The Global Binge On Cheap Finance Is Our Modern-Day Debacle
It’s Friday desk clearing time for this blogger. “The Credit Union of Colorado has revived a loan product that disappeared following the housing crash a decade ago — the zero-down conventional mortgage. Reaction to its return will likely range from first-time homebuyers wondering what took so long to survivors of the foreclosure crisis asking why did they awaken a financial beast better left for dead. ‘We are looking for a way for individuals to get into the market right away rather than having to save up a down payment while the prices are going up,’ said Doug Schneider, vice president of marketing at the credit union.”
“Lou Barnes, a mortgage industry veteran with Premier Mortgage Group in Boulder, said there is a reason why zero-down loans went away, along with a host of other riskier loan products that contributed to the housing crash. ‘If you can’t save, what are you doing buying a home with nothing down? … Rolling out stuff like this has marked cycle tops,’ he warned.”
“In West Roseville, many new homes are going up and new neighbors are moving in. Realtor Jose Chavez said new housing developments are popular for homebuyers, but recently they’ve been all too inviting for the those who are not welcome. ‘Since May we’ve had 13 construction site thefts. Twelve have been in the west side of town where all the homes are being built,’ said Rob Baquera with Roseville PD. Baquera made the connection between new homes and thefts. ‘This is a trend we see more and more just based on the fact there are a lot of homes on the market,’ Baquera said.”
“Police said vacant homes are attractive to criminals. ‘Criminals are seizing the opportunity of not many neighbors being around. They are going into the houses in the middle of the night and pulling out appliances and selling them,’ Baquera said. But Chavez said there are ways to try to prevent this crime from happening. ‘Stage the home. Make it look like someone is living there,’ Chavez suggested.”
“The Minnesota Land Planning Act mandates that each of the 105 municipalities in the seven-county metro area undertake a decennial comprehensive plan update. This radical land-use experiment will cost Minneapolis our most affordable homes, because developers are in the business of maximizing profits. Free to build where they want (instead of where the city should encourage greater density), developers will tear down the lowest-priced homes. Additionally, the role of speculators will invariably overshadow house investment by single-family homeowners. This paper recently chronicled hundreds of vacant and boarded houses in the city. One speculator alone owned 87 vacant residential properties on the North Side.”
“The former CEO of Saks just sold a condo at Faena House for $7.9 million, nearly half of its original asking price. Fair Properties LLC, which is managed by Stephen Sadove, sold the condo in Miami Beach according to property records. Sadove bought the condo from the developer for $8.1 million in September 2015 and then tried to flip it for $14.5 million, or about $3,500 per square foot, the same month he closed on the unit. Sadove is one of many high-profile buyers who have tried to flip their condos at the ultra-luxury 42-unit building.”
“What works in Toronto and Vancouver won’t work everywhere else. That’s the message the Association of Regina Realtors CEO Gord Archibald wants to communicate to the federal government. As a result of people leaving the marketplace, demand for property in southern Saskatchewan is decreasing even further. ‘In Regina, we’ve got supply levels and the number of active listings on the market at all time highs and we’re seeing already weak demand being dampened through these rules.’”
“The slump in London house prices is accelerating with the market now falling at its fastest pace for almost a decade, new figures reveal. Prices have now been in reverse for four consecutive quarters and have not dropped at this pace since Autumn 2009 when the market was still reeling from the impact of the financial crash. However, some property experts said the situation on the ground on London is even worse than the Nationwide figures suggest.”
“Property buyer Henry Pryor said: ‘Nationwide is giving us the equivalent of the weather ten days ago. The real picture is that the housing market is far more perilous than it was for sellers negotiating deals in June. I would say prices are down five per cent year on year in London. I have just agreed a deal for a property in Maida Vale that was on at £2.25 million in 2016 for £1.7 million.’”
“In 2016, when the majority of developers and households remained confident, casting aside the possibility of property prices dropping, Chief Financial Market Strategist Jihad El Hokayem went against mainstream analysts and rang alarm bells, predicting a ‘two for the price of one’ free-fall. Two years on, and El Hokayem is of the belief that the situation is much more dire than what he initially thought. Today, El Hokayem is adamant that if prospective buyers wait longer, they’ll snatch three properties for the price of one in 2020.”
“El Hokayem’s logic hasn’t wavered since and is based on the most basic economic theory, that the market is oversupplied and demand is shrinking, with all signs pointing towards a downward spiral. How did Lebanon find itself in this predicament? Witnessing the real estate market stagnating, with developers scrambling to find buyers, billions of dollars were injected for subsidized housing loans of up to LBP 800 million for a single apartment, with a ’significant share being handed out to affluent individuals who did not need this help, leaving minimal funds for people who were really in need.’ The spiral could have been avoided, maintains El Hokayem, ‘if developers acknowledged the truth and adjusted their prices, sold their inventory at lower prices, and deposited the funds in the bank.’”
“These concerns are fueled as Lebanese buyers who purchased a property through an installment plan, begin to realize that their investment value is gradually dropping, prompting them to ponder the possibility of relinquishing ownership of the property only to buy it later at a lower price. ‘If someone bought an apartment valued at $200,000 two years ago and is now valued at $120,000, what’s to stop him to him from forgoing the $30,000 he already paid and give the apartment back to the bank?’ he asks. ‘It feels a lot like the subprime mortgage crisis of 2008, but on steroids, due to the lack of transparency.’”
“The Chinese property industry’s bad year keeps getting worse, sending bonds of some developers to record lows and triggering fresh concerns about a major pillar of the world’s second-largest economy. Tighter financing constraints, a state campaign to rein in real estate prices and a tumbling yuan are battering the sector just as it faces an unprecedented wall of maturing offshore debt. The worry is that defaults will jump and economic growth will take a hit. Real estate accounts for about 20 percent of China’s gross domestic product, when both direct and indirect contributions are considered, according to Bloomberg Economics.”
“‘Private developers will face the toughest ever repayment pressure in the third quarter,’ said Zhang Hongwei, a research director at property consulting firm Tospur. ‘Builders will make big cuts to prices in exchange for cash income.’”
“Is the current period of falling prices a temporary dip, or does it foreshadow something else more dramatic? Is the long bubble about to turn into the cataclysmic crash so frequently forecast by the doom-mongers? ABS numbers earlier this month confirmed Sydney’s six-year house price party ended in March. Unlike just 12 months ago, developers such as Sydney-based Ceerose are now unable to sell units and are turning landlord and renting them out instead.”
“Those who bought in the latter stages of the boom could soon be facing negative equity. Despite banks increasingly forcing buyers to put down larger deposits to satisfy the concerns of regulators, falling prices mean their homes may already be worth less than they borrowed. Former Reserve Bank board member Warwick McKibbin told The Australian Financial Review this week that it was past time for the central bank to begin preparing households for higher interest rates.”
“‘If the argument is ‘we can’t raise rates because if we do we could make the housing market a lot worse’, or prick some other asset bubble and cause a shock – if that’s the problem – it’s better to raise rates now than wait six months,’ he says.”
“Many banks are already being forced to pay more for the money they lend households. Smaller lenders like Bank of Queensland, AMP Bank, and ME Bank this week announced plans to hike their mortgage rates by up to 40 basis points. Bigger lenders are facing the same pressures, but may be reticent to draw attention through mortgage rate hikes amid the banking royal commission. Peter Sheahan, director of institutional markets at Curve Securities, likens what is happening in money markets around the world as the US Fed unwinds its crisis-era monetary policy stimulus to the late 1980s, when Australian farmers and corporates ran into serious trouble borrowing low-interest rate Swiss francs without hedging the currency.”
“‘We are seeing another period in history where it proves to be dangerous to borrow too much money in a foreign currency,’ he says. ‘The adjustment phase can be seen in our own domestic funding problems that are emerging.’ Australian banks rely heavily on US dollar funding sources, which are becoming more costly. ‘The global binge on cheap USD finance is our modern-day foreign currency debacle,’ he says.”
“Much of this is likely to play out in coming months, say money market experts, coinciding with more negative headlines out of the nation’s biggest property markets as prices drop. A big unresolved question for state governments, regulators and the Reserve Bank is whether these adjustments lead to a wider panic. That has always been the Reserve Bank’s biggest concern throughout the whole post-GFC cycle; that an eventual fall in property prices that were bid up to unsustainably high levels topples consumers into a defensive crouch.”
‘I would say prices are down five per cent year on year in London. I have just agreed a deal for a property in Maida Vale that was on at £2.25 million in 2016 for £1.7 million’
Sounds like more than 5% Henry.
How does one say “schlonging” in British?
Worst part is, that property is probably just a ancient townshouse that’s been partially remodeled and is across the street from council housing.
I believe “buggering” is the closest equivalent. Another fine word the FBs of Londonistan will be ruminating on, as in, “We are well and truly buggered.”
1.7M down from 2.25M is a 25% drop. Just a bit bigger than 5%, but I’m sure whomever bought for that much more in 2016 doesn’t mind. 😱
They won’t mind at all if they paid $1.1M in 2014……it’s very hard to draw meaningful conclusions from the limited data……
A 24% price decline….. with bottom a long way down yet.
‘A big unresolved question for state governments, regulators and the Reserve Bank is whether these adjustments lead to a wider panic. That has always been the Reserve Bank’s biggest concern throughout the whole post-GFC cycle; that an eventual fall in property prices that were bid up to unsustainably high levels topples consumers into a defensive crouch’
Well you weren’t concerned enough to do anything when it could have prevented it. Enjoy your massive depression Australia.
‘It feels a lot like the subprime mortgage crisis of 2008, but on steroids, due to the lack of transparency.’
This report on Lebanon is worth reading in full.
When are central bankers going to be held accountable for this crap? Driving up the cost of living and dropping hundreds of millions of debt nooses in order to pay for it is not merely questionable, it’s reprehensible and perhaps criminal.
It’s the 21st century answer to the abolition of slavery. This may also help explain why people of color are preferentially targeted by government lending programs, even though lending discrimination is officially illegal.
‘‘This is a trend we see more and more just based on the fact there are a lot of homes on the market,’ Baquera said. Police said vacant homes are attractive to criminals. ‘Criminals are seizing the opportunity of not many neighbors being around…‘Stage the home. Make it look like someone is living there’
Hmmm. Just where is this Roseville with all the new, vacant shacks laying around with no neigbors, getting picked over like dead bodies? Anyone heard of it?
I’ve heard the term Abandominiums
I believe the term “schlongdominium” is about to come into vogue for millions of FBs trapped in depreciating condos.
Just where is this Roseville with all the new, vacant shacks laying around with no neigbors, getting picked over like dead bodies? Anyone heard of it?
It’s an upscale suburb of Sacramento just up the road toward Tahoe/Reno. Jingle country. They’ve got the only nice mall
in the area with a Morton’s steak house, etc.. The west side
is the side closest to Sacramento and lowest in elevation, so
I’m assume it’s the cheaper side of town.
Sorted by price reduction:
https://www.realtor.com/realestateandhomes-search/Roseville_CA/sby-7
This one looks new:
4693 Winona Ct
Roseville, CA 95747
4 beds 3 baths 2,481 sqft
For Sale
$495,451
Price cut: -$10,000 (6/25)
Zestimate®: $558,348
Homesite #97 NEEDS AN OWNER! Covered patio + room for RV Access & pool! Master & bedrooms, + loft and laundry upstairs, downstairs bedroom and full bath. 18 x 18 ceramic tile in great room & kitchen, upgraded white cabinets with hardware, Quartz kitchen counter tops, upgraded back splashes in kitchen and bathrooms. Year Built: 2018
https://www.zillow.com/homedetails/4693-Winona-Ct-Roseville-CA-95747/2089054621_zpid/
From Pulte:
7981 Mt Evans Cir
Roseville, CA 95747
4 beds 3 baths 2,521 sqft
Furnished & Landscaped Model Home Sale!
‘The model homes have been released for sale! Scheule an appointment with the sales team to learn homes are still available!
Contact now. New Construction
$534,990 and up’
Price History
Date Event Price $/sqft Source
06/28/18 Back on market – – Pulte Homes
06/28/18 Pending sale $563,990 $223 Pulte Homes
06/28/18 Price change $563,990-2.3% $223 Pulte Homes
06/25/18 Price change $576,990+0.5% $228 Pulte Homes
05/14/18 Price change $573,990 $227 Pulte Homes
04/20/18 Listed for sale – – Pulte Homes
03/06/18 Listing removed – – Pulte Homes
03/02/18 Listed for sale – – Pulte Homes
01/21/18 Listing removed – – Pulte Homes
11/23/17 Listed for sale – – Pulte Homes
https://www.zillow.com/community/primrose/2091977105_zpid/
Check out the “Other Homes in this Community” aerial photo. Looks like Mars.
Gosh, it looks like we’ve got a little new shack crash getting started in Roseville.
Looks like Mars.
Yeah, and that’s the problem. They would have already sold this spring for more than that if they were in nice established neighborhoods with 10 rated schools. The flight to quality has begun even though nobody (but us) sees a crash yet.
‘If wishes and buts were candy and nuts, we’d all have a merry Christmas’
I have to question your “flight to quality” thesis. From what I observed of both the last crash and today’s past-peak moment, RE tops and crashes go exactly the opposite. “Up-and-coming” neighborhoods (higher crime, worse locations) shoot up in value, eclipsing nice neighborhoods where inventory lingers unsold.
By the end of a bubble quality is too expensive and offers little upside to speculators. Then as credit tightens, quality lingers on the market next to everything else because few can get financing.
IMO, flight to quality is just part of the “we’re immune from a crash because [good schools/weather/location]” myth.
So you would have expected the neighborhood Ben used in his example to sell faster than the nicer neighborhoods if we were actually close to a crash? Not sure I’m following. My assumption is that the stuff that’s farther from everything that everybody wants to be close to would be the first to fall even though it’s cheaper. I would interpret ““Up-and-coming” neighborhoods (higher crime, worse locations) shoot up in value, eclipsing nice neighborhoods where inventory lingers unsold.” as the last stage of the bubble.
Seems to me your last sentence explains why we’re past that and into the crash rather than contradicting me.
Thanks for the thoughtful reply. I’m kind of arguing with myself about it, because while posts about Sydney often mention that price reductions so far have been confined to the most desirable neighborhoods, posts about Vancouver mention simultaneous drops in the highest-end, best-located single family homes and also townhomes in the furthest out low-quality suburbs. So what do I know?
“So you would have expected the neighborhood Ben used in his example to sell faster than the nicer neighborhoods if we were actually close to a crash?”
Actually yes, because new developments can be the last resort for the typical “tail end of the mania” buyers who can’t get traditional financing, and the most desperate speculators. Last time around these were the least informed, least credit-worthy, very-late-to-the-party FOMO buyers who had no hope of flying to quality if they wanted to. And they were the last to get the memo that prices had already started to stagnate and reverse at the higher end and in better locations.
Of course there were plenty of windswept, half-built new developments that never sold a single house, like perhaps this Roseville development will turn out to be. But as far as I can remember (others please chime in if I’m wrong), this wasn’t followed by a sudden bounce in home sales in “better” areas as buyers substituted one for another (ie slowing of sales in new dev in Salinas did not coincide with reinvigorated markets closer to SF.) There just weren’t enough quality buyers, period.
“My assumption is that the stuff that’s farther from everything that everybody wants to be close to would be the first to fall even though it’s cheaper.”
I think the low-end and periphery will eventually fall even further than the the close-in quality, but it definitely hasn’t fallen first. The turning point started as early as two years ago in prime areas (Manhattan, the Hamptons, etc.) while people were/still are fighting over lower-quality stock in worse locations.
So I just don’t see “flight to quality” as part of the crash process, at least en masse. What buyers are left who are willing and able to fly to quality this late in the game? Just my thoughts, willing to be persuaded…
Malibu, CA Housing Prices fell over 40% during the last minor correction. There’s your “flight to quality”.
Lesson? Never believe the excuses. Those invoking the excuses are liars. Born liars.
“If wishes and buts were candy and nuts, we’d all have a merry Christmas.”
“If onlys and justs were candies and nuts, then everyday would be Erntedankfest.” - Dwight Schrute
“…posts about Vancouver mention simultaneous drops in the highest-end, best-located single family homes and also townhomes in the furthest out low-quality suburbs. So what do I know? :)”
Vancouver is an anomaly, thanks to taking the sensible step of drumming the Chinese investors out of their residential real estate market.
Given the brewing trade tensions, it’s hard to understand why the U.S. has not adopted similar measures to keep Chinese equity locusts out of America’s bedrock bedroom communities.
What buyers are left who are willing and able to fly to quality this late in the game? Just my thoughts, willing to be persuaded…
I don’t know…I don’t have data, just my observations of the Folsom/El Dorado Hills area of California this spring. Still plenty of lower end stuff available at inflated prices but pretty much sold out of the good stuff that went for just a little more, and went pretty quickly. I interpreted that as a flight to quality.
So I just don’t see “flight to quality” as part of the crash process, at least en masse. What buyers are left who are willing and able to fly to quality this late in the game? Just my thoughts, willing to be persuaded…
My belief is that if enough housing supply is allowed to be built closer to where economic vibrancy is, which is urban city centers, then these outskirt areas (e.g. drive ’till you quality) that spring up as a result of exclusionary zoning and NIMBYism, such as what exists in California, will begin to fall. A lot of these far flung places become communities because they don’t have a housing cartel that discourages density and infill (e.g. “don’t block my heirloom tomato plants” with your fourplex).
In order to complete a sale by Dutch auction, you have to keep reducing the price until a buyer steps forward and makes a purchase.
My wife’s cat likes to crawl under the covers. I didn’t know he was there until I dutch-ovened him.
That was three days ago. Now he looks at me, and I just know he’s plotting to kill me.
Has the “Fed” ever had a Dutch auction?
“Now he looks at me, and I just know he’s plotting to kill me.”
Obviously cats would kill their owners if only they weren’t so much smaller.
Thankfully, this little shack crash is confined to Roseville.
Oh, wait….
“06/25/18 Price change $576,990+0.5% $228 Pulte Homes
05/14/18 Price change $573,990 $227 Pulte Homes”
What home seller logic inspired that repricing? ‘It wouldn’t sell for $574K. Maybe if we bump the price up by $3K, some dumbass will make an offer.’
“Hmmm. Just where is this Puerto Rico with all the new, vacant shacks laying around with no neighbors, getting picked over like dead bodies? Anyone heard of it?
$an Juan … & nearby vicinitie$ … JetBlue $20 flight$, hurry!
“……where is this Roseville…”
I know this market. It is in the Sierra foothills above Sacramento.
Sales are strong, inventory is tight (but increasing). I’m sure there are lots of aggressive sellers trying to get wishing prices in a sellers market and eventually reducing the price to sell.
Movato says Days on Market = 23
Prices up YoY 8%. Inventory up 25%.
Where is HA! to point out these facts. This is also a good example of why you can’t read a newspaper article and always draw accurate conclusions.
I agree Roseville may become a buyer’s market someday……but it is a strong seller’s market today. If you can sell the average house in 23 days, there is no weakness in the market.
Hmm…..is that crickets chirping?
HA! ???
Mafiblox?
Housing my good friend.
Porter Ranch, CA Housing Prices Crater 10% YOY
https://www.zillow.com/porter-ranch-los-angeles-ca/home-values/
https://snag.gy/m5EzRB.jpg
North Dallas, TX Housing Prices Crater 6% YOY As Wholesale Exit From Housing Accelerates
https://www.zillow.com/north-dallas-dallas-tx/home-values/
*Select price from dropdown menu on first chart
Property developers in Hong Kong blast “unfair” vacancy tax. Boo frickin’ hoo. What’s really unfair is that young couples don’t have a hope in hell of ever owning their own place at these insane bubble price levels, not without being debt serfs for the rest of their lives.
http://www.scmp.com/business/article/2153175/property-developers-blast-unfair-vacancy-tax-call-longer-grace-period-flats
‘The global binge on cheap USD finance is our modern-day foreign currency debacle’
Huh. This global binge was supposed to save us from the big meanie of lower shack prices. Turns out this stupid plan just made things a lot worse. In much of life, when faced with difficult decisions, kicking the can down the road and taking the easy way out is not the way to go.
Don’t worry too much, The Fed will just kick the can down the road another ten years before they deal with the dreaded “adjustment phase” following QE (insert number). Seems to be working for that little island off the coast of China.
In 2006 there were a lot of trolls here saying the central bank wouldn’t let prices fall (even though prices were falling). They all went away. I wonder what happened to them?
Well…they did eventually step in a prevent them from falling all the way.
Not sayin’ prices won’t fall hard and fast, but don’t be surprised if QE pops up again in 2022. Hold onto those Forever Stamps!
those are my good friends you’re talking about. They’re still here. Just alot further under water.
Right my friends? :mrgeen:
“Seems to be working for that little island off the coast of China”
are you talking about Japan?
I cannot figure out what is going - except that the BOJ has bought up a bunch of the commercial bonds and stocks.
I think he’s talking about the recent stories from Hainan.
Its the surf capital of China, where the womens longboarding contests are often held. Not sure about the water quality though.
In other surf related news, I read about a movement of domestic surfboard producers to petition Trump to apply tariffs to foreign manufacturers. I back this 110% - foreign quality is generally lower so domestic shapers had to raise prices just to stay alive and really make the argument about quality and customization but they have been taking a big hit.
Make America(n) (surfboards) Great Again
And dont get me started on handplanes for bodysurfing or mountain bikes. We need tariffs on all that stuff, get more domestic producers with better profit margins on lower prices and everyone will be stoked!
‘Regina and Moosejaw’s demand for houses in downward spiral’
Regina is quite the Housing Bubble ground zero, eh?
Clarification$: hou$ing bubble$ ll, (2.0 … Beta) right?
Damn young$ters … Think it$ ea$y with my callused fingers!
Houses for Sale (5,333)
https://www.kijiji.ca/b-house-for-sale/regina/c35l1700196
Goodness gracious…can we put some of those 5000+ homes on big trucks and export them to house-starved San Diego?
Hong Kong housing bubble growth starting to slow.
Then it will stall.
Then prices will crack and begin to drop.
We know what happens next. We’ve seen this movie before and know how it ends. Only this time the central banks have already used up all their ammunition.
http://www.scmp.com/property/article/2153063/beginning-end-growth-hong-kongs-runaway-home-prices
Hong Kong is an odd case. A few years ago their government got serious about popping the bubble and prices came down a lot. But somewhere along the way they let the mainlanders back in and off it went. I don’t follow China and Hong Kong very much because the government mandated happy talk and it all got too silly for me around the time of the garlic bubble.
Hong Kong does seem odd. So does Hong Kong realtors brawling over marks, er, clients, as a housing bubble starts to deflate and the Greater Fool pipeline suddenly dries up, but there you have it.
Everybody was Kung-Fu fighting….
https://www.zerohedge.com/news/2018-06-29/watch-hong-kong-real-estate-agent-brawl-clients-business
ka-POW! ka-POWIE! Oooof!
https://twitter.com/vocativ/status/1011980219455098880
They really shouldn’t hit each other with glasses on, especially the women.
Ka-POW! Wham! Uuurrk! (Batman & Robin fight scenes, 1966)
https://www.youtube.com/watch?v=NZaG_13ZIYY
I wonder just how much inflation central banks will tolerate before removing the punch bowl. And let’s not kid ourselves, these tiny rate increases are not removing the punch bowl. If anything, to me it looks like they’re just taking a breather before blowing the next bubble.
I think I read it has to do with higher rents mostly ?
“The Fed’s preferred headline inflation gauge — tied to consumption — rose 0.2 percent from April, the second straight such gain. Excluding food and energy, so-called core prices also rose 0.2 percent, matching estimates, while the annual gain of about 2 percent was higher than the median estimate for 1.9 percent. It was the first time in six years the core index registered a 2 percent gain.”
It’s somewhat a matter of perspective.
Business #Economy
Jun 29, 2018 @ 05:00 PM
Argentina Should Scrap the Peso and Dollarize
Steve Hanke , Contributor
AP Photo/Victor R. Caivano
On July 9th, Argentina will celebrate its 202nd birthday. The biggest spoiler during the festivities will be the beleaguered peso. It’s not the first time the peso has been a spoiler. Since its founding, Argentina has been burdened with numerous economic crises. Most can be laid at the feet of domestic mismanagement and currency problems (read: currency collapses). To list but a few of these crises: 1876, 1890, 1914, 1930, 1952, 1958, 1967, 1975, 1985, 1989, 2001, and 2018(?).
…
Oh, geez, they carrie$ their inventorie$ with cla$$ic auto$ …
Get hip!
Only this time the central banks have already used up all their ammunition.
Have they? What I learned in the last 10 years is that they have a lot more ammunition than I thought. And seem to be willing to use it to protect their friends no matter how bad the long term consequences are likely to be.
When you have infinite liquidity and an unauditable balance sheet, what could go wrong?
Nothing if you are a member of the .1 percent but if not it could get very ugly. The former get the money when it is worth something, by the time it reaches the working class it is Zimbabwe dollars.
But any dip now!
We are coasting!
+++++
Shiller: The housing market has been overheated since 2012
Yahoo Finance - Melody Hahm - June 28, 2018
Nobel laureate and Yale economics professor Robert Shiller said the housing market is on a tear, and he sees no signs of a crash like the one that rocked the housing market a decade ago.
“The market has been looking overheated ever since 2012 when we saw the upsurge that has been going on now for almost six years. And it looks like it’s still going up,” he said in an interview with Yahoo Finance.
Weekly mortgage applications slid 4.9% last week, and overall applications are down 12% from a year ago. Even with historically low interest rates, potential homebuyers are pulling out of the process because of high listing prices.
Despite prices reaching record levels, Shiller said he’s not yet concerned that a bubble is brewing.
“It got a little crazy in 2006, as you might remember. And it had some unfortunate consequences. We shouldn’t just assume that that’s going to happen again. But it might, it might. Expectations are not as extravagant as they were 10 years ago. So it looks more like we’re still coasting, still coasting up,” he added.
So Shiller’s a shill for RE, who knew?
So it looks more like we’re still coasting, still coasting up,
The space shuttle Challenger coasted up for a while too.
“…still coasting up…”
That’s a very odd concept, kind of like “falling up.”
It means the sustainer engine has burned out, but the rocket’s velocity continues to carry it higher.
Until a little something call gravity kicks in and causes it to reach apogee, then accelerate rapidly into a downward trajectory to break-up or impact.
Ever hang out & a have few beers with a “flat earther”?
Gawd, eye so miss click & clack …
” well, honestly … Can ya tell me something that will make him come back & keep working on it? … He’s soooooooo cute!
Ever hang out & a have few beers with a “flat earther”?
I hear there is a network of flat earthers all the way around the world.
Always amusing when shareholders or FBs burned in the implosion of their bubble stocks or overpriced shacks “demand to know” what happened, as they see the illusory value of their “investment” plunge.
Well, bag holders, YOU are what happened. You came along, foolishly bought into the hype, and bought into an overpriced asset. Then a little something called gravity came along.
So demand away, but if you’re expecting actual accountability or for someone to cover your losses, good luck with that.
http://www.scmp.com/tech/article/2153065/many-questions-few-answers-zte-meeting-shareholders-question-whos-blame-us-ban
A full-time housewife, Li said she is sitting on a paper loss of about 170,000 yuan (US$25,715) after buying 10,000 shares of ZTE in April, right before the US barred the company from buying American components, including crucial parts like semiconductors that go into its smartphones. The denial order was imposed to punish the company for flouting the terms of an earlier settlement for illegal sales to Iran and caused ZTE to shut down major operations.
Well, Li, maybe you should’ve stuck with what you know - dusting and vacuuming - instead of trying to be a get-rich-quick day trader.
Every house wife I know is selling junk on social media. Shampoos, skin creams, jewelry and yoga pants. Way too many people selling and wearing yoga pants. Why not speculate with a Chinese telecom company?
My wife and her friends have “parties” where they market overpriced products to each other. Seems idiotic and tacky to me, as I’ve explained to the ladies on several occasions, but maybe I’m missing something.
I think there are a lot of people who don’t understand that you can’t all get rich selling Tupperware to each other. All that MLM stuff is a luxury that only seems like it’s working if somebody else in the various households is actually producing something or stealing from those who produce something.
Anybody can skim the cream. But somebody’s gotta go out at 4am and milk the cow that they’ve been carefully feeding and protecting for years.
Little confused by your verbiage:
“My wife and her friends …”
“Comment by Boo Randy
2018-06-27 17:52:36
Well, sweetie, that’s the difference between you and I. …”
Is it Randy, Randi, or eye’m rather Randy?
ver·bi·age
ˈvərbēij/ noun
US
the way in which something is expressed; wording or diction.
Every house wife I know is selling junk on social media. Shampoos, skin creams, jewelry and yoga pants. Way too many people selling and wearing yoga pants. Why not speculate with a Chinese telecom company?
I’m so glad my wife has a real job instead of pitifully trying to coerce Facebook and Instagram friends into buying some multilevel marketing scam.
Down with yoga pants!
As a card carrying member of “free.the.nipple” campaign, eye admire your calling as well.
Looks like the 100°’s degrees for the mid.south central states … hot.diggity.dog!
“Down with yoga pants!”
Was that meant as a double entendre?
You got that right, MLM too.
There’s some practicality to selling baby / toddler clothes though. It isn’t like they get worn out before the child grows out of them. My wife generally recoups our cost, if not more. There are some items in such high demand, she’ll buy 2 to 3 pairs of shoes for $35 each and sell them for $60 a piece. She recently started making things, like bows. $3 worth of ribbon, glue and a pin, sales price $18.
I can’t fault women for trying to earn some money. They sell what they know, products they use. I don’t expect to see women selling aftermarket car parts like guys do.
Nothing at all, except when every house wife is selling MLM based Lularoe and spends $8k for inventory. Read the reviews on that business, they don’t even make good pants
Earning money by selling overpriced crap to each other seems like a flawed business model.
Earning money by selling overpriced crap to each other seems like a flawed business model.
Unless you got in first and are at the top of the pyramid.
“Earning money by selling overpriced crap to each other seems like a flawed business model.”
You just described the entire US eCONomy.
“‘We are seeing another period in history where it proves to be dangerous to borrow too much money in a foreign currency,’ he says. ‘The adjustment phase can be seen in our own domestic funding problems that are emerging.’
In Mexico, a populist firebrand is the odds-on favorite to win the presidential election on Sunday. Like Trump, he is campaigning as an economic nationalist and ardent foe of globalism and neoliberal economics.
This could get interesting. For one thing, if the Mexican peso tanks, Mexican corporations that look out huge dollar-denominated loans to fund their expansion are going to have a tough time repaying those loans. All that “cheap” credit (thank you, Auntie Janet) may suddenly turn ruinously expensive to repay.
https://www.cnbc.com/2018/06/29/mexicos-presidential-front-runner-could-shake-up-trump-and-nafta.html
While AMLO is a shoo in to win the presidency, unless his MORENA party also takes control of congress his socialist administration won’t have a lot of teeth. That said, it could happen, as in Mexico all elected offices are single term, meaning that an entirely new lower house will be elected. Only about a third of the senate is up for grabs.
An AMLO victory would be another middle finger to the globalists and their neoliberal economic rackets that enrich the .1% at the expense of everyone else. That’s the true significance of an AMLO victory, as it signifies a rising tide of resistance to the globalists, their captured Establishment political parties, and (most portentously) that voters are finally rejecting the corrupt, crony capitalist status quo, after decades of mindlessly voting for the same-old, same-old.
I’m not sure what a globalist is ,but socialists shure sck
AMLO is far more Hugo Chavez than Donald Trump. I can see the Peso taking a big tumble on Monday.
I’m not sure what a globalist is ,but socialists shure sck
I’m not familiar with your trailer park, though I may have flown over it.
AMLO is no Chavez. Also, Mexico’s foreign currency debt is less than 25% of their GDP. Compare this to about 50% of Turkey and Argentina’s GDP. In other words, a weakening of the Mexican peso wouldn’t likely hurt Mexico in the way that it is hurting Turkey and Argentina.
The outcome will depend on how many seats in congress MORENA picks up. If they get enough, AMLO will show his socialist colors. For now he’s saying that there won’t be any business expropriations/nationalizations/confiscations but he could change his tune if he has congress in his pocket.
Normally an oversupply of anything causes crashing prices. But it’s different here, and it’s different this time, said every realtor everywhere.
https://wolfstreet.com/2018/06/28/is-this-going-to-crush-rents-in-seattle/
Uhm… don’t they read the news? They’re already behind the times…
https://www.businessinsider.com/amazon-growth-seattle-vacant-luxury-apartments-2018-6
It’s been very interesting to watch the recent activity here on Mercer Island/
After a quiet(ish) spring, inventory has been springing (see what I did there
) onto the market faster than I’ve seen in years, and the lower priced homes ($0.9M-$1.5-8M) have been moving moving to pending very fast. The higher you go, and almost all new construction is $2-3M, the slower it gets as you would expect. The gap in selling speed between ‘lower’ and ‘higher’ priced properties (it’s all relative for the area) seems to me to be wider than I’ve seen in years past (I’ve been casually watching the area RE since 2013)
https://www.zillow.com/homes/for_sale/Mercer-Island-WA-98040/house_type/99525_rid/1_pnd/pricea_sort/47.626933,-122.163077,47.501141,-122.313109_rect/12_zm/0_mmm/
What I feel is going on is two-fold:
1 ) Potential sellers are getting nervous and deciding now is the time get off the fence and onto MLS, and
2) Pent up pressure from people wanting ‘cheaper’ homes in 98040 (all being relative) is getting released, and it’s making clear where the ‘top’ of that pressure is (the price point where DOM starts accelerating). As that delayed demand is filled, the lower priced homes will be staying longer on the market longer as well.
Besides being considered very safe and upscale, etc, 98040 is a bit peculiar of a market because it is an island and located between the twin job hubs of Downtown Seattle and Downtown Bellevue. Living here might cut 30-60 minutes off someone’s commute each way, and you can’t just easily move to an adjacent zipcode and keep the convenience or security.
To clarify, I’m not saying ‘it’s different here’ - rather, the opposite - if I’m seeing cracks in real estate sales here, then odds are very likely there’s even more cracks growing in all the other areas surrounding Seattle/Bellevue/Redmond.
Oh dear…
3410 W Mercer Way Mercer Island, WA 98040
5 beds 6 baths 6,028 sqft
New Construction
$4,160,000
Price cut: -$290,000 (5/1)
Date Event Price
05/01/18 Price change $4,160,000-6.5%
01/29/18 Listed for sale $4,450,000+386%
06/15/15 Sold $915,000-1.1%
03/04/15 Pending sale $925,000
02/20/15 Back on market $925,000
02/08/15 Pending sale $925,000
01/31/15 Listed for sale $925,000
https://www.zillow.com/homes/for_sale/Mercer-Island-WA-98040/house_type/48815275_zpid/99525_rid/1_pnd/pricea_sort/47.588423,-122.209855,47.565146,-122.270194_rect/13_zm/0_mmm/
I’m sure it was a nice ranch or mid-century house, until sold in 2105 to a developer and torn down.
Now it’s 6000+ sq ft of “modern luxury” on a triangular lot on the busy (busiest) loop around the island where it’ll never be that quiet. and what? no buyers at$4.5 million? (been on the market for 5 months now)
…. and not a buyer in site at any price. Looks like garbage precast walls. Costs less than a deck framed structure.
There you go lying again Haystacks!
There MOST CERTAINLY IS a buyer for that house, just not at that price. Rest assured, that the seller will make a tidy profit on that place even if they do have to cut the price significantly.
“There MOST CERTAINLY IS a buyer for that house, just not at that price.”
Well d’oh…
And look at what you get blocking your view…. Holy hells, where are they getting the valuation from?
https://www.zillow.com/homes/for_sale/Mercer-Island-WA-98040/house_type/48888706_zpid/99525_rid/1_pnd/pricea_sort/47.583817,-122.248881,47.580354,-122.253875_rect/17_zm/0_mmm/
“Mercer Island, WA 98040
3 beds 7 baths 12,570 sqft
Off Market
Zestimate®: $56,997,387
Rent Zestimate®: $67,588 /mo”
Mercer Island has some freaking upscale renters!
BTW, the estimated Rent Zestimate only implies a 1.4% annual rate of return on the Zestimated market value, even before considering PITI, etc., not to mention the risk of losing your shirt when the market next crashes. Something tells me that calculation is way off, given that I can get nearly a 3% return on ultra-safe 10-year Treasurys these days.
$375K per year in taxes? that’s $125K an acre.
Bellevue, WA Rental Rates Crater 14% YOY As Seattle Area Housing Demand Collapses
https://www.zillow.com/bellevue-wa-98004/home-values/
Kensington, MD Housing Prices Crater 11% YOY As DC/NoVa Housing Inventory Reaches New High
https://www.movoto.com/kensington-md/market-trends/
Realtors are liars.
And every closing a crime scene.
They always tell the truth.
Fraud, extortion, theft, larceny.
“Miami Beach Broker Found Guilty Of Extorting Rival Realtors”
https://www.local10.com/news/florida/miami-beach/miami-beach-broker-found-guilty-of-extorting-rival-realtors
Is this a per$onal campaign … to improve$ their $tatus?
OK there Housing Analyst, how many different names are you using to post today? Four? Five???
Get back on your meds, man.
Housing my good friend.
Arlington, VA Housing Prices Crater 15% YOY
https://www.movoto.com/arlington-va/market-trends/
Another central bank loses control.
https://www.zerohedge.com/news/2018-06-29/were-gonna-need-bigger-bailout-argentine-peso-plummets-new-record-low
By definition, submerging markets will submerge.
fastFT
Argentina
Argentine peso sinks to record low
Pan Kwan Yuk in New York
Yesterday
The “Albiceleste”, as the Argentine national football team is known, might have advanced to the next stage of the World Cup, but the scorecard is not looking good for the Argentine peso.
The Argentine currency started trading with a thud on Friday, sinking 3.3 per cent at the market open to a new record low of 28.90 per dollar and putting it on track for a 7.3 per cent loss for the week.
The drop comes despite efforts by the country’s central bank to halt the slide by upping the size of its daily dollar for peso auction to $150m yesterday and today.
Sentiment for Latin America’s third-largest economy has soured substantially over the past two months. Soaring inflation and a free-falling currency prompted the central bank to unexpectedly raise rates to 40 per cent last month. An agreement with the International Monetary Fund for a $50bn bailout and the country’s recovery of its emerging markets status provided a brief respite from the sell-off.
But investors remain on edge amid mounting signs that the country could fall back into a recession this year, just two years after emerging from its previous one.
…
It’s not just the Argentine peso that has been feeling the heat. The 100-year bond issued by the country just a year ago is now trading at a new low of 77 cents on the dollar. The Merval stock market is down 45 per cent year-to-date while the peso now holds the infamous status as the world’s worst-performing emerging markets currency after shedding about 56 per cent this year.
“The Credit Union of Colorado has revived a loan product that disappeared following the housing crash a decade ago — the zero-down conventional mortgage. Reaction to its return will likely range from first-time homebuyers wondering what took so long to survivors of the foreclosure crisis asking why did they awaken a financial beast better left for dead. ‘We are looking for a way for individuals to get into the market right away rather than having to save up a down payment while the prices are going up,’ said Doug Schneider, vice president of marketing at the credit union.”
“Lou Barnes, a mortgage industry veteran with Premier Mortgage Group in Boulder, said there is a reason why zero-down loans went away, along with a host of other riskier loan products that contributed to the housing crash. ‘If you can’t save, what are you doing buying a home with nothing down? … Rolling out stuff like this has marked cycle tops,’ he warned.”
Stuff like this is a symptom of a bubble, not a cause. Guess what else starts on Monday? Freddie Mac’s no-income, no-geography restrictions!
May 25, 2018
“In his corner of American finance, where hard selling meets hard luck, Angelo Christian is a star. Each time Christian sells a home loan, the company he works for, American Financial Network Inc., takes as much as 5 percent. Many of Christian’s customers have no savings, poor credit, or low income—sometimes all three. Some are like Joseph Taylor, a corrections officer who saw Christian’s roadside billboard touting zero-down mortgages. Taylor had recently filed for bankruptcy because of his $25,000 in credit card debt. But he just bought his first home for $120,000 with a zero-down loan from Christian’s company. Monthly debt payments now eat up half his take-home pay. ‘If he can help me, he can help anyone,’ Taylor says. ‘My credit history was just horrible.’”
“Christian can do this kind of deal because he is, in effect, making the loan on behalf of the federal government through its most important affordable housing program. It’s a sweet deal: He gets his nearly risk-free commission. Taylor puts no money down. If things go south, the government ultimately bears the risk. Many borrowers ‘are living paycheck to paycheck and, if they lose their jobs, they go into default immediately,’ says John Burns, a housing consultant.”
“One reason more borrowers may be stretching: Real estate prices are soaring again.”
http://thehousingbubbleblog.com/?p=10443
Also from that post:
“Financial bubble are not accidents. Our asset-backed banking system creates bubbles by design—they’re an inevitability. Imagine a homeowner who owns a $1 million house free and clear. The owner goes to a bank and borrows $800,000 against the house. This credit money springs into existence as an accounting entry of a private bank. The borrower goes out into the market and starts purchasing other assets: stocks or a weekend house. The new money drives prices higher, including the assets that form the collateral of the banking system.”
“Since collateral values now have increased, the banking system is happy to increase its loans to borrowers, which pushes prices yet higher, and so on, in a positive feedback loop. The Chicago Tribune reported in June last year: ‘Several major lenders are offering 1 percent down payment loans, and now a large national mortgage company has gone all the way, requiring absolutely nothing down.’”
“It looks like the lessons from the 2008 housing crash have been erased completely: a quasi-government agency, which operates under federal conservatorship, is guaranteeing loans made by reckless institutions to shaky borrowers. The difference is that the reckless institutions are not banks but non-bank lenders. If we follow all of the credit tributaries back to their source, we see that this system is more malignant than ever. The banks are, in fact, still funding mortgages, just surreptitiously. In the new normal mortgage transaction, the non-bank lender funds its loan to the borrower by in turn borrowing ‘warehouse loans’ from a bank.”
“These banks loans are secured by the new mortgages and are extremely short-term, generally for only 15 days, which is the time needed for the non-bank lender to flip the mortgage to one of the government-sponsored enterprises or Ginnie Mae. These GSE then securitize the incoming mortgages into mortgage-backed securities (MBS) and guarantee the payments ‘to increase affordable, sustainable lending,’ Fannie Mae claims. And who owns most of the $7 trillion of outstanding MBS? The Federal Reserve owns 25 percent and banks another 27 percent.”
“And who owns most of the $7 trillion of outstanding MBS? The Federal Reserve owns 25 percent and banks another 27 percent.”
No problems with this, as the debt is federally guaranteed. It’s turtles all the way down.
‘If you can’t save, what are you doing buying a home with nothing down?
————————————————
I’ll take “A Realtor friend told me it was cheaper than renting based on howmuchamonth” for $100 Alex.
Realtor math = FAIL.
Real Estate Analysts and Experts to you my friend!!
My county is raising retirement age,contribution levels etc
U can make a diference
But…but….Bitcoin to $25,000 by year’s end, bleated the Fanboys.
Should’ve bought precious metals instead, suckers.
https://www.marketwatch.com/story/bitcoins-plunge-means-one-thing-calls-for-rallies-to-25000-by-year-end-are-fadingfast-2018-06-29
Whenever I need to be reminded of just how stupid people are (which isn’t all that often) all I need to do is follow the various predictions of the price of bitcoin and then match these predictions up with the current price.
My second source of evidence that demonstrates just how stupid people are is their buying into predictions that the the sea level of the planet’s oceans will rise up twenty-three feet higher from what they are now before the end of this century.
Well, just had dinner with a fellow who just raised up his paid.for.home in Pensacola, FL … 6′ higher …
(He’s kinda a impatient sort of fella anywho, ponderin’$ inve$ting in bitcoin$ …)
https://www.texastribune.org/2018/03/14/harvey-elevate-homes-flood-houston-money-costs/
“With a mix of their own monie$, in$urance fund$, a $mall grant and an $BA loan, the family of five is chipping away at the $280,000 elevation$ bill. They’ve stopped saving money and contributing to their retirement fund to help pay off the new debt$.”
($ = edit$ by hwy50)
You can ask $25,000 for your Bitcoin, but good luck at finding a buyer.
Is there any reason to believe other asset classes can’t drop by 70%, given that Bitcoin already has?
70% Stock Market Crash to Strike August 1, Economist Warns
June 30, 2018 J.L. Yastine
Several noted economists and distinguished investors are warning of a stock market crash.
For example, former budget director for the Reagan White House, David Stockman recently raised a red flag when he declared an economic collapse is imminent. He went on to say: “There surely is a doozy just around the bend.”
Scott Minerd, Chairman of Investments and Global Chief Investment Officer of Guggenheim Partners, warns: “The markets are potentially on a collision course for disaster … once we reach a peak we’ll probably see a 40% retracement in equities.”
Paul Tudor Jones, the famed hedge fund manager and founder of The Tudor Group, is credited for calling the October 1987 market crash, now says that while “we have the strongest economy in 40 years … it is unsustainable.”
And John Hussman, President of Hussman Investment Trust, says that when the market crashes we can expect “a market loss on the order of 60%.”
But there is one distinct warning that should send chills down your spine … that of famed economist Ted Bauman. Bauman and his team correctly predicted the collapse of 1999 and 2007.
Bauman now warns: “There are three key economic indicators screaming SELL. They don’t imply that a 70% collapse is looming, it’s already at our doorstep.”
https://banyanhill.com/exclusives/70-stock-market-crash-to-strike-august-1-economist-warns/?z=974344
Meanwhile, in our supposedly booming economy, the retail meltdown continues.
http://www.businessinsider.com/sears-closes-72-stores-as-sales-tumble-2018-5
It’$ just a con$umer behavior$ $hift, the meltdown$ are in a new mold, Google: Amazon$… Et$y … $aks
Radio Shack did the same thing all the cheap stuff was online, and all the high end gold plated stuff was stocked in their stores
Stared visiting those 99 cent stores and they had what i wanted, Its always a managements choice to get rid of long time customers for the new glitzy ones with money to “burn”.
Just dropped another c-note into the fuel tank of the ol’ truck, and that didn’t even fill me up. I wonder how those $1,000 month truck payment guys feel about $4 per gallon diesel?
No worrie$, ri$ing wage$ + tax refund$ have con$umer$ $oaring like never$ before!
Credit card debt$ = 1.2 Trillion$
$tudent loan$ debt$ = 1.5 Trillion$
Intere$t rate$ are going to fall to the ba$ement $oon!
just.you.wait$.&.see
Hey, you’re not kidding. I stopped by big orange box store to grab a couple inexpensive things and the place was crawling with brand new diesel trucks (with big lifts and tires of course) hauling brand new trailers. $100k sitting in each parking space…to the moon, Alice!
Add$ it to the li$t:
Auto loan$ debt$ = 1.2+ Tillion$
“The US closed out 2016 with just shy of $1.2 trillion in out$tanding auto loan debt, a rise of 9% from the previous year and 13% above the pre-cri$is peak in 2005, in inflation-adjusted terms.Feb 21, 2017
What’$ the back.of.page. caluculation$?
Con$umer $pending = 2/3 + of GDP
U$ GDP is 70 Percent Personal Consumption: Inside the Numbers. It seems most people understand, personal consumption drives the American economy. Per$onal con$umption hi$torically repre$ents 70% of our nation’$ GDP.
(ju$t.must.bee.different.thi$.time eye reckon$)
I remember the last time gas prices spiked to over $4 a gallon, suddenly you could pick up a used gas-guzzler at firesale prices.
I’m watching Iran. If the protests there start to pose a real challenge to the regime, oil prices are going to skyrocket, and stay that way for months at least. And all the dweebs driving F250s on six year payment plans to their jobs at the cubicle farm are going to be hating life.
If/when that happens I might consider picking up a cheap 420hp AWD Yukon to road trip and pull stuff around with.
all the dweebs driving F250s on six year payment plans to their jobs at the cubicle farm are going to be hating life
Enjoy gassing up that King Ranch F-350 while driving to the cube farm, LOLZ.
And here in Denver, your commute will only get longer in time, even if the distance remains the same, for the rest of your life…
Yes. Yet I am paying $2.64 a gallon. Not even close to $4.
No price declines in used vehicles anywhere that I can see.
“No price declines in used vehicles anywhere that I can see.”
Likely due to leverage, which Wolf has been documenting.
“Not even close to $4.”
No doubt, where is this $4 gouge gas being sold?
California?
West coast - come out and get fleeced, yo.
Chevy, Ford and Dodge started slashing 3/4 and 1’s in March. Chevy crew with duramax is now under $45k.
That’s completely stripped down. You can still get a 1 ton diesel truck for $40k if you want rubber floors and plastic galore.
A new crew cab with 4 full sized doors with duramax and allison was $55k last year. Now it’s $40k. Not a bargain yet but will be with the way prices are falling…. say around $30k. Like housing, buy later after prices crater.
Chevy is advertising 18% cash back if you finance with them.
“I wonder how those $1,000 month truck payment guys feel about $4 per gallon diesel?”
ABC has a road rage show on tonight’s 20/20, although I haven’t watched 20/20 in a decade or so I will be watching tonight at 10 pm and I will keep an eye out for those $1,000 a month truck payment guys.
Very disappointing show.
I have seen much better road rage in person.
Just dropped another c-note into the fuel tank of the ol’ truck, and that didn’t even fill me up. I wonder how those $1,000 month truck payment guys feel about $4 per gallon diesel?
This reminds me of an anecdote the last time gas prices were in the stratosphere. Was filling up the car when I guy I know drove his Suburban in and proceeded to fill it up, his bill ending up well over $100. He was next to me, and when I saw the numbers of his pump I said “ouch”. He gave a “no biggie” smile and got into his Suburban and took off.
$1,000 a month for a truck. Plus who knows how much more the trailer and boat are costing. Plus insurance.
How log until the dealers are flooded with cheap, used trucks? By next summer?
The inventory in 92101 is now over 350!
Asking prices are still ridiculous, but there is now light at the end of the tunnel.
Arcadia, CA Housing Prices Crater 22% YOY As Decades Of Mortgage Fraud Emerge In LA Area
https://www.movoto.com/arcadia-ca/market-trends/
This article is the definition of a red herring. “People are outraged over ‘monetary policy’ because the Fed is paying banks 25 billion a year.” No Peter, people are angry about monetary policy because it extracts purchasing power from the society, firehoses it to the financial sector that causes financial crises, blows asset bubbles which cause economic dislocation, harms savers and retirees, encourages moral hazard and socially destructive behavior, encourages central planning and capital misallocation and causes economic ossification. A few billies to the banks is literally the least of the issue. Classic misdirection.
How Monetary Policy Suddenly Became Controversial
One person’s technical adjustment is another’s flagrant theft.
Last year the Federal Reserve paid about $26 billion in interest on the money banks kept deposited there, up from the zero dollars it paid before the financial crisis a decade ago. For many people, this is a source of distress.
https://www.bloomberg.com/news/articles/2018-06-29/how-the-fed-got-in-trouble-for-enacting-sensible-monetary-policy
“$26 billion in interest” … Aw pa$haw, $tay focu$ed on the prize$!
26 Billion$ … + … 1+Trillions … coming to your local theater $oon!
Which beg$ the que$tion … What is the intere$t that is paid on thi$:
National debt of the United $tates
Intere$t and debt $ervice costs$
Component$ of interes$ on the debt$:
Despite rising debt levels, interest costs have remained at approximately 2008 levels (around $450 billion in total) due to lower than long-term interest rates paid on government debt in recent years. However, interest rates may return to higher historical levels.
The cost of servicing the U.S. national debt can be measured in various ways. The CBO analyzes net interest as a percentage of GDP, with a higher percentage indicating a higher interest payment burden. During 2015, this was 1.3% GDP, close to the record low 1.2% of the 1966–1968 era. The average from 1966 to 2015 was 2.0% of GDP.
However, the CBO estimated in 2016 that the interest amounts and % GDP will increase significantly over the following decade as both interest rates and debt levels rise: “Interest payments on that debt represent a large and rapidly growing expense of the federal government. CBO’s baseline shows net interest payments … more than tripling … under current law, climbing from $231 billion in 2014, or 1.3 percent of GDP, to $799 billion in 2024, or 3.0 percent of GDP—the highest ratio since 1996.”
Oh, and as I watched him on the stage
My hands were clenched in fists of rage
No angel born in hell
Could break that Satan’s spell
HILLARY REFUSES TO CONDEMN THE LEFT BECOMING ‘UNCIVIL’ — CALLS FOR ‘STRENGTH’ TO RESIST TRUMP
2:31 PM 06/29/2018
Justin Caruso | Senior Media Reporter
http://dailycaller.com/2018/06/29/hillary-uncivil-trump-strength/
It’s really a good thing in disguise. The more Hillary tries to out-Trump Trump, the lower her prospects of ever gaining entry to the WH.
“Chief Financial Market Strategist Jihad El Hokayem went against mainstream analysts and rang alarm bells, predicting a ‘two for the price of one’ free-fall. Two years on, and El Hokayem is of the belief that the situation is much more dire than what he initially thought. Today, El Hokayem is adamant that if prospective buyers wait longer, they’ll snatch three properties for the price of one in 2020.”
Not just two-for-one, but three-for-one? This stategist is a gem. American needs a housing market Jihad!
In case the math is confusing, a ‘two for the price of one’ free-fall entails a 50% price correction, while a ‘three for the price of one’ free-fall would reflect a 67% price decline.
Wrightsville Beach, NC Housing Prices Crater 14% YOY As Coastal Property Values Plunge
https://www.movoto.com/wrightsville-beach-nc/market-trends/
I think I spotted Timmy and Ben tending bar in this video!
“Fear the Boom and Bust”: Keynes vs. Hayek Rap Battle
https://www.npr.org/2018/04/28/603678259/10-years-after-housing-crisis-a-realtor-a-renter-starting-over-staying-put
“I had a stomachache all the time when I was working through that process,” he says. “They’d invested so much time and money in making it a home, and now they have to leave it. I still have nightmares to this day that I’m going through that.”
From the realtor Sean Hanh’s website:
“A recession is probably less than two years away. A housing crisis is not.”
He seems pretty sure we are safe this time… wonder if he will be eating his words and back on the Tums to fix his stomach aches in the near future
I blinked, then opened my eyes, and Paul McCartney was old. I blinked again, and looked in the mirror, to discover that I was old, too.
Paul’s music remains forever young, though.
Paul McCartney Carpool Karaoke
The Late Late Show with James Corden
“Is the current period of falling prices a temporary dip, or does it foreshadow something else more dramatic? Is the long bubble about to turn into the cataclysmic crash so frequently forecast by the doom-mongers? ABS numbers earlier this month confirmed Sydney’s six-year house price party ended in March. Unlike just 12 months ago, developers such as Sydney-based Ceerose are now unable to sell units and are turning landlord and renting them out instead.”
When MSM financial journalists get all introspective like this, you can stick a fork in the ‘long bubble.’
Best things to like about Jerome Powell so far:
1) He’s quiet; not trying to be a rock star like his predecessors.
2) He appears to be apolitical, unlike his predecessors.
3) So far, he is sticking to the punchbowl removal plan.
Chintzy rate hikes. Too little, too late.
Would any cryptobubble HODLers care to weigh in on this ongoing slow-motion collapse? I’m curious whether everyone assumes cryptocurrency is decoupled from stocks, bonds and housing, or is the cryptoscam collapse a harbinger of what’s to come for other risk assets?
Technology
Bitcoin Bloodbath Nears Dot-Com Levels as Many Tokens Go to Zero
By Adam Haigh and Eric Lam
June 29, 2018, 7:45 PM PDT
- Largest cryptocurrency falls to lowest level since November
- Intensifying regulatory scrutiny, exchange hacks hurt demand
Bitcoin’s meteoric rise last year had many observers calling it one of the biggest speculative manias in history. The cryptocurrency’s 2018 crash may help cement its place in the bubble record books.
Down about 70 percent from its December high after sliding for a fourth straight day on Friday, Bitcoin is getting ever-closer to matching the Nasdaq Composite Index’s 78 percent peak-to-trough plunge after the U.S. dot-com bubble burst. Hundreds of other virtual coins have all but gone to zero — following the same path as Pets.com and other red-hot initial public offerings that flamed out in the early 2000s.
https://www.bloomberg.com/news/articles/2018-06-30/bitcoin-bloodbath-nears-dot-com-levels-as-many-tokens-go-to-zero
Personal Finance #IfIOnlyKnew
Jun 29, 2018 @ 08:00 AM
Why The Bitcoin Bubble Will Burst In 2018
John Wasik, Contributor
Opinions expressed by Forbes Contributors are their own.
I know millions of speculators across the world don’t want to hear this, but there are some solid reasons to believe why the bitcoin run-up won’t last and will continue to recede.
It’s not just about speculating on computer code and the fact that Bitcoin isn’t really universal legal tender like a Euro or Dollar. You can’t buy a cup of coffee with it in most places and pull it out of your wallet.
The most fundamental reasons have more to do with blockchain, the technology behind bitcoin: The cryptocurrency has a lot of competition. Here are three powerful reasons why Bitcoin may not lead the pack of cryptos:
https://www.forbes.com/sites/johnwasik/2018/06/29/why-the-bitcoin-bubble-will-burst-in-2018/#150fbd48e9ff
I have my sign ready for the protests the weekend.
Abolish ICE’ AND MAKE UNINSURED MOTORIST A RIGHT
https://en.wikipedia.org/wiki/Uninsured_motorist_clause
Better idea put all the illegals in sanctuary city and let the local citizens pay for it. by raising RE taxes like 50%…seems fair to me.
I think is abusive to put them in cities where no one voted to be a sanctuary city.