February 13, 2018

Now Buyers Are Allowed To Be Cheeky

A report from ABC News in Australia. “If you needed a sign Brisbane has an apartment oversupply, a two-bedroom unit with city views in one of the most trendy suburbs has just gone for $50,000 less than it was bought for two years ago. The Paddington unit, which sold for $440,000 after it was renovated, is just one of hundreds of units that have crashed in value since an apartment construction boom created an oversupply, with no end in sight.”

“It is not just small units affected, either. A big three-bedroom pad in South Brisbane is now on the market for $799,000, which is what it was sold for brand new 10 years ago. A luxury three-bedroom unit at Toowong that would have snared up to $950,000 at sale two years ago has lost about $100,000 in value because of the soft market, according to its seller. Units in Kelvin Grove’s Urban Village that were valued at $450,000 two years ago are now going for $399,000. Agents in those areas are ’submitting all offers’ and taking buyers’ low bids very seriously.”

“National Property Research Company director Matthew Gross said buyers had done their sums in this oversupplied market, and they were being cheeky. ‘I think buyers have always been cheeky but now they are allowed to be cheeky,’ he said. Coronis Agent Gerard Hawes said the investor market dried up in 2017 due to the crackdown on foreign investors. ‘For those people looking for decent market value, our foreign investors did tend to push the values up on that property,’ Mr Hawes said. ‘So we have seen a bit of kickback of around 10 per cent across the board.’”

The Courier Mail. “Forget apartments, Brisbane is about to be swamped with a different type of attached dwelling — prompting fresh oversupply fears. As the inner-city unit sector flounders, industry experts say developers are turning their attention to townhouses, with a new wave of residential projects set to saturate the market in 2018. New research by PRDNationwide reveals the number of townhouses in greater Brisbane is set to surge by nearly 250 per cent this year, with construction scheduled to start on more than 5400 new townhouses. In comparison, there is set to be a 170 per cent increase in the number of new apartments predicted to hit the market this year.”

“Real Estate Buyers Association of Australia Queensland representative Zoran Solano predicts Brisbane is facing a townhouse glut over the next two to three years. Mr Solano, who is a buyer’s agent with Hot Property Buyers Agency, said he had been dealing first-hand with many developers who had been snapping up sites around the city for townhouse developments. ‘We’ve seen an unprecedented amount of apartment settlements in recent years, so it’s getting harder and harder for developers to sell that product,’ he said.”

“Mr Solano said townhouse investors should be cautious in the current market, with some of his clients having to pay the difference between the purchase price and the valuation of their townhouse. ‘These properties are being sold at overinflated prices and then not valuing up to contract price,’ he said.”

From the Daily Telegraph. “Four Sydney suburbs have topped a list of the most risky areas for home seekers to purchase new properties off the plan. The research examined areas under a number of criteria including where housing supply was tracking well above demand and pushing down prices. This, in turn, was putting recent buyers at risk of paying down mortgages worth more than the value of their homes, the RiskWise Top 100 Most Risky Suburb report said.”

“Inner Sydney suburb Zetland was ranked the riskiest suburb in Sydney to buy a unit off the plan, according to the report. The suburb and neighbouring Waterloo have 5000-plus new units in the pipeline. With banks releasing their own blacklists of oversupplied markets, many lenders would require higher deposits as security for off the plan buyers who purchased in higher risk suburbs, the group added.”

“‘Lenders understand that oversupplied suburbs carry a greater degree of risk,’ RiskWise said. ‘Unlike a straightforward property handover, off the plan investors must be able to attain finance approval after construction is complete, and if the market has sunk during the build period, they are fronting the mortgage on an overvalued property. Additionally, off the plan dwellings are typically marketed to investors, and when many — sometimes hundreds — of identical dwellings come online simultaneously, it can be a race to the bottom as investors drop rents to lure in a tenant.’”

From the Australian Financial Review. “Sellers are lowering prices on high rise inner-city apartments by up to 10 per cent, advisers are being offered $10,000 commissions to recommend apartment sales, builders are adding ‘free’ luxury fixtures and lenders are including new incentives – on top of record low rates – in a bid to revive flagging residential property markets, analysis of market offers reveals. Some off-the-plan apartments are being revalued by lenders before final settlement by up to 15 per cent lower than their original purchase price, causing credit problems for buyers before they finalise their deals, according to mortgage brokers.”

“Property groups, such as Kokoda Property, are offering mortgage brokers, financial advisers and accountants $10,000 bonus for every sale plus generous rebates on stamp duty and other incentives. For example, $1.5 million apartments in Ashwood, which is about 14 kilometres south-east of Melbourne, are being offered 3 per cent stamp duty and free blinds.”

“Steve Lusi, a director of Direct Property Group, said a lender crackdown on small apartments under 50 square meters is also slowing demand and reducing prices for developers and sellers. He said the asking price for an apartment in Melbourne’s inner-city South Bank is being reduced by 10 per cent from $315,000 to $285,000.”

From News.com.au. “Six years ago, Mark was talked into using his mum’s home as equity to buy his first house. Now, in the midst of a messy divorce, he’s going to have to sell his mum’s flat to give half the proceeds to his ex-wife. The Sydney father, who asked not to use his real name, said he felt ‘conned’ by the Aussie Home Loans broker into the highly convoluted process, which all these years later looks set to leave his mum homeless. The upshot of all this was the couple wound up with two mortgages totalling $880,000. “Ever since then I have been shaking my head thinking, ‘Why did we allow this to happen?’ We should be in debt for a family home [for] $650,000, not in debt $880,000.’”

“Mark said he just wanted ‘one house for me and my wife to build a family in,’ but now owned ‘two homes, owe a lot of money, and now I have to try and figure out what to do’”

“There was some good news, however. In 2014, the couple sold their Kogarah home to an apartment developer for $1.6 million. They used the money to buy a large home in Bundeena and pay off the Kogarah loan. Mark said when the Aussie Home Loans broker heard about the couple’s developer windfall, he began trying to ‘push me towards buying more homes so I could have a property portfolio.’”

“Housing market analyst Lindsay David from LF Economics said people needed to be aware of the risks when involving a parent’s home in the purchase of a property. ‘Marital issues, the loss of a job, more often than not it’s at those times, the worst possible time, when people have to start to consider how to unlock themselves out of the financial risks they’ve acquired,’ he said. ‘The majority of people just don’t have the cash to come up with a 20 per cent deposit, so we use unrealised capital gains that exist within a house like it’s a bank account. But you can’t just take a tile out of the land bank and pay it back to the bank.’”

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Comment by Ben Jones
2018-02-13 08:59:08

‘Ever since then I have been shaking my head thinking, ‘Why did we allow this to happen?’ We should be in debt for a family home [for] $650,000, not in debt $880,000.’


Comment by cactus
2018-02-13 09:44:15

Mark said when the Aussie Home Loans broker heard about the couple’s developer windfall, he began trying to ‘push me towards buying more homes so I could have a property portfolio.’”


Comment by BlueSkye
2018-02-13 13:11:21

I know a guy who borrowed close to half a mil from his mom to open a Deli. After a few years he declared bankruptcy on the loan and liquidated the business. He was quite the gambler too. I couldn’t sit in when he was at the poker table on Saturday nights. The ante was too high.

Within a year he bought a new motor home and truck. Cash I’m betting because he didn’t have a job.

Comment by Big V
2018-02-13 15:14:17

Sounds like tax evasion to me.

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Comment by BlueSkye
2018-02-13 18:54:19

Fraud in the BK court and he stiffed his own mother.

Comment by messagetorudy
2018-02-13 13:07:44

Even at 650K that house is probably double what it should sell for - I lived in Brisbane back in the day, the city is only nice in comparison with its sh-thole brethren in asia I suppose. Aussie incomes are pretty middling as well. Maybe theres a dingo/wombat/vegemite premium, but that probably equates to a mere 5-10K.

Comment by Mafia Blocks
2018-02-13 14:30:49

And quadruple the cost of lot, labor and materials to build it.

Comment by messagetorudy
2018-02-13 18:30:55

I dont know about quadruple but 2-3x wouldnt surprise me.

You also get old greek guys with muppet like eyebrows (e.g., hairy sponges) giving you the stink eye as you walk past their stores. Small price to pay for baklava.

Had to learn greek in primary school there, plus they had prayer time - and this was a public school. Saw one of my very pregnant teachers (still wearing heels) kick a kid right between the cheeks when he wasnt paying attention during PE, which included dancing - couples dancing.

Too bad the leftists had to destroy all that. Came back years later to walk the old streets only to find junkies shooting up in the parks and had one chase me out of the bathroom.

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Comment by rms
2018-02-13 22:34:36

“Saw one of my very pregnant teachers (still wearing heels)…”

Now that’s fugg’n rich. LOL!

Comment by 2banana
2018-02-13 09:02:17

QE unwind + DJT New Tax Laws + Rising Interest Rates = The Tipping Point (TTP)

7% mortgage rates come DEC 2018?


Four Rate Hikes in 2018 as US National Debt Will Spike
by Wolf Richter • Feb 12, 2018

Four rate hikes this year – that’s what Credit Suisse’s US economists said in a research note on Monday. Previously, they’d expected three rate hikes for 2018.

“With the economy near (or above) full employment, prudent risk management suggests the Fed ought to accelerate their tightening in response to a large positive demand shock,” they said.

In this cycle, the FOMC has raised its target range for the federal funds rate only at meetings that were followed by a press conference. There are four of them this year. This would mean that the Fed would announce a rate hike during each of them.

If the Fed raises its target range for the federal funds rate four times this year – so to a range of 2.25% to 2.50% in December – and if the still relatively flat yield curve remains relatively flat without steepening, the 10-year Treasury yield would reach about 3.85% by December.

But if the yield curve steepens toward a more normal-ish slope, it would push the 10-year yield somewhere near or above 4.5% by the end of this year. And this would likely cause the 30-year fixed-rate mortgage rate for top-tier borrowers, which is currently at around 4.5%, to rise above 6%, by the end of December.

And if 2019 also sees four rate hikes, those mortgage rates are likely to climb above 7% by the end of 2019. No one is prepared for this. Four rate hikes a year don’t sound like much – until it starts adding up.

Comment by Professor 🐻
2018-02-13 09:13:44

“7% by the end of 2019″

I’ll believe that when and if I see it.

Comment by azdude02
2018-02-13 10:53:13

are u shilling for trump?

Comment by Sean
2018-02-13 09:30:51

Bring it on!!!! The ‘price per month’ buyers are gonna get slammed!!!

Comment by sleepless_near_seattle
2018-02-13 10:00:55

Agreed. I’d like to see mortgage interest rates in the 8.5 - 10% range.

Comment by Mr. Banker
2018-02-13 10:25:23

Higher mortgage rates produce lower home prices.

Lower home prices destroys equity.

Destroyed equity:

1. Increases the number of debt pukes that are underwater.

2. Prevents equity cash-outs, which curtails spending.

(And the worse part …)

3. May cause me some mild discomfort.

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Comment by sleepless_near_seattle
2018-02-13 10:51:55

Maybe even an overshoot to the upside…so, 10-12%?

Comment by Ben Jones
2018-02-13 10:56:32

There’s no telling what might happen. Look at these Australian markets above. There are no loans in some areas at any price. When the Texas bust went down in the 80’s, many loans were 14% or higher and you had to have 30-40% down.

Comment by Professor Bear
2018-02-13 14:09:19

“When the Texas bust went down in the 80’s, many loans were 14% or higher and you had to have 30-40% down.”

When was the last time before the current period (e.g. pre-2010) when mortgage rates were at comparably low levels to current, and how long did it take for them to climb from there to 14% or higher?

Comment by BlueSkye
2018-02-13 14:29:43

FIL had a mortgage from 1960 that was 3%.

Comment by Professor 🐻
2018-02-13 20:15:44

That goes to my point, which is that we most likely won’t see rates go from 3% to 14% overnight. More likely it will happen over the course of decades.

Comment by 2banana
2018-02-13 09:34:12

QE unwind + DJT New Tax Laws + Rising Interest Rates = The Tipping Point (TTP)

The housing bubble is about to go up in smoke.


Plunge in Interbank Lending: The Straw that Broke the Fed’s Back
Mike Mish Shedlock - 2/13/2018

Interbank lending took a historic dive. Readers ask “What’s happening?” Let’s investigate.

A more robust explanation is the Fed is tightening two ways: The first by hiking, the second by letting assets on the balance sheet roll off.

Both measures have a tendency to push up long-term interest rates. This is another explanation for the long-end rising. Despite conventional wisdom, inflation and wages have little to do with it.

The treasury unwind started at $6 billion per month, increasing by $6 billion at three-month intervals over 12 months until it reaches $30 billion per month.

The mortgage debt unwind started at $4 billion per month, increasing in steps of $4 billion at three-month intervals over 12 months until it reaches $20 billion per month.

In short, when the Fed buys and sells bonds, it affects the interest rates on such bonds. So does the Fed pushing the Fed funds rate up or down. As a rough guide, a rate hike of 100 basis points is historically associated with a 25-point rise in ten-year Treasury yields.

The Fed expects to raise the Fed funds rate about 100 basis points, from the current rate of 0.375 percent, over the course of the coming year. This should, then, be expected to push up ten-year Treasury yields by about 25 basis points. The numbers above suggest that the Fed could achieve the same rise in ten-year Treasury yields by letting its maturing bonds roll off and selling an additional $600 billion worth.

Increasing number of rate hikes and rate hike expectations
Balance sheet tapering, which is an effective rate hike.
Repatriation of tax dollars puts upward pressure on rates.
Mortgage rates are at 4-year highs. This will pressure housing.

Comment by azdude02
2018-02-13 10:52:04

in a sense QE was a temporary loan. Now they want the money back apparently.When the bonds mature they get the principal back. The issuer of the bond pays the principal back. With treasuries that is the treasury dept. They have to issue debt to pay off the maturing debt.

So the debt is really going to transfer from the fed balance sheet to the treasury.

in the long run the taxpayers paid for all the bailouts.

Comment by BlueSkye
2018-02-13 13:34:52

It’s not really just the taxpayers who pay for the bailouts. It’s everyone who uses USD to buy the things they need and is not in the front end of the Willy Wonka wealth transfer machine.

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Comment by OneAgainstMany
2018-02-13 14:45:47

So the debt is really going to transfer from the fed balance sheet to the treasury.

I look at it as like this: the Treasury has been getting a sweetheart deal on the debt it issues because the Fed has bought so much and depressed interest rates. Now that the QE is reversing, the cost of debt will increase. There will be new buyers for this debt, but the cost will be higher. The debt will transfer from the Fed to other buyers. The cost to the treasury is the incremental cost in servicing the debt. The cost to the taxpayer is the myriad ways in which malinvestment occurs due to interest rate distortions.

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Comment by messagetorudy
2018-02-13 18:33:11

Thats the first time you’ve wrote something I agree with.

The stupid (including governments - fed, state and local) will have to pay more going forward - good.

Comment by In Colorado
2018-02-13 21:06:35

The stupid (including governments - fed, state and local) will have to pay more going forward - good.

Or they might just default and stiff a lot of people.

Comment by Mafia Blocks
2018-02-13 15:42:45

Shirley, MA Housing Prices Crater 12% YOY On Plummeting Housing Demand


Comment by 2banana
2018-02-13 09:05:12

No chance this would have happened under obama or Hillary…


Danielle DiMartino Booth: Don’t Count On The Powell Fed To Rescue The Markets
Adam Taggart _ Silver Bear Cafe - 2/13/2018

The new Fed Chair may break from his predecessors

To address these questions, former analyst at the Federal Reserve Bank of Dallas, Danielle DiMartino Booth, returns to the podcast this week. In her opinion, having studied Powell’s previous statements, she thinks those expecting him to continue the market support his predecessors provided will likely be quite disappointed.

Powell appears to be no large fan of continued quantitative easing, and has long been on the record as concerned about the eventual pain its unwind will cause. He very well may resist riding to the market’s rescue at this time, allowing natural market forces to finally have their way:

Look, this is a message that market participants do not want to hear: It is not the Federal Reserves job to put a floor under risky asset prices.

Compare and contrast Jerome Powell’s silence in the wake of the flash crash on his first day at work to Alan Greenspan — who got on an airplane the day after the Black Monday crash of 1987, canceling an appearance he was to have made, and reassuring the markets with a statement on Tuesday morning that the Federal Reserve was standing by and ready and willing and available to satisfy any kind of disruption in the banking and financial systems. That was the day — October 20, 1987 — that the Greenspan put was born.

My issue with the mainstream media these past few weeks is that they have been insistent on the fact that there is going to be a Powell put to follow the Greenspan, then Bernanke, and then Yellen put.

Powell himself has stated that was concerned that quantitative easing would end up being habit-forming for the markets.

Comment by Professor 🐻
2018-02-13 09:19:40

Talk is cheap at the end of a decade-long boom.
What makes anyone believe that Powell would respond differently than his predecessors in a crisis situation, with intense political pressure to reinstitute extraordinary accommodation?

Comment by 2banana
2018-02-13 09:22:12

Talk is cheap.

But we would not even be having this conversation under obama or Hillary.

Comment by jeff
2018-02-13 17:12:49

“But we would not even be having this conversation under obama or Hillary.”


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Comment by Apartment 401
2018-02-13 09:05:18

Realtors are liars.

Comment by azdude02
2018-02-13 11:02:06

BTFD era is over!

HAS the FED outlawed the business cycle?

Comment by Apartment 401
2018-02-13 11:37:31

Buy a house today and you will lose alot of money.

Comment by BlackSwandive
2018-02-13 16:52:55

QE was so wildly successful at making the FED’s banker buddies whole on their bad bets that, like a junkie, they just couldn’t stop once they started. Look for them to go “ALL IN” if things take an ugly turn. There’s nothing they won’t try to print away.

Comment by 2banana
2018-02-13 09:08:21

More government = more debt = more people who can’t afford the basics, let alone a house


Student Loan Crisis: Another Obama Legacy of Failure
The Revolutionary Act | 02/13/18

The crisis has its origins in 2010, when President Obama essentially nationalized the national student lending program by signing a law he had proposed and Congress passed that muscled banks out of the picture as lenders. Banks had been providing government-backed student loans, but Obama, in all of his community organizer wisdom, figured distant government bureaucrats could do it better than bankers and save taxpayers money. It’s laughable, sure, but he and Democrats apparently believed it.

“By cutting out the middleman, we’ll save the American taxpayers $68 billion in the coming years,” Obama said during the signing ceremony. “That’s real money.” By the way, that savings number comes from the Congressional Budget Office, which once again shows that a palm reader would probably be more accurate in projecting impacts.

The president assured Americans that anyone who wanted to go to college would be able to get a loan. Again, totally predictably, federal student loan debt skyrocketed, from $154.9 billion in 2009 to $1.1 trillion by the end of 2017, according to Investor’s Business Daily.

A recent U.S. Department of Education report puts it starkly. The report points out that the program had a $25 billion surplus in 2012. That fell to a $5 billion surplus by 2015, was $8.4 billion in the red in 2016 and plummeted to a $36 billion loss last year. Who knows where it will be by the end of this year.

Remember. This was pitched as a way to not only save money, but make money. Why let the banks make the interest when the government can?

One of his programs — called “income-driven repayment” but nicknamed “Obama student loan forgiveness” — allows borrowers to not make payments when their income falls below a specific threshold, then caps payments as a percentage of total family income. Any debt left over at the end of 25 years is forgiven. Because that’s how real life works.

It doesn’t take a genius with an expensive degree in human nature to know the perverse incentives that program provided.

Comment by cactus
2018-02-13 10:04:51

“genius with an expensive degree in human nature”

Maybe they are the ones who can’t figure out the perverse incentives that program provided. Or most likely don’t care.

Comment by oxide
2018-02-13 14:21:05

You gotta love those “distant government bureaucrats.” :roll:

Sure there’s a bunch of secret stuff going on at the top, but down at the “bureaucrat” level, nothing is distant. Almost everything is public. There’s a lot of public engagement if you know where to look for it: Regulations.gov, ecfr.gov, and federalregister.gov, not to mention individual websites. When the Dodd-Frank QRM rule was still being hammered out, the public could make a comment. Enough people made comments and got involved to change the proposed rule. Do you think you could get that from profit-driven Mr. Banker?

As for the student loan program going into the red, remember those loans were all government guaranteed to begin with. If banks had still held those loans, then the banks would be in the red and they would be bailed out by the government. So the gov would be in the red anyway. The problem wasn’t the bureaucrats. It was the policies, passed by Congress, that the bureaucrats have to follow. But it *did* cut out the middleman.

Comment by OneAgainstMany
2018-02-13 14:49:00

The explosion of student debt is a travesty, but I did support the government moving to cut the private sector out completely. Before this happened, the banks were making a guaranteed margin on top of these loans for basically doing nothing. The whole program should be revamped, but when the Federal government took over and cut out the middle man, it at least trimmed the skimming by the banksters.

Comment by Mr. Banker
2018-02-13 15:18:05

“Before this happened, the banks were making a guaranteed margin on top of these loans for basically doing nothing.”

“… basically doing nothing” Bahahahahahahahaha … that’s how bankers make all their money, by basically doing nothing.

Pukes work, bankers reap. Bankers prepare a few dotted lines (which, essentially, is doing nothing) and pukes willingly come into the bank and sign them.

Bahahahahahahahaha … a nation of dummies.

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Comment by da bear
2018-02-14 18:09:08

Things ain’t looking so hot for Obama University.

Oh wow. Just thought of that. It would be OU aka Owe You.

da bear

Comment by 2banana
2018-02-13 09:11:09

Well played Mr. Banker, well played…


“Six years ago, Mark was talked into using his mum’s home as equity to buy his first house. Now, in the midst of a messy divorce, he’s going to have to sell his mum’s flat to give half the proceeds to his ex-wife. The Sydney father, who asked not to use his real name, said he felt ‘conned’ by the Aussie Home Loans broker into the highly convoluted process, which all these years later looks set to leave his mum homeless. The upshot of all this was the couple wound up with two mortgages totalling $880,000. “Ever since then I have been shaking my head thinking, ‘Why did we allow this to happen?’ We should be in debt for a family home [for] $650,000, not in debt $880,000.’”

“Mark said he just wanted ‘one house for me and my wife to build a family in,’ but now owned ‘two homes, owe a lot of money, and now I have to try and figure out what to do’”

Comment by Mr. Banker
2018-02-13 09:25:30

“Well played Mr. Banker, well played…”

A piece of cake.

I enjoy making money the old fashioned way: I tell people what they want to hear and in return they hand over to me all their money.

Life is good.


Comment by azdude02
2018-02-13 10:28:49

Are there any cryptos backed by Tulips?

Comment by Professor 🐻
2018-02-13 09:11:44

‘I think buyers have always been cheeky but now they are allowed to be cheeky,’

Does this mean the buyers no longer need to write letters of agreement to feed the squirrels?

Comment by azdude02
2018-02-13 10:26:05

“trump filed for bankruptcy 4 times!!!!! He is the best man for getting our country out of this mess.”

Comment by Dr. Chim Ritchalds
2018-02-13 16:19:28

lol did Trump sodomize you? Your litany of comments here crying about him make it seem like he went in dry and hard and you’re still sore.

Comment by jeff
2018-02-13 19:13:09

“lol did Trump sodomize you? Your litany of comments here crying about him make it seem like he went in dry and hard and you’re still sore.”

Now I feel bad. :(

Here I’ve been giving poor old azdude a hard time about having Trump Derangement Syndrome and needing Skull Cream when that wasn’t the kind of Cream he needed at all.

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Comment by Saltwater Catfish
2018-02-13 23:34:45

Trump Sold a $40 Million Estate to a Russian Oligarch for $100 Million—and a Democratic Senator Wants to Know Why
By Tom Porter On 2/10/18 at 10:57 AM

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Comment by 2banana
2018-02-13 09:13:56

DJT cutting the size of government. As promised.

God Bless that man.


Public broadcasting chief decries proposed Trump budget cuts
The Hill | February 12, 2018 | Rebecca Savransky

The president and CEO of the Corporation for Public Broadcasting (CPB) warned Monday of the negative effects that President Trump’s proposed budget cuts could have on public broadcasting.

Trump’s budget proposes eliminating federal funding for the CPB over a two-year period. The budget has to be approved by Congress before it can take effect.

In a statement released Monday, Patricia Harrison said that the “elimination of funding to CPB would at first devastate, and then ultimately destroy public media’s ability to provide early childhood content, life-saving emergency alerts, and public affairs programs.”

Comment by oxide
2018-02-13 10:05:56

For supposedly being po’, PBS sure does spend lot of money to send me mail and call me on the phone to beg for money.

I had a good ol’ knock-down drag-out with one of those telemarketers calling “on behalf of” PBS. I told them that they should just play commercials, like any other network. If a few commercials for Tide and Mountain Dew are enough to pay for the Tom Brady Show, then surely a few mid-program spots for BNSF Railroad can pay for the guy who does the voiceover for Frontline. And a couple ads for Coke is a lot cheaper than staging those begathon concerts (Those Celtic tenors don’t work for free ya know). And since PBS doesn’t do much more than buy programming from the BBC and proceed to milk it to death (Downton Abbey anyone?), maybe I should just get a satellite dish and watch my TV direct from Britain — and anywhere else — instead of sending money to PBS. Then I wouldn’t have to endure three solids months of begathons each year.

And so on. That poor soul on the phone had no answers for me. Actually I think he put me on the reverse do-not-call list (whatever you do, do *not* call this girl..)

Comment by azdude02
2018-02-13 11:36:01

doesnt it seem robo traders have been painting the tape for 8 years?

Comment by alphonso bedoya
2018-02-13 16:42:50

Understand that when volatility disappeared, trading disappeared. For whatever the reason it was the grand experiment. We commoditized everything.
With regards to the present, Edmund Hillary said it best:
“Getting to the peak is only half the climb.”

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Comment by da bear
2018-02-14 18:13:11

Yeah, are there REALLY millions of shares of Proctor & Gamble being traded every day?

da bear

Comment by BlueSkye
2018-02-13 12:55:28

Advertising certainly helps run our government. I’d like to see all the Congress people wear jackets like race car drivers, with the emblems of their sponsors sew on.

Comment by oxide
2018-02-13 14:29:05

Or you could just go to opensecrets.org and see the sponsors for yourself. Here’s your Senator Gillibrand:

Boies, Schiller & Flexner
Davis, Polk & Wardwell
EMILY’s list
Morgan Stanley
JPMorgan Chase
Paul, Weiss, et al
Goldman Sachs
Blackstone Group
Sullivan & Cromwell
National Amusements
and others


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Comment by da bear
2018-02-14 18:14:36

So, the “little people”.

Comment by redmondjp
2018-02-13 23:12:38

And PBS has been showing ads for at least the past 15 years if not longer; they had Acura ads (I had to flip channels to be sure that I was really on the PBS channel) on, and then got even more sneaky and starting building the ads right into the shows (This Old House, for example).

Why should I send them a penny if they are making money selling ads? Oh yeah, I remember now - to support all of those six-figure salaries at the local PBS station! It’s not cheap living in Seattle.

Comment by OneAgainstMany
2018-02-13 14:54:25

I agree with general McChrystal: “Save PBS. It Makes Us Safer.”

I like to say that leadership is a choice. As our leaders in Washington confront tough decisions about our budget priorities, I urge them to continue federal funding for public broadcasting. Public broadcasting makes our nation smarter, stronger and, yes, safer. It’s a small public investment that pays huge dividends for Americans. And it shouldn’t be pitted against spending more on improving our military. That’s a false choice.

This might seem like an unlikely position for me, a 34-year combat veteran. But it’s a view that has been shaped by my career leading brave men and women who thrive and win when they are both strong and smart. My experience has taught me that education, trusted institutions and civil discourse are the lifeblood of a great nation.

Public broadcasting plays a special role with young children. According to the Pew Research Center, rising numbers of American children live with one parent or with two parents who both work.

My son and daughter-in-law are a two-income family with two children, and day care is a part of their lives. Many other parents must get by without day care services. These parents are busy in the morning and busy at night. They want to protect their children from over-commercialized content. And they strive to prepare their children for school and lifelong learning. Having thoughtful television, games and other media that is not commercially driven is essential to good parenting.


Comment by Ben Jones
2018-02-13 15:46:11

The moment PBS NewsHour realizes Donald Trump has WON THE ELECTION


That’s some sad pandas right there.

Comment by BlueSkye
2018-02-13 16:20:17

“the worst of us” elected a President.

I listen to NPR sometimes driving. They still don’t accept reality.

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Comment by 2banana
2018-02-13 10:04:13

What could go wrong?

And I hope you declared that income on federal and state income taxes.


Airbnb income can now count on refinance applications
Brittany Jones-Cooper - February 12, 2018 - yahoo

In Dallas, the average Airbnb host earns $10,311 a year by renting out their entire home. In Austin, a full home listing can bring in $17,007, and in the state of Colorado, the average host brought in $8,100 in 2017.

Now some of that Airbnb income can have an added benefit for some homeowners. Airbnb and Fannie Mae this month announced that three major lenders would recognize income through Airbnb as part of a homeowner’s mortgage refinancing application.

“People are earning part-time income in different ways through Airbnb, or other forms of part-time income never contemplated before,” said Jonathan Lawless, Vice President of Product Development and Affordable Housing at Fannie Mae. “Our aim is to work with lenders and partners who share our goal of finding innovative, safe, and sensible housing solutions by testing and learning from innovative ideas.”
What hosts need to know

“Qualified Airbnb hosts will be able to tap into their equity through a refinance and use that equity for other big expense or to reduce their monthly payments,” said Jonathan Lawless of Fannie Mae.

Comment by Big V
2018-02-13 15:20:41

Airbnb is merely an online platform for advertising rentals. There is nothing about it that somehow changes the amount or type of income that people can earn. If they aren’t reporting it on their taxes, yet they still find lenders willing to loan against the property, then I’m betting those lenders intend do foreclose.

Comment by azdude02
2018-02-13 16:54:45

seems the only good part of their service is weeding out the bad people.

Comment by Big V
2018-02-13 17:06:41

Does their service weed out the bad people better than a property management company could? It’s all based on reviews, right?

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Comment by azdude02
2018-02-13 10:14:54

we need to expand the FED balance sheet to stabilize the stock market for DJT!

Comment by azdude02
2018-02-13 11:21:00

For the first time in history the FED and treasury will both be selling bonds. Who is gonna be the buyer?

Another global central bank?

Comment by octal77
2018-02-13 13:24:58

“… Who is gonna be the buyer?…”


Holders of crypto? The Russian Mafia? Mexican Cartels? Wealthy Chinese immigrants with gunny sacks of $100 bills? The 1%?

Or better yet, holders of HELOCS who will recycle their dollars to the FED thereby creating the worlds first financial perpetual motion machine.

Get ready for the show. We may face a shortage of 10 gallon hats.

Comment by Rental Watch
2018-02-13 13:33:30

For the first time in history the FED and treasury will both be selling bonds. Who is gonna be the buyer?

Nope…the Fed is simply going to be buying fewer, and letting the ones that are maturing roll off their balance sheet.

We will find out in 12-18 months whether they will be actively selling bonds to keep shrinking their balance sheet, or whether they will simple allow it to naturally shrink (but at a slightly slower pace.

Comment by da bear
2018-02-14 18:17:00


Comment by azdude02
2018-02-13 11:33:16

i hired a buyer to buy my 50k chevy truck.

Comment by Mr. Banker
2018-02-13 11:59:12

Hire several and have them conduct a bidding war. Spread the word that there is really something special and mysterous about your truck and the highest bidder is sure to make out like a bandit. Then (reluctantly) allow outsiders to submit bids.

Comment by Mr. Banker
2018-02-13 12:06:27

BTW, Here’s a very pricy car that doesn’t even run that nevertheless has a “something special” tag associated with it …


Comment by rms
2018-02-14 22:14:45

“i hired a buyer to buy my 50k chevy truck.”

…aka a shill.

Comment by Senior Housing Analyst
2018-02-13 12:04:49

Parker, CO Housing Prices Crater 8% YOY As National Housing Demand Plummets


Comment by Lurker
2018-02-13 16:16:05

Weekly Summary: HBB-Reported Purchase Price Declines
Feb 7-13

> -25% [Toronto - Greater Toronto / EST SFR] (yoy Feb18)
> -20% to -30% Miami / PCS CND EST (Feb18)
> -20.9% Toronto sub - Mississauga / AVG (Mar17P-Jan18)
> -19.8% Toronto / AVG (Apr17P- Feb 18)
> -18.5% Toronto sub - Mississauga / AVG SFR (Mar17P-Jan18)
> -17% Toronto exb - Burlington / MED (Mar17P-Jan18)
> -15% Melbourne / ARV CND DEV (Feb18)
> -13.4% Toronto sub - Mississauga / AVG SFR (yoy -Jan18)
> -12.3% Toronto exb - Hamilton-Burlington / MED (Apr17P-Jan18)
> -11.8% Toronto exb - Hamilton / MED (Apr17P-Jan18)
> -12% Toronto - 905 ac / AVG SFR (Feb18)
> -11.3% [Brisbane / CND EST] (Feb16-Feb18)
> -10.5% [Brisbane / CND EST] (Feb16-Feb18)
> -10.2% [Brisbane sub / UPS CND] (Feb16-Feb18)
> -10% Brisbane / VAL EST (Feb18)
> -10% Melbourne - inner city / PCA CND EST (Feb18)
> -10% Melbourne - South Bank / PCA CND DEV ENT (Feb18)
> -9.8% Toronto sub - Mississauga / AVG (yoy -Jan18)
> -9.4% Oslo - area / AVG (yoy -Jan18)
> -8% Toronto exb - Burlington / MED (yoy -Jan18)
> -7.8% Sweden / AVG (Q417)
> -6% Toronto sub - Mississauga / AVG (mom -Jan18)
> -4.4% Sydney - Canterbury Bankstown / MED CND (Q417)
> -4.1% Toronto / AVG SPR (yoy Feb18)
> -3.9 Toronto - 416 ac / AVG SFR (Feb18)
> -3.7% Sydney - southwest / MED CND (Q417)
> -3% Berthoud, CO / AVG SP (yoy -Feb18)
> -2.2% Norway / AVG (mom -Feb18)
> -2.1% Sydney - south / MED CND (Q417)
> -1.9% Sydney - west / MED CND (Q417)

[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”)
Methodology: AVG Average, MED Median, PIX Proprietary Index
Type: LP Listing Price, SP Sales Price, VAL Valuation, PSQ Price Per Square Foot, PSM Price Per Square Meter
Specialty: PCA Price Cut Asking, PCS Price Cut Sold, UPL Under Purchase Price List, UPS Under Purchase Price Sold, LTF List Price to Foreclosure Auction Sale, ARV Appraisal Re-Valuation
Category: CND Condo, COP Co-Op, TOW Townhouse, 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)
Neighborhood: ac Area Code, zip Zip Code, sub suburb, exb exhurb
n.b. Type of decline, methodology, etc., are only noted when info is available in source material.

Comment by azdude02
2018-02-13 16:44:14

I am a real estate investor seeking an apprentice.

Comment by BlueSkye
2018-02-13 17:22:10

Is that you Typhoid Mary?

Comment by Senior Housing Analyst
2018-02-13 17:03:04

Euless, TX Housing Prices Crater 17% YOY As Housing Correction Expands Across Dallas/Fort Worth


Comment by Apartment 401
Comment by Professor 🐻
2018-02-13 21:01:25

Does your FOMO have you buying stocks when your own better judgement says we are nearing a market top?

Comment by Professor 🐻
2018-02-13 21:03:24

The Financial Times
The fully invested bear
18 hours ago
By: Dan McCrum

The latest from James Montier, one of the in house pessimists at asset manager GMO, lands with a conundrum inside.

Investors live in a cynical bubble, he argues, where certain things are taken for granted. “That the US equity market is obscenely overvalued,” he goes on, “can hardly be news to anyone.” On a Shiller PE basis, US stocks were only more expensive at the peak of the dot com bubble.

What we have, then, is “the fully invested bear”. Whether this is cognitive dissonance or Fomo (fear of missing out), it is odd. The professional failure of bearish inclinations for most of the last decade is perhaps one explanation.

GMO prefer non-US equities with the enthusiasm of a hungry vegetarian trapped in a fish market, but then they have been grappling with the new normal for years.

Think of the sentiment expressed by Chuck Prince, Citigroup chief executive, just before the financial crisis, who said bankers have to keep dancing while the music plays.

Comment by OneAgainstMany
2018-02-13 22:32:39

American Fertility Is Falling Short Of What Women Want

New York Times

The Upshot
Lyman Stone
Feb. 13, 2018


America’s fertility is in precipitous decline. Our team of forecasters at Demographic Intelligence projects 3.84 million births in 2017, down from about 3.95 million in 2016.

And it’s likely to fall further — far short of what women themselves say they want for their family size.

The latest data from the Centers for Disease Control and Prevention, reflecting births as of the year ending in September 2017, shows the total fertility rate at 1.77 lifetime births per woman, down 3.8 percent since 2015, and down 16.4 percent since its most recent peak at 2.12 in 2007. (The replacement rate in developed countries is around 2.1.)

The key factors driving down the birthrate are not mysterious: The pregnancy rate among young women is falling, and has been for years.

But what began as sharp declines in pregnancy and childbearing among teenagers — typically considered a socially desirable result — has slowly spread up the age cohorts, first to women in their early 20s, then to those in their late 20s. And now fertility decline has set in for women even in their 30s. Far from reversing as America grew out of economic recession, this lost fertility has worsened.

A key factor is that marriage is increasingly being postponed. Total fertility rates controlling for marital status have not changed very much over the last 15 years. But with marriage coming later, the share of women at peak childbearing ages (20 to 40) who are married has steadily fallen.

Comment by Mr. Banker
Comment by OneAgainstMany
2018-02-14 13:23:36

Very interesting read Mr. Banker, thanks for sharing. I agree that this is a possible explanation. My wife and I are college educated (bachelor degree), but neither of us have masters or doctorate degrees, although we plan to pursue those in the not-to-distant future. I haven’t thought too much about how education influenced my decision in picking a spouse. All the girls I dated were college educated, except for one hair stylist and one aesthetician. Both of those girls were wildly attractive, but we had little in common other than chemistry.

However, I tend to think that housing costs and the high cost of childcare is a bigger deterrent to having children. After all, the aforementioned article you cited did say that women are necessarily opposed to forming relationships with men who are less educated than they are. It’s more that there is a barrier to meeting them in the first place with online dating in which education serving as a reflexive filter. Either way, as the saying goes “the biological clock is ticking.” If women don’t pair up quickly, the length of time during which they can have a child is shortened.

I shared this article with the blog because we have had several ongoing discussions about housing and how population growth migh affect its demand. I continue to believe that the US population growth will fall far faster than people realize and if we crack down on immigration as we are now committed to doing, I think the demand for housing will be even less. All these factors just add to the bubble popping more spectacularly.

Comment by jeff
2018-02-13 23:57:35

Good Night

Nitty Gritty Dirt Band - Mr. Bojangles


Comment by CryptoNick
2018-02-14 00:54:14

It’s not too late yet to sell for a price above $0.

sponsored by
Bitcoin price: Wolf of Wall Street’s shock warning: ‘Bitcoin will end at ZERO’
BITCOIN’s skyrocketing prices have been compared to tulip mania that took over Europe during the 17th century – but “real Wolf of Wall Street” Jordan Belfort is claiming the cryptocurrency will ultimately lose its attractiveness.
By Aurora Bosotti
07:19, Tue, Feb 13, 2018 | UPDATED: 07:24, Tue, Feb 13, 2018
Jordan Belfort: Bitcoin will become a ‘footnote to the tulip bubble’

The comparison to the 17th-century tulip craze in the Netherlands has followed bitcoin since its infancy.

Tulip mania is another way to describe a speculative bubble where the natural worth of something is sent upwards by irrational demand.

The tulip craze saw the price of a tulip bulb - thought to produce unique and valuable flowers - move from being valued at the same as a country estate to dropping down to less than the price on an onion.

Mr Belfort, nicknamed the Wolf of Wall Street, has dismissed comparisons between bitcoin and tulip mania.

He said: “The chances, in my mind, of bitcoin becoming anything more than the greatest footnote to the tulip bubble are zero.”


Comment by Mr. Banker
2018-02-14 05:48:37

I predict the price of Bitcoin will never drop below its fundamental value.

Comment by tj
2018-02-14 06:23:45

I predict the price of Bitcoin will never drop below its fundamental value.

mr. boinker, (a term of endearment because we all know that’s what you do to all us pukes).

i know what intrinsic value is, but regarding bitcoin, what is ‘fundamental value’?

Comment by CryptoNick
2018-02-14 06:43:50

< $0 once electricity and the value of wasted time are subtracted

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Comment by tj
2018-02-14 07:07:41

< $0 once electricity and the value of wasted time are subtracted

you misunderstood the question.

Comment by Mafia Blocks
2018-02-14 07:34:11

Better than housing considering housing goes negative.

Comment by Professor 🐻
2018-02-14 07:26:04

The CPI came in hot today… something like a 6% annual rate. But stock market bulls needn’t worry, as last week’s bout of volatility was just a bad dream, which is henceforth fully contained.

Comment by Professor 🐻
2018-02-14 07:44:39

Is today when the 10-year Treasury yield will finally clear 3%? It’s hard to envision after so many years of extraordinary rendition under the Fed’s QE yield suppression program.

Comment by Mafia Blocks
2018-02-14 07:47:24

Get the 10 year up in the 8%-10% range and watch the economy accelerate like it never has before.

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