A Government Willing To See Prices Fall
A weekend topic on government policy and housing bubbles, starting with the Los Angeles Times in California. “For the last eight years, I have used my commute from the South Bay to downtown to explore the neighborhoods of Los Angeles. The more I drive, the more I notice what I call L.A.’s ‘lost space,’ mysterious plots of land that sit abandoned or underused throughout the city. On Figueroa Street near West 52nd Place in South L.A., for instance, two barren parcels sit on opposite sides of the road, the larger one surrounded with an old rusted chain-link fence. As a person who studies the economy, I’ve found it puzzling: How is it that in one of the world’s hottest real estate markets, in a city that is in dire need of affordable housing, land like this sits idle?”
“The answer stands in plain sight at the center of one of those forlorn lots, where a large white sign reads: ‘Property of the City of L.A.’ We now know that we’re land rich. Faced with a growing homelessness crisis, City Hall has started offering affordable-housing developers opportunities to develop a small number of the city’s surplus properties. That’s an important step. But there’s still no long-term strategy for using and leveraging L.A.’s incredible wealth of city-owned land to meet our needs.”
From Xinhua in China. “Home prices in major Chinese cities largely remained stable in May as local governments toughened up restrictions to prevent speculation, official data showed. Home prices in 35 third-tier cities were cooler. There was a slowdown in price growth for four months in a row in new houses, and for 10 months in existing ones. ‘The majority of cities saw an ongoing year-on-year downturn or deceleration of growth in home prices,’ NBS senior statistician Liu Jianwei said.”
“During previous years, rocketing housing prices, especially in major cities, had fueled concerns about asset bubbles. To curb speculation, local governments passed or expanded their restrictions on house purchases and increased the minimum downpayment required for a mortgage. With a flurry of property market controls, authorities have demonstrated their will to keep a lid on housing prices. Over 40 cities unveiled a total of 50 property market regulations in May, a monthly record for frequency, according to the latest statistics from Centaline Property.”
“This year’s government work report reiterated that ‘houses are for living in, not for speculation.’ ‘China will not waver in its efforts to implement property market regulation and will maintain continuity and stability of policies in 2018,’ said Wang Menghui, minister of Housing and Urban-Rural Development.”
From Channel Asia on Singapore. “By the late 1980s, housing security was mostly solved with home ownership hovering at around 90 per cent of the population from 1990 till present. Yet, policies to encourage home ownership did not let up. From the late 1980s to mid 1990s, many policies were introduced to encourage home ownership. To compound issues, our population is ageing fast. By 2030, as much as one quarter of our resident population may be over 65, many of them living in larger-than-needed flats, as their children leave the nest or as their partner passes away.”
“A house is not just a shelter. It is also a leveraged financial asset. You are taking risk on both property prices and interest rates. Singapore’s rapid growth over the first 50 years from independence has led many people to believe that home ownership is a ’sure win,’ as house prices also rose from wage and population growth. Even then, we received a sobering lesson in the late-1990s, when housing prices crashed. We have only recovered to 1996 price levels in the last several years. If many choose to fund their retirement by monetising their houses, they may run into an oversupply of flats on the market, lowering resale prices.”
From Vietnam News. “The HCM City housing market will continue to grow this year, especially the VNĐ1 billion (US$44,000) condo segment, the HCM City Real Estate Association (HoREA) has predicted. Lê Hoàng Châu, its chairman, said the VNĐ1 billion segment would be the most liquid while the luxury segment will be restructured in line with actual demand. Authorities would continue to cool down the land and condotel segments, it said.”
“They would strengthen relations with foreign investors to raise more funds, it said. Nearly 9,200 housing units were put in the market, 8,690 of them apartments and the rest houses, down by more than 44 per cent. The slowdown had spread to the apartment market, with the luxury segment declining by 26 per cent, the mid-price segment by 32 per cent and the low-end segment by 70 per cent. Land prices shot up, especially in District 9, though of late they have levelled off.”
“According to HoREA, developers face challenges in getting loans since banks are tightening credit on instructions from the State Bank of Việt Nam. The association wants the Government to control two main factors that affect the market: the imbalance between demand and supply in the luxury apartment and condotel segments and the disinformation spread by brokers to manipulate land prices.”
From Edge Malaysia. “The new government’s apparent intention to ease lending rules for home purchases may introduce additional risks to banks, analysts told The Edge weekly. Plans to facilitate home ownership among the youth, and M40 and B40 groups may result in banks being ‘forced’ to lend to these groups. ‘As it is, banks are generally wary of lending to youth, given that the biggest number of bankruptcies comes from this group,’ said an analyst.”
“Analysts speculated that the government may relax the debt service ratio (DSR) from 60% currently, but this raises concerns over what happens in case of defaults and also the gearing levels of the borrowers. The DSR was introduced to prevent the lower-income group from borrowing too much, pointed out one analyst. ‘We’ve already tried a lot of things and reached a point where there is even an oversupply of affordable housing.’”
From IntelliNews. “The Czech National Bank (CNB) took aggressive actions to burst a potential real estate bubble before it gets too big on June 12 by increasing the banks capital buffer rate to 1.5% effective from July 1, 2019 and tightening lending policies on mortgages effective from October 2018. The CNB introduced a raft of tough prudential rules to ensure that consumers don’t overload themselves with debt. Analysts have said a nascent real estate bubble is already receding and could soon burst.”
“But the growth in prices is still a worry, especially in Prague, where AirBnB is driving out regular tenants and the rate of issuing construction permits for new apartments has long outstripped demand. In response, the CNB has slammed on the brakes and issued very conservative recommendations, in effect saying, ‘We won’t let the 2008 crisis happen again.’”
From CBC News in Canada. “In an election where housing affordability is far and away the dominant issue, Vancouver mayoral candidates have largely taken two tracts. Patrick Condon wants new taxes on development land, and a new mansion tax. ‘I don’t see any way that the market under present circumstances can supply housing for the average wage earner, and I think the city only has a choice, under these circumstances, to re-engage in the construction of non-market housing,’ said Condon, who has been a University of B.C. professor in architecture and urban design for over 25 years.”
“Condon’s campaign, while only a week old, has been enthusiastically promoted by some on the left. Lindsay Brown, a writer and communications consultant, believes other candidates are putting too much faith in the private market to lower housing prices. ‘This idea that if we just build more, and remove barriers to build more housing, prices will go down. We’ve had more than an decade of this idea, so I don’t think there’s any thing particularly valuable about Hector Bremner’s idea.’”
From Macleans in Canada. “Across the street from a run-of-the-mill Starbucks in the Kitsilano neighbourhood of Vancouver is a two-storey Ferrari and Maserati dealership. Locals will tell you with amazement that it is the highest-volume location in North America. Whether or not that’s true, the five homeowners gathered today around a table at the Starbucks want to make clear that Ferraris are not for people like them. Though their homes on the west side of the city may be worth millions of dollars, they do not consider themselves rich.”
“‘It’s really hurtful when someone says, ‘You live in a $2-million property, so that means you’re a wealthy person,’ says Mary Lavin, an English teacher. ‘Um, no. Not at all.” Lavin points to her car in the lot, a 1998 Toyota Tercel. ‘I’ve had one holiday in my life.’”
“They do, however, have lots of equity in their homes, which the provincial NDP government has moved to tax at a higher rate. Residents have launched petitions, staged protests and erected yard signs claiming the tax is ‘hurting seniors and working-class families the most!!!!’ Home values have skyrocketed in the area, but incomes have not. Those who purchased property many years ago don’t necessarily have extra cash on hand.”
“The NDP government has opted for taxation to reduce demand. In addition to the extra school levy, the province increased and expanded the foreign buyer tax and put in place a so-called ’speculation tax,’ which applies to vacant homes in select regions. Finally, the province boosted the property transfer tax on high-end homes, and expanded disclosure requirements to end hidden ownership. ‘We finally have a government that’s serious about housing affordability and is willing to see prices fall,’ says Joshua Gordon, an assistant professor in the school of public policy at Simon Fraser University.”
From This Garden Island in Hawaii. “Kauai County Councilman Arthur Brun said his employer, Hartung Brothers, has been trying to build farmworker housing on its Westside property. But there’s a problem. ‘There’s so much red tape to get it done,’ Brun told about 100 people at the Aqua Kauai Beach Resort. ‘It’s a battle. The politics have gotten in front of the daily living,’ he added.”
“Their main point seemed to be that there is a lack of affordable housing, and part of that is due to government regulations that limit building. But they also noted high housing is, after all, the cost of living in paradise. ‘It’s probably never going to be as cheap as we want in Hawaii,’ said Paul Brewbaker of TZ Economics. ‘If it were, others would come here and bid up the price.’”
‘It’s really hurtful when someone says, ‘You live in a $2-million property, so that means you’re a wealthy person,’ says Mary Lavin, an English teacher. ‘Um, no. Not at all.” Lavin points to her car in the lot, a 1998 Toyota Tercel. ‘I’ve had one holiday in my life.’
So the shack only makes you rich by getting the money from someone else. Most likely borrowed money. I think we’re making some progress here. The shack itself doesn’t produce anything. And a global economy based on buying and selling shacks to each other is pretty stupid, in hindsight.
“Lavin points to her car in the lot, a 1998 Toyota Tercel.”
She must be rich because I drive a 1984 Toyota Tercel.
“They do, however, have lots of equity in their homes, which the provincial NDP government has moved to tax at a higher rate”
That will keep you poor
She must be rich because I drive a 1984 Toyota Tercel.
I’m rich and I ride an eBike. Actually, I now drive a ten year old Honda Civic.
What does it mean to be rich?
I should clarify, I ascribe to a broad view of wealth:
“Money may be the measure of wealth, but it is far from the only form of it. Family, friends, social networks, personal health, culture, education, and even location are all ways of being rich.”
“‘You live in a $2-million property, so that means you’re a wealthy person,’ says Mary Lavin, an English teacher. ‘Um, no. Not at all.’”
Sell it. That’s the smartest thing to do at this point.
Sell it and live where? If she bought it even 5-6 years ago, renting even an apartment might cost more than the monthly payment on the house. Although, with $2 million, it’s tempting to sell, pocket the cash, and retire early and do the Canadian equivalent of an Oil City plan.
If it’s truly worth $2 million, then it’s a no-brainer. You an rent an apartment in Vancouver for $1,500. Do the math.
You gotta find a buyer at that price first.
She could rent for a couple of years at less than PITI, then repurchase for a song during the next recession.
Sounds like a great plan until you factor in family and community. Does she have grandkids? Elderly parents? Vested retirement? Decision-making usually comes down to far more than the financial bottom line, as it should.
It likely means they bought it before the huge influx of wealthy foreign buyers began showing up in Vancouver, back when where they lived was a middle-class neighborhood.
Property prices explode around them, but they have their house paid for or a mortgage from before the run-up. So their their steady middle-class income keeps the mortgage paid, but they go from being the typical resident to the unusual left-overs as more and more of their neighbors cash out (and move away we assume).
If they’re prudent and careful people all that supposed ‘wealth’ does them no good as they need a place to live. (HELOC equity draining is not covered under ‘prudent and careful’)
The property taxes go up with the bubble valuations and then they get whammied again with the govt move to tax them even more because of the high valuation - a tax grab targeting the rich(er) foreigners. That’s how you ensure your middle class gets the short end of the stick and driven out of the area.
“A house is not just a shelter. It is also a leveraged financial asset.”
What a perverse state of affairs, accepted as normal and desirable given the financializaiton of everything.
“…given the financializaiton of everything.”
+1 Everything!
Even our cars and our free time are being financialized. Sharing-economy side-hustle gigs are now considered normal.
Donk,
That’s what happens with a 100 million people out of work.
“What a perverse state of affairs, accepted as normal and desirable given the financializaiton of everything.”
Ah, yes, the masses have been well conditioned. Pukes get to do all the working, we financial artists get to do all the reaping.
A nation of dummies. And I am sooooooo glad.
Bahahahahahahahahahahahahahahahahahahahahahaha.
“Governments don’t want a population capable of critical thinking,they want obedient workers,people just smart enough to run the machines and just dumb enough to passively accept their situation.You have no choice. You have owners. They own you. They own everything. They own all the important land. They own, and control the corporations. They’ve long since bought, and paid for the Senate, the Congress, the state houses, the city halls, they got the judges in their back pockets and they own all the big media companies, so they control just about all of the news and information you get to hear.They got you by the balls.”
– George Carlin
“It is also a leveraged financial asset.”
I wonder if historians will eventually look back on the last 40 years or so and say ‘this is where they went off the rails…’
Unfortunately it will probably depend on where they worship.
“History is written by those who have hanged heroes.” — Braveheart (1995)
“History is written in blood.” — Bismark
‘A house is not just a shelter. It is also a leveraged financial asset. You are taking risk on both property prices and interest rates. Singapore’s rapid growth over the first 50 years from independence has led many people to believe that home ownership is a ’sure win,’ as house prices also rose from wage and population growth. Even then, we received a sobering lesson in the late-1990s, when housing prices crashed. We have only recovered to 1996 price levels in the last several years. If many choose to fund their retirement by monetising their houses, they may run into an oversupply of flats on the market, lowering resale prices.’
And then they’d be fooked at an age when there wouldn’t be much they could do about it. Heck of a job Bernanke!
26 February 2008
‘Housing prices in the US must not be permitted to continue falling, says the chief investment officer of a fund with $US750 billion of fixed-income assets under management.’
‘The outlooks for Australia and the US are at two different extremes, said Bill Gross, chief investment officer for US fixed interest funds management giant PIMCO.’
‘The US economy was financial asset-based while the Australian economy was driven by commodity exports, he told funds management professionals in Sydney through an international video hook-up. “And so Australia is doing well, the US is not, really because of the nature of the economies themselves” he said.’
‘He said the US economy has had “a long wonderful secular run”. “Ever since 1981 lower interest rates and in effect accelerating asset prices, whether they’re stocks, bonds or real estate/housing, have led to the continued success of consumption, and indeed over-consumption, in this finance-based economy.”
‘But this has come unravelled. He said the current situation had not been seen since at least the 1980s and probably since the 1930s. “For the first time in decades the totality of US finance-based assets - stocks, bonds, real estate - are going down in price, are deflating,” he said.’
‘When looking at bonds, Mr Gross includes not just government bonds, whose prices have been firm, but also corporate and mortgage-backed bonds, whose prices have fallen after the sub-prime loans crisis that emerged after the US housing boom fizzled out.’
“It means simply that this finance asset-based economy, which is so dependent on rising asset prices is now beginning to experience a lengthy period of time, over two years in fact, when these asset prices are declining.”
‘He said the US Federal Reserve had tried to reverse the outgoing tide by reducing interest rates but without success. “It’s not working,” Mr Gross said.’
‘He said bank loan and other market rates are much higher than they were before the Fed starting cutting official interest rates last year. “The totality of private credit is higher in yield, lower in price since the Fed began to cut interest rates.”
‘It was “paramount” for the Federal Reserve through fiscal policy measures “to in effect put a floor under housing prices in order to stop the deterioration in this asset-based economy”, he said.’
‘He said it was a “very dangerous situation at the moment”. He said the “shadow banking system”, the array of non-bank financing structures multiplying the flow of credit in the economy, was contracting.’
‘He said all of these financial conduits were suspect in their ability to generate future lending, which was having a substantial effect on all asset prices. This would create a negative environment for the US economy and asset prices until either monetary policy or fiscal policy, or a combination of both, put a floor under US home prices.’
‘He said home prices in the US were declining at an annual rate of seven to nine per cent. “This is something that truly cannot be permitted to continue if in fact the US economy is to stay above the line as opposed to below the line,” he said.’
‘It was “paramount” for the Federal Reserve through fiscal policy measures “to in effect put a floor under housing prices in order to stop the deterioration in this asset-based economy’
For the moment, let’s not challenge this communist approach, but take the suggestion at face value. OK so a floor. But what about 2011 and 2012 and gosh! Here we are in 2018 and this floor was really a trampoline! Where is this floor idea now? Heck that’s two central bank chiefs ago and off they go giving $150k speeches and claiming they can’t refinance their shacks.
Here’s the problem as I see it. Dishonesty. We know from this blog’s archives the plan all along was to save the economy from the housing bubble by reflating it. And there was never any plan for what to do when we get where we are today.
“Here’s the problem as I see it. Dishonesty.”
Want honesty? Shrink the size of government.
Large, expansive governments MUST lie. They have no other choice.
Want honesty? Shrink the size of government.
+1
The real graft is on the local government levels. You would have thought that the biggest housing bubbles in the history of the world, and the associated tax windfalls, would have shored up even the shakiest of budgets and balance sheets. Instead, they have raised taxes and come up with all sorts of new “fees” and “charges” which don’t require a vote.
I have noticed many people complaining about excessive vehicle registration fees in states across the country as of late. It seems a large portion of the DMVs have decided to raise fees into the stratosphere. That’s just a small example - you can pretty much pick any government agency and see a hyperinflation of charges.
That’s just a small example - you can pretty much pick any government agency and see a hyperinflation of charges.
It’s amazing how much effort the animal services department put into getting me to renew the license for my dog. Multiple snail mails, emails, phone calls even. For a $30 annual fee.
The Fed is (reportedly) not part of the government.
‘It was “paramount” for the Federal Reserve through fiscal policy measures “to in effect put a floor under housing prices in order to stop the deterioration in this asset-based economy’
What a puke of a statement! We don’t have an asset-based economy, we have a debt-based economy.
We have a debt-based economy that depends on price rises to push up (choke) “values” - values that in turn back up the debt that allows these (another choke) values to exist.
Without the access to debt to pay hefty price increases these so-called values would - poof! - they would vanish right before your eyes.
Vanish right before your eyes, but as for the debt …
(ta da)
It gets to stay.
😁
Mr. Banker: We have a debt-based economy that depends on price rises to push up (choke) “values” - values that in turn back up the debt that allows these (another choke) values to exist.
In the AEI interview of Bernanke, and the presentation by the four panelists, both Bernanke and Lachlan generally agree that the “wealth effect” generates 4 cents on the dollar in economic activity.
No one ever talks about the costs. Just like no policy maker ever talks about the cost of printing money and redistributing it to the financial sector. It’s remarkable. Like ignoring side effects of medication.
Bernanke flat out denied QE causes asset bubbles, but allowed if it did, it’s a minor issue.
Also, it seems like top economic policy makers try to create a Steve Jobs-esque “reality distortion field.” During the AEI interview, Bernanke said household debt is lower than during the crisis; and then Powell repeated the same thing during his press conference on Wednesday. But the NY Fed’s report on household debt clearly shows this is not true. Reality distortion field I guess.
Bernanke flat out denied QE causes asset bubbles
Bernanke’s counterpoint was that Canada had a housing price runup (no way they’d use the term bubble) but no QE.
Fair enough. But they’ve had a tremendous amount of money injected in the market via foreign (Chinese) investors and by government enticements.
So - the core mechanism to boost a market remains unchanged - inject money into it, either via government or private enticements.
The continuous inject of hundreds of billions of dollars into the housing market, via purchase of MBS for the past 10 years having no impact (or at least not causing price runups, again avoiding the term ‘bubble’) seems counter to the Fed’s explicit policy of setting a floor under house prices.
It’s all a game of poker, the Fed playing against the people, and the financial sector playing “against” the Fed, with the Fed wanting them to win.
‘Canada had a housing price runup (no way they’d use the term bubble) but no QE’
That’s ridiculous. How much of the Chinese QE (multiples of the US) made it’s way to Canada especially during the resource boom. China pours 100 years of concrete in 3, etc. How do you think they got $500k mobile homes in Fort McMurray? Same thing happened in Brazil, which to my knowledge didn’t run a QE. Now those $400k old apartments in Rio aren’t even talked about things are so bad.
Thanks for posting that video BTW, I plan to watch it when I can. I’m thinking about putting snippets together with the AEI vids and posting on my channel. I am in contact with the AEI and listen in to their conferences live. Here’s one that’s coming up:
What: Conference on “Should Fannie Mae and Freddie Mac Be Shrinking or Expanding Their Activities?”
When: 2:00PM-4:00PM, Thursday, July 12, 2018
Where: AEI, 1789 Massachusetts Avenue, NW, Washington DC (this event will be livestreamed)
Background: Fannie Mae and Freddie Mac will soon “celebrate” their tenth anniversary of being in government conservatorship. They are under the total control of the Federal Housing Finance Agency, have virtually zero capital, and are utterly dependent on the guaranty of the U.S. Treasury, which is the de facto owner. Should they be shrinking their activities or expanding them? How can private companies compete with their infinite leverage, broad regulatory exclusions and benefits, and government backing? What kind of regulatory approvals should be required before Fannie and Freddie exploit these powers in new lines of business? Can a future capital regime address the market distortions Fannie and Freddie otherwise create? These and related issues will be debated by a panel of experts in real estate finance.
Welcome: Ed Pinto
Introduction of the panel: Alex Pollock and moderator
Speakers (in order of speaking):
Ed Pinto
Tom LaMalfa
Mike Fratantoni
Norbert Michel
Mike Stegman
Ed DeMarco
Audience Q&A
Adjourn
People forget to apply the perspective of the person making those statements; who they are, who they serve, who is ‘important’ to them and who isn’t.
It was never a plan to save the economy as a whole, it was about saving the assets of the financial elite. If everyone else was sacrificed to achieve that ends, it was considered worth it.
Another one cracks the code.
“When looking at bonds, Mr Gross includes not just government bonds, whose prices have been firm, but also corporate and mortgage-backed bonds, whose prices have fallen after the sub-prime loans crisis that emerged after the US housing boom fizzled out.”
Mr Gross shamelessly demands government welfare.
You use what works.
The Chinese powers that be are trying mightily to keep the Shanghai stock exchange levitated above the magic 3,000 resistance line. If it drops below that, Katie bar the door - China could be the first centrally planned debt and credit bubble to implode, but it certainly won’t be the last.
Me thinks that China may be the weak link. A trade war could be what traders like to call a “catalyst.”
The steel tariffs have been hitting China much harder than anyone will admit. China was selling a lot of steel to this country through third countries. We do not gloat because then China might increase tariffs on farm exports. China does not complain more since it would have to admit it was cheating. In the U.S. I see two bubbles and one Ponzi scheme. Tech is one bubble and Tesla will be one of the first to go up in flames check out the car that looks like it has a flamethrower. Of course, we have the housing bubble. The Ponzi scheme is shale oil and gas. The companies go deeper in debt because it is an unprofitable business. However if the companies can get money to drill the wells produce good cash flow for two years. To get money to drill they lie about the break even price.
I would agree with you that we have a tech bubble, but Tesla is probably not part of that bubble. Too high of a stock price? Yes. But Tesla actually makes stuff and has actual assets. There are plenty of dotcom like tech companies that are getting Softbank money that actually don’t have a viable product, nor any demand. Tesla doesn’t belong in that group.
Sure they do. They are a joke to anybody who actually knows how to make things. GM learned about excessive automation back in the 1980s, and they haven’t made that same mistake again. Tesla just learned that same lesson last year and are still struggling to overcome it.
They will most certainly go bankrupt. Since they now have a parallel operation set up in China, I have no doubt that Teslas will continue to be made by whomever buys up the assets at pennies on the dollar.
Once they stop selling every single car that comes off their line, maybe I’ll believe you. They also cut staff, increased prices, and are addressing the over-automated issue. Maybe they will go bankrupt, but the surely don’t point to it. Keep your eye on Jaguar’s i-Pace.
Will shorty be forced to wear sandwich boards and executed?
‘Housing prices in the US must not be permitted to continue falling, says the chief investment officer of a fund with $US750 billion of fixed-income assets under management.’
These asshats don’t even pretend any more that we’ve got a “free” market or that the central bankers will step aside and let speculative financial excesses have consequences.
The Fed was supposed to be lender of last resort. If inter-bank lending froze up, the Fed would be there. It was never supposed to own anything but T bills (now, it owns none) but instead it had loaded up on MBS and longer term paper. The Fed was not supposed to interfere with the market allocation of credit. Now, it directly favors housing and enables cheap credits to weak borrowers. We have not had a market economy for decades.
The Fed is the Monetary Politburo.
The central bank in Japan buys stocks with phony money. The ECB at one time ran out of bonds to buy, corporate and otherwise.
I am amused at the Canadian angle. They are socialist and proud of it. But they find themselves conflicted by corrupt governments that have built a system for the rich. Our problem in the US is we pretend to be capitalist when we have just as corrupt a bunch of bubble building socialists as anywhere.
Just what kind of a “market’ requires a floor? Much less 10+ years of pedal to the metal government subsidies to the tune of trillions$?
“We have not had a market economy for decades.
Correct. A reintroduction of the gold standard would help. Not that I expect to ever see that happen.
Boo Randy: These asshats don’t even pretend any more that we’ve got a “free” market or that the central bankers will step aside and let speculative financial excesses have consequences.
The financial sector seizes a great deal of purchasing power (represented as money) by the creation and sale of dubious financial products (logical constructs).
When it’s discovered these products have little or no value, resulting in collapsing balance sheets for financial companies, the fed generates units of currency (money) and transfers them to the financial companies.
Powell said the financial system essentially failed in 2008, at his press conference on Wednesday (6/13). Yet politicians and the central bank did everything they could to rebuild it, only with middling changes at the edges. They haven’t changed the ability of the financial sector to continue to seize purchasing power; the big change is the streamlining of money transfer to them, when they implode.
This is a pure form of privatize profits, socialize losses.
Salmon, ID Housing Prices Crater 22% YOY As Boise Housing Correction Expands
https://www.movoto.com/salmon-id/market-trends/
According to Zillow the Boise market is now neutral, previously it was hot. Eagle is now cold. We’re getting there.
22% is a mere flesh wound. Let’s see this thing gutted entirely and get the economy going again.
In the 12 years that I have owned my house, it has maybe gone up 5%. I don’t understand these people who say they aren’t rich but have 2 million dollar houses. Sell them and move somewhere it’s more affordable. Then you can take a lot more vacations.
What - and give up their lifestyle?! Gotta be kidding.
There are 100 million people in this country who would love to have this whiner’s problem.
It’s possible the only option that includes ’significantly cashing out’ involves moving away.
Unlike the newcomers with multiple homes around the globe, these more ordinary people might have jobs, kids, family, obligations, etc that are tied to the immediate area.
“It’s possible the only option that includes ’significantly cashing out’ involves moving away.
Unlike the newcomers with multiple homes around the globe, these more ordinary people might have jobs, kids, family, obligations, etc that are tied to the immediate area.”
All of this is nonsense. Excuses to whine.
Again, there are 100 million people who would love to have this whiner’s problem.
Bullshit. She’s probably got $1.5 million free and clear in that place. Cry me a fawking river. She could easily sell and rent a modest place, and live like a queen on that. She’s whining because her house is “worth” so much. What a joke…
She sounds like yet another of those who made out big even though she didn’t lift a finger to make it happen.
Poor, poor baby.
Now that she may have to actually pay taxes on her property rather than force other taxpayers to cover it via federal write-offs, she’s all upset. Tough.
There are a great many people out here who aren’t thrilled that she made coin while others covered her tax hit.
‘How is it that in one of the world’s hottest real estate markets, in a city that is in dire need of affordable housing, land like this sits idle? The answer stands in plain sight at the center of one of those forlorn lots, where a large white sign reads: ‘Property of the City of L.A.’ We now know that we’re land rich.’
And a bunch of greedy fooks too. Enjoy the bust California.
114 W Alondra Blvd, Compton, CA 90220
3 beds 3 baths 1,746 sqft
For Sale
$519,990
Year Built
1922
Price/sqft
$298
06/13/18 Price change $519,990-1.9% $297
04/19/18 Price change $529,990-3.6% $303
03/23/18 Listed for sale $549,990+129% $315
03/09/17 Sold $240,000-3.6% $137
01/23/17 Pending sale $249,000 $142
01/06/17 Listed for sale $249,000+13.7% $142
05/23/16 Listing removed $219,000 $125
05/04/16 Price change $219,000-2.7% $125
03/25/16 Price change $225,000+13.1% $128
03/15/16 Pending sale $199,000 $113
03/01/16 Listed for sale $199,000-12.1% $113
02/03/14 Sold $226,500+88.7% $129
01/11/13 Sold $120,000-12.4% $68
06/25/12 Listing removed $137,000 $78
05/24/12 Price change $137,000+4.6% $78
05/19/12 Listed for sale $131,000 $75
Tax History
Year Property taxes Change Tax assessment Change
2017 $4,387 – $239,236 +2.0%
2016 $4,387 +2.4% $234,546 +1.5%
2015 $4,287 +73.4% $231,024 +84.0%
2014 $2,472 – $125,567 +265%
2011 – – $34,408 +0.5%
2009 – – $34,234 +4%
2007 – – $32,906 +2%
2006 – – $32,262 –
2005 – – $32,262 +4%
2004 – – $31,011 +1.9%
2003 – – $30,444 +2%
2002 – – $29,848 +4%
2000 – – $28,691
https://www.zillow.com/homedetails/114-W-Alondra-Blvd-Compton-CA–220/21007092_zpid/
Is that a flippers wishing price I see?
If LA owns the land, why don’t the allow developers to lease (not buy) the land for a song and build plain-jane garden apartments (not high-rise projects) on it. Developers won’t be able to complain about the price of land, they can still make some profit off of affordable housing, and if anything goes awry the city can kick out the developer and try something new on the same land.
June 5, 2018
The Deceit, Fraud And Greed Is Breathtaking
The Los Angeles Times. “A real estate developer pleaded not guilty Monday to charges that he made illegal donations to local politicians while pushing for them to support his $72-million apartment project. Samuel Leung, the developer behind the Sea Breeze project in L.A.’s Harbor Gateway neighborhood, was charged in February with conspiring to launder campaign money and offering bribes to a legislator.”
“Prosecutors with the L.A. County district attorney’s office said Leung and an associate, Sofia David, recruited employees, family members and others as ’straw donors’ to funnel money to local politicians in the hopes of getting a Sepulveda Boulevard lot rezoned so that homes could be built there. The criminal charges came more than a year after a Times investigation into political donations linked to Leung.”
“As of Monday morning, David, who had a warrant issued for her arrest in February, had yet to be arrested in the case, according to Deputy Dist. Atty. Eugene Hanrahan. The Times has been unable to locate her for comment. The Times’ investigation found that more than 100 donors linked directly or indirectly to Leung had made contributions totaling more than $600,000 to area politicians while Sea Breeze was under review. Eleven of those donors denied making contributions or said they did not remember doing so.”
“Before the charges were filed, Leung told reporters who approached him at the Department of Building and Safety that he did not reimburse any donors, but declined further comment. The Sea Breeze project was slated for a vacant site that was designated for manufacturing, not housing. The Department of City Planning and a city commission had opposed a zone change. But Mayor Eric Garcetti and the City Council backed the change, allowing the project to move forward. In the criminal complaint, prosecutors singled out donations from Leung and his associates to political committees that backed eight politicians.”
http://thehousingbubbleblog.com/?p=10454
ut Mayor Eric Garcetti and the City Council backed the change, allowing the project to move forward.
Looks like the corrupt politicians just self-identified. And will no doubt be re-elected by the fine upstanding voters of Los Angeles.
“06/13/18 Price change $519,990-1.9% $297
04/19/18 Price change $529,990-3.6% $303
03/23/18 Listed for sale $549,990+129% $315
03/09/17 Sold $240,000-3.6% $137″
Dutch auction! First one in is a rotten egg!!
Realtors are liars.
…..and every closing a crime scene.
I woke up this morning with an idea of just how to assist coming generation’s in dealing with everyday problems. I like to think of this idea as an extension, an addition, to whatever it is that is now being taught in our public schools. I have decided that a new course of study needs to be introduced in a serious manner and the name I have decided upon for this new course is the word “arithmetic”.
The use of Arabic numbers would fit nicely with this new idea in that unique concepts such as addition and subtraction could be employed with little effort. Possibly later on such exotic concepts known as multiplication and division could be presented, but not too quickly or too soon because one does not want the student to seek refuge in a Safe Space.
Reminds me of a couple stories by Asimov.
https://en.wikipedia.org/wiki/The_Feeling_of_Power
Also: Replace “Tapes” with “TV” and “phones/screens” and
https://en.wikipedia.org/wiki/Profession_(novella)
“Reminds me of a couple stories by Asimov.”
+1 My first thought was Ray Bradbury.
Maff is hard.
I recommend the curriculum include ambition, distraction, uglification, and derision.
Addison, TX Housing Prices Crater 14% YOY As Dallas/Fort Worth Housing Demand Collapses
https://www.movoto.com/addison-tx/market-trends/
The NDP government has opted for taxation to reduce demand.
No government will ever run short of pretexts for extracting more wealth out of the citizenry.
Lately there’s been a steady drumbeat of warnings from Goldman Sachs analysts that the market is broken and could be facing an imminent sharp downturn. With Goldman’s history of telling the muppets one thing, then secretly betting against them, does this mean Goldman has ordered its Fed gimps to pump up the Ponzi markets to new highs?
Are you still HODLing cryptocurrency?
Business
Bitcoin is useless, unsafe, and dirty, finds withering BIS report
Trust of the digital currencies “can evaporate at any time”, the BIS warned
Ambrose Evans-Pritchard
17 June 2018 • 5:06pm
Cryptocurrencies have no intrinsic worth and are useless as a form of exchange. They entail exorbitant transaction costs. They are very slow. Together they have turned into an ecological nightmare.
They are not backed by the assets and revenues stream of an established state. Most can be rendered worthless by fraud or digital manipulation. They are essentially ponzi schemes that masquerade as citizen currencies beyond government control.
Such are the broad findings of the Bank for International Settlements, the Swiss-based ‘bank of central bankers’ and the leading global authority on the crypto-craze.
https://www.telegraph.co.uk/business/2018/06/17/bitcoin-useless-unsafe-dirty-finds-withering-bis-report/
The banality of evil, personified, as the Bilderburg elites meet for their secret annual confab.
http://www.dailymail.co.uk/news/article-5850053/Undercover-worlds-elitist-secret-society.html
From This Garden Island in Hawaii. “Kauai County Councilman Arthur Brun said his employer, Hartung Brothers, has been trying to build farmworker housing on its Westside property. But there’s a problem. ‘There’s so much red tape to get it done,’ Brun told about 100 people at the Aqua Kauai Beach Resort. ‘It’s a battle. The politics have gotten in front of the daily living,’ he added.”
Hartung is the company that bought Syngenta (GMO seed company). Libtards in blue states love their slaves and are trying to maintain their plantation economy with whatever means possible, including super shady companies involved in human trafficking that funnel people from Africa (I kid you not) to work the fields in Hawaii. They actively dodge ICE agents. You also get americans who probably need to work under the table to dodge warrants/alimony payments.
Reported, but still waiting for the MAGA to happen on this bs.
“Reported, but still waiting for the MAGA to happen on this bs.”
You sound as though you’re part of the cult.
Selling “ownership stakes” to get the “equity” out of a house.
excerpts:
He signed on with Unison. After just three weeks, the company had dispersed $200,000 in cash to pay off Lindsay’s creditors and allow him to do much-needed deferred maintenance on the house.
Unison’s product, which it calls HomeOwner, has been around for years, but it’s really hit its stride in the past year or so. The housing market has not only recovered from the Great Recession; it’s heated up. According to an analysis from Attom Data, nearly 14 million Americans are now “equity rich” — meaning they have at least 50% equity in their homes.
[...]
What’s more, as part of the agreement customers strike, Unison has the ability to foreclose on a homeowner in a worst-case scenario, but the company says that’s never happened. Throughout the history of the program, Unison has had three to five short sales, meaning all lenders agreed that the home could be sold for less than the mortgage was worth, but it’s also worth noting that nearly all of Unison’s agreements have been struck in a real-estate upcycle.
What could possibly go wrong?
The Rich Are Getting Richer Way Faster
Thank god
Heckova job, Ben & Janet.
Imperial Beach CA Housing Prices Crater 6% YOY As Construction Costs Continue To Sink Lower
https://www.movoto.com/imperial-beach-ca/market-trends/
Has anyone else noticed the plethora of “Biggest…Since 2008″ financial comparisons in the MSM as of late?
Markets
Emerging Asia Hit by Biggest Foreign Investor Exodus Since 2008
By Yumi Teso, Garfield Clinton Reynolds, and Adam Haigh
June 17, 2018, 10:54 PM PDT
Updated on June 18, 2018, 12:21 AM PDT
Stock fund outflows so far this year only exceeded by 2008
Philippine, Thai central banks will meet this week on policy
A falling tide lowers all boats, it seems. Amid an exodus from emerging markets, investors are pulling out of even Asian economies with solid prospects for growth and debt financing.
Overseas funds are pulling out of six major Asian emerging equity markets at a pace unseen since the global financial crisis of 2008 — withdrawing $19 billion from India, Indonesia, the Philippines, South Korea, Taiwan and Thailand so far this year, according to data compiled by Bloomberg.
While emerging markets shone in the first quarter, suggesting resilience to Federal Reserve tightening, that image has shattered over the past two months. With American money market funds now offering yields around 2 percent — where 10-year Treasuries were just last September — and prospects for more Fed hikes, the bar for heading into riskier assets has been raised. Headlines on trade disputes that could hit Asian exporters haven’t helped.
“It’s not a great set-up for emerging markets,” James Sullivan, head of Asia ex-Japan equities research at JPMorgan Chase & Co., told Bloomberg TV from Singapore. “We’ve still only priced in about two thirds of the U.S. rate increases we expect to see over the next 12 months. So the Fed is continuing to get more hawkish, but the market still hasn’t caught up.”
…
Can’t remember where but I also recently saw my first “worst something since 2003″…implying that particular measure has now gotten even crazier than during the last bubble.
Home
Investing
Commodities
Oil slides as trade-war fears add to pressure
Published: June 18, 2018 2:41 a.m. ET
By Biman Mukherji
Oil prices continued to weaken Monday, building on Friday’s slide as worries about increased production were amplified by the potential of Chinese tariffs on energy imports from the U.S.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in July were down 1.8% at $63.88 a barrel in the Globex electronic session. August Brent crude on London’s ICE Futures exchange fell 0.8% to $72.84. Both had rebounded a bit from earlier lows.
Energy-related products have been mentioned as China plans retaliatory tariffs against the U.S. That could mean that the world’s biggest importer of oil could eschew U.S. products at a time when exports of crude, coal and liquefied natural gas to Asia have been rising.
Oil prices have also been pulled lower by reports Russia and Saudi Arabia are considering a plan to raise output by more than 1.5 million and 1 million barrels, respectively. A meeting of the Organization of the Petroleum Exporting Countries and other major producers starts Friday to consider raising production caps which have been in place since the start of 2017.
…
Check again Brent over $74 and that price is setting your gasoline prices, lower WTI just fattens refinery’s profits.
39yr fixed and refi rate almost the same
that gets you 50+ years of endless payments
Another beta wallet about to make his life’s mistake.
https://www.marketwatch.com/story/i-love-my-girlfriend-but-she-spends-all-her-money-on-vacations-and-clothes-2018-06-16
“She literally treats him like an ATM and knows it.”
Dude, you’re not her daddy, so don’t think for one second that you’ll get any more respect from her. Grow a pair!
More and more MSM “analysts,” their Captain Obvious capes billowing around them, are acknowledging that our so-caled “recovery” is nothing but debt-fueled asset bubbles, courtesy of the Fed and central banks.
https://www.cnbc.com/2018/06/18/were-seeing-the-greatest-asset-inflation-bubble-in-20-years.html