June 11, 2018

There’s A Lot Of Greedy Sellers

A report from the Kitsap Sun in Washington. “Although Kitsap County’s housing market has been firmly balanced in the favor of sellers for most of the year, buyers are now finding they have regained some bargaining power heading into summer, as more houses are coming onto the market. ‘We have a lot more listings, which means there will be more competition between sellers,’ said Silverdale-based John L. Scott broker Shelley Morritt. ‘The more listings we get on the market, the more it’s going to change to a buyer’s market rather than a seller’s market.’”

“For those above the $300,000 price point, Morritt said sellers shouldn’t be concerned if their properties are staying on the market for a bit longer than other comparable homes that sold earlier this year. The market conditions have changed. ‘If it takes longer than a couple of weeks in this market to get an offer, it’s because you’re overpriced. There’s a lot of greedy sellers,’ she said. ‘They’d be better off pricing it to what you think it will sell for rather than what they’d like to make. Don’t price yourself out of the market.’”

From the Denver Post in Colorado. “Metro Denver experienced a nearly 25 percent surge in the number of homes and condos available for sale in May versus April, according to the Denver Metro Association of Realtors. Unlike prior months, a surge in new listings wasn’t matched with a commensurate surge in home and condo sales. Those rose 6.5 percent to 5,235 during the month and are down 10.9 percent year over year. The median price of a single-family home sold in May dropped 0.88 percent from April to $451,000.”

“‘Overall economic conditions like employment, job growth and net migration are stronger today than 2007-2008. I don’t see a bubble any time soon, but keep an eye on inventory,’ Steve Danyliw, chairman of the association’s market trends committee, said in the report.”

From Biz West on Colorado. “As we head into summer — and peak season for residential real estate sales — it’s instructive for would-be Front Range homebuyers to get a lay of the land and see how regional housing prices are stacking up. We found one potential sign of prices easing up this spring. The Estes Park, Greeley/Evans, Loveland/Berthoud, and Windsor/Severance sub-markets all reported average sales prices slightly below their first quarter averages.”

From Mansion Global on New York. “Manhattan’s luxury real estate market is chugging along at a steady pace, said Donna Olshan in her eponymous Olshan Report. Buyers were getting an average discount of 11% from the original asking price, the report said, while properties spent an average of 390 days on the market. The priciest deal was for a full-floor co-op unit at 640 Park Ave., on the Upper East Side. The six-bedroom apartment was asking $21 million, reduced from the $25 million it was first listed for in February last year.”

“For the first time in more than a year, not a single co-op or condo was sold on the Upper West Side, though one townhouse did go into contract, the report said.”

From The Union in California. “Now that most of the votes have been counted, the losers have made their excuses, and the winners have advanced dubious theories for why they were victorious, do you still have questions about last week’s election? So much for the carpetbagger issue: Opponents of Rep. Tom McClintock love to point out that he can’t vote for himself because he doesn’t live in the Fourth Congressional district, but his opponent in November, Jessica Morse, is hardly a homebody. She returned to the area recently after long service elsewhere in the federal government.”

“(McClintock claims he can’t move into his district because he bought his house in Elk Grove just before the real estate bubble burst and would have to take a loss if he sold. Given today’s housing prices, that excuse doesn’t work anymore.)”

From the Illinois News Network. “Steinar Andersen is a disabled veteran, widower and father of a disabled stepson who is ready to move out of Illinois. But he can’t. Employed as a information technology manager, he and his wife bought an old farmhouse near Huntley in 2005. After the housing bubble burst and the state widened a nearby road, he’s deeply underwater on his loan. ‘I still owe $187,000 in principle,’ said Anderson, 55, now fully disabled from a service-related injury. ‘Once I get to $90,000 in principle in about 10 years, I’ll be able to sell at a $130,000 loss.’”

“Andersen isn’t alone. Collen Percy and her recently retired husband are $85,000 underwater on their suburban Plainfield home. They’re worried about property taxes eroding their home’s value further, pushing a potential payoff of their home further into their twilight years. ‘We’re stuck,’ she said. ‘We would love to sell [our home] and go live in a smaller home so we don’t have the upkeep and tax burden.’”

“Two new reports on home equity reveal that a number of Illinoisans, like Anderson and Percy, may be chained to to the state by a mortgage larger than their home is worth. A study of negative equity by Zillow found 16.4 percent of Illinois homeowners with a mortgage owed that is more than their home was valued as of the end of 2017. ‘There are several metro’s throughout Illinois that are even higher,”’ Zillow economist Sarah Mikhitarian said.”

“Centralia, Dixon and Canton are the highest, with nearly two of every five mortgages underwater. Chicago, Illinois’ economic engine and home to the state’s highest wages, saw 15 percent of mortgages carrying negative equity, representing $28 billion in lost home value.”

RSS feed


Comment by Ben Jones
2018-06-11 15:32:55

‘We have a lot more listings, which means there will be more competition between sellers’

Well wadda-you-know? They didn’t build them. These shacks were there all along, with greedy sellers hoping to get top price. All of sudden, they’re here! What happened to the shortage?

Comment by MGSpiffy
2018-06-11 19:22:52

Yup. The surge in listings is real, also combined with a slowing of sales velocity for existing listings. Can you say “plateau before reversing direction?”

Something to note about the first story: Kitsap county is the area across the sound west of Seattle: Bainbridge Island, Port Orchard, Bremerton, etc. People have been flocking there for cheaper homes, but it comes at a HUGE commuting cost if you work in Seattle, or heaven forbid, the eastside (Bellevue, Redmond, etc). You either have to take the one of the 3 ferrys across (limited capacity and schedule), or you are driving south across the Narrows Bridge into Tacoma. So it should be considered an outlier region for the Seattle Metro area. But then, that’s the kind of area you would expect a downturn to first be spotted in.

Anyway, if people out there are seeing a slowdown in sales, we may see people who were ‘on the fence’ jumping in “just in case the party’s almost over” - which will create an interesting feedback loop.

And $250K to $300K seems to be the inflection point for areas like Tacoma, etc - below that a lot of regular working people can afford to buy, above that your pool of buyers starts rapidly shrinking if you don’t have a big source of high paying (techy) jobs nearby - I think you had a story mentioned a while back about a guy in Tacoma who was selling 2 houses he owned - one sub $300K and one over, where the more expensive one didn’t get a fraction of the frenzy of the cheaper one.

Comment by b
2018-06-11 20:05:29

lots of Seattle / Bellevue / Redmond upper/middle class folks bought weekend places in Kitsap county. It might have been a mistake for them. A co-worker did that on Orcas iland and then his kids starting getting in grade 5,6,7 … and there are all these weekend activities. They used it less than 5 times last year

Comment by MGSpiffy
2018-06-11 21:35:37

Wow. Even worse than getting a boat…

(Comments wont nest below this level)
Comment by Taxpayers
2018-06-12 10:31:30

Lake house !
On househaters hivtv show
The kids are always 5-12
As soon as the doodads drop they’ll say “fck the lake house”

(Comments wont nest below this level)
Comment by TIC TOK
2018-06-12 11:55:42

My parents had a ski condo growing up. Once I hit 16 and had a license, that condo became my weekend hangout with friends. Tbese kids today are missing out.

They sold it for about 5x what they paid for it fwiw. It is impossible to have bought real estate in the 80s and not have made a killing, I think.

(Comments wont nest below this level)
Comment by oxide
2018-06-12 12:06:11

Nah, kids today just rent a similar condo through AirBNB. And make lots of noise.

taxpayer what are the dropping doodads? the bun in the oven?
gotta have that bunintheoven.

Comment by taxpayers
2018-06-12 13:06:57


then the kids ditch the parents

Comment by BearCat
2018-06-12 09:16:28

If you have to drive once you get to Seattle, the car ferries are very expensive (and capacity is even more limited). The main employer in Kitsap County (not counting local government like hospital and schools) is the US Navy, between Puget Sound Naval Shipyard, Bangor sub base, and Keyport Naval Station.

Comment by MGSpiffy
2018-06-12 12:49:38

But if you are running late and need to get home in less than 2 hours you can cut into the front of the line for the ferry… if you like risking an extended hospital stay…

(Comments wont nest below this level)
Comment by redmondjp
2018-06-12 14:33:37

But if you are on a bicycle, motorcycle, or 3-wheeled car (legally considered to be a motorcycle in WA), you are allowed to go to the front of the line.

Comment by MGSpiffy
2018-06-12 14:49:02

I didn’t know about the 3-wheeled car status - something like a Polaris Slignshot I guess? Not many people would risk driving around downtown Seattle in one of those though.

Yeah, it’s much preferable to have a 2-wheeler as the ferries can pack so many more bikes and pedestrians. I’ve just heard about what happens when someone who doesn’t know the drill tries to find the line for the ferry downtown :)

Comment by oxide
2018-06-12 18:17:07

Over and over again, why people are packing into these cities?

Why can’t a few fancy companies just start a new city? Or revive an existing city? All they need to do is pay the same salary that they would in, say, San Francisco. And people would move, believe me they would move. And no BS about “culture.” You’d get plenty of craft breweries and Sbux and all the “culture” almost overnight.

Instead, everyone seems to be attracted to tiny peninsulas with scarce land space (Seattle, SF), or fight over scarce water (LA, Denver), or move to places which are already congested (DC, Austin).

Comment by Professor 🐻
2018-06-12 19:12:45

“Why can’t a few fancy companies just start a new city?”

Happens all the time, mainly on the fringe of existing cities, where it is cheaper to locate than out in the middle of nowhere. Aka “urban sprawl”.

Comment by Mr. Banker
2018-06-12 20:35:40

“Why can’t a few fancy companies just start a new city?”

Here’s a city (sorta) that’s already been started, and I will sell it to you CHEAP!

I’ll even loan you the money to buy it with.


Comment by OneAgainstMany
2018-06-12 21:41:59

Oxide, your comment makes me think of the company towns of yore:

“At their peak there were more than 2,500 company towns, housing 3% of the US population. The companies that ran the towns were primarily labor companies such as coal, steel, lumber and various war industries. Most of the people living in these towns were immigrants new to the country. This could cause issues among the populace since the manager of the town would be in charge of establishing the town’s religion.[34][35]”


Planet Money did a pretty good episode on the Endicott Johnson Company (shoes) in upstate NY:


Comment by oxide
2018-06-13 06:26:17

OAM, I remember some of those. IIUC those towns were isolated one-company towns for geographic purposes: to be near the forests or the mines, or near a highway for shipping, or a railroad, or to dump the waste in a lake.

I’m thinking of existing towns. Imagine if Amazon went to Youngstown, or Google moved to Buffalo. Or, more practically, if the car parts factories moved back to Flint MI. Most of the infrastructure is already there. You could turn a town of 25K people to 75K people and still have plenty of land to build on, lots of surrounding farmland for food, local gov etc. You could have 50 of those pleasant cities instead of, say, one Houston.

Comment by OneAgainstMany
2018-06-13 07:58:39

That makes sense. What you’re describing would be much different from a company town, which is a concept that didn’t really pan out. Although it would be safe to say that some companies are de facto company towns. I’m thinking specifically of Sidney, NE which is facing the loss of their only employer, Cabelas, as Bass Pro took them over.

Krugman, which many people disdain on this forum, talks about why the dispersion you talk about doesn’t happen. In fact, his Nobel prize in economics has to do with the benefits that confer in economic growth to large urban areas. I think the reason what you are describing doesn’t happen is because there is an advantage for a company to be close to universities and other thriving ecosystems of companies. The more frequent exchange of people in close systems tends to lead to more innovation and sharing of ideas.

Maybe this can be replicated via the internet? Or maybe such proximity is less important as we shift from a production/industrial/manufacturing economy to a digital services economy? I don’t have the answer. But for whatever reason I don’t see small cities as having a renaissance. It seems that they are dying out, hence mayors offering free land if the millennials will just move there and build a house.

Comment by Carl Morris
2018-06-13 14:00:01

Why can’t a few fancy companies just start a new city? Or revive an existing city? All they need to do is pay the same salary that they would in, say, San Francisco. And people would move, believe me they would move. And no BS about “culture.”

I think it comes down to key people. Yes, you can do that with all the line workers and it will work. In fact it will make that even better and easier. But I think there are key people, especially in tech, that you have to go where they are to make it work. And you have to steal them from where they already work. And they don’t want to move and will be perfectly happy to stay where they are if you can’t give them what they want. I think tech is more dependent on a few top gurus than people realize. Lots of people can keep something that’s already working on course but very few can take new intensely complicated things and brute force them into working.

Comment by OneAgainstMany
2018-06-13 14:45:15

I think you are onto something there Carl. If thinks are good for the elite in the hot companies, but maybe not so good for the grunts, then there is not a big impetus to move. Also, we’ve had waves of consolidation in many companies, so competition is at an all-time low and start-ups are at a low too. So there are not many factors forcing these companies out of their comfort zone. Some of these well-paid workers enjoy a life that is very different than the service workers that keep the guts of a city functioning.

Comment by BearCat
2018-06-13 15:55:31

Carl, the Silicon Valley companies don’t believe that — why else would they be so eager to axe older, experienced (and more expensive) talent for younger, cheaper, more willing to work long hours people - unless, maybe, you’re considered a “superstar”.

But on the programming side, I don’t believe in the superstar theory - I agree with Larry O’Brian that the key isn’t having superstars, it’s avoiding bad developers…

Comment by Carl Morris
2018-06-13 19:34:35

I don’t like the superstar theory, but I think it has merit. For most code, no…just throw more “good enough” people at it and you can get it done eventually. But I’m talking about the architects…the people who actually invent the stuff and make it work at a high conceptual level…and can code it themselves if they have to. They really are irreplaceable.

I’ve been through my share of layoffs, several that affected me. Lots of older more expensive talent gets blown out because they’re not that much better than the younger people. But you never see the real gurus get blown out. First because they are kept to the bitter end if possible, second because as soon as they think it’s not going to work they have five other places they can go any time they want and they choose one and go. The best us mortals can do is just watch what they do…and when they leave it’s already past time to start looking.

Comment by Professor 🐻
2018-06-12 03:31:11

It’s amazing how long it took the race to the exits to get underway this time around.

Comment by Carl Morris
2018-06-12 10:47:46

Or are we just so far ahead of the curve it just seems that way to us?

Comment by BlackSwandive
2018-06-12 17:32:31

I’m not really seeing the race to the exits yet, though I’m sure it’s coming.

Comment by oxide
2018-06-12 08:54:41

The competition is below the $300K price point.

Greedy builders used the sub-$300K shortage to say that there was a shortage “everywhere” and whined until they got tax breaks and Yellenbucks. Then they promptly proceeded to overbuild profitable luxury units. Of course, city councils all over the country fell — and are still falling — for it.

Comment by tango_uniform
2018-06-12 15:05:36

Why wouldn’t the goobers in gov’t office NOT encourage the lux-o life? It means higher appraisals and higher taxes. SOMEONE has to fund Dan-the-DMV-clerk’s lifestyle when he retires as 55.

Comment by Ben Jones
2018-06-11 15:35:23

’I still owe $187,000 in principle,’ said Anderson, 55, now fully disabled from a service-related injury. ‘Once I get to $90,000 in principle in about 10 years, I’ll be able to sell at a $130,000 loss.’

Look at the bright side Steinar: it was cheaper than renting.

Comment by In Colorado
2018-06-11 16:00:27

The article says that he’s fully disabled, yet works as an IT manager. If he can hold down a job, how can he be “fully disabled”?

Also from the article:

Andersen isn’t alone. Collen Percy and her recently retired husband are $85,000 underwater on their suburban Plainfield home. They’re worried about property taxes eroding their home’s value further, pushing a potential payoff of their home further into their twilight years

What does the house’s eroding value have to do with pushing the mortgage payoff into the future, unless what they meant to say was that they can’t unload it on someone before the mortgage’s actual payoff date?

Comment by DF
2018-06-11 17:11:08

VA disability allows you to do that. It’s a totally different approach vs. SSI and SSDI.

Comment by rms
2018-06-11 21:34:00

This guy will be better-off without assets as he and his son are both disabled ward(s) of the state.

Comment by oxide
2018-06-12 08:56:01

I agree. Illinois is a recourse state, but maybe they would be better off getting rid of their assets and walking away from the house.

(Comments wont nest below this level)
Comment by oxide
2018-06-12 18:20:30

Colo, if taxes are higher, that’s money they can’t put on principle. Or money they can’t save up for an early payoff. But yeah, that shouldn’t have anything to do with the home’s *value.* Looks like this local newsrag had to hire the B team.

Comment by Mafia Blocks
2018-06-11 16:17:23

‘Once I get to $90,000 in principle in about 10 years, I’ll be able to sell at a $130,000 loss.’

Using honest math. That’s refreshing.

Comment by b
2018-06-11 20:06:42

ouch. It really sucks if you get upside down on a leveraged asset.

Comment by Mafia Blocks
2018-06-12 04:04:19

Considering a house is a rapidly depreciating asset that swallows cash every day you own it, you’re upside down from day 1.

This is why it’s never a good idea to pay more than construction cost ($50/square foot for lot, labor, materials and profit) for a house.

Murphy, TX Housing Prices Crater 5% YOY


(Comments wont nest below this level)
Comment by Albuquerquedan
2018-06-12 05:45:34

Many that are putting 3.5% down do not understand that leverage works both ways.

(Comments wont nest below this level)
Comment by BlueSkye
2018-06-12 06:00:22

Collen Percy and her recently retired husband are $85,000 underwater …‘We’re stuck…

Maybe it wasn’t wise to go to the Real Estate Casino while approaching retirement and bet your entire future.

Comment by oxide
2018-06-12 09:00:24

$85K is a lot of water to be under… what was the purchase price of the house to be that far underwater, especially after 10 years?

(Comments wont nest below this level)
Comment by Mortgage Watch
2018-06-11 15:46:54

Palm City, FL Housing Prices Crater 8% YOY As Retirement And Coastal Property Demand Collapses


*Select price from dropdown menu on first chart

Comment by Professor 🐻
2018-06-12 03:41:19

Whatever became of Rental Watch?

Comment by BlueSkye
2018-06-12 06:49:52

“It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.”

Crows still chasing him probably.

Comment by Ben Jones
2018-06-12 20:32:38

Could be dead. It’s happened before.

Comment by Professor 🐻
2018-06-13 00:19:36

Name changes, Exodus and blogcations also happen.

(Comments wont nest below this level)
Comment by In Colorado
2018-06-11 15:54:07

From Biz West on Colorado. “We found one potential sign of prices easing up this spring. The Estes Park, Greeley/Evans, Loveland/Berthoud, and Windsor/Severance sub-markets all reported average sales prices slightly below their first quarter averages.”

Interesting that Ft. Collins wasn’t mentioned, as it’s just across the freeway from Windsor, yet it’s the most expensive community north of Denver.

Comment by AztoORtoCOtoOR
2018-06-11 16:58:42

Seems like the perfect time for the state of Illinois to pass this proposal to pay the pensions (as was posted here a few weeks ago). This will really let these homeowners know they are living the American dream:

“Taxes will almost certainly have to go up to pay for Illinois’s pension debt. What’s the best way to raise them? We argue that a statewide residential property tax that expires once the debt is repaid is the most fair, efficient, and transparent of all available options. When we calculated how much taxes would have to go up, we found that the increases would be substantial even in the rosiest of scenarios.”


Comment by MGSpiffy
2018-06-11 19:24:04

expires once the debt is repaid

Uhm, I’ve seen that movie before. Spoiler: The repayment date is “Never”.

Comment by oxide
2018-06-12 07:24:32

Yup. Their tax proposal would have worked in, say, 1995. Greatest Generation families bought the houses in the 50s, paid them off in the 80s, and elderly grandma could live in the house with low tax until her death.

But now that people are buying later and later, and resetting the clock even later, they will almost never have a paid-off house.

Wasn’t there an HBB poster in Chicago with a paid off house? Wonder what she thinks of all this?

Comment by Mafia Blocks
2018-06-12 07:46:43

Hey Donk

(Comments wont nest below this level)
Comment by oxide
2018-06-12 12:07:26

hi hon

Comment by Mafia Blocks
2018-06-12 12:42:53

Housing Donk…. Housing.

Hollywood, FL Housing Prices Crater 6% YOY As Coastal Property Market Turns Stone Cold/b>



Comment by Neuromance
2018-06-11 17:53:23

So I saw a video the other day, which I highly recommend. It’s an interview at AEI (where Bush delivered his casus belli prior to the Iraq invasion). It’s a deep Washington organization.

The video is on monetary policy. It’s an interview with Bernanke and and four panelists, all deeply involved in the financial sector and the Fed. It’s all ably moderated by Desmond Lachman.

If you want to understand the state of the art of economic policy thought, this video is essential. These are deep insiders who are architects of QE, and skeptics. Each panelist’s speech is about 15 minutes. To understand government and housing, this video is important, and the last panelist is essential.

Link to video: https://www.youtube.com/watch?v=dnXLEaAJqno

Below are the panelists, and a link to a bio:

Kevin Warsh - Fed Governor: https://www.hoover.org/profiles/kevin-warsh

Stephen Roach - Senior Fellow, Yale, chairman Morgan Stanley Asia, chief economist Morgan Stanley: http://jackson.yale.edu/person/stephen-roach/

Joseph Gagnon: QE architect: https://piie.com/experts/senior-research-staff/joseph-e-gagnon

Alex Pollack: President/CEO of Federal Home Loan Bank of Chicago: https://www.rstreet.org/team/alex-j-pollock/

Desmond Lachman: http://www.aei.org/scholar/desmond-lachman/

Below are the sections of the video (minutes):

Introduction: Desmond Lachlan: 00:00 - 5:35

Bernanke interview: 5:35 - 34:30

Intermission: 34:30 - 37:00

Speaker introduction: 37:00 - 40:00

Kevin Warsh: 40:00 - 59:00

Stephen Roach: 59:00 - 1:14

Joseph Gagnon: 1:14 - 1:31

Alex Pollack: 1:31 - 1:48

Q & A: 1:48 - 1:59

Comment by rms
2018-06-12 10:17:24

All of these people privately realize the hardship that central banks have wrought on main street businesses and Sixpack families across the country. Bernanke’s speech should have been preceded with a playback video of his “it’s contained” speech to congress.

“Bernanke Was Wrong”

Comment by BlackSwandive
2018-06-12 17:51:54

“All of these people privately realize the hardship that central banks have wrought on main street businesses and Sixpack families across the country.”

It’s why I consider bankers and politicians the enemy. I absolutely DESPISE them.

Comment by BlackSwandive
2018-06-12 17:52:59

This, of course, includes all of their crony capitalist buddies, shill eCONomists, etc.

(Comments wont nest below this level)
Comment by Neuromance
2018-06-12 18:26:31

Yeah, Bernanke’s assertion that household debt is way down since the crisis (~29:40) is just wrong, according to the NY Fed’s report on household debt and credit. Maybe he’s talking about financial obligation ratios? But the Fed says, “The limitations of current sources of data make the calculation of the ratio especially difficult.” I’m not sure to what he’s referring.

Reminds me of the Vietnam era quote: “When you can’t measure what’s important, what you can measure becomes important.”

Also the attitude that QE didn’t cause asset bubbles, but if it did, no big deal seemed a bit cavalier.

I think the core problem is that they think prosperity comes from the top down and not from the bottom up. The problem is that if you have 10 well off people and 90 not so well off people, I doubt the economic activity of the 10 makes up for the 90. Also, corporations are not going to build out for nonexistent demand. They’ll soak up the low cost debt, but use it buy back stocks.

Regardless, this will continue until it has to stop. It makes “all the people in that room” wealthier, as Stephen Roach succinctly put it. Politicians have paid no real price. There is the rise of the non-traditional candidate, starting in the US back in 2008, with Obama beating McCain, and more recently in Europe. But here, it will require some Congressional turnover. And ultimately, until politicians lose jobs, the monetary reverse-robin-hood policies will continue. But of course there’s Japan.

Comment by rms
2018-06-12 19:55:14

“Yeah, Bernanke’s assertion that household debt is way down…”

No mention that it was due to bankruptcy, charge-offs and write-downs… not debtors paying-off their debts.

(Comments wont nest below this level)
Comment by Parker
2018-06-12 18:16:14

I listened to this in the car today. Fascinating insights on Bernanke and his recklessness. I found Kevin Warsh to be eminently reasonable.

Comment by Mike
2018-06-12 19:45:05

many thanks for this. Listened to the whole thing. Bernanke’s remarks were defensive, as I expected. It was interesting to hear that QT is essentially on auto pilot, less there be another market “taper tantrum.”

Comment by Neuromance
2018-06-13 04:35:55

“You may not be interested in monetary policy, but monetary policy is interested in you.”

It involves redistribution, so it helps to have some idea of the policymaker’s mindset. Trying to plan while not being aware of the Fed is very much like “Player 3 has entered the game.

Ultimately the central banks are given a lot of autonomy, but they are under political control. For example, the Indian central bank chief, Raghuram Rajan, started publicly questioning some sacrosanct elements of monetary policy and was terminated. It is important they do stay under explicit political control.

Comment by palmetto
2018-06-11 18:51:27

Congratulations and God Bless You, Donald J. Trump. Historic moment!


Comment by jeff
2018-06-12 10:04:56

I heard someone say those on the Left would rather be bombed than have Donald Trump save them from being bombed.

Comment by Albuquerquedan
2018-06-12 16:51:18

A lot of them got bombed Trump’s election night.

Comment by palmetto
2018-06-12 17:41:19

Time to go all McCarthy on their collective beezers. I’ve really had it with these azz-clowns. If they get back in power, we’re done as a nation and there just ain’t nowhere else to go. It’s bad enough now, imagine how much worse it can get.

(Comments wont nest below this level)
Comment by Drater
2018-06-12 18:13:25

Sadly DJT is just buying us a few more good years before society collapses…

Comment by jeff
2018-06-11 18:56:17

“There’s A Lot Of Greedy Sellers:

If you sell a house that you purchased in 2012 for $150k more than you paid for it does that make you a “Greedy Seller”?

Comment by palmetto
2018-06-11 19:02:27

jeff, did you sell your house and make out like a bandit?

Comment by jeff
2018-06-11 22:43:25

I purchased in 1984 and sold in 2005 and did, I am considering selling the house I bought in 2012 and doing it again.

Comment by palmetto
2018-06-12 11:48:50

I don’t blame you, but given your response to adan below, that’s a tough choice. There’s something to be said for having a stable, decent living situation and that can outweigh the profit you can get. As we both know, renting kinda sucks these days.

(Comments wont nest below this level)
Comment by TIC TOK
2018-06-12 13:03:22

My plan is sell my house and buy one 1/2 price. My house has appreciated $300k give or take since purchase. I will take that money stuff it under the mattress at 1.5% for 2 or 3 years.

The 1/2 price house will become a rental in 3 years when i buy the “nice house” again for a significant discount. And at the top of the next bubble sell both houses just in time for retirement, around 2030ish.

Comment by Mafia Blocks
2018-06-12 14:48:24

Good luck finding a buyer willing to pay $300k more than it’s worth.

Comment by Albuquerquedan
2018-06-12 05:43:25

Astute investor, once the house is actually sold. You are a greedy seller when you follow the house down in price because you always want more than it is worth at the time.

Comment by jeff
2018-06-12 08:51:51

“you always want more than it is worth at the time.”

The house is worth as much or more to me now than it ever will, it’s a perfect location for us, affordable, CBS, no HOA, decent hood etc. but if I decide to shut down and move that all changes.

Comment by Albuquerquedan
2018-06-12 06:01:57

Astute seller, greedy sellers do not sell they are foreclosed.

Comment by palmetto
2018-06-11 19:13:53

Now, when do we get to kick every last lefty/commie arse out of the US? It’s well past time.

Comment by aNYCdj
2018-06-11 19:43:09

I dunno the last couple of days i’ve been running into a lot of interesting articles

A Company Built on a Bluff

For almost 25 years, Shane Smith’s plan for Vice was that, by the time the suckers caught on, he’d never be stuck owning the company he co-founded.


Comment by Tarara Boomdea
2018-06-11 20:58:04

by the time the suckers caught on, he’d never be stuck owning the company he co-founded

An acronym, because it’s not worth a Master of the Universe’s time to say the words.

Comment by Professor 🐻
2018-06-12 03:29:13

Ready or not, here come more rate hikes.

The Financial Times
Global Economy
Federal Reserve considers retiring low-rates guidance
Surging US growth and tumbling unemployment set stage for the year’s second rate rise

Comment by Professor 🐻
2018-06-12 04:19:39

Market News
June 12, 2018 / 3:05 AM / Updated an hour ago
EMERGING MARKETS-Currencies in the cross-hairs as Fed hike looms
Marc Jones

LONDON, June 12 (Reuters) - Argentina’s peso, the Turkish lira, South African rand, Mexican peso and Pakistan’s rupee all weakened on Tuesday as pressure remained firmly on emerging markets.

Comment by BlueSkye
2018-06-12 06:06:58

Surging US Debt.

Comment by In Colorado
2018-06-12 12:03:38

Surging global debt. Individuals and governments are up to their eyeballs in debt everywhere. And don’t forget, we are the safe haven. Foreign capital flows here during times of crisis.

Comment by Get Stucco
2018-06-12 03:53:50

“Two new reports on home equity reveal that a number of Illinoisans, like Anderson and Percy, may be chained to to the state by a mortgage larger than their home is worth. A study of negative equity by Zillow found 16.4 percent of Illinois homeowners with a mortgage owed that is more than their home was valued as of the end of 2017. ‘There are several metro’s throughout Illinois that are even higher,”’ Zillow economist Sarah Mikhitarian said.”

How did so many Illinoisans manage to get themselves underwater on their mortgages, and stay there right through the second of The Housing Bubble’s twin peaks? A lot higher percentage of Illinoisans will find themselves underwater on their mortgages before this ends.

Try not to get stucco.

Comment by In Colorado
2018-06-12 12:07:29

How did so many Illinoisans manage to get themselves underwater on their mortgages, and stay there right through the second of The Housing Bubble’s twin peaks?

Maybe those expensive cars in the driveway, paying for the kid’s college, a big medical bill that wasn’t covered by insurance or a few fun, but very expensive vacations could have done the trick.

Comment by Get Stucco
2018-06-12 04:16:26

Can someone please remind me why our government is in the business of encouraging individual households to overpay for houses at prices they cannot afford? Does this have something to do with foaming the runways for banks?

Comment by Neuromance
2018-06-12 04:47:00

Watch the last 15 minutes of the video link I posted. The whole thing is extremely worthwhile but the last 15 minutes will kind of wrap things up.

Summary: politicians are in love with real estate. When the central bank was weak and heavily constrained, it was prodded to get involved. Now that it’s strong and the reigning intellectual paradigm is a hybrid Keynesian/Monetarist view, it too is in love with real estate.

Comment by hwy50ina49dodge
2018-06-12 06:22:48

“politicians are in love with real e$tate.”

Knot just politician$, there are other$, you know … The u$ual $uspects!

Name an equal a$$et cla$$ that bring$ in the large$t amount$ of monie$ when you inflate$ it$ value & multiplie$ it bye million$ of customer$ around the wobbling Central Wanker$ financial globe?

Nike teni$$ $hoes?
$tudent loan$?
Travel vacation$
Pa$$book $avings account$?
Image enhancement $urgerie$

(Oh, wait! All of the above can also bee had bye utilizing … Real E$tate appreciation$)

What a marvelou$ thing, real e$tate! … “Oh, Mr. Banker …”

Comment by rms
2018-06-12 07:58:21

“Watch the last 15 minutes of the video link I posted.”

Working on the video right now.

Comment by oxide
2018-06-12 12:10:04

encouraging individual households to overpay for houses at prices they cannot afford?

Because there are more voters who already bought, than there are voters trying to buy.

Comment by Albuquerquedan
2018-06-12 06:00:04

Finally an honest CEO. There are no jobs that Americans will not do. There are just some jobs where the amount companies are offering is less than Americans will accept. Part of that is the existence of the safety net, I am not advocating we abolish it but certainly you are going to have trouble filling a job when government benefits are more than what the job will pay. I do support some work requirements for the able bodied. We still have tens of millions of people that can be persuaded to rejoin the work force with the offer of a reasonably paying job:


Comment by oxide
2018-06-12 09:04:17

For your xenophobic pleasure, here’s a plant tour of a Hormel meat-packing plant, filmed in 1965 (4 minutes):


Comment by OneAgainstMany
2018-06-12 10:00:15

Wow, that does not look appetizing one bit. Makes me want to go vegetarian.

Comment by Taxpayers
2018-06-12 10:42:23

I toured them in 1977
Very Upton Sinclair

Comment by redmondjp
2018-06-12 14:47:10

Yup. There are some things that you are just better off not knowing. Heck, even if you like fruit or wine - you better not research the unintentional catches in the mechanized harvesting machines . . . just saying!

(Comments wont nest below this level)
Comment by Carl Morris
2018-06-12 15:59:53

Life is messy. People can “ewww” and “gross” all they want…but when they’re out there in the sun picking pretty soon they stop worrying about it too. The real problem is that so few people have that experience now. And that’s just for vegetarians…skinning and plucking takes it to another level.

Comment by Professor 🐻
2018-06-12 23:59:57

The lack of people with meat processing experience makes the industry an easy target for a strategically-placed ecoterrorist armed with a video camera. “Cow murderers!”

Comment by hwy50ina49dodge
2018-06-13 06:54:24

“Cow murderers!”

USDA choice cut Top $irlion

$2.88 fer 16oz

Bar.bee.q … or … Outdoor pizza oven

Deci$ions, decision$

$cratch.the.e.coli. rabbit greens

Comment by Albuquerquedan
2018-06-12 16:37:56

Meat packing is the perfect example it paid around $25 an hour in the 1980’s and it is ten dollars an hour less today not even accounting for inflation. A flood of immigrants caused that decline. Unions which addressed issues from the 1960s were crushed as their employers tried to deal with non-union immigrant staffer companies.

Comment by Albuquerquedan
2018-06-12 16:48:35

The $25 dollar was from a story I previous read and it appears to be inflation adjusted but the point is still sound, wages are significantly below their highs in that industry and immigration has played a major role.

An interesting article:


Comment by OneAgainstMany
2018-06-12 22:02:05

I read an article from Bloomberg this evening and this quote from the article kind of makes your point in a different way:

“What the sales data does show is that the interests of U.S. firms aren’t always the same as the interest of U.S. workers because American firms can profit from growth abroad without exporting from the U.S. and employing U.S. labor, he said.”

In other words, firms and the capitalist class can benefit while collectively dunking labor and the workers’ heads in the toilet and flushing it. In this regards, Piketty was absolutely on the money. He has talked at length about the gains of capital accruing to the top 1%, and more specifically the top .1%. Even this week’s edition of The Economist highlighted the prominent conservative (Torries) who are now talking about the need to reform capitalism (good capitalism vs bad capitalism) because it isn’t working. Here is a jewel of a quote from the article:

“The failure of our current model of capitalism to deliver the progress we all aspire to. Productivity growth is sluggish. Wage growth has stagnated. Economic insecurity is rife. A well-connected oligarchy is sucking up a disproportionate share of the proceeds of growth.”

(Comments wont nest below this level)
Comment by Mafia Blocks
2018-06-13 06:46:03

“Piketty was absolutely on the money.”

Picketty=Garbage in, Garbage out.

Comment by Carl Morris
2018-06-12 10:55:25

There are no jobs that Americans will not do. There are just some jobs where the amount companies are offering is less than Americans will accept.

Yup. As always.

And they complain that Americans won’t move. That should also be looked at the same way. Offer them a real salary and security and they’ll move. But nobody wants to move just to be a slave. Better to scrounge where your safety net is.

Comment by Parker
2018-06-12 06:26:38

The article may say that the cost of a SFH has gone down in the Denver area, but that’s only because prices are inching down from the top. I moved back to the Denver area over the winter and have been watching housing prices closely for a couple of years. This spring the market went even further off the rails at entry level price points. During the months of April and May, almost everything under $450K sold for $10K-$40K over list price.

Take, for example, this run-down hunk of junk in a shrug-worthy suburb that just sold for $367K within days of being listed at $350K:


It will be scraped and replaced with one of these hideously-designed and overpriced duplexes listed at $699K:


I am patiently awaiting the stiff breeze that will topple Denver’s house of cards real estate market.

Comment by b
2018-06-12 07:36:45

the problem is that lots of upper middle class people are moving into Denver. There is a gold rush in neighbourhoods like Lowry, Cherry Creek, Tech Center etc.

That has skewed the $400-600 market higher elsewhere.

My SIL is in a very nice house in Lowry - but it should not be ‘worth’ 1.5M.

Comment by Parker
2018-06-12 08:44:37

The other problem is that the marijuana industry cannot legally participate in the banking system and banks won’t accept their money at the risk of losing FDIC insurance. As a result growers and dispensaries have been parking or “banking” their money in real estate. I understand that a local credit union was recently established in response, but I haven’t kept up with how that’s playing out.

Comment by In Colorado
2018-06-12 10:16:21

Can you bring a briefcase full of cash to a closing?

(Comments wont nest below this level)
Comment by Parker
2018-06-13 21:47:45

Smells a little funny…

Comment by ibbots
2018-06-12 10:25:09

‘the marijuana industry cannot legally participate in the banking system ‘

That’s not going to change as long as Jeff ‘Hayseed’ Sessions is in office.

(Comments wont nest below this level)
Comment by Mortgage Watch
2018-06-12 07:07:39

Littleton, CO Housing Prices Crater 24% YOY As Housing Inventory Floods Denver Area


Comment by taxpayers
2018-06-12 08:48:44

inventory tight here in 22151
par is 50
16 is smokin

Comment by Taxpayers
2018-06-12 10:46:35

Wow,mall n office reits are still holding up?

A mall is a place for teens to observe each other and buy drugs.

Comment by BlackSwandive
2018-06-12 11:17:39

Nothing screams “healthy company” like a massive layoff of your workforce. Stick a fork in this pig.


Comment by Professor 🐻
2018-06-12 14:37:05

You know the end is near when WaPo announces the ‘Mother of All Credit Bubbles’. Good luck to the Fed with keeping it full of air!

Washington Post
Business Analysis
Beware the ‘mother of all credit bubbles’
By Steven Pearlstein

Comment by redmondjp
2018-06-12 14:56:12

Wow! So who is going to be getting all of these new Tesla models designed and ready for production then????

Comment by Professor 🐻
2018-06-12 16:48:43

Without a price reduction, nobody is going to be buying.

Comment by OneAgainstMany
2018-06-12 22:06:25

Read the letter that Musk sent out. Good letter and too the point. I think he is making a good move here, albeit a tough one. I liked this part of the letter:

“Given that Tesla has never made an annual profit in the almost 15 years since we have existed, profit is obviously not what motivates us. What drives us is our mission to accelerate the world’s transition to sustainable, clean energy, but we will never achieve that mission unless we eventually demonstrate that we can be sustainably profitable. That is a valid and fair criticism of Tesla’s history to date.”

Thought this was an interesting point:

“We are a small company in one of the toughest and most competitive industries on Earth, where just staying alive, let alone growing, is a form of victory (Tesla and Ford remain the only American car companies who haven’t gone bankrupt)”.

(Comments wont nest below this level)
Comment by OneAgainstMany
2018-06-12 22:08:05

Also, no production employees are being let go. In 2015 Tesla had 14k employees. In 2018 Tesla has 37k employees. Seems like there are probably some redundancies in scaling up employees so fast.

Comment by Albuquerquedan
2018-06-12 17:02:25

You have to give the devil his due. All Musk has to do is announce something that is supposed to happen in the future, like he will produce a car that will automatically drive you to the best place to buy avocado toast and the shares will shoot up. No matter that the company does not seem any closer to producing an affordable car and it will hit the 200,000 sold cars next quarter so the tax credit is fading out. Thus, the car people were expecting to take off the lot for $27,500 now costs $78,000. Soon he will announce that the flamethrower produced by the Bore company will be a $3000 option on a Tesla car and Tesla will shoot up 10%. Actually, it might be a useful option in the urban environment.

Comment by oxide
2018-06-13 05:12:35

automatically drive you to the best place to buy avocado toast

C’mon Dan, you’re slipping. A *true* Millenial-approved Tesla would drive itself to the store, buy the avocado toast, and drive it back to you. In an hour.

Comment by Albuquerquedan
2018-06-13 06:18:02


(Comments wont nest below this level)
Comment by OneAgainstMany
2018-06-13 08:07:46

Pretty sure that millennials aren’t going to be buying Teslas. Too much student debt. Then again, they life with mom and dad, so maybe a car payment can replace that free rent?

Comment by Mortgage Watch
2018-06-12 12:31:27

Falls Church, VA 22046 Housing Prices Crater 14% YOY As Housing Depreciation Ravages DC/NoVA Homeowners


*Select price from dropdown menu on first chart

Comment by Mafia Blocks
2018-06-12 17:06:51



Comment by rms
2018-06-12 17:09:44

Here’s another laughable ad for an 8-yr/old pickup truck. Are there really any lenders willing to hang their a$$ out there for something this old? Where’s Uncle Sam with the junk-bond guarantees?

“Used 2010 Toyota Tundra SR5 - Only $39,000″

Comment by rms
2018-06-12 20:05:42

Here’s a split-tail who spent her good years wrapped-up in herself and materialism trying to live like those television shows. In her late thirties now she’s ready to turn-off the television, ditch the thong panties for the Barbara Bush collection and “settle” for Mr Right.

“Dating columnist reveals how ‘Sex and the City’ ruined her life”

Comment by Rj not in Chicago anymore
2018-06-12 21:46:07

After reading this the only thing that comes to mind is cats and boxed wine.

Comment by jeff
2018-06-12 22:32:32

She has been at the Husband Store.

An unusual High-Street store in New York selling new husbands had just opened. It was publicized that each woman could visit this store ONLY ONCE! There were six floors and the value of the products increased as the shopper ascended the flights. The shopper could choose any item from any floor, or choose to go up to the next floor, but could not go back down except to exit the building!

So, a single woman called Cheryl went to the store to find a husband. On the first-floor the sign on the door read:

On the first-floor the sign on the door read:

Floor 1 - These Men Have jobs

She was intrigued, but continued to the second-floor, where the sign read:

Floor 2 - These Men Have Jobs and Love Kids

“That’s nice”, she thought. “But I want more.”

So, she continued upward. The third-floor sign read:

Floor 3 - These Men Have Jobs, Love Kids, and Are Extremely Good Looking

“Wow!” she exclaimed. But felt the urge to keep ascending.

She went to the fourth-floor where the sign read:

Floor 4 - These Men Have Jobs, Love Kids, Are Drop-Dead Good Looking and Help with Housework

“Oh, mercy me!” she burst out. “I can hardly stand it!”

Still, she went to the fifth-floor where the sign read:

Floor 5 - These Men Have Jobs, Love Kids, Are Drop-Dead Gorgeous, Help with Housework, and Have a Strong Romantic Streak

She was so tempted to stay, but she went to the sixth-floor, where the sign read:

Floor 6 - You Are Visitor 31,456,012 to This Floor. There Are No Men on This Floor. This Floor Exists Solely as Proof That Women Are Impossible to Please. Thank You for Shopping at the Husband Store.

Comment by MGSpiffy
2018-06-12 23:34:57

Ok, I tend to stay away from discussing Red Pill type topics here both to stay on topic and because I have some complex views on the range of topics covered that don’t fit a label neatly. But with that said…

Two months ago, I started seeing someone I never would have dated 10 years earlier. Back then, I wasn’t looking to get married or seek a lifelong partner, and that was a mistake. This man is a very reasonable choice, and I’m at a place in my life where reasonable is very sexy.

Whole Lee Cow. This gal is as blatant example of AF/BB/Hypergamy does exist for all to see that I’ve come across. If this new guy doesn’t come quickly to the realization that she is ’settling’ for him, now that her ‘best years’ are behind her… and more importantly that she is always to see it that way in her mind despite what she tells him, then he’s either an idiot or a chump.

Nobody who is considering someone to be their ‘life partner’ (in terms of relationship and emotional investment) want to be that person’s second choice (or third, or forth, or..).

Given Julia’s very well documented past living an extreme ‘high life’ there’s no escaping that she’s going to be hung up on not having ‘landed Mr. Big’ and no amount retconing and spinning will be enough to convince everyone the tiger has changed its stripes. Who is going to want to go through life with her knowing that she will be forever comparing him and their life together to her past and the life she had when younger (Adventure, TV Pilots, Red Carpets, Bali, etc etc) and the one she wished she had (all the above plus landing ‘Mr Big’). Who sleeps well knowing they are competing with that?

This man is a very reasonable choice, and I’m at a place in my life where reasonable is very sexy.

Ain’t buying it. Rationalization time over unrealized dreams as looks and youth fade. Just wow.

Comment by 2banana
2018-06-13 05:35:44

Poor guy. Run away while you can!


“This man is a very reasonable choice,”

Comment by Mortgage Watch
2018-06-13 05:20:13

“94,785,000 Not in Labor Force; At 62.9%, Labor Force Participation Stuck Near 38-Year Low”


Name (required)
E-mail (required - never shown publicly)
Your Comment (smaller size | larger size)
You may use <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong> in your comment.

Trackback responses to this post