “buying opportunity.” The historic average dividend yield is 4.3%. Can we at least get 3.0%? That would require a nearly 50 percent drop.
Haven’t heard much about the “Fed model,” which related the stock dividend yield to the 10-year treasury rate, much lately have you?
greenspan was mumbling about the phillips curve a couple days ago.
when stocks start going down none of that bs matters.
if you are sitting on big gains in the market u are a dam fool to wait for more after this huge run.
hogs get slaughtered!
Albany, OR Housing Prices Crater 20% YOY As Housing Correction Expands
https://www.movoto.com/albany-or/market-trends/
this is trumps stock market now!
That “Poof!” you hear is the sound of pension plans all over the US.
Your family may want to read this.
Padded ‘calm-down’ room at charter school drives kids to anxiety attacks
“He was crying hysterically,” said Teneka Hall, 28, a full-time Washington Heights mom whose son, Xavier, was rushed to the hospital after he panicked and wet himself while he was holed up in the padded room. “It’s no way to treat a child.”
http://www.nydailynews.com/new-york/education/padded-calm-down-room-causing-anxiety-kids-article-1.1543983
This calm down technique works for my 3-year-old:
http://www.dailymotion.com/video/x2g8fom
Thank you.
Yes it is! Everything I invest in went up today. 666 down its most likely those loser companies who need to go down.
Teacher’s Village has 204 residential units ranging from studios averaging at $1,000 per month to two-bedrooms that go for $1,900 a month.
\
they retire in VA w 75% of pay at age 55
poor teachers?
Public education teachers in general have done a really bad job in recent years, as evidenced by the pitiful state of education and graduates. If they get pensions equal in quality to the product they’ve turned out, c’est la vie. I find it hard to shed a tear.
Teachers much be significantly better paid in NJ than in my neck of the woods. $1900 for a two-bedroom apartment is hardly what I would call a bargain.
There’s a run on banks in China and their stock market has been sliding down all week, is this the real reason our stock market is going down?
Watch “Bank Runs Break Out In China! Deutschebank Charged With Dollar Manipulation!” on YouTube
https://youtu.be/z4gJcxIcHBM
Yep. I mentioned this yesterday. Kind of interesting that the lamestream media doesn’t seem to have much to say about it.
You’re right. The MSM hasn’t made a peep about what’s going on in China. The MSM doesn’t want to spook us.
“The memo” is a distraction so we don’t notice the run on banks in China… Is there a domino effect coming?
Business
IMF On China: A Downturn is Inevitable
February 1, 2018 11:46 am by Rupert Hargreaves
A recent working paper from the IMF titled “Credit Booms – Is China Different?” provides a good summary of many of the key issues facing China’s economy. Rapid credit growth since the global financial crisis is record setting for both its total expansion and its duration. Credit is being poorly used with the most inefficient sectors and firms grabbing large shares of new debt. Banks have seen rapid growth in their size and complexity and when combined with a heavy reliance on short term funding this creates a major risk of a liquidity crisis.
Whilst using diplomatic language the working paper makes clear that China may be able to continue its current trajectory for the medium term but in the long term a downturn, likely accompanied by a banking crisis is inevitable. This paper reviews the key points from the IMF paper and adds commentary on issues that the IMF paper omits.
…
where is the PPT for trump?
(((they))) are trying to pull the pin on the grenade they created - and closing down 666 is no coincidence as the vampires in the deep state feel the noose tightening
Remember when they closed the S&P at 911 on 9/11 one year? Yeah, its not a big sham - look over there, something shiny!
“…closing down 666…”
It’s the sign of the beast.
i saw that today and also thought it was a weird coincidence. Time to listen to some mainden tonight.
Will powell be wheeled out on monday to save trumps presidency?
“time to listen to some mainden tonight.”
No Donk Craterton And The Stampedes?
is the selloff contagious crowman?
DebtDonkey
Boulder, CO Housing Prices Crater 8% YOY On Record High Vacancy Rate
https://www.movoto.com/boulder-co/market-trends/
azdude: Will powell be wheeled out on monday to save trumps presidency?
It depends on whether broad social prosperity comes from the bottom up or the top down. And whether it comes from the financial markets. They’ve tried 40 years of top-down.
even 91 year old senile greenspan can see these bubbles.
From the comments section in the Nairobi article:
“By the way, “the biggest issue [is not just] access to credit” for prospective local property owners, but its the influx of monies that have been pouring or being channeled into real estate by immigrants based in Europe, North America and the Middle East.”
So the unfettered flow of capital is not just a first-world problem.
Ford is selling $90,000 Lincoln SUVs faster than it can make them.
https://www.cnbc.com/2018/02/01/ford-is-selling-90000-suvs-faster-than-it-can-make-them.html
100K for a fancy F-150.
im sure most of the buying is from free money via home equity and stocks.
I caught that article yesterday. That’s absolutely amazing. Have we learned nothing? Americans are piling into SUVs and trucks again and oil is on the verge of getting expensive. We just bailed out the automakers a decade ago and a major contributing factor was that they were making uneconomical gas guzzlers that were decimating an already underwater populace. Many US car manufacturers are getting rid of making cars altogether:
http://www.chicagotribune.com/classified/automotive/sc-auto-cover-american-sedan-20180123-story.html
“It’s like deja vu all over again.” -Yogi Berra
how does the new fed chair powell calm the markets next week?
Or does he go silent and let trumps economy take a nosedive?
Im sure there are gonna be a lot of conversations this weekend by investors.
“Or does he go silent and let trumps economy take a nosedive?”
Why should Trump give a hoot? He can blame any nosediving on Obama, and take credit for fixing it going forward…
Lol, I got so caught up with the memo thing I forgot to read the story about the criminal mortgage broker and RE agent in South Florida. I noticed Hendricks Isle in Ft. Lauderdale mentioned in conjunction with multi-million dollar condominiums and busted out laughing.
Back during the 1980s, it was mostly a transient dump with cheap apartments on the water. There were a few nice houses there, but most people who lived there were new arrivals in town. With some small time drug dealers, grifters and prosties mixed in. For the most part it was pretty seedy. It was the “down-market” part of the Las Olas Isles, some of which were pretty nice. But not Hendricks.
How times have changed.
get on board the trump train! woohoo
Wrap it up, Mueller, and hit the road. Why the long face?
Dallas, TX 75214 Housing Prices Crater 9% YOY
https://www.zillow.com/dallas-tx-75214/home-values/
*Select price from dropdown menu on first chart
nincompoop
the median price in 2017 was only $4,000 lower than in 2006, at the height of the housing bubble.
11 years gone
When talking re folks ignore current vs nominal dollars
Subtract another 15%
we are highly dependent on inflating asset prices and financial engineering cause the real economy is terrible.
sunshine and lolipops b@tchez!
Da bears…
‘Bitcoin is in trouble’: the cryptocurrency has now lost half its value — and keeps falling
The bears have taken control
Bitcoin has dropped another 10 per cent today.
Bloomberg News
Eric Lam
February 2, 2018
7:43 AM EST
Bitcoin tumbled below US$8,500 as a miserable 2018 continued for cryptocurrencies, with investors confronting a mounting list of concerns about the future of the industry.
The largest digital currency dropped about 10 per cent to US$8,145 at 11:02 a.m. in London, the lowest since Nov. 21, according to consolidated Bloomberg pricing. Rival coins Ripple, Ether and Litecoin tumbled at least 16 per cent as losses continued to spread across cryptocurrencies.
Price action suggests that bears are clearly in control
Since reaching a record high of US$19,511 on Dec. 18 shortly after the introduction of regulated futures contracts in the U.S., Bitcoin has wiped out more than half its value amid waves of negative news. Setbacks included escalating regulatory threats from authorities around the world including India, South Korea, China and the U.S., a record US$500 million heist at Japanese exchange Coincheck Inc., fears of price manipulation and Facebook’s ban on cryptocurrency ads.
“Bitcoin is in trouble,” Lukman Otunuga, a research analyst at foreign exchange broker Forextime Ltd, wrote in a note Friday. “Price action suggests that bears are clearly in control, with further losses on the cards as jitters over regulation erode investor appetite further.”
http://business.financialpost.com/technology/blockchain/bitcoin-drops-below-8500-as-cryptocurrency-pain-continues-1
Bit-pop: Bitcoin rout deepens, down more than 40% so far this year
Heightened regulation and Facebook move have weighed on
myFT
Adam Samson in London 18 hours ago
Bitcoin is having a bad year, and it’s only February 2. The cryptocurrency has come under further pressure on Friday and deepened its 2018 loss to more than 40 per cent.
Bitcoin declined 12.7 per cent on Friday to $7,850 on the Bitstamp exchange, a major trading venue. It ended last year at $13,800, having climbed as high as $19,666 in a rally spurred by fizzing enthusiasm from a sect of retail traders and increasing interest from institutional investors.
Sentiment has shifted drastically this year, however, as the fledgling market has taken a number of blows. This week, Facebook banned advertisements for cryptocurrencies amid concerns that too many were being used to mislead potential customers.
The Securities and Exchange Commission also this week accused AriseBank and its co-founders of perpetrating an “outright scam” in an initial coin offering that purportedly raised $600m from investors.
In Asia, officials from Japan’s Financial Services Agency on Friday raided the offices of Coincheck, a cryptocurrencies exchange, to monitor its response to a $500m hack.
Thomas Lee, head of research at Fundstrat, said on Thursday that “headlines for crypto have been mostly negative lately”. He said now that bitcoin has fallen below $9,000 investors were “sidelined”, watching for the next support level at $7,800 to $8,000.
Mr Lee noted, however, that evidence of strong interest from millennials in bitcoin, along with signs that demand for bitcoin futures is rising, both represent “positive developments”.
“Bottom line: It has been a terrible few weeks but the fundamental positive story for crypto remains intact,” he said.
On Reddit, where thousands of users discuss the digital currency, sentiment was mixed. Some appeared to grow weary of the popular “hodl” mentality — a term widely used to mean that traders should hold on through declines.
“There is a point where it goes from being ‘buying the dip’ to ‘catching a falling knife’,” said one user. Another responded that it “feels a lot like Mt Gox days”, a reference to the ructions four years ago when Mt Gox, then the world’s biggest cryptocurrencies exchange, collapsed.
“Bitcoin is in trouble…”
Of course it is, because other than being bought with the sole intention of re-selling it for a higher price to a greater fool, what is it good for?
Take it from the highly animated Asian millennial: It’s cool to be a Bitcoin FB.
‘HODL,’ ‘whale’ and 5 other cryptocurrency slang terms explained
Ali Montag | @Ali_Montag
9:39 AM ET Tue, 23 Jan 2018
In recent months, everyone from celebrities like Jamie Foxx to businessmen like Warren Buffett have been weighing in on bitcoin and other cryptocurrencies.
With the growing attention, jargon that was once just used for inside jokes in early cryptocurrency chatrooms and on Reddit threads has now become a part of the dialogue.
You may see bitcoin enthusiasts on Twitter say something like, “Don’t listen to FUD, just HODL your bitcoin and head to the moon.”
So what does that mean? To make sense of such crypto-slang, CNBC Make It asked Peter Saddington, a serial entrepreneur and early bitcoin investor who runs a bitcoin community called The Bitcoin Pub, to break it down. Saddington first purchased bitcoin in November 2011 when one coin only cost $2.52.
Here he explains what HODL and six other terms mean.
…
The Financial Times
US Treasury Bonds
US bond market sell-off deepens after wage growth surges
Stocks slide as 10-year Treasury yield rises above 2.8% to highest level since January 2014
Robin Wigglesworth and Mamta Badkar in New York and Emma Dunkley in Hong Kong 7 hours ago
Wages of American workers grew at the fastest annual rate in almost a decade in January, accelerating a sell-off in US government bonds as investors begin to worry that long-dormant inflation may be returning stronger than expected.
The 10-year Treasury yield jumped to 2.85 per cent on Friday, its highest level since January 2014. The inflation jitters — this week’s rise in government borrowing costs was the biggest since immediate aftermath of Donald Trump’s election victory — also roiled global stock markets, sending the S&P 500 sliding towards its worst day since May last year.
The US equity benchmark’s 1.8 per cent slide by late afternoon in New York, coupled with another bad day for European stock markets, deepened the FTSE All-World index’s slump this week to 3.1 per cent — the worst since the turmoil of January 2016 triggered by a scare over Chinese economic growth. The Dow Jones Industrial Average lost more than 500 points, for a 2 per cent decline.
Although inflation and bond yields are returning to levels considered normal before the 2007 financial crisis, the sharp increase in wages raises the spectre that the Federal Reserve will now need to move more aggressively in tightening monetary policy this year.
“It’s all driven by bond yields,” said Rebecca Patterson, chief investment officer of the Bessemer Trust. “It’s not that the level is that frightening, but the speed of the move is causing anxiety.”
…
Holbrook, MA Housing Prices Crater 13% YOY
https://www.zillow.com/holbrook-ma/home-values/
*Select price from dropdown menu on first chart
Opinion FT
New Federal Reserve chief Powell a debt man walking
Yellen’s successor more sceptical of bank’s macro model and more aware of market risks
John Dizard
Jay Powell will not, at least initially, be able to voice his misgivings
“Meanwhile, we look like we are blowing a fixed-income duration bubble right across the spectrum that will result in big losses when rates come up down the road. You can almost say that is our strategy.”
The speaker is Jay Powell, US Federal Reserve chairman from Saturday, referring to large-scale asset purchases in the just-released transcript of the October 2012 Federal Open Market Committee meeting.
Is Mr Powell stepping into a dream or a nightmare? Becoming Fed chair should be a dream. Doors open as you approach, cars are waiting, calls are taken, grovelling is freely offered and no reservations are necessary.
This six-year-old transcript, however, shows he is more likely to feel he is in a “sleep paralysis” nightmare, where he is wide-awake but unable to move or speak.
Despite sensing the market “demons in the room”, he will, at least initially, be unable to move away from the dot-plot of rate increases or even voice his misgivings.
From the transcripts we can see that Mr Powell is more sceptical of the Fed’s macro model and more aware of market risks than his recent predecessors.
Gradually, the Fed staff have acknowledged the risks of sudden yield curve movements, or as the New York Fed called them, “convexity event risks”.
Too late. After the 2013 “taper tantrum”, the Fed board and the politicians behind it did not want the pain of a real market correction. Now they have no choice.
…
im sure these insiders have gotten filthy rich by the ability to control the markets with interest rates. They will make a lot more when it goes down. are we at the rinse cycle now?
It seems like a bell was rung at Janet Yellen’s retirement party which signaled the end of the drunkfest and the onset of detox. Got pink elephants?
If this keeps up, there’s gonna be a lot of sad panda real estate investors a few months from now, when they realize that the same policy shift at the Fed which tanked Bitcoin, stocks and bonds similarly affects the value of their leveraged real estate HODLings. All of these risk assets went up in lockstep during the easy money regime, so it should surprise noone when they simultaneously tank as the punchbowl is gradually withdrawn.
“Meanwhile, we look like we are blowing a fixed-income duration bubble right across the spectrum that will result in big losses when rates come up down the road. You can almost say that is our strategy.”
Can anyone who understands that sentence kindly unpack it?
My understanding is something like, “When interest rates eventually normalize, bond investors are screwed, whether they own three month T-bills or thirty-year zero-coupon junk bonds, or anything in between in terms of default and duration risk,” but I am not sure this is what he meant.
I’m not sure why owners of short-term bills would be screwed. Even if values come down, they can just hold to duration and buy a new bill at the higher yield.
Sure, perhaps you lose a little due to inflation, but over the course of 3 months? Absent hyper-inflation, I don’t see how much damage could be done
Could this bubble in fixed-income duration apply to anything longer than a few months? Investors have been buying 2, 10, and 30 year bonds and if interest rates go up too fast, too quickly (due to inflation), then they stand to loose quite a bit the longer the duration of their portfolio.
Does it seem like the markets don’t trust Powell to do regular head fakes on interest rate increases the way that Janet Yellen did almost every FOMC meeting?
He can easily demonstrate that he is not planning to change course by overruling a rate increase next month, after loudly communicating to anyone with a pulse the intention to tighten.
Any thoughts on for how long the pattern of upward-spiraling long-term Treasury yields might continue to play out? It seems like in comparable years when interest rates started climbing in January (e.g. 1987), the uptrend continued for most of the year.
Eyeballing a graph of long-term U.S. government security rates for 1987, it appears they increased from about 7.6 percent in January to 9.6 percent in October — a 200 basis point increase in market temperature before the fever broke. The loss over the period to someone hodling a U.S. Treasury bond yielding 7.6 percent at the beginning of the year would have been roughly 19% by the time of the October 19 Black Monday stock market crash.
I will stand pat for a while and see if this year plays out similarly…