Weekend Topic Suggestions
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The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
Location:Northern Arizona, United States
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Uh, so when does all of this start for the big fishies?
“TAMPA — A former Florida Highway Patrol trooper was arrested Wednesday and charged with financial crimes.
Shaun Reid, 32, of Tampa, was charged with grand theft of $100,000 or more, mortgage fraud by material misstatement and mortgage fraud by receiving proceeds, jail records show.”
http://www.tampabay.com/news/publicsafety/former-trooper-charged-with-theft-mortgage-fraud/1190569
Any city prosecutor can land a prosecution case a week for mortgage fraud. He could pursue the first dozen or so with great vigor through actual trial, and then use those successes to force guilty pleas and settlements from the next 100s and 100s, while still snagging a few entitlement yuppies in the same trial caseload, for those who are still in disbelief that they did anything wrong with lying on their mortgage apps.
Notice that none of that is happening. We get a few cases that fool the public into thinking that mortgage fraud is actually being pursued. That’s all this is: Theater.
My Sister and her husband are dairy farmers in Ontario ,Canada. In order to sell milk they need to own “Quota” or the right to do so . The value of the right to sell their milk from the 50 cows they have is now at $1.8 million, more then the combined value of their house ,animals, land, cars , and about everything else they own . They got this government Milk Quota stuff some decades ago for about nothing when the government started this scheme .
And we think we’ve got regulation in our Country ? We let our Dairy farmers starve , as they are now with the high grain prices ,and all.
I watched it happen as a youngin’ and it all started with farm credit back in the early 70’s. New silos, new equipment, new out buildings…. all on credit. The crushing blow came when milk prices collapsed. And yes it was manipulated. The entire thing was intentional.
The worst thing about it was watching the offspring attempt to make a go at it after the first generation was crushed.
Say what? You need to purchase the right to sell a product? From the government?
Is that called freedom?
Flooding ALL over the North East is terrible.
Houses that NEVER had water in the basement now do.
Flash floods in URBAN neighborhoods.
Floods in places that never flooded before.
If these houses are empty - even in the NE they are going to get mold in a few days if no one is taking care of them.
Even by not just fixing very minor roof repair issues or cleaning out the gutters is going to cause lots of problems with all the rain we are having.
Jobs. With jobs on my mind, I realized walking to work today how different the technological landscape is than it was say 20-30 yrs ago. Bank tellers are mostly gone, replaced by ATMs. Checkout cashiers are much reduced, replaced by self-checkout kiosks. There wasn’t a doorman at the Trump Condo/Whatever this morning (attached yet separate from the hotel entrance), you scanned your security card to get into the complex. I downloaded the paper this morning on my Kindle, so no delivery boy, no printing press needed.
And yes, I know there is support staff for the above stuff, but there has to be way less workers for all of these necessities compared to 30 yrs ago. Add to that the fact that both spouses are usually working now…
Anyway, jobs were on my mind. The other stat that keep coming back to me is the fact that unemployment for college degreed individuals is only 4-5% Like it or not, at least right now, one of those expensive pieces of paper is worth it.
there has to be way less workers for all of these necessities compared to 30 yrs ago.
I’m not sure about absolute numbers, but now there are folks who are employed developing this “automatic” technology that weren’t present before. Sure, there’s no paper boy, but there are mechanical, industrial, electronic, and software engineers working on the Kindle, the manufacturing process, and the software.
You also need people who know how to fix this equipment. After all, when a key card scanner, a supermarket self-checkout stand, or an ATM breaks down, it doesn’t spontaneously heal itself.
My topic suggestion is: Why have property bubbles burst in some countries, but not in others?
In the US the bubble has clearly burst, but in Canada there is no sign of even a slowdown. In Europe the Irish bubble has well and truly burst, whilst in the UK prices fell 10% or 15% in 2009 but are now back to all time highs.
Securitisation is dead everywhere, interest rates are at similar levels. Buyer sentiment? I can tell you that people are more pessimistic about the economy in London than they are in LA, but London prices keep going up So why the huge divergence in property markets?
Yes, what keeps bubbles in certain areas from bursting? I’d love that topic. Certainly the areas who had rapid growth based only on building vs growth based on real growth in multiple industries have gone down harder but I think there’s something more to it than that.
Here in Boulder I’d say its that there really are jobs here, people are still trying to get into the college here (or just hang out with those who do and be trustafarians), and the anti-growth/sprawl efforts of the last couple of decades largely succeeded in preventing the housing supply from matching demand. If things get bad enough it’ll fall but for now prices only have to drop a tiny bit and people from everywhere seem to jump on it. The advantage of having tens of thousands more jobs than houses is that there’s always pent up demand.
My 2 cents.
Supply and demand.
Places like Phoenix, Tucson, Vegas, Orlando… There was never a shortage of buildable land. Lots of supply.
There was also very little real demand. Lots of people coming to work, flip, etc, but they didn’t plan on staying long term.
Places like coastal CA, Manhattan, London… There has been a lack of buildable land for a very long time. Shortage of supply.
People with lots of money but fearing devaluation of said money, are looking for safe haven inflation hedges. Gold, copper, oil, farmland… and real estate in desirable areas with a lack of supply.
Is QE3 on the way or isn’t it? And could this news have bearing on the decision?
Sept. 9, 2011, 9:26 a.m. EDT
ECB’s Stark to step down amid bond row: report
By William L. Watts
FRANKFURT (MarketWatch) — European Central Bank Governing Council member Juergen Stark is set to step down amid disagreements over the central bank’s bond-buying program, Reuters reported Friday, citing unidentified sources. The report was credited with putting added pressure on the euro (EURUSD -1.17%) , which traded at $1.3769 versus the dollar, a decline of 0.9%. An ECB spokesman said the bank had no comment.
Question: is there ANYTHING the federal government could or should do? Or should it just stand aside and allow a collapse to occur, admitting it is doing so?