March 3, 2018

Keeping The Situation Alive Is Part Of The Problem

A weekend topic starting with DSN News. “GSE reform has been a hot-button topic ever since Fannie Mae and Freddie Mac came under government conservatorship during the financial crisis, but it’s one of those talking points that often seems heavy on the talk and light on the corresponding action. This week an assembly of analysts and think tanks, including the American Enterprise Institute, introduced a proposal outlining how President Trump could, at least theoretically, move to eliminate the GSEs without having to rely on Congressional support.”

“The plan hinges upon having a Trump-appointed head of the Federal Housing Finance Agency, the government organization tasked with overseeing the GSEs. The FHFA is currently overseen by Obama-era appointee Mel Watt, whose term will conclude at the end of this year. The new paper argues that a Trump-appointed head of the FHFA could essentially whittle Fannie and Freddie down gradually. This process would involve limiting the types of loans the GSEs could purchase and lowering the size limits for those loans. The authors of the paper said they believed that the plan would allow President Trump to ‘break this logjam.’”

“In a January op-ed for the Wall Street Journal, Keynote Speaker Peter put it bluntly: ‘The trouble here is not merely that the Treasury is an outlier in what was supposed to be a deregulatory administration. It is also that the department’s current custodians appear to have learned nothing from the financial crisis, which was caused by precisely the policies they now support.’”

“The AEI paper argues that, rather than focusing on affordable housing mandates, government subsidies should be reduced, which they argue would bring down home prices and make homeownership available to a broader spectrum of Americans.”

“Not everyone would support such a plan, of course, with some proponents arguing that of Fannie and Freddie are in need of either moderate reform or minor policy adjustments. Moody’s Analytics Chief Economist Mark Zandi put it succinctly, telling MarketWatch that when it came to the GSEs, ‘it’s not fixed but it’s not broken.’”

“Last week California-based investment management firm PIMCO wrote in a letter to Congress that, ‘We believe GSE ‘reform’ should simply formalize the current state of affairs—namely, by making the government guarantee explicit and otherwise keeping Fannie and Freddie functioning as they largely are today. In other words, Congress should be honest about conservatorship: It has been and continues to be immensely successful, not to mention wildly profitable, and the current system works.’”

From The Daily News. “Zombie homes are a blight upon a community. Yet more fees aren’t the answer, according to Timothy Moriarty of Medina Savings & Loan. Moriarty visited February’s Association of Municipalities meeting to talk about zombie properties from a bank perspective. Using Medina Savings & Loan statistics, he said that out of every 100 loans, only three are delinquent. Out of those, one in 100 is 90 days past due and only one in 300 is in the foreclosure process.”

“‘You see the results of that, but it’s not like it’s overwhelming from a bank’s perspective,’ he said. ‘There is a lot of different circumstances why these go into foreclosures.’”

“The problem, he said, boils down to the fact there are two types of commercial lenders. Portfolio lenders — such as Medina Savings and Loan — make up 5 percent of creditors. They originate a loan and keep it, taking on the risk. The other 95 percent go through brokers and bid banks which package up loans — there’s no way to know who the mortgage owners are. There is no risk to those lenders.”

“From a portfolio lender’s point of view, Moriarty said part of the problem is New York State, after the latter changed its rules to greatly lengthen the foreclosure process. In the past, a homeowner might be four months delinquent and would have five months to resolve the situation. Typical foreclosure houses are zombie properties which have gone into disrepair over the years because the homeowners cannot afford to fix them. Moriarty said these people decide not to pay the mortgage anymore and simply stay there until the process is finished, which takes a couple of years.”

“‘I bring up the cost because from a bank’s perspective, you got to look at it used to be a five-month process. Get it back. Get it sold. Get it done,’ he said. ‘But now it takes so long and it’s so costly.’”

“Moriarty said tacking on fees isn’t the answer and all it does is raise the threshold at which banks walk away. However, the second type of lender — which makes up 95 percent of those who give out loans — would have sold the loan off. The banks can sell high-risk loans in through Fannie Mae and Freddie Mac. Moriarty said keeping the situation alive is part of the problem — that the United States taxpayers are on the hook for 95 percent of the loans.”

“He said the next housing crisis will be bigger than the previous one as a result. ‘There is very little we can do,’ he added. ‘All I can really do is go and change the locks and cut the lawn.’”

“Moriarty said to fix this problem, he suggested closing up Fannie and Freddie — government-sponsored loan enterprises — and making portfolio lenders, who will manage the risk, the leading lenders again.”

“He also said the homeowner seems to have zero responsibility in the entire situation and the process needs to go back to what it was by lowering expenses and shortening the process. ‘If they thought they only had five months like they used to, after they’re four months delinquent, they would be more responsible in making the payments,’ he said. ‘It used to be homes were the first things people paid,’ he said. ‘It’s the last thing people pay now. They’ll pay the car first because we can pick that up in 10 days. A home, it takes two years.’”




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170 Comments »

Comment by Ben Jones
2018-03-03 08:11:22

I highly recommend watching Mr Pinto from 15:45 to 31:45.

Eliminating Fannie Mae and Freddie Mac without legislation

https://www.youtube.com/watch?v=i625_QSnLO8

Comment by Professor 🐻
2018-03-03 14:27:26

“economics-free zone”

That about nails the effects of U.S. housing policy, which the Bernanke bailouts extended to the entire U.S. economy.

 
Comment by Professor 🐻
2018-03-03 15:24:26

The “Real House Prices and Construction Costs” figure towards the beginning of Peter Wallison’s talk is quite an eye opener. It shows that house prices began levitating well in excess of construction costs as early as 1984, and have remained levitated ever since. This suggests the origins of the Housing Bubble may date all the way back to the nearterm aftermath of Paul Volcker’s economic baptism by fire of fourteen percent long-term Treasury yields.

 
Comment by BlueSkye
2018-03-03 15:28:09

Affordable Housing Mandates…The government is simply beating the crap out of the moderate and below income family going back 65 years. Who benefits? The UHS!

Could “Affordable” be a more Orwellian term?

Comment by BlueSkye
2018-03-03 15:31:18

These old guys are all looking like they skipped getting a haircut for 3 or 6 months. I wonder if I should join up now that I’m not holding down an honest job and my hair is turning grey. The savings might add up quite nicely and perhaps I would look more wise though less responsible.

Comment by Professor 🐻
2018-03-03 16:46:13

That’s funny. I guess AEI doesn’t pay their researchers enough to afford a decent haircut.

I also got a kick out of hearing Peter Wallison accidentally start to say President Reagan instead of Trump.

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Comment by jeff
2018-03-03 16:40:36

“Who benefits?”

Evidently not low and moderate income buyers.

Government backed cash out refi and second home loans was half of the loans.

One out of ten dollars to low and moderate income buyers.

Comment by Professor 🐻
2018-03-03 16:54:01

To get the full damage assessment, you’d need to determine how many low- and moderate-income homeowners lost their jobs, homes and life’s savings in the 2007-2009 episode. That’s where the lure of easy riches through leveraged purchase of a home at a high multiple of income becomes permanently destructive to household financial stability. I’ll bet lots of the folks living under bridges these days could attest to this deleterious consequence of the mad attempt to force all Americans to purchase overpriced houses.

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Comment by Professor 🐻
2018-03-03 17:08:52

I am more optimistic about this proposal to rid the U.S. housing market of the evil twins’ death grip than any I have ever seen previously. But I wish AEI luck, as it won’t be easy to break the control of the coalition of realtors, homebuilders and financiers who are the beneficiaries of the GSE gravy train, and whose lobbyists bribe Congress to keep the system intact. President Trump may be the only hope to get this done.

Comment by BlueSkye
2018-03-03 18:50:08

President Trump may be the only hope…

1000 Hitler posts! I’ve no idea what changed the set of your sails.

Comment by Professor 🐻
2018-03-03 19:32:58

He’s turned out to be a good president on many levels. Nonetheless, leaders who seem to want unlimited power always make me feel uneasy. Look at Winnie the Pooh, for example.

PS I suspect that Hitler got an unfairly bad wrap compared to his power-loving peers, as the victors get to write the history books.

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Comment by BlueSkye
2018-03-03 20:09:07

A bad wrap is an unappetizing sandwich made of fillings wrapped in a tortilla.

ripped off the internet.

Bad Rap? He presided over the murder of millions of Christians and Jews. He might have been misunderstood, but I don’t think so. Oh Winnie the Pooh. I’ll have to catch up on that actor.

I hope for success in good directions for Trump, but it is too early for real heroics. Little steps are goog though.

 
Comment by Professor 🐻
 
Comment by Karen
2018-03-04 11:57:05

PS I suspect that Hitler got an unfairly bad wrap compared to his power-loving peers, as the victors get to write the history books.

You really are a lunatic.

 
Comment by Professor 🐻
2018-03-04 20:33:55

You really are an ignorant feminazi.

Trump wonders if U.S. could have president for life
By Mike Murphy
Published: Mar 4, 2018 5:17 p.m. ET
President also jokes about White House chaos at Gridiron Dinner
Reuters
President Donald Trump waves as he arrives in West Palm Beach, Fla, on Friday.

In closed-door remarks Saturday, President Donald Trump praised Chinese President Xi Jinping’s recent consolidation of power, and wondered if someday the U.S. could have a president for life.

 
 
 
 
Comment by Mafia Blocks
2018-03-03 17:32:05

Just as I’ve shown all along. Our costs haven’t moved in years. Not labor, not materials and definitely not the worthless dirt we build on. Competitive bid prices and price on executed construction contracts year after year demonstrate that fact.

So how do we get from earning a lucrative profit at $50/sq ft to outlandish multiples for a rapidly depreciating 20 year old structure?

Fraud.

Comment by BlueSkye
2018-03-03 18:53:49

If a maniac wants to, really wants to pay many multiples of the value of something, is it fraud to sell it to them? Yes, I think it is.

 
Comment by Karen
2018-03-04 12:00:40

Just as I’ve shown all along. Our costs haven’t moved in years. Not labor, not materials and definitely not the worthless dirt we build on. Competitive bid prices and price on executed construction contracts year after year demonstrate that fact.

So how do we get from earning a lucrative profit at $50/sq ft to outlandish multiples for a rapidly depreciating 20 year old structure?

Fraud.

I notice the resounding silence in response to this. Where are all your hecklers?

 
 
 
Comment by Ben Jones
2018-03-03 08:13:54

‘Economist Mark Zandi put it succinctly, telling MarketWatch that when it came to the GSEs, ‘it’s not fixed but it’s not broken.’

We can always count on Ho Chi Zandi to give us a commie perspective.

‘PIMCO wrote in a letter to Congress that, ‘We believe GSE ‘reform’ should simply formalize the current state of affairs—namely, by making the government guarantee explicit and otherwise keeping Fannie and Freddie functioning as they largely are today. In other words, Congress should be honest about conservatorship: It has been and continues to be immensely successful, not to mention wildly profitable, and the current system works.’

Maybe profitable to you bond guys who are risking absolutely nothing. Jeebus, the GSE’s are back in bailout mode.

Comment by Mr. Banker
2018-03-03 08:34:45

‘it’s not fixed but it’s not broken.’

Bahahahahaha … it’s JUST RIGHT! Just right in a Goldilocks sort of way, just right in that pukes do all the workin’ and bankers do all the reapin’.

God’s Plan.

 
Comment by Professor 🐻
2018-03-03 08:52:01

It would be interesting to know if Zandi is somehow on the GSE payroll.

 
Comment by Professor 🐻
2018-03-03 09:01:27

“It has been and continues to be immensely successful, not to mention wildly profitable,…”

I wonder if the government-sponsored duopoly status or the taxpayer-funded guarantee have anything to do with this?

And somehow the fact that home prices are again headed to levels that are beyond the financial reach of typical American families, thanks in part to ever-rising GSE loan limits, plus government-sponsored low downpayment loans, escapes scrutiny. Higher home prices are evidently consistent with the GSE mission to make America’s housing affordable.

Comment by Ben Jones
2018-03-03 09:17:12

Don’t forget central bank forced low interest rates and QE, buying up MBS. And there’s this:

‘Timothy Geithner’s Treasury Department Ignored Warnings Of Mortgage Fraud: Book’

‘In a new book, TARP’s former inspector general claims that he warned Timothy Geithner’s Treasury Department repeatedly that the mortgage program, HAMP, was a disaster waiting to happen. Instead of listening, he says, Geithner plowed right ahead with it, to serve the banks.’

‘Neil Barofsky, the congressionally appointed watchdog for the Troubled Asset Relief Program, which pumped $700 billion to banks, auto makers and homeowners after the crisis, argues in the book that the Home Affordable Modification Program introduced in early 2009 was poorly thought out and executed, opening the door for abuse.’

“The hurried rollout of HAMP would soon bring with it a rash of misconduct and criminal activity,” Barofsky writes. “Treasury’s bungling of HAMP and its refusal to heed our warnings and those of other TARP oversight bodies resulted in the program harming many of the people it was supposed to help.”

‘As it turned out, the main beneficiaries of the mortgage program were the banks — a repeated theme in Barofsky’s book, “Bailout: An Inside Account Of How Washington Abandoned Main Street While Rescuing Wall Street,” a copy of which was obtained before its release by The Huffington Post. The book is fairly blistering in its assessment of the Treasury Department’s handling of the bailouts, saying Geithner & Co. consistently took pains to avoid causing problems for the banks, often at the expense of homeowners and taxpayers.’

‘Barofsky’s concerns about HAMP began when he watched a “twitchy, sweaty and obviously nervous” Geithner announce only bare-bones information about the program, as part of a broader new bailout plan, in February 2009.’

‘Further details of the mortgage plan were painfully slow in coming. “That became Treasury’s modus operandi,” writes Barofsky. “[F]irst, announcements intended to ‘shock and awe’ the media that made for good sound bites but were not particularly well thought out; then, weeks later, scattered and incomplete details that had to be reworked on the fly. And finally, poor program execution that accomplished little, if any, of the originally announced goals.”

‘In a meeting with Geithner — this one involving fewer f-bombs than others — Barofsky says he finally realized the root of the Treasury Department’s apparent lack of interest in helping homeowners: They apparently had another goal in mind.’

‘At the meeting, Elizabeth Warren, then chair of a congressional oversight panel established in 2008 to oversee the bailouts, questioned Geithner about HAMP’s ability to help homeowners — not the last time she would grill him.’

“In defense of the program, Geithner finally blurted out, ‘We estimate that they can handle ten million foreclosures, over time,’ referring to the banks. ‘This program will help foam the runway for them.’”

‘To Barofsky it seemed that Geithner saw HAMP mainly as a way to stretch out the foreclosure process, giving banks time to recover from the crisis without having to be hit with a wave of foreclosures all at once.’

“Helping the banks, not home owners, did in fact seem to be Treasury’s biggest concern,” Barofsky writes. “HAMP was not separate from the bank bailouts; it was an essential part of them.”

Comment by Professor 🐻
2018-03-03 09:24:31

“Don’t forget central bank forced low interest rates and QE, buying up MBS.”

Do you think that could have been a factor in the GSEs’ wild profitability? ‘Ignore the man behind the curtain.’

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Comment by Mafia Blocks
2018-03-03 10:33:24

I I wonder how their efforts are going in selling off the 3 trillion dollar mountain of toxic housing bonds to foreign investors?

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Comment by Professor 🐻
2018-03-03 10:47:58

Business
Peter Navarro, former UCI professor and a top trade skeptic, in line for White House promotion
By The New York Times
PUBLISHED: February 26, 2018 at 12:32 pm | UPDATED: February 26, 2018 at 1:23 pm

While most economists say NAFTA has benefited the U.S. economy on the whole, Navarro has sharply criticized the deal. He has denounced some foreign investments as “conquest by purchase” and argued for retracting global supply chains back within the United States’ borders.

 
Comment by Professor 🐻
2018-03-03 11:13:32

Hopefully Navarro will follow Vancouver’s lead and put in place some barriers to entry against foreign real estate investors pricing U.S. families out of our own housing market.

 
Comment by OneAgainstMany
2018-03-03 13:34:35

Hopefully Navarro will follow Vancouver’s lead and put in place some barriers to entry against foreign real estate investors pricing U.S. families out of our own housing market.

And maybe a registry of beneficial ownership so we can identify corrupt oligarchs, drug kingpins, and money launderers who are washing their illicit gains through the housing market.

 
Comment by GreenEggsAndSpam
2018-03-03 15:17:44

Navarro is one of the few economists I have any respect for - came on my radar when he ran for mayor of San Diego back in the mid 90s I think. Called out the nonsense of the dot com boom when virtually everyone else was bending over backwards trying to justify the insanity as well as a number of shady deals the crooked politicians and businessmen cooked up in San Diego which the taxpayers had to pony up for. When I heard Trump tapped him as an advisor to his campaign my ears went up bigly.

My sense is Navarro and Trump want to end the potemkin village economy we’ve been under for the last several decades. I’m hoping the tax cut capping SALT was just the opening salvo.

 
 
Comment by aNYCdj
2018-03-03 13:14:40

Ive always said they should have bailed out CIT not AIG Cit provided short term cash advances to business for their accounts receivables and to make payroll.

What a colossal screwup

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Comment by Hi-Z
2018-03-03 11:33:22

“It has been and continues to be immensely successful, not to mention wildly profitable,…”

until of course, it isn’t when the bubble bursts same as before. Then taxpayers are on the hook for everything. Not going to be pretty.

Comment by Professor 🐻
2018-03-03 11:44:29

The “privatize profits, socialize losses” business model is as strong as ever!

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Comment by Jingle Male
2018-03-04 07:12:24

“…..the fact that home prices are again headed to levels that are beyond the financial reach of typical American families, thanks in part to ever-rising GSE loan limits…..”

The median home price in Detroit, Michigan is $145,000. Thank God they don’t have Fannie Mae loans there, so prices stay affordable…….

….or maybe home prices are the result of many, many factors, not just the GSEs lending programs.

Comment by Professor 🐻
2018-03-04 08:15:48

Detroit is kind of an extreme example, but you picked it, so:

Median household income (in 2016 dollars), 2012-2016
Detroit, Michigan $26,249

Median home price to median household income:
$145,000 / $26,249 = 5.5.

If you go back to the early 1990s or earlier, you would find home price to income ratios above 5 in places like San Diego or San Francisco, because “everyone wanted to live there.” By contrast, the ratios for upper Midwest cities were around a long-term stable level of 2.2, though probably less for crime- and poverty-ridden places like Detroit that many economically viable households preferred to avoid.

So your cherry-picked data point is indeed consistent with the existence of a Fannie Bubble in Detroit.

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Comment by rms
2018-03-03 09:12:47

A lot of paper would be downgraded without the hillbillies.

 
Comment by Professor 🐻
2018-03-03 09:21:25

The Great Debate
Will someone please put Fannie and Freddie out of their misery?
By Mark Zandi and
May 7, 2015

Federal Reserve Chair Janet Yellen’s speech on Wednesday made the case that the Fed’s policy response to the financial crisis has put the system on much sounder ground. Perhaps, but policymakers’ work is not over.

Something has to be done with Fannie Mae and Freddie Mac. These too-big-to-fail financial giants buy mortgage loans, package them into mortgage securities and guarantee investors in these securities against any losses if borrowers default on their loans.

The problem is that Fannie Mae and Freddie Mac are owned by U.S. taxpayers, who are thus effectively making most of the nation’s mortgage loans. They have been since the government had to take over the two mortgage-finance giants during the 2008 financial collapse.

Comment by Ben Jones
2018-03-03 09:43:45

‘Changing the system is critical but must be done judiciously. Nothing should disrupt mortgage lending today because the housing recovery is still fragile.’

Comment by Professor 🐻
2018-03-03 10:31:40

Meanwhile last month’s median SFR sale price in our zip code came in at a fragile $1.1 million, way beyond the last bubble peak.

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Comment by OneAgainstMany
2018-03-03 13:38:37

On my long run today I ran through scores of McMansion neighborhoods. The houses look like they haven’t been kept up well. The lots are ginormous and the houses reek of faux wealth, like the nouveau riche (or, rather, wannabes) don’t have the class to really make something look beautiful, so they just go big. I see a ton of listings on houses priced $500k or above but almost nothing below $200k. The price per square foot on the higher ends is very low compared to houses on the lower end.

 
Comment by rms
2018-03-03 13:48:06

“On my long run today I ran through scores of McMansion neighborhoods.”

Any trophy wives worth a second look? :)

 
Comment by GreenEggsAndSpam
2018-03-03 15:19:22

Any trophy wives worth a second look?

Sadly, I think they probably went big too ;)

 
Comment by OneAgainstMany
2018-03-03 16:06:05

Any trophy wives worth a second look?

Not in the McMansion neighborhoods. But it was the Lake to Lake relay going on and there were a few exceptionally good looking runners in the race.

 
Comment by Jingle Male
2018-03-04 07:21:06

“…….SFR sale price in our zip code came in at a fragile $1.1 million……..”

There are no GSE loans being made there.

 
Comment by Professor 🐻
2018-03-04 08:18:53

“There are no GSE loans being made there.”

I would guess the majority of recent sales in our zip code were GSE-funded condo sales, though I don’t have the data in front of me.

 
 
Comment by Mafia Blocks
2018-03-04 08:07:57

Given the fact 90%+ of all mortgages made since 2008 are subprime, ‘fragile’ is an understatement.

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Comment by Taxpayers
2018-03-03 14:40:35

Governmentarians,there is no left or right

 
 
Comment by Apartment 401
2018-03-03 08:25:46

Realtors are liars.

Comment by rms
2018-03-03 09:08:31

If you ain’t lying… you ain’t trying.

 
Comment by Drater
2018-03-03 10:22:37

…and their merry band of thieves - title, escrow, “recommended” lenders, appraisers, termite company, home inspectors, contractors/repairmen

 
Comment by Mafia Blocks
2018-03-03 10:24:08

…. and every closing a crime scene.

 
 
Comment by Mr. Banker
2018-03-03 08:28:06

“The banks can sell high-risk loans in through Fannie Mae and Freddie Mac. Moriarty said keeping the situation alive is part of the problem — that the United States taxpayers are on the hook for 95 percent of the loans.”

Bahahahahahaha … a nation of fools. Lenders keep the fees then pass on the loans - and all the risks - to taxpayers.

Bahahahahahahahahahahahahahahahahahahahahahahahahaha.

Comment by Mr. Banker
2018-03-03 08:51:14

There’s a real Gotcha situation at hand here:

Freddie and Frannie have to continue to exist else the market for outrageously stupid loans would evaporate and this evaporation would cause the evaporation of outrageously stupid prices which will cause the evaporation of outrageously stupid equity wealth which will in turn cause the evaporation of outrageously stupid equity cash-outs and the resultant evaporation of cashed-out spending by outrageously stupid idiots.

Not a good thing to occur in a stupid consumer-basec economy such as ours.

Comment by Mr. Banker
2018-03-03 08:57:29

consumer-basec = consumer-based

And by far - BY FAR! - the worse thing that could happen if Frannie and Freddie are reigned in is that the free ride for lenders would (gasp) come to a close.

The horror!

 
 
 
Comment by Professor 🐻
2018-03-03 08:50:25

Does it seem like foreign investors in U.S. real estate are pursuing a strategy of “conquest by purchase?”

Comment by Professor 🐻
Comment by OneAgainstMany
2018-03-03 09:30:01

Still one of my all-time favorite articles. I reread this one frequently.

 
Comment by steadykat
2018-03-03 10:50:52

Buffett, champion of bailout, is also leading beneficiary:
http://www.mcclatchydc.com/news/nation-world/national/economy/article24532354.html

“Selling The Nation Out From Under Us”

The Oligarch of Omaha’s Berkshire Hathaway fund would have disappeared without the bailouts that he fully supported 5 short years after drafting this 2003 trade deficit article.

Keystone XL Pipeline:
Interestingly, another billionaire, Obama economic inspiration Warren Buffett, stands to benefit from the Keystone XL pipeline delay. As oil production ramps up in the Bakken fields of North Dakota, plans to use the pipeline to transport it have been dashed.

As a result, North Dakota’s booming oil producers will have to rely even more on the Burlington Northern Santa Fe (BNSF) railroad, which Buffett just bought, to ship it to.

https://www.investors.com/billionaire-buffetts-bakken-boom/

Comment by alphonso bedoya
2018-03-03 11:22:53

Warren the Predator

“Watch the feet , not the ball.”–B-ball advice

Watch what he DOES, not what he says.

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Comment by rms
2018-03-03 13:53:48

“Buffett, champion of bailout, is also leading beneficiary:”

‘Ol folksy Gramps knows who comes first, and it’s not Joe Sixpack.

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Comment by BlackSwandive
2018-03-03 15:47:39

This guy owns a predatory lending company which provides high interest loans to poor people for manufactured homes, then takes them away for non-payment.

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Comment by Anonymous
2018-03-03 16:52:46

Yep, I remember how he profited by owning that railroad. Gee, think he knew ahead of time that the administration would delay the pipeline, and make the RR profitable?

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Comment by tango_uniform
2018-03-03 18:05:46

BNSF had its tail in a crack with the reduction in coal use across the country. They were the lifeline for the mines up in the upper plains states. I suspect that tanker rolling stock is going to constrain transport for some time, keeping transport prices high. You can’t convert a hopper car to a tank car and we don’t ship in barrels anymore…

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Comment by Ben Jones
2018-03-03 09:24:33

From yesterday:

‘Locally, there were 73 single-family homes and 13 condos sold in our coverage area this December. Of those, 27 single-family homes sold in the Hollywood Hills’ 90068 zip code. The median price for the area was down just under 2% from December 2016 to $1.451 million. The 90039 ZIP code, which includes parts of Silver Lake, Los Feliz and Atwater Village, had 20 home sales in December for a median price of $956,000, about 6.7% lower than the previous year. Condos in 90039 saw a nearly 20% drop in median price from last year to $728,000 for the five sold. Los Feliz saw 10 homes sell in the 90027 ZIP code for a median price of $1.43 million, roughly 17% lower than the previous December. The area’s condos saw a median price decrease of about 40% to $405,000 for the four sold.’

http://thehousingbubbleblog.com/?p=10360

OK, so maybe this is a statistical blip. But we’ve been seeing weakness in Los Angeles shacks/airboxes for a while, especially with the Chinese speculators. So what if these numbers represent the beginning of a collapse? Just southern California alone could blow the GSE’s out of the water. It’s not hard to see how fragile this whole thing is.

Comment by Ben Jones
2018-03-03 09:26:09

February 24, 2017

“The mansion on Fallen Leaf Road in the secluded Upper Rancho neighborhood of Arcadia has all the trappings a wealthy buyer from China could want. Yet two months after it was placed on the market, the house remains unsold. Not long ago, real estate like this would have been snapped up almost immediately. ‘It would have been gone in two weeks with multiple offers,’ said Dee Chou, the property’s listing agent.”

“Median home prices have dropped in Arcadia to $930,000 at the end of last year from about $1.1 million at the start of 2015. In San Marino, the median price for a home was $2.5 million as recently as the second quarter of last year before tapering to $2.2 million by the fourth quarter. Agents say the city is left with a surplus of luxury properties whose sellers could face pressure to reduce prices. One agent said her client had to drop his asking price for a property in Arcadia last summer to $8.3 million from $10 million because it drew no interest for three months. ‘All agents are crying that the money isn’t coming,’ said Sanne Lee, an agent for A + Realty & Mortgage in Rowland Heights.”

http://thehousingbubbleblog.com/?p=10006

Comment by Ben Jones
2018-03-03 09:35:28

‘February 26, 2018 - LOS ANGELES – Following months of defying severe housing inventory shortages and eroding affordability, California’s housing market dropped below the 400,000-level sales benchmark for the first time in nearly two years as sales declined on both a monthly and annual basis, the CALIFORNIA ASSOCIATION OF REALTORS®(C.A.R.)® said.’

‘January’s sales figure was down 7.6 percent from the 420,960 level in December and down 2.9 percent compared with home sales in January 2017 of a revised 400,580. The month-to-month decline was the largest in more than two years. Nineteen counties posted double-digit yearly price increases, and nine counties posted price declines from last year.’

Santa Barbara:

Jan. 2018: $567,000

Dec 2017: $730,000

Jan. 2017: $710,000

MOM%: -22.3%

YOY%: -20.1%

Comment by Mafia Blocks
2018-03-03 10:28:49

Santa Barbara housing prices down 22%+ in a year is just the beginning. Liars babbling about affordability when resale prices are 8x higher than production cost(lot, labor, materials and profit) is criminal.

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Comment by Ol'Bubba
2018-03-03 13:51:18

When was the last time you priced a lot in Santa Barbara?

 
Comment by rms
2018-03-03 14:02:15

Well there’s Romero Canyon, the Montecito area. It’ll be years, if ever, before the debris is removed.

 
 
 
 
Comment by OneAgainstMany
2018-03-03 09:32:52

I’m hopeful that soon as CA starts to turn, a lot of the equity locusts spreading over Nevada and Utah will disappear too.

Comment by Ben Jones
2018-03-03 09:39:21

‘Special loans and grants that make home ownership attainable’

‘Do you want to buy a home but do not have enough money for the down payment and closing costs? There are numerous programs to help homebuyers come up with the needed funds to take advantage of low-interest rates and an improving housing market.’

‘Government-backed loans are at last keeping up with the rising home prices and can get you in a home with as little as 3.5 percent down payment on an FHA program with a $636,150 loan amount.’

‘VA loans that are available to veterans and military personnel have a no-down-payment program with 100 percent financing up to a $636,150 loan amount. The loan can also pay all the closing costs associated with the transaction.’

“It is a very good time to take advantage of these programs and start building equity in a home of your own,” said Felicia Wellborn of New Penn Financial.’

‘As an example, a teacher buying her first home, priced at $400,000, can receive a grant of up to $15,000 in down-payment assistance through a special teacher home-purchase program. By combining the grant with the California Homebuyer’s Down Payment Assistance Program, which is a loan, the teacher can obtain an additional $12,000.’

‘The teacher’s family is also eligible for a federal tax credit as well as a tax deduction for mortgage interest.’

‘The teacher home-purchase program is designed for eligible teachers, administrators and staff in designated California schools. A borrower must live in the home and be a first-time homebuyer, defined as those who have not owned real estate in the past three years.’

‘The term is for 30 years, and payments on the loan are deferred for the life of the first loan with an interest-forgiveness feature.’

‘The California Housing Finance Agency offer several programs for homebuyers. The amount of assistance varies by loan product, loan amount and borrower eligibility. The purchaser must meet stipulated credit, income and loan requirements. Some of these loans do not have to be paid back.’

‘And you don’t have to be a teacher. The California Homebuyer’s Down Payment Assistance Program loan provides up to 3 percent of the purchase price to use for a down payment or closing costs, not to exceed $15,000.’

‘Along with this program, the homebuyer can use additional down-payment assistance loans or grants for help in the purchase of the home.’

‘Another program, the Mortgage Credit program, allows first-time buyers to take 20 percent of their annual mortgage interest payment as a tax credit against their personal income tax, reducing potential federal income tax liability dollar for dollar. The home must be their principal residence.’

‘Programs like these can provide the additional financial assistance necessary to make homeownership attainable for California homebuyers.’

‘Lynnette Shifman has a doctorate in business administration. She has worked as a Realtor for over 33 years and as an educator for over 40 years.’

‘Felicia Wellborn of New Penn Financial has been a senior loan originator for over 25 years. She values honesty and integrity in dealing with all of her clients.’

Comment by Sean
2018-03-03 10:25:10

Geesh, all that ‘program’ is missing is a low budget commercial.

Bad credit, no credit? We finance everyone! Se habla espanol!

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Comment by Mafia Blocks
2018-03-03 10:36:46

‘Felicia Wellborn of New Penn Financial has been a senior loan originator for over 25 years. She values honesty and integrity in dealing with all of her clients.’

:mrgreen: we’ll see.

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Comment by ItsNotATumor
2018-03-03 10:39:25

0 down on loans up to 636K? What could possibly go wrong?

I’m hearing commercials on the radio every 15 minutes when I’m driving around about unlocking your home equity - take a vacation, home remodel - in one commercial you hear a woman coo “I love your kitchen countertops!”. This is what happens when you become a lawless country with a baseless currency - you create a nation of predator scum.

Probably a few million living on the streets in their own filth. Mind boggling how f-d up this country has become.

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Comment by Ben Jones
2018-03-03 10:58:48

I’ve been hearing this on the radio too, especially around Phoenix, Tucson and Las Vegas. Then there are the 30 min-1 hour infomercials. It’s all cash out refi stuff.

FHA Loans
Own a home with less money down.
Home Improvement
Get cash to renovate a fixer-upper to move in or resell.
VA Loans
Special terms are available to vets and active duty military.

https://www.newamericanfunding.com/

Cash Out Refinance Loan Options
What loan types are eligible for Cash Out refinance?

All Types!

Including Conventional, Jumbo, FHA, VA, and Home Equity Lines of Credit - check with a Loan Specialist for your personal consultation.

Why Cash Out refinance?

If you’ve been thinking about getting a HELOC, consider a Cash Out refinance to access your home equity. You may want to use some of the money invested in your home to eliminate other debts, like credit card balances or to contribute to your children’s college tuition bills. Perhaps you’re looking to self-finance home improvement expenses or pay medical bills. You may even prefer to use it to fund vacation homes, a rental property, or start a business.

A Cash Out refinance could help you:

Access a large lump sum of cash
Pay off high interest credit card debt
Pay off a car loan
Pay student loans
Pay off medical bills
Finance a wedding
Take a vacation
Make home improvements
Pay for elderly care
Buy an investment property
Pay for college
Pay down debt and improve your debt-to-income ratio
Boost your credit score
Get a lower interest rate
Improve your financial situation
Get potential tax deductions (be sure to consult a tax professional)

https://www.newamericanfunding.com/loan-types/cash-out-refinance/

I even heard these guys say, “if you don’t need the money, take the cash out and give it to your favorite charity!”

 
Comment by goedeck
2018-03-03 11:10:15

The car that was 2nd place at this year’s Daytona 500 had on the hood “Click ‘n Close”.

 
Comment by Professor 🐻
2018-03-03 11:29:19

I don’t care for these policies which essentially put the U.S. taxpayer on the hook for welfare payments to homeowners and drive home prices sky high as a consequence.

 
Comment by Mr. Banker
2018-03-03 12:12:31

“This is what happens when you become a lawless country with a baseless currency - you create a nation of predator scum.”

This is what happens when you totally dumb-down a population, you get a nation of willing debt slaves whose lives become totally dominated by wonderful and benevolent bankers.

There, fixed it for you.

“If God did not them to be sheared He would not have made them sheep.” - Calveras

 
Comment by BlueSkye
2018-03-03 12:38:34

Boost your credit score…

I know it’s hard to have a high credit rating if you don’t use credit, but increase your credit score by refinancing your mortgage?

 
Comment by oxide
2018-03-03 12:58:00

A Cash Out refinance could help you:
… Pay student loans

And if you default on the house and declare BK, isn’t that fraud?

That said, the only two reason IMO to take any cash out is either to send a kid to college, or to do serious home improvements.

Serious home improvements = necessary and time sensitive. Big ticket stuff like new HVAC or roof, and possibly a kitchen/bath if the old one is really falling apart.

 
Comment by Professor 🐻
2018-03-03 13:11:34

Way back before the Housing Bubble, borrowing against your home was limited to home improvement expenses, a prudent restriction that helped balance the loan balance with the value of the underlying collateral.

Unless you expect your child to boomerang back to the nest after college and contribute income towards paying the mortgage, how does your child’s college education qualify as a home improvement expense?

 
Comment by Professor 🐻
2018-03-03 13:27:23

I suppose a home equity loan to pay for college would merely shift a little bit of the yuuuge and rapidly growing aggregate consumer debt overhang away from the $1.48 trillion pile of student loan debt onto the even more ginormous federally guaranteed pile of GSE debt. So perhaps it is a wash, so far as future bailout risk is concerned.

 
Comment by aNYCdj
2018-03-03 13:28:30

Pay student loans

Has anyone actually did this???? Bet the money all went to the man cave his and hers SUV’s and Disney…….

 
Comment by Professor 🐻
 
Comment by Professor 🐻
2018-03-03 13:48:05

I suspect Oxide may be talking her book… just a hunch. But if she has an economic rationale for why student loans are different than other non-housing investments that homeowners might want to fund through taking out a bigger mortgage, then I am interested to learn about it. Otherwise, we may need to go borrow a big enough mortgage to buy ourselves a house and a new car. And owning a car does come in handy for commuting to work in order to generate the income needed to cover monthly housing expenses, unlike college educated children, who normally move away and get a place of their own.

 
Comment by BlueSkye
2018-03-03 13:49:43

Serious home improvements…

Those things are maintenance unless you’re flipping the house. It is wise to plan a budget for keeping up with depreciation like that when buying a house. Just my experience.

 
Comment by Ol'Bubba
2018-03-03 13:56:44

I know this is a stretch, but paying for your kid’s college education might be considered as a form of retirement savings.

When you become old and feeble and dependent on your children, it’s better if they’re able to earn a higher salary thanks to their education.

 
Comment by S-Crow
2018-03-03 13:56:53

Ben -

New American is opening up a brand new office in Belleuve, WA (press releases via Housing Wire). Like you quoted:

“If you’ve been thinking about getting a HELOC, consider a Cash Out refinance to access your home equity. You may want to use some of the money invested in your home to eliminate other debts, like credit card balances or to contribute to your children’s college tuition bills. Perhaps you’re looking to self-finance home improvement expenses or pay medical bills. You may even prefer to use it to fund vacation homes, a rental property, or start a business.”:

BS. you are not paying off debt. you are shifting it onto your home. I see this ALL day long in closing these transactions.

 
Comment by Professor 🐻
2018-03-03 14:06:08

“…might be considered as a form of retirement savings.”

Having extricated my octogenarian parents from the grips of a $100K Ponzi scheme last year, your comment hits close to home.

However, there is no guarantee that your kids will willingly assume this support role.

 
Comment by In Colorado
2018-03-03 14:26:07

I know it’s hard to have a high credit rating if you don’t use credit, but increase your credit score by refinancing your mortgage?

I’m guessing that a cash out to pay off maxed out credit cards is involved.

 
Comment by scdave
2018-03-03 15:03:23

However, there is no guarantee that your kids will willingly assume this support role ??

Correct. Remembering that your child likely has a spouse that may not be as emotionally committed to you like your children may be.

 
Comment by oxide
2018-03-03 15:48:55

I suspect Oxide may be talking her book…

What book? You mean like cashing out equity to pay my college loans? I paid off my college loans in full in 2003.

Student loans are different in that they can’t be discharged in BK. CC debt is unsecured. Mortgage debt is secured by the house.

So what if somebody in a non-recourse state cash-out refi’ed, used the money to pay student loans, and then went underwater on the house and mailed in the keys? Effectively, the mortgage bank (actually Fannie Mae) just discharged the student loan. Is there a regulation that covers this? Are ALL cash-out refis recourse, or does it depend on the state?

 
Comment by BlackSwandive
2018-03-03 15:56:05

“However, there is no guarantee that your kids will willingly assume this support role.”

Exactly. Some kids don’t even care about their parents once they leave home, and wouldn’t kick in a dime or help with their care.

 
Comment by Professor 🐻
2018-03-03 16:37:45

Oxide, I was under the impression you had a kid who might be in college.

But good thinking on how to avoid the non-dischargable nature of student loan debt (though that may be about to change). Even better, if the Fed decided to reinstitute its authority to buy up MBS, the default on the home equity loan wouldn’t harm any creditor in case the Fed gobbled it up and buried it on its balance sheet forever.

 
Comment by Professor 🐻
2018-03-03 16:42:19

Student Loans Could Hurt Economic Growth, Says Fed Chairman
Christy Rakoczy
Updated on March 2, 2018

Federal Reserve Chairman Jerome Powell said Thursday that rising student loan debt could be a drag on economic growth going forward.

Powell, the top U.S. monetary policymaker, also questioned why educational debt can’t be thrown out under current bankruptcy rules.

His remarks in testimony before the Senate came just days after the Department of Education announced it was seeking public comment on modifying the “undue hardship” standard. Currently, the standard offers few borrowers student loan relief in bankruptcy.

Burgeoning education debt could slow growth

While Powell’s overall remarks before the Senate Banking Committee suggested the Fed has a positive economic outlook over the next several years, the chairman warned that ballooning balances on student loan debt could pose problems for economic growth.

“It absolutely could hold back growth,” Powell said in response to a question on student debt. “You do stand to see longer-term negative effects on people who can’t pay off their student loans. It hurts their credit rating. It impacts the entire half of their economic life.”

 
Comment by oxide
2018-03-03 18:46:16

had a kid who might be in college

Heh. I’m not heaped with the “box wine and multiple” stereotype for nuthin’. Nope, barren spinster here. (no cat at the moment)

 
Comment by rms
2018-03-03 19:29:05

“…studentloanhero…”

The colleges really have a hard-on for race-based stats these days despite laws. These student economic data should also be ranked by race.

 
Comment by Professor 🐻
2018-03-03 19:35:15

Oxide, don’t be so hard on yourself. Kids are great, but they tend to drain your resources big time.

 
Comment by cactus
2018-03-03 20:07:29

Kids are great, but they tend to drain your resources big time.’

yep thats true

 
Comment by cactus
2018-03-03 20:09:25

Having extricated my octogenarian parents from the grips of a $100K Ponzi scheme last year, your comment hits close to home.”

good for you. Old folks are easy targets

 
Comment by BlueSkye
2018-03-03 21:00:55

Old folks are…

I’ve spent most of the last two weeks sitting with my oldest daughter in the joint surgical unit and now in Rehab after some unfortunate bone breaks. She’s 40. Her “roommate” is a few years older than me.

I’ve heard the social workers give the roommate “interviews”. She’s strong willed but I’m pretty sure she’s not “going home”.

Make the most of the time you have I think. You never know.

 
Comment by Professor 🐻
2018-03-03 21:02:35

It was a nightmare, as I had to be the debt collector on this guy who had hit my dad up for over $100K in personal loans over a 15 year period. Each of the loans had a five-year term, but instead of repaying the loans on schedule, the guy hit my dad up for more money each time one was due. The borrower had a bunch of other creditors on similar terms. I expect him to go BK in the next crash, as this was a small-scale real estate investment scheme, and the guy didn’t do proper financials (kinda like the GSEs!).

 
Comment by BlueSkye
2018-03-04 03:35:02

Your dad is fortunate to have you around.

 
 
Comment by Taxpayers
2018-03-03 14:43:35

Teachers,closer to God then thee

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Comment by steadykat
2018-03-03 11:16:50

Washington County (SoUtah) collapsed in 2008 and it was ugly. Washington County unemployment spiked over 15% and we had a net loss of people for about the first time in history.

And we ended up with a bunch of these:
https://www.youtube.com/watch?v=RZK-kBIxPek

https://www.youtube.com/watch?v=5aUbxLtV-ps

Comment by alphonso bedoya
2018-03-03 13:20:29

steadycat

How do i know that the second video isn’t an Egyptian excavation site? “King Tut Estates” coming soon.
And for the owner/developer it’s a great family legacy, no doubt.
“Take a left up ahead at Cluster F$$K Blvd.”

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Comment by GreenEggsAndSpam
2018-03-03 15:27:02

Make a good episode on the HBB TV channel - hack a garmin and have it give you brutally honest descriptions about neighborhoods and the people in them and their shady history.

 
 
Comment by OneAgainstMany
2018-03-03 16:02:54

Thanks for posting steadykat. This is around where we live. We came after the bust, but I remember driving through smaller cities in Washington County during this time. Rural poverty is very different than urban poverty. It often isn’t as visible, but it seems to be more disheartening because there are fewer safety nets in place.

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Comment by BlackSwandive
2018-03-03 16:12:29

“Price on 50 acres here is about $1.2M on paper, I’m sure if you came in with about $800k cash you could probably get it.”

The guy talks with such confidence, but $800k was still delusional at the time. I’d like to see what it actually sold for.

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Comment by Mafia Blocks
2018-03-03 17:13:56

San Diego, CA 92037 Housing Prices Crater 6% YOY As Housing Correction Expands In Southern California

https://www.zillow.com/san-diego-ca-92037/home-values/

*Select price from dropdown menu on first chart

 
Comment by Jingle Male
2018-03-04 07:30:35

Max GSE limits are $680,000. They are not lending on those houses.

Comment by Professor 🐻
2018-03-04 08:27:35

No, but they are lending on all the houses that would be on the market at price points below $680,000 if they hadn’t already been snapped up by buyers qualified by GSE leverage to buy at high multiples of income. The resulting dry cleaner effect is a dessication of all inventory at affordable price levels, leaving only unaffordably priced homes for sale.

 
 
 
Comment by Professor 🐻
2018-03-03 10:23:30

Are you ready and willing to have your guns confiscated?

Politics
President Trump’s ‘Take the Guns First’ Remark Sparks Due Process Debate
Trump Says NRA Will Do Something On Gun Control
By Toluse Olorunnipa, Anna Edgerton and Greg Stohr / Bloomberg 11:10 AM EST

President Donald Trump hit a nerve with gun-rights enthusiasts this week after suggesting firearms should be confiscated from potentially dangerous people without a court’s approval, remarks that raised concerns among conservatives about his respect for the concept of due process.

“I like taking the guns early,” Trump said during a televised meeting on gun laws at the White House on Wednesday. “To go to court would have taken a long time.”

Comment by alphonso bedoya
2018-03-03 11:45:13

“Yup. Texas crazies r ready to give up their guns.”
— The Ghost of Hopalong Cassidy
.
.
.
I’m older than you :)

Comment by BlueSkye
2018-03-03 12:41:57

There’s no fool like an old fool.

Ancient proverb

Comment by alphonso bedoya
2018-03-03 13:21:41

“Take out the garbage, son.”

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Comment by BlueSkye
2018-03-03 14:59:00

Hey Gramps, you forgot to say “Get off my lawn!”

 
 
 
 
Comment by Apartment 401
Comment by Professor 🐻
2018-03-03 12:28:45

It’s pretty paranoid to pin the grabber narrative on Democrats when Republicans are the ones in power and their leader is the one breaking ranks with the NRA.

Comment by TIC TOK
2018-03-03 12:31:59

Trump says a lot of things I dont like.
So far though he has done lots of things I like. With guns, I’ll worry when he actually does the gun ban, not when he talks about it.

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Comment by Professor 🐻
2018-03-03 13:35:03

I don’t expect him to confiscate any law-abiding citizen’s guns. But I applaud his efforts to prevent those who enjoy shooting assault weapons into crowds from obtaining them and to mock Congress critters who are afraid that acting responsibly might upset the NRA.

 
Comment by alphonso bedoya
2018-03-03 13:37:08

They’re not taking away your guns. They’re not confiscating your gold. Relax. We’re merely paying the price for closing down hospital wards that treated these people in the late 1970s.
The country has one third doing just fine, one third marginal and one third lost. If you complain, you are labelled a Commie.
We gave a man yesterday an $800 million dollar paycheck. What did he create? invent? manufacture?
——————————————————————-
There is no photograph that does the downtown Miami condo development justice. None. You need to fly over it to appreciate its density. It’s a vertical slum with granite kitchen-tops.
Now pass the popcorn.

 
Comment by OneAgainstMany
2018-03-03 16:22:48

Wow, that Townhall article was a bunch of paranoia drivel. There have been a lot of things that Trump has done and said that I heartily disapprove of, but his willingness to take on the NRA and start a discussion on gun control is one thing that actually makes me respect him.

 
Comment by rms
2018-03-03 22:11:48

“We’re merely paying the price for closing down hospital wards that treated these people in the late 1970s.”

+1 Ronald “Mommy?!” Reagan

 
 
Comment by jeff
2018-03-03 13:10:36

I saw Andrea Mitchell repeat this quote this week and she lit up like a Christmas tree.

03/01/18 08:00 AM

By Steve Benen

“Take the guns first, go through due process second,”

http://www.msnbc.com/rachel-maddow-show/trump-shows-why-theres-no-point-talking-him-about-policy

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Comment by Maldonash
2018-03-03 10:35:02

My wife and I just bought our first home. We have rented together for 14 years in Los Angeles and 11 years in midtown Manhattan. Now we moved the family to Scottsdale - leaving both LA and NY. So far our quality of life is leaps and bounds above LA and NY, albeit not much cheaper. Let’s see if reduced taxes will save us noticible money.

I have read the blog off and on for about 12 or 13 years and even attended the Las Vegas get together. I am very nervous about our state controlled economy but decided to put down roots and purchase. It was an emotional decision and not financial… Time will tell if a good financial move or not. If we have a large bout of inflation then we are more protected. I can’t see inflation staying low for next 30 years.

Comment by Professor 🐻
2018-03-03 11:02:39

Good luck! I’m sure if your payments are manageable, you’ll do fine over 30 years.

Comment by azdude
2018-03-03 13:28:51

scottsdale is where the high rollers of az hang out.

Comment by Apartment 401
2018-03-03 16:09:40
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Comment by alphonso bedoya
2018-03-03 11:50:46

“…albeit not much cheaper.”

If you start to suffer from nostalgia, we can charge $20-$25 to get into a museum.

 
Comment by In Colorado
2018-03-03 14:28:23

I can’t see inflation staying low for next 30 years.

Keep in mind that wages will not even come close to matching inflation.

 
Comment by scdave
2018-03-03 15:18:52

and even attended the Las Vegas get together ??

Well I was there with you. Scottsdale huh. Interesting after NY & LA.

I spoke with a gentleman the other day. Very wealthy man. Owns lots of classic cars and racing planes including jets (think Reno Air Races). He won that race in 2006. He told me as far as he is concerned, Arizona is the best place to live and this dude can live anywhere he wants to.

 
Comment by Mafia Blocks
2018-03-03 17:46:42

“If we have a large bout of inflation then we are more protected. I can’t see inflation staying low for next 30 years.”

Do you really believe wages will triple or quadruple to meet grossly inflated asking prices of resale housing?

Of course not.

Housing prices will continued falling to dramatically lower and more affordable levels meeting wages.

Simi Valley, CA 93065 Housing Prices Crater 5% YOY As Los Angeles Area Housing Correction Accelerates

https://www.zillow.com/simi-valley-ca-93065/home-values/

https://snag.gy/m5EzRB.jpg

 
Comment by cactus
2018-03-03 20:11:44

Visit Flagstaff in the Summer to get out of the heat

I liked AZ it was alright

 
Comment by rms
2018-03-03 22:15:30

“It was an emotional decision and not financial…”

Eventually dad has to turn around and take one for the team.

 
 
Comment by TIC TOK
2018-03-03 12:29:08

Buddy of mine bid 40k above asking for a house. And he was outbid on that by 15k. This was in coastal N. CAROLINA.

The madness continues.

Comment by oxide
2018-03-03 13:12:52

Where and what was he buying? I checked the only sizable city — Wilmington —

$50K buys a fixer-upper,

$200K buys a cute 3/2 new build cottage,

$650K buys this 5/5 party house with a private boardwalk right to the Atlantic:

https://www.zillow.com/homedetails/1010-Carolina-Beach-Ave-N-Carolina-Beach-NC-28428/54350614_zpid/?fullpage=true

Comment by Taxpayers
2018-03-03 14:45:46

Oxide,I’ll see u in Brunswick co nc in ten years
Taxes r non existent

 
Comment by TIC TOK
2018-03-03 15:18:28

Yeah Wilmington.
$50k fixer upper? Lol. Maybe in 1980.
$500k on the Atlantic? Maybe Carolina Beach, aka Redneck Beach. On Wrightsville Beach, the good beach, $500k doesnt get a beach home.

http://www.starnewsonline.com/news/20180205/1000000-home-sales-surge-in-new-hanover-county

 
 
Comment by Taxpayers
2018-03-03 16:29:21

? I see price cuts and tons of new build in coastal nc

 
Comment by Mafia Blocks
2018-03-03 17:37:12

The madness fraudcontinues.

Chapel Hill, NC Housing Prices Crater 8% YOY On Record High Mortgage Defaults

https://www.zillow.com/chapel-hill-nc-27514/home-values/

https://snag.gy/m5EzRB.jpg

Comment by Maldonash
2018-03-03 18:42:34

Fortunately I do not work for wages…

 
 
 
Comment by Professor 🐻
2018-03-03 13:04:40

This book might be worth a look.

Coincidentally, I took a college course in money and banking out of Hubbard’s undergraduate text book. I can’t recall any discussion in the book or the course of subprime lending, downpayment assistance, minimal or zero downpayment requirements, interest-only loans, no-doc loans, too-big-to-fail institutions, financial bailouts, zero interest rate policy, quantitative easing, or Federal Reserve purchases of mortgage backed securities. This was way back in the pre-Housing Bubble era.

Books on Google Play
Seeds of Destruction: Why the Path to Economic Ruin Runs Through Washington, and How to Reclaim American Prosperity
R. Glenn Hubbard, Peter Navarro
FT Press, Aug 13, 2010 - Business & Economics - 288 pages

If you think the current administration is mismanaging the economy straight towards disaster, you’re not alone: so do two top economists from both sides of the political aisle. In Seeds of Destruction, former Bush chief White House economist R. Glenn Hubbard and well-known CNBC commentator Peter Navarro explain why current economic policy is a catastrophic failure. Then, they offer a comprehensive, bipartisan blueprint for reversing the decline of America’s currency, manufacturing base, and standard of living - setting the stage for the epic policy debates that will precede the 2010 elections. Hubbard and Navarro begin with a “checklist” of what it takes to be a prosperous, democratic nation - and show why Obama’s policies (some of Bush’s also) fail on every level. They explain why the activist Federal Reserve and Obama fiscal stimulus policies are doing far more harm than good… why we must restore the U.S. manufacturing base, whatever China says about it… how to transform tax policy into an engine of growth and innovation… how to apply the “tough love” needed to save Social Security, Medicare, and Medicaid… why America must resign the job of world policeman… how market-based solutions can finally deliver real energy independence… how to reform our antique financial regulatory system without imposing heavy-handed rules that cause even more trouble.

Comment by Professor 🐻
2018-03-03 14:01:03

There are lots of naked debt swimmers frolicking in the QE liquidity floodwaters as the Fed keeps yammering about taking away the punchbowl.

Total US household debt soars to record above $13 trillion
- Total household debt rose to an all-time high of $13.15 trillion at year-end 2017, according to the Federal Reserve Bank of New York’s Center for Microeconomic Data.
- The report said it was fifth consecutive year of annual household debt growth with increases in the mortgage, student, auto and credit card categories.

Tae Kim
Published 2:53 PM ET Tue, 13 Feb 2018 Updated 3:43 PM ET Tue, 13 Feb 2018 CNBC.com

The American consumer is loading up on debt.

Total household debt rose by $193 billion to an all-time high of $13.15 trillion at year-end 2017 from the previous quarter, according to the Federal Reserve Bank of New York’s Center for Microeconomic Data report released Tuesday.

Mortgage debt balances rose the most in the December quarter rising by $139 billion to $8.88 trillion from the previous quarter. Credit card debt had the second largest increase of $26 billion to a total of $834 billion.

The report said it was fifth consecutive year of annual household debt growth with increases in the mortgage, student, auto and credit card categories.

Comment by Professor 🐻
2018-03-03 14:14:25

“Total household debt rose by $193 billion…”

That’s about $600 per man, woman and child in the U.S. population.

 
 
 
Comment by Mortgage Watch
2018-03-03 13:12:39

Bellaire, TX Housing Prices Crater 21% YOY As Dallas/Fort Worth Area Housing Correction Accelerates

https://www.zillow.com/bellaire-tx/home-values/

*Select price from dropdown menu on first chart

 
Comment by alphonso bedoya
2018-03-03 14:18:16

Ce qu’on voit et ce qu’on ne voit pas.–Bastiat

Comment by Jingle Male
2018-03-05 06:05:12

What we see and what we do not see.-Bastiat

 
 
Comment by OneAgainstMany
2018-03-03 16:39:15

February auto sales numbers in the US were lousy. They were down 2%. On the other hand, it looks like EV sales will be up about 15%-20%. EVs continue to gain ground on ICE vehicles.

Comment by Professor 🐻
2018-03-03 17:03:08

I suspect the current subprime auto lending binge to end about when the Fed gets around to removing the easy lending punchbowl.

Auto loan defaults rise as subprime loans soar
By David Jackson · February 6, 2018

Subprime auto bonds are booming, with loans being sold to big investors in lucrative packages that include risky securities. Similar to the subprime mortgage crisis which led to the recession but on a much smaller scale, the auto industry is moving into risky territory.

The auto industry’s loans are valued at $1.2 trillion, so a crisis is expected to have far less of an impact than the housing market.

The colleterial behind the bonds being issued are less safe for investors, as borrowers are opting for 72-month loans over 60-month loans, large loans are being taken out and vehicle values are depreciating. Borrowers with credit scores in the 580 range are able to secure loans even with poor credit.

Interest rates as high as 11% are being promoted, with many owners underwater on their car loans.

Annual loss rates for subprime auto loans are up 3% since 2013, according to Goldman Sachs Group. Loss rates were at 5% in 2013 and up to 8% last year.

The Federal Reserve’s goal to increase interest rates has also led to many consumers choosing used vehicles over new vehicles. Car salesmen are helping those with credit scores under 600 find used vehicles with subprime options.

 
 
Comment by Mr. Banker
2018-03-03 16:59:19

“Ominous Sign For The US Economy: Spending On Hookers, Drugs And Booze Tumbles”

https://www.zerohedge.com/news/2018-03-03/ominous-sign-us-economy-spending-hookers-drugs-and-booze-tumbles

Comment by Professor 🐻
2018-03-03 17:13:36

Johns’, addicts’ and alcoholics’ consumption activities are the only things keeping the economy afloat?

Comment by oxide
2018-03-03 18:53:48

People who give those up are truly out of resources: no cash, no credit, nothing left to sell.

Comment by Mafia Blocks
2018-03-04 06:22:56

Hey Donk

(Comments wont nest below this level)
 
Comment by Jingle Male
2018-03-04 07:47:34

….or the economy is humming along and people have the means to do other things.

(Comments wont nest below this level)
 
 
 
 
Comment by Professor 🐻
2018-03-03 17:20:02

Who is buying Treasury bonds these days? Anybody?

Business News
March 2, 2018 / 2:20 PM / a day ago
Dumping U.S. debt, a possible weapon in global trade war
Richard Leong

NEW YORK (Reuters) - U.S. President Donald Trump’s plan to slap stiff tariffs on imported steel and aluminum has rattled financial markets and stirred fears that some trading partners might retaliate by dumping U.S. Treasuries.

Should China, Japan and other nations, which have recycled their trade dollars through their Treasuries holdings, suddenly decide to whittle them down, markets could be in for a rough ride.

Such a retaliatory move, in the wake of Trump’s first big protectionist action, comes at a time when foreign demand for U.S. debt is seen critical to offset an expected surge in federal borrowing needs, analysts and investors said on Friday.

Comment by BlueSkye
2018-03-03 17:59:45

Let it stop. We were stupid to borrow so much to maintain a fake lifestyle and police the world. Let’s work for a living instead of borrowing for a living. We’ll be much better off in the long run.

Comment by Mike
2018-03-03 21:11:51

You shouldn’t say such things. They make sense and therefor might disrupt the narrative

 
 
 
Comment by Mortgage Watch
2018-03-03 17:50:28

Financial District Manhattan Housing Prices Crater 11% YOY As Housing Correction Advances Rapidly In Major Cities

https://www.zillow.com/financial-district-new-york-ny/home-values/

*Select price from dropdown menu on first chart

 
Comment by Prime_Is_Contained
2018-03-03 21:47:00

Simplest idea for GSE reform: set the conforming loan limits for any given area at 3x the median household income, rather than setting it based on the median house price. The “affordability crisis” would be solved in short order.

Comment by rms
2018-03-03 22:36:10

Or the time-honored, 2.5 x Pretax Income?

 
Comment by OneAgainstMany
2018-03-04 08:34:21

Simplest idea for GSE reform: set the conforming loan limits for any given area at 3x the median household income, rather than setting it based on the median house price. The “affordability crisis” would be solved in short order.

+1000

 
 
Comment by BlackSwandive
2018-03-03 22:17:46

Off topic, but is anybody having trouble with certain websites/web pages sucking mass CPU lately? I had to install a coin miner blocking extension for Firefox a while back. That took care of everything for a while, but lately Yahoo and some other places are really sucking power again. I think it’s this craptocurrency scam that’s causing all these problems.

Comment by Professor 🐻
2018-03-04 08:32:30

So cryptominers are stealing processing power to mine their HODLings? This imaginary money nonsense has to stop soon…

 
 
Comment by jeff
2018-03-04 00:20:20

Try And Love Again (Remastered) · Eagles

Hotel California (Remastered)

https://www.youtube.com/watch?v=qD3aZ837VJY

 
Comment by taxpayer
2018-03-04 08:21:58

wonder how far under water Kushner is?

also the wealthiest hood in N VA, great falls has been going down for years=smart money leaving

 
Comment by jeff
2018-03-04 08:22:10

Betters to wear anti-gun pin

Stars to Wear Anti-Gun-Violence Pin at Oscars, Sources Say

1:41 PM PST 3/1/2018 by Ingrid Schmid

Michael Bloomberg’s New York-based gun-control advocacy group Everytown for Gun Safety has created an anti-gun-violence pin for celebrities to wear to the Oscars on Sunday, sources tell The Hollywood Reporter.

https://www.hollywoodreporter.com/news/stars-wear-anti-gun-violence-pins-at-oscars-sources-say-1089937

Comment by taxpayer
2018-03-04 08:42:24

there’s still UNarmed home lawn signs available

 
Comment by oxide
2018-03-04 12:31:19

They gonna give up their armed guards too?

 
 
Comment by Mortgage Watch
2018-03-04 08:24:48

Kure Beach, NC Housing Prices Crater 26% YOY As Vacation Property Mortgage Defaults Skyrocket

https://www.zillow.com/kure-beach-nc/home-values/

*Select price from dropdown menu on first chart

 
Comment by taxpayer
2018-03-04 08:41:08

30-year fixed rate loan rose to from 4.40% to 4.43% last week and up from 4.10% a year ago.
so 8% more most expense
and ? 5% ? more tax expense
that ought do it folks

 
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