September 11, 2018

The Blunders Of Quantitative Easing

A report from CNBC TV 18 in India. “Every second investment report on India sees housing as the most promising sector and yet we see defaults, slowdown in launches and declining sales dominating the industry. On the surface, the problem is, ‘Home prices are not affordable.’ But a more economically correct definition of the current situation would be : ‘At prices that buyers can afford homes, developers are unable to find land that can give developers economic return.’”

“To understand the root cause of a developer’s inability to find appropriate land parcels, one needs to go back to September 11, 2001. After the Twin Towers were felled, the US government feared that crashing consumer confidence could take the slowing economy into a recession. It therefore, adopted the easy money route. But even at low interest rates, there weren’t enough opportunities for investment.”

“Housing, as a result, became the darling of American financial markets. Homebuyers too were happy borrowing as low-interest rates meant buying was cheaper than renting. As soon as banks were able to find a wiling homebuyer, re-financing institutions were more than happy to refinance banks, creating an extremely efficient channel for the flow of newly printed dollars into US real estate.”

“With the US following easy money policy, few nations could follow a tight money policy. Money became easily available across the globe. The Indian government permitting foreign direct investment (FDI) in real estate in 2004, the excess global liquidity also found its way into India.”

“Indian real estate market took the prices of these marquee properties as benchmarks and real estate boom started spreading to smaller cities, towns and villages.”

“A crash in the housing market can cause a bigger emotional trauma than any stock market crash as most homebuyers are leveraged. So in 2008 when the housing market crashed in the US, its government was quick to realise the impending public distress. It pumped in money and saved the day.”

“The Indian market, however, had a different story. In 2008, responding to the US market, the Indian housing market dipped for a while mainly because of liquidity issues with some developers. But a large number of individual investors, who had missed the bus during 2004-08, were waiting to have a piece of estate. These were small investors but larger in numbers.”

“Banks and housing finance companies (HFCs) found them promising customers. So the real estate boom continued for another five years. But by 2013-14, developers had realised that the momentum had slowed. They were now looking at reducing their cost of land in new acquisitions. And this is where Indian land market exhibited its uniqueness. Market inefficiency in land markets came to the fore.”

“The land sale typically involves decision-making by multiple-owners (joint families, trusts, companies, societies, tenants etc.) and due to the psychological phenomenon called ‘Group Think’, rationality does not prevail in such decision-making and the group is unable to accept the market reality (slowdown in sales).”

“The land prices, therefore, do not come down. Moreover, in India, buying of land is seen as a sign of prosperity and selling land is associated with a stigma. Even in distress, few would consider selling land and among them, very few would agree to sell at less than the original purchase price. Thus, developers looking at buying land at discount to earlier prices are hardly able to any crack deal.”

“To make matters worse, during the past 8-10 years, state governments have started to look at housing as a key source of revenue. Circle rates were increased across the country. Service tax and now GST made a further dent into housing sales. Thus, the money left with developers for payment to landlord shrunk significantly. The offer from developers now appears to be a raw deal to landlords.”

“Circle rates and income tax laws further inhibit landlords from selling at lower prices. Market inefficiencies have thus created a big quagmire. Correcting market inefficiencies involve unpopular and difficult decisions; these are neither easy nor quick in a federal democracy like India.”

The Business Report on South Africa. “The average house price growth is likely to be slower than anticipated for this calendar year, with FNB forecasting another year of decline in house prices after taking in account the impact of inflation. John Loos, a household and property sector analyst at FNB, said the consistently negative real house price growth since early-2016 led FirstRand to believe that economic growth rates of 1 percent to 1.5 percent, along with little interest rate stimulus, were not be sufficient to create the level of housing demand that could mop up oversupplies, balance the market and lead to positive real house price growth.”

“Loos added that the longer-run performance of FNB’s repeat sales house price index in real terms was at relatively expensive levels and 91 percent higher than the January 2001 pre-boom index levels despite the significant cumulative ‘post bubble correction.’ The ‘bubble’ refers to the pre-2008 housing bubble. Loos said the ‘post bubble correction’ to date had come in two phases, with the first a sharp decline in real house prices of -21.2 percent from the all-time high in August 2007 to July 2009.”

“He said that there was a period of mild recovery between August 2009 and February 2015, with cumulative real house price growth of 4 percent, but that this mini recovery occurred on the back of massive monetary and fiscal stimulus packages, both globally and locally, that had been aimed at ending the 2008/09 recession and global financial crisis.”

“In South Africa, the Reserve Bank implemented major interest rate cuts at the time, with the prime rate dropping from 15.5 percent in late 2008 to 8.5 percent by mid-2012. Loos said that the global and local stimulus had helped the economy recover moderately and that the stimulus helped economic growth recover to 3.3 percent post the 2008 recession peak. Loos said the rental market was also mired in mediocrity in a weak economy, but there had been a -2 percent decline in FNB’s Price-Rent Ratio Index since the post recession high reached in May 2006, with the index 11.86 percent lower than in January 2008. ”

“However, Loos said the stimulus began to wear off from 2012 and economic growth began a broad stagnation and interest rates started to drop from early 2014 until early 2016. Loos said these events led to the start of the second phase of the post bubble correction, resulting in real house prices to date declining cumulatively by -2.5 percent since February 2015.”

From Ekathimerini on Greece. “We are at the 10th anniversary of the global financial crisis that laid ruin to the Greek economy. The overriding lesson of the global crisis is the persistently weak governance of the global financial system. I count six basic blunders that cost the world trillions of dollars in lost output and years of anguish. Unfortunately, among the worst blunders has been the handling of the Greek crisis, including the recent empty declarations that the crisis is over. If only life were as easy as the fantasies of the politicians and of European Union bureaucrats who routinely checked the boxes.”

“Blunder 1. Excessive liquidity and financial deregulation (pre-2008). At the core of the 2008 financial crisis was a major expansion of credit that greatly outpaced the real economy during the years 2001-2007. With Wall Street’s political power ascendant in the Clinton Administration during 1993-2000, the US government deregulated Wall Street in the late 1990s and the Federal Reserve pumped credits into the deregulated banking system in the early 2000s. The result was a housing bubble and leveraged balance sheets of America’s major financial companies (including commercial banks, investment banks, and insurance companies).”

“Blunder 6. Leaving future growth to quantitative easing rather than public investments. Both the US and Europe cry out for upgraded and updated infrastructure. Genoa’s recent bridge collapse is a tragic manifestation of infrastructure that is woefully inadequate for the 21st century, especially in the era of global warming, with the burdens of rising sea levels, more droughts, more floods and more intense storms. Yet both the US and the EU have continued to pump up the economy through easy credits, which are highly vulnerable to another boom-bust cycle, rather than through long-term infrastructure investments. (Easy credits were the right policy immediately after the Lehman failure, but the growth package should have shifted from easy credits to increased public investments later on.)”

“The macroeconomics profession has also failed. At an analytical level, the two competing schools of macroeconomics, the Keynesians and the neoliberals, both got it wrong. The Keynesians treated the 2008 financial crisis as a crisis of aggregate demand rather than as a financial and structural crisis. The neoliberals (like Weidmann) were far more damaging in their incorrect belief that market forces could quickly overcome the financial crisis and even resolve the overhang of debt.”

“Even worse, the macroeconomics profession generally stood on the sidelines as Greece suffered a persistent and catastrophic collapse of output deeper than the Great Depression. Until today, it has mostly nodded silently as Europe offered Greece one illusory ’solution’ after another.”




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60 Comments »

Comment by Apartment 401
2018-09-11 16:51:25

Nobody believes the Realtor lies anymore.

“You gotta roll with it” — Caitlyn Vestal, millennial, Portland, OR

How’s that working out for you so far, Caitlyn?

Comment by rms
2018-09-11 18:05:32

“How’s that working out for you so far, Caitlyn?”

No pink for 401. :)

 
 
Comment by Mortgage Watch
2018-09-11 16:55:25

Arvada, CO Housing Prices Crater 8% YOY As Denver Area Mortgage Fraud Escalates To Unprecedented Level

https://www.movoto.com/arvada-co/market-trends/

 
Comment by Boo Randy
2018-09-11 17:05:42

Market inefficiencies have thus created a big quagmire.

And what created systemic market inefficiencies and malinvestment? The Keynesian fraudsters at the central banks and corrupt policymakers owned by Wall Street private equity firms. With captured regulators and enforcers ensuring the latter can engage in the unfettered plunder of the 99% with impunity. Meanwhile, Senator Running Deer and her ilk bloviate for the cameras but take no meaningful action to protect the increasingly hard-pressed middle and working classes.

Comment by Albuquerquedan
2018-09-12 05:57:11

Yes. All her and her and her allies are trying to do is stampede people into voting for Democrats. They are trying to promote polls showing a blue wave, it is 2016 again. Meanwhile, Rasmussen is showing the truth and remember due to gerrymandering Democrats tend to run up huge margins in their districts while Republicans win their districts by much smaller margins and the numbers are averaged:

Democrats maintain their lead over Republicans on this week’s Rasmussen Reports Generic Congressional Ballot.
The latest telephone and online survey finds that 46% of Likely U.S. Voters would choose the Democratic candidate if the elections for Congress were held today. Forty-two percent (42%) would opt for the Republican. Four percent (4%) prefer some other candidate, and nine percent (9%) are undecided. (To see survey question wording, click here.)
Three weeks ago, the two parties were dead even for the first time since May before Democrats jumped back out to a five-point lead two weeks ago. In early July, they led by eight, their largest lead since January.

 
 
Comment by Ben Jones
2018-09-11 17:07:07

‘The dot-com bubble (also known as the dot-com boom,[1] the dot-com crash,[2] the tech bubble,[3] the Internet bubble, and the information technology bubble) was a historic economic bubble and period of excessive speculation that occurred roughly from 1995 to 2000, a period of extreme growth in the usage and adaptation of the Internet.[4]‘

‘The Nasdaq Composite stock market index, which included many Internet-based companies, peaked in value on March 10, 2000 before crashing. The burst of the bubble lasted from March 11, 2000 to October 9, 2002.[4][2] After the bubble burst, online retail companies, such as Pets.com, Webvan and Boo.com, failed completely and shut down along with communication companies, such as WorldCom, NorthPoint Communications and Global Crossing.[5][6] Others, such as Cisco, whose stock declined by 86%,[6] and Qualcomm, lost a large portion of their market capitalization but survived, and some companies, such as eBay and Amazon.com, declined in value but recovered quickly.’

‘In 1993, the release of the Mosaic web browser made access to the World Wide Web easier.[7] Internet usage increased as a result of the reduction of the “digital divide” and advances in connectivity, uses of the Internet, and computer education. Between 1990 and 1997, the percentage of households in the United States owning computers increased from 15% to 35% as computer ownership progressed from a luxury to a necessity.[8] This marked the Information Age, the shift to an economy based on information technology, and many new companies were founded.’

‘At the same time, low interest rates increased the availability of capital.[9] The Taxpayer Relief Act of 1997, which lowered the top marginal capital gains tax in the United States, also made people more willing to make more speculative investments.[10] Alan Greenspan, the former Chair of the Federal Reserve, allegedly fueled investments in the stock market by putting a positive spin on stock valuations.[11] The Telecommunications Act of 1996 was expected to result in many new technologies and people wanted to profit.[12] ‘

‘As a result of these factors, many investors were eager to invest, at any valuation, in any dot-com company, especially if it had one of the Internet-related prefixes or a “.com” suffix in its name.[13] Venture capital was easy to raise. Investment banks, which profited significantly from initial public offerings (IPO), fueled speculation and encouraged investment in technology.[14] A combination of rapidly increasing stock prices in the quaternary sector of the economy and confidence that the companies would turn future profits created an environment in which many investors were willing to overlook traditional metrics, such as the price–earnings ratio, and base confidence on technological advancements, leading to a stock market bubble.[11]‘

‘Between 1995 and 2000, the Nasdaq Composite stock market index rose 400%.[13] It reached a price–earnings ratio of 200, dwarfing the peak price–earnings ratio of 80 for the Japanese Nikkei 225 during the Japanese asset price bubble of 1991.[11] In 1999, shares of Qualcomm rose in value by 2,619%, 12 other large-cap stocks each rose over 1,000% value, and 7 additional large-cap stocks each rose over 900% in value. Even though the Nasdaq Composite rose 85.6% and the S&P 500 Index rose 19.5% in 1999, more stocks fell in value than rose in value as investors sold stocks in slower growing companies to invest in Internet stocks.[15]‘

‘An unprecedented amount of personal investing occurred during the boom and stories of people quitting their jobs to engage in full-time day trading were common.[16] The news media took advantage of the public’s desire to invest in the stock market; an article in The Wall Street Journal suggested that investors “re-think” the “quaint idea” of profits, and CNBC reported on the stock market with the same level of suspense as many networks provided to the broadcasting of sports events.[11][17]‘

‘At the height of the boom, it was possible for a promising dot-com company to become a public company via an IPO and raise a substantial amount of money even if it had never made a profit—or, in some cases, realized any material revenue.’

‘On March 20, 2000, Barron’s featured a cover article titled “Burning Up; Warning: Internet companies are running out of cash — fast”, which predicted the imminent bankruptcy of many internet companies.[28] This led many people to rethink their investments. That same day, Microstrategy announced a revenue restatement due to aggressive accounting practices. Its stock price, which had risen from $7 per share to as high as $333 per share in a year, fell $120 per share, or 62%, in a day.[29] The next day, the Federal Reserve raised interest rates, leading to an inverted yield curve, although stocks rallied temporarily.[30]‘

‘On April 3, 2000, judge Thomas Penfield Jackson issued his conclusions of law in the case of United States v. Microsoft Corp. (2001) and ruled that Microsoft was guilty of monopolization and tying in violation of the Sherman Antitrust Act. This led to a one-day 15% decline in the value of shares in Microsoft and a 350-point, or 8%, drop in the value of the Nasdaq. Many people saw the legal actions as bad for technology in general.[31] That same day, Bloomberg published a widely-read article that stated: “It’s time, at last, to pay attention to the numbers”.[32]‘

‘On Friday, April 14, 2000, the Nasdaq Composite index fell 9%, ending a week in which it fell 25%. Investors were forced to sell stocks ahead of Tax Day, the due date to pay taxes on gains realized in the previous year.[33]‘

B’y June 2000, dot-com companies were forced to rethink their advertising campaigns.[34] On November 9, 2000, Pets.com, a much hyped company that had backing from Amazon.com, went out of business only 9 months after completing its IPO.[35][36] At that time, most internet stocks had declined in value by 75% from their highs, wiping out $1.755 trillion in value.[37]‘

‘In January 2001, just 3 dot-com companies bought advertising spots during Super Bowl XXXV: E-Trade, Monster.com, and Yahoo! HotJobs.[38] The September 11 attacks accelerated the stock market drop later that year.[39]‘

‘Several accounting scandals and the resulting bankruptcies, including the Enron scandal in October 2001, the Worldcom scandal in June 2002,[40] and the Adelphia Communications Corporation scandal in July 2002 further eroded investor confidence.’

‘By the end of the stock market downturn of 2002, stocks had lost $5 trillion in market capitalization since the peak.[41] At its trough on October 9, 2002, the NASDAQ-100 had dropped to 1,114, down 78% from its peak.[42][43]‘

Comment by Ben Jones
2018-09-11 17:08:13

One can see there was a whole lotta bull-crap going on.

Comment by Mafia Blocks
2018-09-11 17:20:00

Still is but far more egregious. That stuff is petty compared to the amount of appraisal and mortgage fraud going on.

 
Comment by Boo Randy
2018-09-11 17:25:27

No one was ever held criminally accountable for the massive accounting fraud and fabricated reporting that enabled both the tech bubble and Housing Bubble 1.0. All three ratings agencies gave AAA ratings to toxic waste subprime crap bundled in mortgage backed securities and sold to “investors,” yet no CEOs or CFOs, or the regulators and enforcers charged with ensuring the integrity of financial markets, went to prison despite massive, systemic wrongdoing that caused trillions of dollars in losses.

 
Comment by hwy50ina49dodge
2018-09-11 17:28:11

“…it wa$ po$$ible for a promi$ing dot-com company to become a public company via an IPO and rai$e a $ub$tantial amount of money even if it had never made a profit—or, in some cases, realized any material revenue$.’

Every current company / Citizen Corportation$ in America has learned those Hi$torical le$$on$ … None can fail due to carrying debt$!!!

just.you.wait$ & $ee!

Comment by OneAgainstMany
2018-09-11 18:01:48

The amount of fraud and mania that has been occurring in the ICO scene (initial coin offering) reminds me a bit of the early 2000s.

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Comment by Prime_Is_Contained
2018-09-12 20:49:56

Definitely agree. Unfortunately, it’s harder to short though!

 
 
 
 
Comment by Anonymous
2018-09-11 18:46:41

…an article in The Wall Street Journal suggested that investors “re-think” the “quaint idea” of profits.

The same crap is going on in 2018. TSLA, anyone?

Comment by Ben Jones
2018-09-11 19:21:10

Which new business model is Uber working on now? They just go from one money losing deal to another.

Comment by Mafia Blocks
2018-09-11 19:47:55

Just like Amazon.

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Comment by hwy50ina49dodge
2018-09-11 20:03:48

“They just go from one money losing deal to another”

$eems everyone’s enjoying tho$e type$ of game$:

Trump Entertainment Resort$, Inc. was a gaming and ho$pitality company that owned and operated the now $huttered Trump Taj Mahal hotel and ca$ino, as well as the now $huttered Trump Plaza Hotel and Ca$ino and the Trump Marina located in Atlantic City, New Jersey, United State$. Formerly known as Trump Hotel$ & Ca$ino Re$orts, it was founded in 1995 by Donald Trump, now 45th Pre$ident of the United $tates, who has not had any formal role in the company since 2011, if not earlier. The company filed for bankruptcy in 2004, 2009 and 2014. It has been a $ubsidiary of Icahn Enterprises since 2016.

 
Comment by Hi-Z
2018-09-11 21:10:25

and your point is ???????

 
 
 
 
 
Comment by azdude
2018-09-11 17:08:05

as long as the credit is flowing the party goes on.

Comment by rms
2018-09-11 18:10:18

+1 Bring on the coconut drinks!

 
 
Comment by b
2018-09-11 17:12:06

why the heck can CNBC India TV 18 provide a 5x better, concise explanation than CNBC US?

Comment by Boo Randy
2018-09-11 17:29:45

Why the heck do citizen bloggers provide far more timely and relevant assessments of current events or economic matters than the Real Journalists of the corporate media? Could it be that the latter are employed to influence rather than inform?

2018-09-12 06:10:24

Excellent point, something I addressed in one of my latest posts, and why I remain an independent broker. The establishment has (as always) a narrative to sell. They don’t want inconvenient things like facts getting in the way of sales and profits.

As Upton Sinclair said “It’s difficult to get a man to understand something, when his salary depends upon his not understanding it.”

Many people are just beginning to realize the blunders of quantitative easing, but there will undoubtedly be a bountiful harvest of consequences from these abysmal trickle-down policy failures designed to enrich the wealthy and well-connected.

https://aaronlayman.com/2018/09/denton-county-home-sales-slide-7-in-august/

Comment by Professor 🐻
2018-09-12 07:40:46

I predict the Fed’s Public Relations Department will continue to tout the merits of QE, straining credulity against a preponderance of empirical evidence that a broken financial system is one of the main effects.

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Comment by Young Deezy
2018-09-12 07:43:36

Nice post pimping your business. You can’t see me on my end of the computer, but I’m rolling my eyes hard.

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Comment by Mafia Blocks
2018-09-12 08:21:28

Realtors are liars

 
 
 
 
 
Comment by Boo Randy
2018-09-11 17:16:11

The overriding lesson of the global crisis is the persistently weak governance of the global financial system.

It’s worse than that. The financial elites have completely captured the institutions of governance, including the Establishment political parties, who on behalf of their oligarch donors allow lobbyists for the latter to draft legislation to facilitate neoliberal economic policies and the unfettered looting of sovereign peoples and nations. The captured media, for its part, keeps the sheeple distracted with mindless entertainment while purveying lies and propaganda intended to influence rather than inform, while labeling opponents of globalism and neoliberalism as “far right” to stifle legitimate challenges to the Oligopoly status quo.

Comment by Apartment 401
2018-09-11 17:38:58

Sounds about right.

I read the New York Times, Washington Post, UK Guardian, because I am interested in the scripting of narratives.

The term “nationalist” has been scripted into their narrative as always prefaced by or associated with “far right” regardless of its context or what nation is being discussed.

Salon, The Atlantic, Huffington Post all extend this scripting of the narrative to include the term “racist” (Salon is the worst offender).

All social media platforms routinely engage in the censorship or outright banning of any thought crime that deviates from the narrative.

The majority of people, the Normals (or Normies) don’t perceive, let alone question any of this. Because if the New York Times, CNN, Facebook, Reddit, etc all enforce the same narrative, with any deviation therefrom branded as “racist,” how would they dare question the narrative and risk being publicly labelled as racist, and thrown to the mob of defamation, character assassination, etc?

“In times of universal deceit, telling the truth becomes a revolutionary act.” — George Orwell

Comment by Mike
2018-09-11 18:21:54

+10

 
Comment by Anonymous
2018-09-11 18:50:23

George was a genius.

Comment by OneAgainstMany
2018-09-11 19:32:31

You mean Eric Arthur Blair?

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Comment by Boots on the Ground in Ptown
2018-09-14 08:49:39

Bang on. Do you read Ben Hunt at Epsilon Theory.com? If not, check it out- I think you’d enjoy his posts on News, Narratives etc. One post name that I recall: Letter From a Birmingham Jail.

While I’ve got my head in the door: friends in SW WA aka bedroom community of Portland listed house on 10 acres (built around 2015) for close to 600k. Price has been dropped at least 4 times, down to 525k last i checked. They listed around April 2018 if I recall right.

 
 
Comment by jeff
2018-09-11 18:15:49

“The captured media, for its part, keeps the sheeple distracted with mindless entertainment while purveying lies and propaganda intended to influence rather than inform,”

Do you want me to read the card?

 
 
Comment by Mortgage Watch
2018-09-11 17:28:27

Bellevue, WA Housing Prices Crater 22% YOY As Amazon And Microsoft Layoffs Drive Seattle Mortgage Defaults To New High

https://www.movoto.com/bellevue-wa/market-trends/

 
Comment by Norma
2018-09-11 18:09:18

Out for taco 🌮 Tuesday in Boise tonight. Got a weird vibe the bar was empty, last week it was full?

Comment by Norma
2018-09-11 18:22:54

Look at this .. pending not pending not in a couple days. I actually know these people they paid $200,000 18 months ago moved to Boise from Washington. They don’t like it here job wise. They did at least get permits for all their work. They want to move back to Washington and get the money they paid for that house “because home prices have fallen in Washington” and are hoping to get their old jobs back.

Comment by Norma
Comment by Anonymous
2018-09-11 18:54:07

I like the house, but wouldn’t pay that price, especially in Boise (no offense).

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Comment by rms
2018-09-12 00:31:46

That’s an interesting shower especially the floor.

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Comment by Norma
Comment by jeff
2018-09-12 06:47:14

“Here’s the link to their Boise house”

Tell him Ray

Boise sucks

https://www.youtube.com/watch?v=vmGEhhRCVo0

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Comment by Anonymous
2018-09-11 18:51:50

Maybe they are all at home, listing their shacks for sale?

 
Comment by hwy50ina49dodge
2018-09-11 18:59:29

Are potatoe$ tacos popular in Idaho?

 
Comment by jeff
2018-09-11 22:08:47

“Tuesday in Boise tonight.”

A rainy night in Boise , a rainy night in Boise
It seems like it’s rainin’ all over the world
I feel like it’s rainin’ all over the world

https://www.youtube.com/watch?v=P3pVkk9ZEDM

 
Comment by rms
2018-09-12 00:27:24

“Got a weird vibe the bar was empty, last week it was full?”

Tuesday was the 9/11 anniversary, so everyone was probably at home trembling in fear in front of their televisions watching some guys wrapped in black rags jumping over hurdles.

 
 
Comment by Neuromance
2018-09-11 20:20:54

An economy built on gambling and wealth effects is, IMO, inherently fragile and stagnant.

After the economy has created a lot of value that practically improves people’s lives, you have a lot of space to redistribute in this way. But leads to stagnation and a hollowing out.

Unfortunately those who in charge come from the world of finance, and their imagination is shaped - limited - by their experience. “When the only tool you have is a hammer, every problem looks like a nail.” They can describe the flow of money but they don’t understand how the factory was built, why the founder built it, how it was successful, and why it fell into disrepair and disuse.

Comment by Ben Jones
2018-09-11 20:33:17

“A bridge that relies on wealth effects, you better hope that you got enough growth to justify the asset price increase which created the wealth effect in the first place.” - Raghuram Rajan

 
 
Comment by Mr. Banker
2018-09-11 21:09:59

“Anatomy of a Housing-Bubble Inflection Point in the Bay Area’s Sonoma County”

https://wolfstreet.com/2018/09/11/bay-area-sonoma-county-house-price-bubble-inflection-point/2

 
Comment by Professor 🐻
2018-09-12 01:03:04

Turns out that Megabank, Inc doesn’t want to see too-big-too-fail go away.

FT Series Financial crisis: Are we safer now?
JPMorgan: defying attempts to end ‘too big to fail’
4 hours ago

 
Comment by lostinspace
2018-09-12 05:06:07

The plague has spread to where I live.

https://www.reuters.com/article/us-financial-crisis2008-houseflipping/how-tech-jobs-helped-rust-belt-become-house-flipping-hotspot-idUSKCN1LS1H2?il=0

Flipping in Pittsburgh is hilarious if you see some of the end products. Very few are well done and most look like somebody raided the Home Depot closeout pile for materials. I mean if you’re gonna buy something that looks crappy after a redo, why not just buy the place in its initial state of crapitude and put HD boob lights on the ceiling and plastic planks on the floor yourself? It’s not that hard people!

Lawrenceville used to be the place where you’d go to underage drink and get in a nice friendly street fight 25 years ago. Now there’s sidewalk dining next a crappy road called Butler Street. Why’d you want to eat right next to trucks spewing diesel fumes is something I don’t get.

I’ve come to understand that I don’t understand anything people do anymore.

Comment by Mr. Banker
2018-09-12 09:17:31

“I’ve come to understand that I don’t understand anything people do anymore.”

Hey, don’t try to fight it, learn to profit from it. Accept the fact that people are stupid and then plot various ways to take advantage of these
people when opportunities present themselves. Which is, what?, every ten minutes or so?

 
 
Comment by BubblevilleCA
2018-09-12 05:34:17

https://www.google.com/amp/s/seekingalpha.com/amp/article/4205712-will-housing-market-fall-fall

“The homebuilder stocks have been in a bear market since the end of January. Many homebuilders are down over 30% since then. If that fact surprises you, it’s likely because you get your news from CNBC, Bloomberg, Fox Biz or the Wall St Journal, none of which have reported the bear market in home construction stocks. This is just like the mid-2000s’ bubble leading up to the financial crisis. The homebuilders peaked in July 2005 and were in a full-fledged bear market before 2007“

No! Why would they do that to us, I thought they have our best interests in mind. What’s going to happen when the sheeple find out!

Comment by Professor 🐻
2018-09-12 07:44:42

Unless this time is different, a bear market in homebuilder share prices is a leading indicator of a housing bust.

 
 
Comment by Boo Randy
2018-09-12 05:56:54

Cryptocurrency crash now worse than the dot.com meltdown. When will the rest of the bubbles follow suit?

https://www.bloombergquint.com/markets/2018/09/12/crypto-s-crash-just-surpassed-dot-com-levels-as-losses-reach-80#gs.hJOn_pc

Comment by Professor 🐻
2018-09-12 07:50:58

This is merely a minor dip to separate the cryptoskeptics who don’t understand the miracle of blockchain from the enlightened and annointed true HODLers. After this shakeout, those who continue to HODL are certain to enjoy a runup to $500,000 per Bitcoin, known as a cryptosplit.

 
Comment by Professor 🐻
2018-09-12 08:01:32

Crypto bulls dismiss negative comparisons to the dot-com era by pointing to the Nasdaq Composite’s recovery to fresh highs 15 years later, and to the internet’s enormous impact on society. They also note that Bitcoin has rebounded from past crashes of similar magnitude.

Too bad that today’s cryptocurrencies, like tomorrow’s, have no fundamental value, and are destined to go to zero, the same as Beanie Babies and Pets.com.

 
 
Comment by aNYCdj
2018-09-12 06:41:17

OT this morning but interesting story on snopes aka “fact checking”

https://www.wnd.com/2018/09/everything-you-need-to-know-about-snopes/

 
Comment by Mortgage Watch
2018-09-12 06:47:22

Bradenton Beach, FL Housing Prices Crater 10% YOY As CNBC Continues To Pump Favorable Reporting On Behalf Of Housing Industry

https://www.movoto.com/bradenton-beach-fl/market-trends/

 
Comment by Albuquerquedan
 
Comment by Taxpayers
2018-09-12 06:50:19

In UK all the tv ads are the same as us.
Debt schemes.
Refi
Reverse mortgage.

Burn money on Keynesian sht

Comment by rms
2018-09-12 08:34:35

“In UK all the tv ads are the same as us.”

The ladies want breast implants… men want to get ahead by gambling.

 
 
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