The Hot Market Raises Questions About Its Upper Limits
A report from BizWest. “Two things struck me at the recent Northern Colorado Economic Forecast, presented by BizWest: Uniform praise for the economy overall, with strong growth in banking, health care, real estate, etc. Strength is apparent both at the national and local levels, as federal tax reform further fuels the U.S. economy. But things can change quickly. As my colleague Neil Westergaard, editor in chief of the Denver Business Journal, noted recently, economic forecasts in 2007 were almost uniformly positive. ‘The consensus view from most public and private economists was full speed ahead for the U.S. economy, despite a weak European market and flagging numbers in many other places in the world,’ Westergaard wrote in a Jan. 5 column.”
“What followed was the Great Recession, the worst economic downturn since the Great Depression. With that in mind, it’s somewhat refreshing to hear economists even hint at a downturn. How helpful would that have been in 2006, when the Weld County housing crash prompted national media to question what was happening? How helpful would it have been in 2007, when national forecasts remained overwhelmingly positive? Or 2008, when the bottom truly fell out of the national economy?”
“Economist Daniel Carter, predicting a downturn, noted in one article that the yield curve of U.S. treasuries, which typically flattens at the end of an economic cycle, might not do so in the future, as low interest rates have negated the effectiveness of the yield curve as a predictor. So, when many pundits spout nothing but optimism, acting as if a downturn is impossible, when daily reports of record-breaking stock-market performance spawn feelings of investment invulnerability, when it seems to make sense to borrow money from your 401(k) to take that Caribbean cruise that you so richly deserve, it might be worthwhile to log onto Google and search for a few archives from 2006, 2007 or 2008.”
The Register Guard in Oregon. “By many measures, 2017 was an eye-opening year in Lane County residential real estate. Fueled by the long-running seller’s market, the average and median sales prices of homes sold in the county last year set all-time records. The same real estate trends are happening in other parts of Oregon and in much of the nation, said Kevin Simrin, owner of ReMax Integrity in Eugene. Last year’s average sales price exceeded the previous record of $265,300, set in 2007 before the real estate bubble burst and the related financial crisis led to the Great Recession. But the hot market raises questions about its upper limits.”
From Builder Online. “Even as underwriting criteria have loosened generally, and credit availability has grown, smaller regional builders have been feeling the pinch when it comes to qualifying for acquisition, development, and construction (AD&C) loans from their local community banks. ‘We are still in a growth cycle,’ says Robert Dietz, chief economist at NAHB. ‘The concern would be if we had two or three quarters where that growth rate continued to slow, or even turned into tightening territory.’”
“‘The situation right now is that the economy is performing quite well,’ says Bert Ely, a banking and monetary policy consultant. ‘But what everybody’s worried about is when do the bubbles start popping, particularly in housing?’”
From the Washington Post. “The Fed isn’t typically a font of Friday night news dumps. But Janet L. Yellen wrapped up her final day on the job leading the central bank by dropping a bombshell: She smacked down Wells Fargo, issuing an order that bars the scandal-plagued, abuse-prone bank from growing until it cleans up its act. The unprecedented move by the Fed represents a shot across the industry’s bow. The policymaking gears in the Trump era have been spinning in sync to relieve pressure on banks. Yellen’s mic drop — as Capital Alpha’s Ian Katz described it in a Sunday note — is a reminder that regulators can still inflict pain on wayward firms.”
“‘Lawmakers make noise and create headlines,’ but don’t pass much, Katz writes. ‘Regulators are the ones that can put the hammer down. The Fed just put the Fear of God into bank boardrooms across the country. And that’s exactly what it wants to do.’ And Jay Powell, Trump’s pick to succeed Yellen, taking the Fed’s helm today, voted with her to impose the penalty on the bank.”
From Fox Business. “As Jerome Powell was sworn in Monday as the new chairman of the Federal Reserve, the pride of the moment may have been tempered by Powell’s recognition of the risks that lie ahead. A ferocious sell-off on Wall Street continued Monday. Yellen was able to oversee a gradual rate policy because inflation posed no threat: It ran below even the Fed’s 2 percent annual target throughout her tenure. The Powell era could be entirely different. The job market is tighter. Wages are up. Federal debt will likely rise. Tax cuts could accelerate growth.”
“The two most recent U.S. recessions were caused by bursting asset bubbles. The pricking of the dot.com bubble led to a brief recession in 2001. And the collapse of the housing bubble ignited the 2007-2009 downturn, the worst since the Great Depression of the 1930s. The current recovery began in June 2009. If it lasts until June 2019, it would tie the longest expansion on record — the one that lasted from March 1991 to March 2001.”
“Powell will be the first Fed leader in three decades without a Ph.D. in economics. But David Jones, the author of several books on the Fed, said that Powell, with his background as an investment banker, reminded him of the longest-serving chairman, William McChesney Martin, who led the Fed from 1951 to 1970. Martin also lacked a doctorate in economics but had extensive knowledge of Wall Street.”
“‘Powell, like Martin, understands markets, and I think he will be as plain-spoken as Martin,’ Jones said, citing Martin’s famous summation of the Fed’s job: ‘To take away the punch bowl just when the party gets going.’”
From Open Democracy. “In recent months, there has been a lively public debate between mainstream economists and its critics. Newspapers such as the Guardian have declared that economics needs a ‘reformation’, while there have been a number of response articles from mainstream economists complaining that the economics profession is misunderstood, and that it has been the victim of ‘dangerous’ and ‘ill-informed expert bashing’ for both failing to predict the 2007/8 financial crisis, and failing to take on new approaches.”
“Economists, and not just those who work for central banks, do regularly make forecasts which have enormous influence over policy makers, the private sector, the public – and therefore the economy. When in 2004 Alan Greenspan responded to suggestions that housing was in a bubble by saying ‘a significant decline in consumer incomes or house prices could quickly alter the outlook; nonetheless, both scenarios appear unlikely’ he was making a forecast that would have a profound effect on the subsequent course of events.”
“The real problem though is not that mainstream economists failed to predict ‘the timing, extent and severity’ (as the London School of Economics put it) of the crisis – economists have never been held to any such standard of forecasting skill, and no one asked for an exact date. It is that they could not have predicted or warned of the crisis, even in principle, because their models didn’t allow for such events. Furthermore, the models directly contributed to the crisis by enabling the financial sector to develop increasingly risky and dangerous products.”
“Finally, there is the oft-repeated claim that criticism is ‘dangerous’ (or even ‘anti-intellectual and dangerous’ as a piece in Times Higher Education said) because it erodes public trust in experts. But how could public criticism of mainstream economics possibly be more dangerous to society than something like the complete failure of orthodox economic tools during the crisis?”
“The problem we believe is not so much that economists are misunderstood by critics or by the public; it is that they have failed to adapt following the crisis, other than to come up with new ways of defending their tired paradigm.”
“Heterodox economists and people from other disciplines, including those working in the media, have already played a useful role by contributing new ideas and advocating for alternative approaches from areas such as biology and complexity theory. But if further progress is to be made, mainstream economists and policy makers need to engage more seriously with alternative viewpoints, and realise – as many in the public and the media have already done – that the days of monoculture neoclassical economics are over.”
‘Senior Housing Feels the Pain as Stock Markets Plunge’
‘After a prolonged boom, with the Dow reaching record levels, some market analysts say a correction has been in the cards. As for the timing, concerns over rising interest rates might be one factor for Monday’s precipitous market drop overall and the REIT impacts specifically. Because they are steady dividend producers that can be treated much like bonds, REITs and similar types of companies, such as utilities, are vulnerable when bond yields increase and investors shift away from the equity markets.’
‘The U.S Federal Reserve has made no secret of its intention to raise short-term interest rates, but there is added uncertainty at the moment, given that Janet Yellen has just stepped down as Fed chairman, being replaced by Jerome Powell.’
“I think the shift at the Fed this past week, with Janet Yellen having led her last FOMC [Fed Open Market Committee] meeting and Jerome Powell taking the helm of the Federal Reserve, has also added some uncertainty since the markets generally understood Janet Yellen’s intentions and words,” Beth Burnham Mace, chief economist of the National Investment Center for Seniors Housing & Care (NIC), told Senior Housing News.’
‘The installation of Powell might be stoking fears of even more aggressive interest rate increases than under Yellen, the Washington Post reported Monday.’
Yes, I wonder how many “retirement home” closings are in the pipeline.
This was interesting. I read the short version:
https://www.zerohedge.com/news/2018-02-06/experts-walkthrough-exactly-how-xiv-ripping-peoples-faces
“This is the way the next crash will likely come. The need for yield for pension funds to actually pay their retirees makes them prime targets for bank ideas to create yield. Ideas like “just sell vol”. And like those old school sellers of strangles to capture premium, they have been right almost 5 years running. But it takes only 1 time to be wrong, and that pension will blow up.”
Got pensions? Well, if you can’t pay a plumber to fix the toilet, just ride your golf cart on over to the clubhouse and take a squat in the pool. Wait, what? Can’t charge up that cart because they shut the electricity off?
State and local public union goons are gonna be pizzed.
Maybe if they gave even more to democrats they could fix it.
Or we could cut spending….
“Got pensions?”
One of the real problems which has caused this pension crisis is the fact that state and local governments have done whatever they’ve wanted with hiring and pay, and spending in general, with no oversight.
Around here their tax hauls from property taxes alone are the highest ever by a wide margin. Yet, they’re crying poor louder than they ever have, looking for special levies, etc., to fund schools, firefighters, you name it. But there’s no audit insofar as where all this money is going/has gone. When you press them for details, they “aren’t available” - neither the details nor the people to answer to what is really going on.
retire at age 55 in VA and counites
“retire at age 55 in VA and counites”
The toothless retire well before reaching the double-nickle!
The one my parents were living in - Quail Run/Acadia in Nelsonia, VA is bankrupt and closing
Sorry to hear that, NY. Now, that’s assisted living as opposed to a retirement community. I don’t think they can shut down an entire community where people own their house AND the land, but nothing would surprise me at this point.
“The real problem …is that they could not have predicted or warned of the crisis, even in principle, because their models didn’t allow for such events.”
What models? You have data miners who build models specifically for such events. What you have are people at the top who either want to continue the SCAM or
T H E Y D O N O T K N O W T H E N E W S K I L L S E T S.
T H E Y D O N O T K N O W T H E N E W S K I L L S E T S.
Deutsch?
Drumpf speech on tax reform, economy, and other topics in Cincinnati yesterday:
https://www.c-span.org/video/?440755-1/president-trump-calls-democrats-un-american-ohio-factory-speech
Did he mention Carter Page was an FBI plant in his campaign to enable the FISA warrant?
That’s all coming out today. Laura Ingraham is dumb as a box of rocks. Fox Nuze vs CNN. Why, it’s like Godzilla vs. King Kong!
“That’s all coming out today.”
Bad timing with the markets-n-all.
“The problem is, is that the way Bush has done it over the last eight years is to take out a credit card from the Bank of China in the name of our children, driving up our national debt from $5 trillion dollars for the first 42 presidents — number 43 added $4 trillion dollars by his lonesome, so that we now have over $9 trillion dollars of debt that we are going to have to pay back — $30,000 for every man, woman and child.
That’s irresponsible. It’s unpatriotic.”
– Barack Obama, Fargo, ND, July 3, 2008
that is pure comedy. can anyone really fix this economy without basically borrowing money? we have dug a hole that is impossible to get out of.
It would actually be simple to fix, but the special interests don’t want that so we don’t get it, we get what they want.
do corporations really pay much tax anyway? after the accountants get done most dont owe any money. This tax cut was another way to boost buybacks.
half of the revenue from taxes is from individual taxes. most of the rest is from payroll taxes.
They should have really cut payroll taxes to help joe blow.
Those payroll taxes are actually suppose to pay for social security checks, medicare and unemployment benis.
Or we could just cut some spending…
without govt spending is how would the economy do?
With 100 million unemployed, organic housing demand at 21 year low and an economy in the gutter, do you think the economy is good?
86% of government spending is for entitlements, defense, and interest on the national debt. There is no way to cut spending that would make a meaningful difference.
The coming federal bankruptcy is the only thing that will change any of this.
Does this mean that people will stop ragging on Fed employees?
That said, there is probably a lot of spending that could be cut — or at least moved — in the department of defense. My annual salary is less than a four-hour mission for an F-22 Raptor.
There is no way to cut spending that would make a meaningful difference.
There is a way, lots of them, in fact, but no one in government has the guts to pursue them as long as the rest of the world is willing to finance our profligate ways.
86% of government spending is for entitlements, defense, and interest on the national debt. There is no way to cut spending…
Hmmm. I wonder what the administrative cost is.
Guarantee it’s half…. at least.
One political hurdle to cutting government spending is that one person’s waste is another person’s paycheck.
waste is another person’s paycheck…
Are you thinking the collective owes the wasters a paycheck? Some bigger than others?
Just pointing out the what one person deems wasteful (e.g. a job, project, program) is often a source of employment or profit for a person or a corporation. So the ideological battle lines get drawn and it becomes difficult to agree on what is truly wasteful. Personally, I do have my own list of what I consider wasteful, but it is going to be vastly different from someone else depending on their ideology.
“Just pointing out the what one person deems wasteful (e.g. a job, project, program) is often a source of employment or profit for a person or a corporation.”
Are you talking about government employment, or ‘private sector’ employment in farming, automotive, military / defense contracting, real estate, or any number of other industries that rely on a perpetual river of subsidies (aka ‘other people’s money’ / tax dollars) to stay profitable?
I do have my own list of what I consider wasteful
USDA mandated rabbit inspectors for magicians is on my list.
Are you talking about government employment, or ‘private sector’ employment in farming, automotive, military / defense contracting, real estate, or any number of other industries that rely on a perpetual river of subsidies (aka ‘other people’s money’ / tax dollars) to stay profitable?
Mostly I’m talking about government employment, although I suppose that private employment that pads its profits with government spending, or is only profitable thanks to government largess, certainly would fall in to my category of waste. But again, people employed in so-called wasteful government or industries propped up certainly don’t view themselves as wasteful. They likely work hard and they believe they contribute, even if it is in the public sphere or supported by the public coffer. A lot of posters on here malign pensions and social spending, but not a lot of criticism is given to defense contractors.
Either way, those employed in this way earn money and spend that money in the economy. And this is why it’s so difficult to cut spending because it always is attached to someone’s livelihood in some way or another.
They’ll find another job. Don’t worry.
“Are you talking about government employment, or ‘private sector’ employment in farming, automotive, military / defense contracting, real estate, or any number of other industries that rely on a perpetual river of subsidies (aka ‘other people’s money’ / tax dollars) to stay profitable?”
Don’t forget college professor and/or school teacher.
They’ll find another job. Don’t worry.
Maybe, maybe not. It depends on whether there are jobs available in their area, and whether they are willing and financially capable to relocate to them. Then there is the opioid scourge. Many people are unemployable due to tattoos, piercings, or can’t pass a drug test. And then many people simply are not willing to retrain into the new types of jobs that are available, often because they pay less or there is a stigma associated with them. A blue-collar manufacturer for 20 years might be reluctant to become a nurse aide:
Men Don’t Want to Be Nurses. Their Wives Agree
https://www.nytimes.com/2017/06/24/opinion/sunday/men-dont-want-to-be-nurses-their-wives-agree.html?mtrref=www.google.com&gwh=A359E16D770217D23AB2BD16DEB776B0&gwt=pay&assetType=opinion
It seems like an easy fix. Traditionally male factory work is drying up. The fastest-growing jobs in the American economy are those that are often held by women. Why not get men to do them?
The problem is that notions of masculinity die hard, in women as well as men. It’s not just that men consider some of the jobs that will be most in demand — in health care, education and administration — to be unmanly or demeaning, or worry that they require emotional skills they don’t have. So do some of their wives, prospective employers and women in these same professions.
In the meantime, the jobs most in demand — like nursing and nurse assistants, home health care aides, occupational therapists or physical therapists — sit open. The health care sector had the largest gap between vacancies and hires of any sector in April, for example.
And it is not only blue-collar men who recoil at taking traditionally female jobs. Ofer Sharone, an assistant professor of sociology at the University of Massachusetts, Amherst, has studied middle-aged white-collar professionals who have lost their jobs. He found that some men who might have been willing to consider lower-paid jobs in typically feminine fields encountered resistance from their wives, who urged them to keep looking.
“The snow’s so deep, the farmers have to jack up the cows so they can milk ‘em!” — foghorn leghorn
http://www.furaffinity.net/view/20877312/
does it make u sleep better at night that trumps people r monitoring the markets? what exactly can they do?
I hope DJT does NOTHING.
The last eight years of obama’s TARP, HARP, QE1, QE2, QE3, QE4, Operation Twist, bailout after bailout, not one banker in jail, record deficits, picking winners and losers, etc
Have pretty much destroyed markets and fundamentals.
The Federal government will receive $3.654 trillion in revenue. Most of the taxes are paid by you, either through income or payroll taxes:
Income taxes contribute 50 percent.
Social Security, Medicare and other payroll taxes add 33 percent.
Corporate taxes supply 10 percent.
Excise taxes and tariffs contribute 4 percent.
Earnings from the Federal Reserve’s holdings add 2 percent. Those are interest payments on the U.S. Treasury debt the Fed acquired through quantitative easing.
Estate taxes and other miscellaneous revenue supply the remaining 1 percent.
https://www.thebalance.com/u-s-federal-budget-breakdown-3305789
How can earnings from the FEDs holdings be adding 2% to revenue?
The interest money comes from the treasury in the first place. This is basically a reimbursement. essentially it doesnt cost anything to the treasury to borrow from fed other than admin costs.
TARP was signed by George W. Bush.
from wiki: ‘The Troubled Asset Relief Program (TARP) is a program of the United States government to purchase toxic assets and equity from financial institutions to strengthen its financial sector that was signed into law by President George W. Bush on October 3, 2008. It was a component of the government’s measures in 2008 to address the subprime mortgage crisis.’
‘On October 14, 2008, Secretary of the Treasury Henry Paulson and President Bush separately announced revisions to the TARP program. The Treasury announced their intention to buy senior preferred stock and warrants from the nine largest American banks.’
Obama Lobbies for TARP Funds, Stimulus Plan
WASHINGTON, Jan. 13, 2009, ABC News
President-elect Barack Obama told Democratic senators in a closed lunch today that he needs the second $350 billion authorized by Congress as part of the TARP legislation last year and that he’ll veto any move by Congress to cut that funding off.
And Obama was not the only member of the incoming administration trying to sell his plan to Democrats today on Capitol Hill.
Larry Summers, the incoming leader of Obama’s National Economic Council, met this morning with Democrats on the Senate Finance Committee to get more of their input on the $700 billion plus the stimulus package, a separate bill to inject capitol in the economy. It was Summers’ third meeting with Democratic senators in five days on the stimulus proposal, which includes tax measures and infrastructure spending that Obama wants to pass early this year.
Freudian slip?
If the central banks can pursue their Reverse Robin Hood policies of extract from the poor to give to the rich without political cost, they’ll keep doing it. In the US and ECB, I can see some political cost. But I don’t think so in Japan. Their prime minister is set to the be the longest serving. The only problem is a subtle one - stagnation. If their focus is on merely redistributing existing wealth, the economy will grow around those money taps, instead of seeking the actual way to increase wealth via innovation, new technology and increased productivity. But those are uncertain and chaotic routes, not worth encouraging now if everything is politically stable now. Taking that line of thinking into the future, it probably doesn’t bode well. Time will tell.
Central banks will continue to ‘feed the beast’: Yale’s Stephen Roach
• While investors may be concerned about higher inflation, Yale University fellow Stephen Roach says inflation will remain below target.
• Therefore, he says central banks will be slow and reluctant to normalize.
• He blames central banks for “distorting asset prices across the spectrum” over the past several years.
The Federal Reserve, European Central Bank and Bank of Japan all massively expanded their balance sheets to the tune of about $8 trillion between 2008 and 2017, while nominal gross domestic product was up by $2 trillion, Roach said.
Therefore, there has been $6 trillion of excess liquidity pumped into the global markets during that time, he said.
“Now central banks are starting to move the other way, led by the Fed, followed eventually by the ECB and the BOJ. So the sustenance of these liquidity-driven markets is being sucked out as we speak.”
https://www.cnbc.com/2018/02/06/central-banks-will-continue-to-feed-the-beast-yales-stephen-roach.html
The stock market is at an eye-popping 24,4xx and up ~100 points today. What’s the problem again?
Maybe the market drop was due to Janet Yellen bringing down the regulatory hammer down on Wells Fargo on Friday night. It wasn’t much money, but it was a warning to big banks.
Why didnt (((yellen))) drop the hammer years ago? Why on the way out the door? Seems more interested in leaving the economy a s-thole for her successor than protecting the little guy/gal.
BTW, first non-(((tribe))) member to lead the fed reserve since 79 or so I’ve read.
No wonder the cabal wants blood - how can they destroy a country and culture without being able to control its money?
‘By many measures, 2017 was an eye-opening year in Lane County residential real estate. Fueled by the long-running seller’s market, the average and median sales prices of homes sold in the county last year set all-time records. The same real estate trends are happening in other parts of Oregon and in much of the nation’
And in how many of these have incomes matched the run-up? When some guy put together a map of the highest price to income housing markets in the US recently, they were all in the most expensive areas. I think Mercer Island in Washington topped it with the median shack price at 13 times incomes.
Uh, oh. Is Spiffy still going to be able to close on his house?
Hey palmetto,
Just closed on it a few hours ago. Probably a good thing I locked in the rate a few weeks back - no telling how the market it going to behave.
hey, Spiffy, congrats and well done. Yep, wouldn’t surprise me if interest rates kept creeping higher. Now you can enjoy Mercer as a permanent resident and all it has to offer.
If you saw wages in Lane County, Oregon, then compared them to prices, you’d be aghast. Poverty level wages in most areas, and very high unemployment.
One of the hallmarks of these real estate bubbles is that they go everywhere, regardless of the local economic conditions. The locals look around and wonder what is going on, as they watch prices just explode, and when they look at their paychecks they’re faced with the reality that they’re completely shut out of the market.
I have a relative in a Raleigh, NC exurb. Just check his house price on zillow and it’s gone up 30% since 2010. I’d say the bubble has passed over his little burg.
Not likely. That just tells me that without this easy money situation, it should be negative for that period.
You said “prices were exploding” pretty much everywhere, even in places with no jobs.
There’s plenty of rage-ravaged skulls exploding… Here there and everywhere.
Yes, that tends to happen when other people post links that are contradictory to what the poster claims.
Hello my good friend.
Boulder, CO Housing Prices Crater 5% YOY As Housing Correction Expands Statewide
https://www.movoto.com/boulder-co/market-trends/
A 30% increase in the price of a house IS exploding when fundamentals would have had it staying pat, or falling.
“One of the hallmarks of these real estate bubbles is that they go everywhere, regardless of the local economic conditions.”
In hindsight it looks pretty easy for the government to stimulate consumer spending by loosening credit standards and guarantee the resulting loans that the “hoi palloi” will flock to like moths to the flame.
Dubya did it best (they were in a hurry) by quickly mailing checks to everyone. Mine went toward a couple of mortgage payments.
Mercer Island is definitely not at 13 times the incomes of the people who can afford to live on Mercer Island.
‘the people who can afford to live on Mercer Island’
You could say that about anywhere. The research I’m referring to looked at the incomes of the people who actually do live there.
Mercer Island fools are mortgaged to their empty skulls like all the other fools are.
Again, talking out of your arse, HA. When is the last time you were on Mercer Island?
Broke, busted and mortgaged to their eyeballs….. just like all DebtDonkeys.
San Diego, CA 92129 Housing Prices Crater 13% YOY On Record Low Housing Demand
https://www.zillow.com/san-diego-ca-92129/home-values/
https://snag.gy/m5EzRB.jpg
Ok, since we’re basically talking about me…
First off - know that I first showed up here on Ben’s blog back circa 2006-2007 (I think it was still on blogspot then) and though my entire life has been spent in tech, back in the mid-90s I got an education as to how mortgage lending works by automating most of the application / back end process. Image using dial up modems over landlines throughout the day to access latest rates.
Post 9/11 I was living in an oversized house in the Dallas, TX area and headed for a divorce. I had to maneuver the situation into selling the house before it all went down (or I would get negative cooperation from my ex who _literally_ would spend $5k a month MORE than I was making at my job). I saw the downturn approaching, in large part due to Ben’s blog, before most people would acknowledge the facts. I had to relentlessly cut the price.. $5k a week.. until it sold. I had to take money to closing. It was still worth it to get that white elephant and the house off my back. After the big D, the ‘08 recession hit and I was laid off along with hundreds of others in my industry. So I moved to Seattle for work.
With those events in my background, I’ve been a lurker to the state of the real estate market ever since, checking in on this and other blogs ever since. With all that background, please assume that I’m not rushing in to this situation blind or ignorant.
Mercer Island is an interesting study in situation and contrasts.
First think to know about any ‘average’ on Mercer Island is that you have 3 separate classes of homes here. Waterfront property on Lake Washington obviously rings the Island - you won’t find any of it for under $5M, but that’s true of most of Seattle, Bellevue, Kirkland, and every where else that has lakefront. Then there are the ‘big homes’ and compounds (think $3M and up). Most of those owners are in you elite. Finally you have a bunch of Mid-Century modern, Ranch style homes, bungelos, etc.. Homes for ‘the rest of us’ - many dating back decades to when they were much more ‘middle-class affordable’ and normative. I just bought one of these. Even today, many of this class of house is occupied by people who have been here decades or inherited them, and make up a ‘middle class’ contingent. That is the only group - the ones that inherited, or been here long enough to retire (and we have plenty of them) - that could even approach the 13x house-value to income stat - there’s no way people have mortgages like that.
Now that middle-class contingent is definitely shrinking, especially as since 2012 people have sold out and moved out with the cash due to the crazy influx of new residents, coming primarily for tech jobs. We’re talking ~50,000 people moving to King County since 2012. Local builds have been relentless in snapping modest decades old ranches and ramblers for ~$1M and then razing them and putting up what I like to call ‘California-Style’ Maximum sq-footage multi-story boxy houses, and sell for $2.5-$3.5+M
Are we seeing an influx of foreign national buyers making all-cash offers. Hells yeah, but they haven’t overwhelmed the local market, only because there is so much competition from other locals, transplants from California, etc. The schools being top rated, and probably the fact the island doesn’t tolerate the homeless at all (which if you don’t know about - is a huge growing problem in Seattle).
For various reasons, I expect my (2nd) wife and I to have a very high probability of staying the Seattle metro area for work for the next 15+ years. Given that, the location is killer great, and the price of buying is almost on part with renting a comparable place (if you can find one) here.
(part 2 to come)
“I had to take money to closing.”
Gawd… hate it when that happens.
Keller, TX Housing Prices Plunge 11% YOY As Markets Crater
https://www.movoto.com/keller-tx/market-trends/
can u check out craterville central?
Hmmm….I never see this problem on “Tiny Houses” on HGTV
++++++
“I need to report a stolen house!”: Houston couple wants vacation home back
ABC13 - Steve Campion and Foti Kallergis - February 06, 2018
A Houston couple wants their vacation house returned to them.
Jo and Lonnie Harrison told Eyewitness News someone stole their entire home off their property in Madisonville, Texas. They bought the 10-acre property with a prefab home on site last year.
It’s a one-bedroom, one-bathroom home with a green roof and wood siding.
Houston couple wants vacation home returned.
“Nothing. Nothing that I wanted to see. I didn’t see the house,” said Harrison. “All I saw were blocks and pipes sticking out. The whole house gone. Everything except the blocks.”
“vacation home”?
These spendthrift DebtDonkeys ought to be thanking their lucky stars it came up missing.
Heard on the local news this morning that the place was repossessed from the previous owner. Owner finance? Quien sabe.
the talking heads on the business channels are already saying we have bottomed after a 3% drop. these people are pure comedy anymore.
Yah, they miss the fact that there are weeks of volatility up and down, followed by the big rockslide.
Also they’re mum on what’s happening in China. Think about that. Global nuze under a commie Chinese muzzle.
“The problem we believe is not so much that economists are misunderstood by critics or by the public; it is that they have failed to adapt following the crisis, other than to come up with new ways of defending their tired paradigm.”
Ouch!
‘Economist Daniel Carter, predicting a downturn, noted in one article that the yield curve of U.S. treasuries, which typically flattens at the end of an economic cycle, might not do so in the future, as low interest rates have negated the effectiveness of the yield curve as a predictor’
This is a point I made a couple of years ago. By manipulating treasuries at different maturities, the central bank smothered a key signal of recession. Yet another hazardous consequence of the “unprecedented” QE.
+1
” …as low interest rates have negated the effectiveness of the yield curve as a predictor”
“That girl’s like that road between Fort Worth and Dallas………………………………No curves.” — foghorn leghorn
It’s different this time. So different that nobody will see the next recession coming!
I was laying in bed last night after watching Bitcoin’s massive slide and the stock market selloff, contemplating things while remembering back to 2008 when Bear Stearns bit the dust. One thing that I do think is “different this time” around is the bank situation. They are insulated from the risk that took them down last time. Unless there’s some sort of derivatives blowup, I have a hard time seeing a repeat of those events.
Further, while real estate prices are even higher than last time in many locales, and matching the dizzying highs in most, I think the volume is much lower and therefore households, while stretched with debt, are not set up for a mass mortgage/HELOC default situation like last time. So, an economic meltdown would likely have to take shape under a different set of circumstances. I don’t know what the future holds, but things don’t feel the same as back then. YMMV.
You’re making the rather cogent argument that we are out of ammunition. Well, we are.
Articles are now saying that Millennial will buy stock and homes and cars ….
Smart Millennials live in another universe. They know pensions are dead, they’re not interested in football or baseball or owning a car. They have their screens for entertainment. (Ivanka and her husband are fking freaks. They’re not the norm.)
Millennials know that stocks game them, that cement boxes that you spend thirty years paying off are losing propositions….
Sixty-year olds are NOT watching them. There is a great disconnect going on NOW.
All that the establishment is doing and has been doing is “making the terms easier.” Have adults done the math for student loans? None that I have talked to.
We gamed the next generation.
George Carlin nailed it.
“Millennials know that stocks game them, that cement boxes that you spend thirty years paying off are losing propositions….”
And so they pile into Bitcoin at $19,000 and lose 65% in a month and a half. Seems smart…
Who do YOU know that bought at $19,000?
If you bought a house for $400K and it goes to $2million and THEN retreats to $1.8, does that mean you lost $200k? If you WANT to believe that that’s a loss, so be it.
I understand your distain, but, not everyone got burned.
James Dine, the Gold Bug, in year 1980, rode Gold up and then down. Greed.
Think about it - all the people bragging about crypto, like yourself, never even so much as made a peep about it until it was all over the media. You know why? Because they got in late, when prices were in the high teens. HOW MUCH HAVE YOU LOST, alphonso?
It’s not the millennials piling into bitcoin at $19k; it’s the boomers who are hopping on the crypto train late in the game as speculators.
All the millennials I know with serious bitcoin only have it because they bought a bunch when it was worth $10-12 each and used mostly to buy drugs, porn and bootlegged software online.
mostly to buy drugs, porn and bootlegged software
Sounds about right.
Riiiiiiight. What a load of horsesh!t. You should do stand up.
For what it’s worth, I’ve never met a single millennial who was interested in bitcoin. My 58 year old mother-in-law on the other hand asked me what I thought of it as an investment around Thanksgiving.
alphonso bedoya: We gamed the next generation.
American institutions they trusted, Hollywood (dysfunctional hypocritical values), Madison Avenue (we don’t care as long we can make it sell, a la civet shi•t coffee), Wall Street (you’re not the partner, you’re the muppet), media (Hillary’s a lock), higher education (of course the underwater basketweaving major is worth 200K of debt), politicians (we won’t sell you out to the highest bidder) - they now suspect are not working in their best interests.
“You f–ked up, you trusted us.” — Animal House
Herndon, VA Housing Prices Crater 13% YOY
https://www.movoto.com/herndon-va/market-trends/
Yay! It’s a start!
53 homes in sample=bs
zillow has n va flat yoy and shiller has it up3%
NVAR.com has it up 5%
take your pick
DebtDonkey
Arlington, VA Housing Prices Crater 6% YOY As Northern Virginia Slips Into Housing Correction
https://www.zillow.com/arlington-va-22202/home-values/
https://snag.gy/m5EzRB.jpg
for those who love eating meat and hate the killing of animals..
‘cultured’ meat or beef
still a ways off, but getting cheaper by the day.
I’m looking forward to cheaply “cultured” organs for transplant. Probably a long way off as compared to growing meat, but would be amazing.
I’m looking forward to cheaply “cultured” organs for transplant. Probably a long way off as compared to growing meat, but would be amazing.
yes, growing human organs by various methods will be fantastic. but nearly everyone knows about that now.
growing cultured meat is relatively new and could affect every meat producer on the planet. no more cattle farming and slaughterhouses. and since in theory, the meat can be customized to taste, it should be an immediate hit (except for the wary). and it can be produced in a much smaller area than a farm. it also is supposed to be able to produce every type of meat, including lobster.
there are still obstacles and tradeoffs though.
I’ve been following the cultured meat thing for a while now. It is something that piques my curiosity. What I really think is interesting is the vegan meat substitutes that are actually very good copies (e.g. the impossible burger that bleeds).
“….cheaply “cultured” organs….”
Could you get them to grow a brain for HA?
DebtDonkey
Neptune Beach, FL Housing Prices Crater 14% YOY
https://www.movoto.com/neptune-beach-fl/market-trends/
“The two most recent U.S. recessions were caused by bursting asset bubbles.”
Bubbles burst. Always.
So, talk about how they got there in the first place?
‘The real problem though is not that mainstream economists failed to predict ‘the timing, extent and severity’ (as the London School of Economics put it) of the crisis – economists have never been held to any such standard of forecasting skill, and no one asked for an exact date. It is that they could not have predicted or warned of the crisis, even in principle, because their models didn’t allow for such events.’
This flaw about their “models” is interesting. For instance, if Krugman digs ditches and fills them in, and it doesn’t have the desired outcome, he’ll insist we just need more ditches. And if central bankers create a trillion pesos and it doesn’t result in inflation, they just create more trillions.
all the talking heads r trying to figure out why the stock market is down. a million different excuses.
What about profit taking and selling before all hell breaks loose? No one wants to say that.
If you get greedy your paper profits can disappear fast. Hogs get slaughtered. The smart money knows when to take profits.
Leave money on the table for the next person and never regret.
+1. Spot on.
“All the talking heads r trying to figure out why the stock market is down. a million different excuses.”
If that’s what you think, then why the hell watch them?
What does AZDUDE think? Why? Answering those questions will be much more useful to you than listening to a bunch of clowns.
Or getting caught up in the noise of the day.
the London school
=the lefty school
Ben Jones: This flaw about their “models” is interesting. For instance, if Krugman digs ditches and fills them in, and it doesn’t have the desired outcome, he’ll insist we just need more ditches.
Unfalsifiability is a hallmark of religion and string theory.
Economists don’t make testable hypotheses. And if a “natural experiment” appears, if it doesn’t match the reigning paradigm, it is labeled a paradox, rather than the underlying theory critically examined.
And on top of that, large systems have emergent properties, that are not necessarily apparent at smaller scales.
What is an economist? A statistician with exposure to social science? Or a social scientist with exposure to statistics? Often a marketer using his background to sway public opinion, paid by an organization with an interest in advocating one position or another.
Weekly Summary: HBB-Reported Purchase Price Declines
–
Jan 31-Feb 6
> -23.5% San Diego / MED SPR SFR DEV (June17-Feb18)
> -20% Egypt / PSM EST (Nov16-Feb18)
> -10% UK - Central London, Oxford, Cambridge, Aberdeen / AVG PCS (Feb18)
> -4% London - Greater London / AVG PCS (Feb18)
> -3.82% Canada / INF (Q317)
> -2%+ Sydney - Inner West, Lower North Shore, Northern Beaches / MED EST (Feb18)
> -0.9% Sydney / MED (mom Dec17)
> -0.8% Sydney / MED (mom Feb18)
> -0.7% Sydney / MED (mom Nov17)
> -0.5% Sydney / MED (mom Oct17)
–
KEY
[Brackets indicate single sales, may not reflect overall market]
(Time range indicated when info available. If not, date of report. yoy - year-on-year, mom - month on month, P - “peak”)
*New this month
-
Methodology: AVG Average, MED Median, PIX Proprietary Index
Type: LST Listing Price, SPR Sales Price, VAL Valuation, PSQ Price Per Square Foot, PSM Price Per Square Meter
Specialty: PCA Price Cut Asking, PCS Price Cut Sold, LPA Less Than Purchase Price Asking, LPS Less Than Purchase Price Sold, LTF List Price to Foreclosure Auction Sale
Category: CON Condo, COP Co-Op, DEV New Development, SFR Single Family
Price Bracket: ENT Entry Level, LUX Luxury, {Price/Size}
Special Circumstances: EST Estimated, NBY Not Built Yet, INF Inflation-adjusted
(A Asking S Sold)
-
n.b. Type of decline, methodology, etc., are only noted when info is available in source material.
The US Department of Health has issued a national alert. There is an epidemic among stock brokers of fat fingers. Side effects include napping during the day, buying or selling securities in very large amounts during a very short time, and an inability to distinguish between time and value.
If you see a fat-fingered suspected stock broker in your region, contact Jeff Saturday immediately.
Thank you.
…aka clubbed fingers?
‘Hodling’ bitcoin: The term is so popular, it made it into Senate testimony
Published: Feb 6, 2018 1:36 p.m. ET
Where did the term ‘hodl’ even come from?
iStockphoto
Lego man approves of bitcoin.
By Shawn Langlois Social-media editor
Jessica Marmor Shaw Senior Editor
Hodling?
If you’re already on board the bitcoin (BTCUSD, +7.73%) train, then that’s a term you’ll know well. But perhaps you happened upon it on Twitter… or while listening to a Senate Banking Committee hearing with the U.S.’s top two financial regulators.
Yes, “hodl” made an appearance in testimony from Commodity Futures Trading Commission Chairman J. Christopher Giancarlo. He had this to say on the issue of whether bitcoin should be classified as a currency, a commodity, or something else:
“When it’s used as a store of value, then it’s very much like an asset, like a commodity. In fact, what we hear a lot of, is people buying and holding. If you go on to the Twitter universe you’ll see a phrase ‘H-O-D-L,’ which means hold on for dear life.”
https://www.marketwatch.com/story/are-you-hodling-bitcoin-2017-09-12
HODL indeed:
http://www.scmp.com/business/banking-finance/article/2132009/china-stamp-out-cryptocurrency-trading-completely-ban
Store of value. Sure, I’ll just take my buttcoin on down to the local power plant and trade it for some electricity.
I was skeptical of $1,000+ gold. Shi!tcoin is preposterous as a store of value.
Seattle, WA Rental Rates Crater 6% YOY As Housing Correction Amplifies Falling Housing Prices
https://www.zillow.com/seattle-wa-98109/home-values/
*Select price from dropdown menu on rental chart
Here’s a link to REAL DATA that proves otherwise, HA:
http://seattlebubble.com/blog/2018/02/05/january-stats-preview-2018-kicks-off-tight-market-2017/
There are no falling housing prices in Seattle. Stop lying.
Boots on the ground data my good friend.
Redmond, WA Housing Prices Crater 7% YOY As Seattle Housing Correction Expands
https://www.zillow.com/redmond-wa-98052/home-values/
https://snag.gy/m5EzRB.jpg
does it make u feel safe that treasury secretary munchkin is monitoring the stock markets?
redmondjp
I live here HA. You are lying. I get letters and cards every day offering to buy my house. Extended families from foreign countries pool their money so they can send their kids over here to buy one large house, and the parents then follow later (chain immigration).
You obviously have mental problems. Go see somebody about them.
That and a dollar will get you a cup of coffee my good friend.
Newcastle, WA Housing Prices Crater 8% YOY As Seattle Area Housing Inventory Skyrockets
https://www.movoto.com/newcastle-wa/market-trends/
+1 on the chain migration. I’ve noticed that some of the wiser DACAs are starting to say, “sure we’ll give you wall funding in exchange for DACA, *if* those are the only two things in the deal. After all, you care only about the wall, right, Mr. Trump?”
They are counting on flying right over the wall via visa overstay, and chain migrate in the entire clan. But suggest getting rid of chain migration and they get thrown into a panic. Even the media hates to use that phrase. They hide it under “border security” if they can, or revert to “family reunification” if they have to. I don’t know if the reunification phrase is catching on.
Hey Donk
They are counting on flying right over the wall via visa overstay, and chain migrate in the entire clan.
I’m pretty sure most illegal immigrants come here on tourist visas which they never intended to use for tourism. Then they “overstay”. A wall won’t fix this.
r the rate hikes back on the table?
Nope.
What a bunch of Horse sh#t
Officials Postpone School’s Daddy-Daughter Dance Due To NYC’s Gender-Neutral Policy
Some Parents Say It’s Political Correctness Gone Too Far
February 5, 2018 at 6:58 pm
NEW YORK (CBSNewYork) — Officials opted to postpone the father-daughter dance at a school in Staten Island because it excludes other genders, claiming city policies forced them to scrap the tradition.
http://newyork.cbslocal.com/2018/02/05/officials-postpone-schools-daddy-daughter-dance-due-to-nycs-gender-neutral-policy/
dude this is a housing blog.
Racis
lmao
“dude this is a housing blog.”
Besides Ben Jones there are more than a few people who post here that I would gladly listen to.
azdude please do not count yourself among their ranks.
Now back to your regularly scheduled azdude rent free Trump skull rage.
Comment by azdude
2018-02-02 13:21:06
this is trumps stock market now!
It’s called walking on eggshells. These folks need therapy.
At our company we have to take sensitivity classes every so often - managers get an extra helping. I find that whole concept bass-akwards. People actually need toughness training! Jeebus.
Toughness training? Come see me and perhaps we can work out a plan especially tailored for you.
😁
Getting laid off or fired can be considered “toughness training”.
“Officials Postpone School’s Daddy-Daughter Dance Due To NYC’s Gender-Neutral Policy”
What retards.
To be fair, they are doing this because they feel that daddy-daughter makes the mother-sons feel left out. They are still having the dance, but they postponed it a month to find a bigger venue for all the parent-child couples.
“To be fair, they are doing this because they feel that daddy-daughter makes the mother-sons feel left out.”
“Officials Postpone School’s Daddy-Daughter Dance Due To NYC’s Gender-Neutral Policy”
“claiming city policies forced them to scrap the tradition.”
I’m going to chime in here and say that I agree with this type of decision. My wife is a school teacher and a large number of her students are being raised by single parents, father or mother. We’ve had “donuts with dad” events and while well-intentioned, these types of events can be incredibly ostracizing to children whose family situation doesn’t fit the 2-parent mold, often for reasons outside of their control.
The solution is not to ban these types of events, just open the circle of inclusion and make it a parent-child event (dad or mom, or both, attending with child).
incredibly ostracizing to children
I was in that situation (father died when I was five) and when the daddy-daughter events occurred I just shrugged it off. No one, back in those days, was particularly worried about your feelings and I didn’t give it much thought. It was just something I couldn’t go to.
Parent-child dance always seemed sensible to me, but I don’t remember ever hearing about one. That might even be a good way for single parents to meet each other.
“To be fair, they are doing this because they feel that daddy-daughter makes the mother-sons feel left out.”
LGBT ACTIVISTS PUSH FOR LGBTQQICAPF2K
The insanity never ends
Truth Revolt - FEBRUARY 7, 2018
The war between reason and the ridiculous rages on.
On Monday, Canadian Prime Minister Justin Trudeau corrected a woman who used the term “mankind” instead of “peoplekind.” Wow.
Not to be completely dusted in the race for supreme cultural wokeness, America is putting its best (make that “worst”) foot forward: according to National Review’s Kat Timpf, some are fighting for the evolution of LGBT to the more inclusive LGBTQQICAPF2K.
“Some Activists Want to Turn ‘LGBT’ Into ‘LGBTQQICAPF2K’ for Inclusion.”
To be clear, the letters stand for: lesbian, gay, bisexual, transgender, queer, questioning, intersex, curious, asexual, agender, ally, pansexual, polysexual, friends and family, two-spirit, and kink.
Yes — “friends and family.” And “kink.” Therefore, if your cousin is gay, you’re a LGBTQQICAPF2K member of peoplekind. If you’re kinky too, then you’re doubly certified.
Are we sure that’s what “friends and family” refers to here?
There are people trying to normalize pedophilia.
Don’t you know that this is official now:
Sexuality is an inborn trait, i.e. you are either born hetero- or homo- sexual, but gender is not.
Black is white, white is black. Why? Because we say so.
Got it?
is fed policy based off the dow?
No. That violates its original mandate, but, the FED needs the Market to keep the game rolling along.
so if the stock market tanks the FED will continue with unloading the bonds on its balance sheet?
A seven percent decline is NOT a “tank.” Nor is ten percent. The debt is infinite so QE 4 is not an unthinkable option in four months.
Do not assume interest rates are going to rise as a defensive measure.
FWIW, China has their own financial issues as well.
7% is nothing. Im talking about a real fall 50%. everyone knows this cr@p is grossly overvalued they are peddling. I am not seeing how its possible to raise rates without this market imploding. they are trapped. Either accept the market decline or keep bluffing on rates.
“Either accept the market decline or keep bluffing on rates.”
Powell has my hopes up that he will end the bluffing games, but time will tell.
Do you really think it’s possible? I have my doubts, but just like you said, time will tell.
Littleton, CO Housing Prices Crater 11% YOY
https://www.movoto.com/littleton-co/market-trends/
dont fight the FED peons. there is still a fed put.
https://youtu.be/gROO7xSTxfY
Donk Craterton And The Stampedes
No one coulda seen it coming. Banks, pension funds, institutions intentionally taking themselves hostage so the Fed will be motivated to step in and bail them out.
Subprime Auto Debt Is Booming Even as Defaults Soar
By Cecile Gutscher
February 2, 2018
Bloomberg
A boom in sales, a pickup in defaults, and risk premiums keep on dropping.
It’s all happening in the market for subprime auto bonds, where loans to American consumers with some of the patchiest credit histories are packaged into securities to be sold to big investors. A decade after risky mortgage lending toppled the U.S. financial system, the securities have rarely been so popular. But the collateral behind the bonds is getting less safe: car-owners are increasingly falling behind on bigger loans with longer repayment terms made against depreciating assets.
Wall Street has rushed to sate investors’ hunger for subprime auto asset-backed securities with $3 billion worth of fresh supply so far in 2018, according to JPMorgan Chase & Co. data — almost double the $1.8 billion worth sold in the same period a year earlier. That’s despite warnings from Steve Eisman, featured in Michael Lewis’s book “The Big Short,” and Morgan Stanley in the past year.
https://www.bloomberg.com/news/articles/2018-02-02/never-mind-defaults-debt-backed-by-subprime-auto-loans-is-hot
There is going to be some good deals on used cars in the next 1-3 years.
Great timing, as our aging fleet of used autos needs updating.
There is going to be some good deals on used cars in the next 1-3 years.
I believe that when I see it. In 2012 I bought a new Elantra after I found the 2-3 year old used ones cost just a little less.
We are looking for vehicles right now. We’re being patient because we know that a flood of inventory is coming.
Let me guess - they’re “rated AAA?” Who’s buying this garbage? Somebody has to be taking massive losses. Who are they?
pension funds desperate for yield? Future bagholders?
is it time to get shorty?
The interesting aspect of what just happened is how steady long-term sovereign bond yields remained while equities crashed then soared. More fireworks to come soon!
The Financial Times
Market Volatility
US stocks halt losing streak after wild ride
Vix gauge of market turbulence hits 50 for first time since 2015 before retreating
Traders signal offers in the S&P options pit at Cboe Global Markets © Getty
Eric Platt in New York, Michael Hunter and Adam Samson in London 4 hours ago
US stocks staged a late rebound on Tuesday that halted a three-day global rout but underlined how volatility has returned to markets after years of unusual calm.
The Dow Jones Industrial Average ended up 567 points, or 2.3 per cent, at 24,913, a day after having recorded its biggest one-day points drop ever. The S&P 500 was up 1.7 per cent to 2,695, its best day since Donald Trump was elected US president.
The technology-heavy Nasdaq Composite gained 2.1 per cent. The sharp late-day reversal on Tuesday pulled all three major indices back into positive territory for the year
Markets in Asia similarly recovered some ground on Wednesday, encouraged by Wall Street’s recovery.
In Japan the Topix index was up 3.1 per cent in morning trading, after falling 4.4 per cent the previous day, while the Nikkei climbed 3.2 per cent a day after shedding 4.7 per cent. Hong Kong’s Hang Seng index was up 2.5 per cent while Australia’s S&P/ASX 200 index rose 1.1 per cent.
Sovereign debt markets in the region were likewise reflecting a risk-on attitude, with the yield on 10-year Australian government bonds rising 5 basis points to 2.866 per cent in morning trade. The yield on the 10-year US Treasury was steady at 2.798 per cent.
The focus for many investors during the roller-coaster day on Tuesday remained on the Vix volatility index, Wall Street’s so-called fear gauge, which briefly shot to its highest level since the 2015 Chinese currency devaluation. Funds that allow investors to bet on tranquil markets were at the centre of this week’s fall in equities, plummeting in value.
Credit Suisse and Nomura both pulled volatility-based securities from the market. Shares of Cboe Global Markets, which owns the Vix index, tumbled as much as 17 per cent as investors feared the closures could affect trading volumes.
“When it [shorting volatility] doesn’t work, it really unwinds quickly and you get catastrophic losses,” said Sebastien Page, head of global multi-asset at T Rowe Price. “Why are investors attracted to it? Because in normal times it consistently makes money until it doesn’t and then you lose big.”
…
HBB-Reported Purchase Price Declines, 2018 Year-to-Date
–
See above post for key
*New this month
–
> -68% [Vermont / LTF LUX] (Q3 2017)
> -60% Beijing - Suburbs (Q2,3,4 17)
> -60% [Manhattan - Greenwich Village / PCS LUX] (Jan18)*
> -47% [Manhattan - Tribeca / PCA LUX] (Q315 - Jan18)*
> -40% to -60% Dubai / PCA DEV (Jan18)
> -44% [Los Angeles - Pacific Palisades / PCS LUX] (sold Jan18)
> -30% Fort Nelson, BC / AVG SFR (yoy ~Jan18)
> -25% [London - Knightsbridge / PCS LUX] (Q3 16 - Jan18)*
> -24.2% [Manhattan / PCS DEV LUX] (Jan18)
> -20% to -40% Beirut - Central (Jan18)
> -5.8% to -26.2% Manhattan, AVG PCA LUX {$10mil+} (Jan18)
> -23.5% San Diego / MED SPR SFR DEV (June17-Feb18)*
> -22% [London - Blackfriars / LPA CON] (2013-Jan18)
> -21% Manhattan / AVG SPR DEV (yoy ~Jan18)
> -20% Egypt / PSM EST (Nov16-Feb18)*
> -20% Manhattan / AVG PCS LUX (Jan18)*
> -20% St. Louis - Edwardsville / PCA DEV ENT (17-Jan18)*
> -10 to -20% London / PCA LUX {£5mil+} (Jan18)*
> -10 to -20% South Florida / PCA DEV LUX (Jan18)
> -19% Manhattan - Upper West Side / AVG SPR CON (2016-2017)
> -18% Manhattan, / AVG COP LUX {3+ bedrooms} (yoy ~Jan18)
> -17% Los Angeles / MED SFR LUX {top 10% of sales} (Q416-Q417)*
> -17% Sydney - Darling Point and Point Piper (yoy ~Jan18)
> -17% Manhattan / AVG SPR DEV (yoy ~Jan18)
> -15.2% Auckland / MED (Q3,4 17)
> -15% Manhattan - Upper East Side / AVG SPR CON (2016-2017)
> -14.4% London - Fulham / VAL (2014-Jan18)
> -14% Sydney - Olympic Park and Parramatta / MED VAL CON (yoy -Jan18)*
> -13.5% Greenwich, CT / AVG PCS LUX (Q4 17)*
> -13% Dubai (2016 -Jan18)*
> -12% Manhattan / AVG CON LUX {3+ bedrooms} (yoy Jan18)
> -12% London - Knightsbridge / AVG PCA (Jan18)*
> -12% Stockholm (Aug17P-Jan18)*
> -10% UK - Central London, Oxford, Cambridge, Aberdeen / AVG PCS (Feb18)*
> -8 to -10% Greater Toronto - Whitby / LST DEV EST NBY (yoy -Jan18)*
> -9% London / PCA LUX {exclusive neighborhoods} (Jan18)*
> -8.9% Toronto / PIX (Q3,4 17)
> -7.8% Sweden / PIX (Q4 17)
> -7% Shanghai / PCA DEV (Jan18)
> -6.5% Vancouver / AVG SFR (yearly 2017 vs. 2016)
> -6.2% Oslo / (yoy -Jan18)
> [-5.3% Manhattan - Upper West Side / LPS LUX (15-Jan18)]*
> -4% Regina / AVG (yearly 2017 vs. 2016)
> -4% Manhattan / AVG SPR COP (Q3-Q4 17)
> -4% Brooklyn / AVG SPR (Q4 17)*
> -4% London - Greater London / AVG PCS (Feb18)*
> -3.82% Canada / INF (Q317)*
> -3.28% Durango, CO / MED (yoy -Jan 18)*
> -3.5% London / AVG LST (yoy -Jan 18)
> -2.5% Sweden / PIX (yoy -Jan18)
> -2.1% Sydney / MED (Q4 17)
> -2.1% Norway (yoy -Jan18)
> -2%+ Sydney - Inner West, Lower North Shore, Northern Beaches / MED EST (Feb18)*
> -0.9% Sydney / MED (mom Dec17)*
> -0.8% Sydney / MED (mom Feb18)*
> -0.7% Sydney / MED (mom Nov17)*
> -0.5% Sydney / MED (mom Oct17)*
I continue to really love this list. Thanks for compiling Lurker!
Valhalla, NY Housing Prices Crater 7% YOY As Housing Correction Ravages Metro Area
https://www.movoto.com/valhalla-ny/market-trends/
CR8R
I was looking for something in Vahevala but it’s really hard to find.
https://www.youtube.com/watch?v=bcz3YIDPZXc
Azdude
“I am not seeing how its possible to raise rates without this market imploding.”
It’s NOT possible. That is why they are NOT going to raise rates. It’s NOT a Paul Volker tenure again.
Remember that Goldman is one of three major market makers and it also has a point man as Secretary of the Treasury. It will take at least three years to take it down to DJIA 12,000. It’s a longggggg arduous task, taking in shares and then enticing the public to buy again. Secular Bear markets usually run half the time of the preceding Bull market. Not enough space here to go through the stages leading up to exhaustion.
This is GREAT stuff! Two Russian comedians spoofed Adam Schiff, said they had nude pictures of Donald Trump:
http://www.dailymail.co.uk/news/article-5355713/Adam-Schiff-spoofed-Russian-claim-nude-Trump-pic.html?ico=amp-comments-viewall#article-5355713
Did we just witness Megabank, Inc’s amazing stealth fire fighting capability in action? The stock market volatility was completely extinguished almost as soon as it flared up.
No wonder Da Boyz on Wall Street make perpetual bets on low volatility, if suppressing and suffocating it is part of the central bankers’ playbook.
How can markets properly price risk if such risk-premium-lethal policy measures are standardly employed?
“The message that really matters is the one from [Fed Chair Jerome] Powell and that hasn’t really been delivered. We’re waiting on that to make a more decisive case,” said Kohli. “I think the key case for Powell is how he addresses the market volatility. … If you view volatility as an asset class, so far the Fed has been willing to suppress it, and the real question is, is that going to continue?”
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I read that the 600 pt gain in the last hour was related to the XIV making a rally. This party is just getting started.
HOGS get SlaughtERED!
What about Buttcoin do some men find so attractive?
This article makes it seem like you’d have to be pretty stupid (and likely female) to miss out on the easy path to prosperity which the cryptocurrency craze has to offer. Why can’t everyone be as clever as the writer’s brother? Got Bitcoin envy?
The Financial Times
Opinion Bitcoin
Bitcoin: why is it so male-dominated?
‘Over recent months, it is mainly men who have bought in to cryptocurrencies’
Hannah Kuchler
3 hours ago
A decade older than my brother, I take some things for granted. I have a professional job, a degree, a credit card; he stays up later than me, knows the cool music and can travel for months at a time. So it came as a surprise to find that his investments were raking it in — because, unlike me, he has put money into bitcoin and other cryptocurrencies.
Perhaps even more painful to admit, he encouraged me to buy bitcoin five years ago, when it was worth about $100, far below the $7,088 it is at the time of writing (or the almost $20,000 it was at its peak). It was an offer only a 17-year-old boy could propose: give me your money, I’ll invest it in bitcoin and give you a share of the proceeds. It turns out — even after the recent fall in bitcoin — it was an offer I was foolish to decline.
I am not alone. Ask most people outside Silicon Valley whether they own any bitcoin, and the answer will still probably be no.
So what do early adopters have in common? One factor is gender. As bitcoin and other cryptocurrencies such as Ethereum have soared over recent months, it is mainly men who have bought in.
Accurate data on who holds the anonymous currencies are hard to find, but Uphold, a virtual currency wallet service that does background checks on its users, says 75 per cent are men, while Coin Dance, which tracks statistics on the bitcoin community, found 97 per cent of engagement was from men. If men like my brother were riding high on returns, why weren’t women?
Cryptocurrencies are, of course, risky: their price is highly volatile and in some cases their digital exchanges have been hacked.
Anna Dreber, an economics professor at the Stockholm School of Economics, studies differences in risk tolerance between men and women. She cites one study that showed a 64 per cent probability that a random man would be prepared to take more risk than a random woman. Yet that alone is not enough to account for the difference between male and female bitcoin investors.
Much is down to information flow. Bitcoin and cryptocurrencies first became popular in the geekiest parts of the tech and finance industries, both male-dominated. The early word was spread mainly on Reddit and forums for discussing video games. Mt Gox, once the biggest exchange for virtual currency before it was hacked, started life as a platform for trading playing cards for a fantasy game called Magic: The Gathering.
Stephanie Hardesty, an investor who also describes herself as a bitcoin anthropologist, says she became interested in the currency in 2013 for two reasons. First, a male friend who was a software developer started telling her about bitcoin. Second, she found bitcoin allied with another interest of hers: cross stitch. After discovering she could cross stitch the QR codes that link to bitcoin wallets, she now keeps her public address as cross-stitch code on her desk at work and her private key safely offline, in a cross-stitched cold-storage wallet.
…
“Bitcoin: why is it so male-dominated?”
As once explained to me (by a woman) the y chromosome that males inherit is essentially the same as the x chromosome that females inherit except it has a missing leg. Among the many genes associated with this missing leg that men inherit is the gene for rationality, in other words, the gene for common sense.
Because I am a man I am tempted to take issue with this stance of hers but my experience with other men has led me to believe that perhaps she is onto something.
😎
Here is one more newly discovered negative of Bitcoin: High and positive beta with popular risk assets.
Another Bitcoin myth shattered provides yet another reason to dump your HODLings before they are completely worthless.
Precious Few
Gold Wins, Bitcoin Loses
So much for the digital currency providing negative beta.
By David Fickling
February 6, 2018, 7:13 PM PST
From Crypto
Photographer: Ulrich Baumgarten/Getty Images
Oh, Bitcoin. Your problem was never that you were too unpredictable. It was always that you weren’t unpredictable enough.
Bitcoin was never really going to cut it as a true currency. Its astronomical volatility — which is a problem if you want certainty about the value of your transactions or wealth — means that the likes of the Uzbekistani soum or the Ethiopian birr stand a better chance of supplanting the greenback.
Pegging It
The historical 30-day volatility of Bitcoin typically exceeds that of even currencies that have suffered devaluations
Source: Bloomberg
Note: All pairs are relative to the U.S. dollar. Spikes in birr and soum represent a 30-day increase in volatility after sudden devaluations. The pound is included as an example of a freely floating currency.
Still, Bitcoin’s disconnection from anything happening in the real world ought in theory to be its greatest virtue. The potential to provide negative beta — to move in the opposite direction of other assets in a portfolio, and thus take the edge off any swings and dips — has long been the best argument for investing in gold, Bitcoin’s shiny physical avatar.
The past 10 or so days have shown that there’s some life in the old yellow metal yet. While the S&P 500 Index fell 7.8 percent from its peak on Jan. 26 to its trough Monday, gold’s drop was a modest 0.7 percent, only bettered among major assets by the 0.4 percent fall in U.S. 10-year Treasuries. Bitcoin crashed 35 percent, making it look more like a short-volatility ETF than a worthwhile hedge against market turmoil.
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CITY & BUSINESS
Bitcoin ‘CRUSHED’: Banks ‘responsible’ for BURSTING crypto bubble but ‘hold liquidity key’
BITCOIN has been “crushed” and banks “may have been responsible” for bursting the cryptocurrency bubble after values plummeted in the last week, the chair of the department of economics at Long Island University has claimed.
By Joseph Carey
06:42, Wed, Feb 7, 2018 | UPDATED: 07:11, Wed, Feb 7, 2018
https://www.express.co.uk/finance/city/915530/Bitcoin-price-crash-cryptocurrency-BTC-dollars-market-investors-value-latest-update-news
“It was Janet Yellen’s parting gift to Trump. As she walked out the door of the Fed for the last time, surrounded by the media, she politely posed the question: “Don’t you think stocks look overvalued?”
I don’t think she ever said that. She may have thought it, but as I read the article, it seems to be something the author imagined her saying.
Whatever the case, now she’s at Brookings, a premier Washington stink tank.
the FED must save trumps economy! Isnt this bs insane?
Apparently Monday’s and last week’s downdraft was merely a fat-fingered glitch and it’s off to the races again on Wall Street. So borrow as much money as you are able, load up on stocks, and enjoy the ride to the moon!
Trump’s economy? What does that even mean? I still see overpriced homes, bad loans, and a rigged market. I had hope when I saw it plunge, but now it is “We’re back!”
What we do have, right now, is a YUUUUGE political crisis, as we find out that the DOJ is nothing but a sham. Corrupt judges, corrupt FBI, corrupt and/or useless attorneys. Unless that is cleaned up in a big way, the country is done and you and I are not going to like it.
As it stands right now, the FBI is a dead agency walking. Every case going forward, and many going back, is in jeopardy due to the corrupt practices of this agency. What jury is going to convict based on “evidence” presented by its agents? In fact the entire DOJ is in question at this point, the judicial system, everything.
Napa, CA 94558 Housing Prices Plunge 12% YOY As Housing Inventory Floods Market
https://www.zillow.com/napa-ca-94558/home-values/
*Select price from dropdown menu on first chart