The Housing Bubble

I love reading your posts more than I am sure you enjoy composing them :). There is some strange sense of relief that comes from creatively documenting the alarming greed-driven shortcomings of our “advanced” society. Nature is no fool. Thank you for sharing your appreciated thoughts.

Beautiful, ahansen. We have more in common than I ever knew..

“…my refusal to join in the Black Friday (that term always makes me think of the plague)…”

Hah! The term always makes me think of Black Monday…

Well…. Congressional Whores are much too costly for peons like me. It seems I pay, pay and pay more and get nothing from Congressional Whores. Congressional Whores certainly service high rollers though. Such is the life of a Congressional Whore. They whore themselves to the highest bidder. Congressional Whores are the types that need to be jailed.

Do you think Congressional Whores should be jailed? I do.

And dammit! Where is my long lost cohort and blog contributor Congressmen Are Whores®? You out there buddy?

Sheep are sheared, what?, once a year?

Sheeple are sheared every day of the year, but some days the shearing is a wee bit closer to the flesh than on other days. We have now entered the season of “close to the flesh”.

One thing neat about shearing sheeple is you don’t have to spend a lot of time rounding them up. Instead you condition them to come to you.

An excerpt from Jim Goad’s article on the Black Friday brawls over at Takimag:

“No one’s forcing these slovenly idiot hairballs to club one another over the heads for flat-screen TVs. I’ve been exposed to the supposedly irresistible allure of capitalist advertising for five decades now, yet it never compelled me to knee someone in the groin for a cheaper iPad. If any of these baseball-cap-wearing ass-sores clawing over one another at midnight to score a discounted toaster oven using their nearly tapped-out credit card had the slightest chance to be a despised villainous oligarch, they’d cannibalize every peasant within a hundred miles and then go out for lobster puffs with champagne. This isn’t to say that greed is inherently good, only to point out that it’s not confined to those who’ve been successful at it. Much of this recent robotic class-war fist-pumping can be summarized with the popular ghetto term “player-hating.”

http://takimag.com/article/the_black_friday_brawls/print#ixzz1f6BsieeE

“Black Friday brawls”? What is this, a form of reverse mugging.

Instead of fighting with others to get money these people are fighting with others to get rid of it.

Crazy, ain’t it?

…and that’s why we’re forked.

Christmas had a tradition of drunken brawls and fighting for most of the past 2000 years.

It was one of the reasons the Pilgrims left England.

I think people get a little extra crazy/depressed when the daylight starts getting so short. The ‘holiday season’
(really the winter solstice- when the days are at their very shortest) was originally designed to get our minds off the darkness, and to celebrate the beginning of the end of the darkness.

We probably shouldn’t have our elections at this time of year, either.

I love the pageantry, the music, and the real message of Christmas. The “stuff” should be left for the kids from Santa, but in a few presents, tame form. I’ve read after 5, the presents lose their punch.

We follow the Magical Christmas Caroling Truck and the Circus size Train, full of carolers through the streets. We all wear Christmas hats, sing along, and belong to a happy annual event. Even the four legged friends have fun.

The rest of the hoopla, we skip.

My son said his friend texted him at 2 am from some major line somewhere. It didn’t sound 2nd hand like it was his idea to be there. I guess he might have been there to help carry heavy items.

We went to Best Buy late in the day on Black Friday the traffic was heavier but no lines. The one item I was interested in was sold out. However I could go back home and order it online for the same price w/o a problem.

Here in Tucson, I went to a bike shop to order something for a bike that I’m working on updating. But for Yours Truly, the place was deserted. I felt sorry for the lone employee. She seemed bored out of her mind.

Then I went to a local restaurant at the far end of a very busy strip shopping center. Place was only about half full at its busiest. And this was the lunch rush, mind you.

Afterward, I went to the library. Which was jam-packed for the entire time I was there.

My youngest daughter and her boyfriend went to Wal Mart at midnight on Black Friday. Along with a bunch of their friends.

They weren’t buying anything, they just wanted to watch the brawls. Nothing funnier/more entertaining than watching a couple of hillbillies wrestling on the floor, fighting over a video game console.

Now THERE is a perspective I’d not considered. Suggests a whole new arena for MMA fans….

Nothing funnier/more entertaining than watching a couple of hillbillies wrestling on the floor, fighting over a video game console.

I guess for some people saving $50 on an Xbox is worth a bloody nose.

Run in front of the stampeding herd of morons headed toward the flat screens- it’s just like being in Pamplona!

Local radio show a couple of years back had people call in with their “Black Friday” stories.

One guy calls in about going to Wal Mart with his mom, who wanted to get a Playstation. Doors open and the mad rush to electronics starts, he saunters in behind the mob.

When he gets to the back of the store, he finds his mom and some other woman wrestling on the floor over the last one in stock.

When asked what he did, he says “I just watched and laughed, and yelled out “You can take her, mom!!”

“MMA fans”

That’s exactly what she said. Said that the only problem is that women always seem to want to grab a big chunk of their opponents hair.

There’s a Simpsons parody of that. Bart plays the arcade game of “Mall Fight” which is clearly a parody of Mortal Kombat. Two women fight over on pair of shoes, while the announcer guy says “The hair. Go for. the hair…. finish herrrrrr.”

I’m noticing the same thing, Awaiting. I’m getting just a handful of Xmas cards, and that’s it.

As for sending them, I haven’t done that for many years. It just didn’t seem to be worth the effort anymore. And don’t get me started on the cost.

Helpful shipping hint:

Check out “Fedex Ground”. Usually cheaper than UPS. You get a tracking number, and you don’t have to pay for a delivery confirmation/receipt, like you do with the USPS.

You’ll have to use a debit/credit card to pay. They don’t carry much cash at the regular Fedex sites.

If presented for shipment before noon-1pm, it will usually be delivered next day to addresses within 200 miles. Shipments from the Midwest to either coast are usually 2-3-4 days.

Correction, the people posting stuff are slow… as in bringing unpackaged items to the counter, not having shipping tape, not having their package properly addressed or addressed at all, etc. etc. The postal clerks are incredibly patient. I’d definitely go postal….

You can watch it on the net. Just google “the century of self”. It will be presented to you in parts.

BlueStar
I am very familiar with the documentary and the man, having read books on him. Truly, once you’ve been introduced to the Engineering Of Consent there is no turning back.

Blue:

Think of diamonds, a relativly rare item but with very little uses, outside of drilling heads and bits and record styluses, (and we all know how many people still play records)

So how did it wind up on hundreds of millions of womens 2nd finger?

bare the mechanisms of consumerist brainwashing.

RE “Century of Self”: it is a must watch. “The Policeman Inside Your Head” was a memorable chapter.

RE diamonds: if you can make your product equal to love (to many), you win. If the CCD process didn’t require N2 (and turn them yellow), we would have gone with those. Canadian was the best we could do and their discovery is very cool.

RE record players: the movers broke the cover, but she still plays!

RE carousel: Great reference. “Look! It’s clear!”

The female fascination with small glittery things is biologically ingrained in many species. As is the human female’s social hierarchic requirement, which requires a passive display of the dominant male’s relative social position.

Though clever, the diamond cartels have done nothing more than exploit human genetics. Diamonds are a highly portable signifier– like a car or a house you can take into a gathering with you. It’s easier to wear your status on your finger than lug it around on a cart piled high with cannon balls.

Power takes on many facets….

AHansen — what about matriarchies like those in some Uighur communities where the women have multiple mates who fight over her — sort of a reverse elk herd or Brother Husband thing? Shouldn’t we see reverse marketing from DeBeers for them?

“Diamonds: render him speechless” (or just give him a bag of beef jerky and a copy of Elder Scrolls V: Skyrim)

More mates=more diamonds.
Them Uighur ladies ain’t stupid.

Not sure how to explain New Jersey, though.

Well played!

If you don’t believe in Carousel, how can you hope for ‘renewal’?
I mean, really, you must be some kind of lame-brained moron!

‘A friend of mine went on carousel. Now he’s gone. ‘

Everybody I’ve talked to say that once the riot/brawl for the loss leader specials ended, everybody left…….well before noon.

I think Kohl’s loss leader was some cheapo Android tablet or something. Like I want a useless toy like that.

Under “Hobbies”, I’ve seen people list “shopping”. That always amazed me.

Under “Hobbies”, I’ve seen people list “shopping”. That always amazed me.

Was at a party this weekend, and a friend was describing the shopping behavior of his Malaysian (I believe) wife.

His wife, her sister, and a friend (I may be mis-recollecting) would go on shopping “vacations”. On day one they would do recon - walk around, make notes, and in the evening compare prices to figure out what the best deals. I’m not sure what day 2 was. Day 3 they’d go buy the things they had come for, but it’d only be a few items.

I just can’t relate to that…at all.

“I’m not sure what day 2 was.”

Frontal lobotomy?

I’d rather have a bottle in front of me than a frontal lobotomy.

“Under “Hobbies”, I’ve seen people list “shopping”. That always amazed me.”

You and me both. On the other hand, it is a handy descriptor for weeding out potential mates.

And I see her response of “just” being there to have fun as a nervous, caught-off-guard, nonsense response. She knows how ridiculous it is for her to be there and needs to pretend to make fun of herself. Reality is she is there to shop just like everyone else.

Until people figure out that when they are “saving cash” in this consumptive manner they are merely spending less than they otherwise would have, the lesson will not end.

Hah, and then maybe our politicians can’t get away with considering the same type of behavior “spending cuts”/”budget cuts”

Carrie:

I wonder how many deadbeats stood in line on black friday?

Are they the only reason the economy is still being propped up?

“But as I’ve said before, this is the bank’s fault.”

Who has allowed the banks to allow the Deadbeats to stay in “their” homes? Did the banksters do it all on their own or do they have an accomplice? I agree that the banksters are scum and the Deadbeats are, well they are deadbeats. But we are missing one more layer of pond scum here. I think it begins with a G. After we find that word we may have to look for an R and D.

“Who has allowed the banks to allow the Deadbeats to stay in “their” homes? ”

FASB?

wikipedia
The Financial Accounting Standards Board (FASB) is a private, not-for-profit organization whose primary purpose is to develop generally accepted accounting principles (GAAP) within the United States in the public’s interest. The Securities and Exchange Commission (SEC) designated the FASB as the organization responsible for setting accounting standards for public companies in the U.S

In June 2009, FASB was criticized by an advisory panel of investors after making changes on mark-to-market accounting in response to political pressure. Lobbyists had obtained its permission for banks to apply a special accounting treatment for toxic assets.[5]

Hw many times do we have to repeat it. The banks don’t own those loans. They are the servicers. They follow the rules set out in the servicing agreement. They have no reason to accelerate the foreclosure because that will eventually end the stream of payments they get for being the servicer of record for the loan. It will happen. Slowly. But don’t expect it to be quick. Not unless someone arranges for them to get paid more to be quick than to be slow.

Someone is making the decision to not foreclose, and it’s definitely not the “deadbeat”.

I know someone who hasn’t made a mortgage payment in quite a while…it’s turned into years. They assumed it wouldn’t go on this long but plan to stay until told to leave. They stretched really hard to buy at the peak (they had bad credit and therefore paid a high interest rate) and were told that in a couple of years they could refi down to a competitive rate. When that time came the bubble was bursting and nobody would refi them at a lower rate. They said “screw it”. They’ve been offered a couple of different workouts to get current again, but in each case it was simply the bank trying to suck more money out of them but reserving the right to take the house back at any time if the market went back up.

I know someone else who is upside down and thinking hard about doing the same thing.

I know others I suspect are in the same boat but don’t actually know the facts about them.

As for new cars … I don’t know anyone who has bought one lately.

I bought one, but it was a better deal (and basically same price) as buying used, and I paid cash.

Sadly I don’t get to live rent-free, so instead my savings took a hit. But I’ve been disciplined and have savings, and am slowly replacing what I spent earlier this year.

In Colorado
The deadbeats who have fallen on hard times aren’t really deadbeats. It’s the ones that made it a business decision, I have absolutely no respect for. Those gaming the system are scum. The people hurting, I feel for.

“What I’m saying is that they are getting evicted after 6 months or so. And in their case it wasn’t a “strategic default”.

It must be different there and I am not saying that as a smart @ss. Because they are evrywhere around here, some poor, some middle class and some rich or posing as being rich and they have not paid in many cases for years. But as you say the bank or Fannie or whoever does not kick them out. One of the many things that bothers me about the DBs is the longer it goes the more they feel they are entitled to live in “their” house for free. I know about the Robo signing but they speak and act as if that is a General Absolution from ALL of their sins.

many are being foreclosed because they don’t have any income, and not because they chose to buy a luxury car instead of paying the mortgage

And statistically, there are just not that many “deadbeats”.

About 33% of Americans own their home outright, 33% of Americans are renters and most people’s mortgage is under control. I don’t thing there is any way that the “deadbeats” statistically affected Black Friday. Do any of you?

About a third of all houses in the US are owned free and clear with no mortgage. Of the two-thirds that are mortgaged, the median mortgage is $101,000, 55% of the value of the house. investing.calsci dot com

one can conclude that the average American resides in his or her own home, pays roughly $1,000 per month in mortgage payments for a three or less bedroom house with no more than one occupant per room.[27] wiki

To the extent that people in your area are not paying their mortgages but are out spending their extra money, they are actually stimulating your local economy, and therefore probably helping you financially.

You should thank them. They’ll get theirs in the end, and in the meantime their spending will help you through the depression.

“About 33% of Americans own their home outright, 33% of Americans are renters and most people’s mortgage is under control. ”

So why is there such a huge shadow inventory? The former houses of the 33% renters? And if so many mortgages are under control, then we can’t expect house prices to drop much more…

It’s all relative.

There are about 130 million housing units in the US. 33% of that is 43 million (give or take).

There are about 6 million loans in default or in the foreclosure pipeline. There is also plenty on the books of investors/banks/Fannie/Freddie, etc.

From the FDIC, this totals about $12B of residential (how many homes is this? At a value of $125k apiece, this is about 100k homes on the books of FDIC insured institutions.

Let’s say a high estimate of REO and mortgages in trouble is 9 million. Pick a different number if you have a better feel for it.

That’s 9 million units out of 130 million units. Or 9 of 43 million (which is a huge percentage)

Normally, even in good times, there would be likely 2.5 million homes with mortgages in some stage of delinquency and foreclosure and another several hundred thousand owned by financial institutions. So, let’s say that “normal” is 3 million of 43 million.

With my estimate, that means 6 million of excess to burn off through:

Short sale
Foreclosure
Loan restructurings (which have been more successful–meaning fewer redefaults)
Miracle self-cures (which do happen)

So why is there such a huge shadow inventory? The former houses of the 33% renters?

Here in Tucson, I would venture to guess that a good bit of the shadow inventory is rental property. As in, houses that were bought as investments that were supposed to appreciate to the sky. While said appreciation was being hoped for, the houses were rented out.

Well, you know tenants. Many of them aren’t very kind to rental houses. Which put another crimp in the specu-vestors’ plans. So, they’ve been letting those houses go back to the bank.

These days, they’re just sitting there, not for sale. And they’re very unoccupied. In many locations, they’re being vandalized.

“What I’m saying is that they are getting evicted after 6 months or so. And in their case it wasn’t a “strategic default”.

Interesting. I know a couple myself that are strategic.

“Has it not ocurred to some of you that many are being foreclosed because they don’t have any income, and not because they chose to buy a luxury car instead of paying the mortgage?”

It definitely is something that I am well aware of. There are real victims in this downturn, who did not buy above their means, and yet were impacted on the earnings side by the downturn. I feel for them.

Actually, I do not judge even the strategic defaulters; they are making a smart business decision. And it’s not like the concept of strategic default is new. The banks have been aware of it for a LONG time, and their knowledge of it should have served to prevent them from taking part in the bubble. But they put their heads in the same.

s/same/sand/.

I can’t type today.

It must be different there and I am not saying that as a smart @ss.

Or maybe its different where you are. You guys make it sound like every other house has a deadbeat in it, buying luxury cars (if they really are, then why are car sales still in the tank?) buying goodies left and right (while retail sales and sales tax collections are still below historical averages) with the mortgage payment money.

“You guys make it sound like every other house has a deadbeat in it, buying luxury cars…buying goodies left and right ”

aka pumping the propaganda

CO, the data from the Bureau of Economic Analysis shows that there has been negative mortgage equity withdrawal over the past couple of years (meaning people are putting money into their homes, not taking it out). I don’t know how they count reduction in debt due to default in this mix, but there is a growing amount of data that household balance sheets are looking better.

The Fed is showing that household net worth is now rising again (and has been for a bit).

And the third leg…regardless of actual levels of debt, the cost to service that debt for consumers is going down. The Fed shows that the “Financial Obligation Ratio” is at levels last seen in the mid-90’s.

My parents are a good example. They have one mortgage on a vacation home that has been in our family since the 60’s. The mortgage is less than a third of value, and they are considering refinancing and dropping the rate by 1%…no cash out. They are focused on paying the sucker off, but if they weren’t, the amount of money they can spend would go up by more than $100 per month.

Taking the low rates that the Fed is giving us and refinancing mortgage debt is like giving yourself a raise (in some cases a big one). While wages are stagnant, a ton of people have more money in their pockets each and every month.

If austerity isn’t forced onto Americans, Americans will spend. The challenge for the Fed is that a lot of their “temporary QE” is resulting in PERMANENT increases in available cash for consumers…how they take away the punchbowl to stop inflation is anyone’s guess…

Taking the low rates that the Fed is giving us and refinancing mortgage debt is like giving yourself a raise (in some cases a big one). While wages are stagnant, a ton of people have more money in their pockets each and every month.

This is only true for debtors, though. For savers, well….we’re getting screwed.

Absolutely true drumminj.

Even for us savers though, having financially healthy debtors is better than financially sick debtors.

If austerity isn’t forced onto Americans, Americans will spend.

Hmmmm…

Median household income has dropped over 10% in my county during the past 10 years. Factor in inflation and the real number is close to 30%.

I can get into just about any restaurant on a Friday or Saturday night with little or no wait.

Several car dealerships in my county have gone out of business.

That sounds like austerity to me.

I think the BF sales stats are BS, meant to make “the consumer” feel more “confident”.

I can tell you there is no such forced austerity in the fantasyland of Silicon Valley (and it’s going to get worse now that LinkedIn employees can sell, and worse yet when Facebook goes public).

Ultimately the sales this holiday season will be known when retailers report profits in January. Until then it’s a guessing game.

Based on better looking household balance sheets and debt service requirements, it is certainly possible that consumption is up…and given the continued poor employment picture, possible that the books are cooked.

As an aside, I heard some positive commentary relating to jobs in Northern NV recently–that temp firms are booming…a precursor to permanent positions.

I can tell you there is no such forced austerity in the fantasyland of Silicon Valley

Not apparent on the east side of Seattle, either. Restaurants seem full whenever I go out (granted I go to the ‘good’ restaurants, not Applebee’s). Malls seemed packed this past weekend.

But this is tech country, and so far the tech industry has held up.

CRAP
I knew it:

“American was embroiled in negotiations with unions for all of its major work groups as far back as 2006, seeking to boost employee productivity and erase part of what it said was an $800 million labor-cost disadvantage to other carriers.

…American’s pilots, flight attendants, mechanics and baggage handlers wanted to use the contract talks to regain some of the $1.6 billion in annual concessions they gave in 2003 to help the company avoid bankruptcy.

AMR shares have plunged 79 percent this year and analysts including Philip Baggaley of Standard & Poor’s have warned the company could face a cash crisis during the next 12 months without new labor agreements.”

———-

The pilots already gave up over a billion years ago. They wanted to get some back, or at least keep status quo. AA’s response was to abuse the bankruptcy laws stomp the little guy.

*sigh* So paying a living wage is now considered a “cost disadvantage.” Pretty soon the only way to make an acceptable profit will be for all the employees to make minimum wage with no health insurance, no matter how skilled they are.

Exactly.

“Exactly.”

Really? Over a billion years ago?

Now yer gettin’ it.

“deficit rose from $23 billion at the end of FY 2010 to $26 billion this fiscal year. ”

That’s about 2 month’s cost of the war in Iraq.

PBGC has caps on how much they will pay out. Pilots will be the big losers and those that retired under 65.

If AMR is successful, the PBGC is allowed to give the pension back.

Now that they’ve been screwed out of their pensions and insurance, it will be interesting to see how many AA pilots end up staying on, and how many quit to take contract work in China and the Middle East.

Perusing “climbto350″, numerous positions in Asia for Boeing and Airbus captains and First Officers…..of course, being non-USA, they can be as age/gender discriminate as they want. They are looking for the 30-50 year old, with 5000hr TT, 1000-1500 hours in type.

AA will replace them with $30K/year guys with 1500 hours total time, 1100 of which is in a Beech Baron, or some other bug-beater.

The physical infrastructure isn’t the only thing crumbling.

The key difference between flying a 777 and a bug beater is staying ahead of the airplane. Flying is stick and rudder, and by some accounts, easier in commercial airliners due to automation. The only thing that concerns me as a passenger is the 1% of the flying time that becomes an “emergency” and the “oh s&&t” moment, where only experience can provide the training to properly and safely assess the situation and get the aircraft back on the ground.

“Comment by Moman
2011-11-29 15:22:03
The key difference between flying a 777 and a bug beater is staying ahead of the airplane. Flying is stick and rudder, and by some accounts, easier in commercial airliners due to automation. The only thing that concerns me as a passenger is the 1% of the flying time that becomes an “emergency” and the “oh s&&t” moment, where only experience can provide the training to properly and safely assess the situation and get the aircraft back on the ground.”

The perfect example of this is the Air France flight 447 disaster in the Atlantic.

Not to defend Frank,m but it wasn’t him who authored the Commondities Modernizaitona Act and repealed Glass Steagal.

As for subprime defualts, you do know that prime defaults took the lead earlier this year, right.

Prime.

“Prime.”

You range?

No worries—it’s all contained.

s/range/rang/.

Wow, I _really_ can’t type today!

Apparently I can’t proofread either.

‘the public wanted something for nothing’

I hear what you’re saying and agree. But let’s not forget that even today there are those who insist that cutting spending/borrowing is not the thing to do in a recession. I asked a while back why was it that the EU was imposing austerity and the US was passing stimulus programs. Does Keynesian policy only work for the US?

Yeah, tell people that your plan is to raise their taxes and cut their benefits and their pork barrel projects. That platform is SURE to get you elected. /sarcasm voice.

weird situation to be in, to decry the goodies voted in by Congress, but vilify those who even suggest cutting them back. I can’t say for sure that it’s the same people, but I am definitely getting mixed messages somehow.

I guess that’s how the Euros got in the mess they’re in.

“why was it that the EU was imposing austerity and the US was passing stimulus programs. Does Keynesian policy only work for the US?”

I guess we’re about to see if austerity programs during depressions work well, thanks to Europe’s experiments with them.

I’m not sure we’ve had Keynesian stimulus here yet, except maybe the payroll tax break. Most stimulus has been monetarist, ie flushing the financial system with cash at super-low rates.

But I agree we’ve not had the austerity measures that are being forced on the PIGS by the banksters, so there will be some room for comparison of austerity vs. stimulus.

1. The total gov stimulus in the US is miniscule when you add in the collapse of State and Local Spending.
2. Bailing out banks who then sit on the money is not stimulus.
3. The people didn’t vote for invading Iraq, and even if they did they were lied to, they didn’t vote for TARP, the repeal of glass steagle, they didn’t vote for a Medicare prescription drug law that prevents Medicare from bargaining for cheaper drugs and thus paying 60% more than the VA, they didn’t vote for alot of the stuff gov does, and even when they try to vote in someone new they find that that person is also beholden to the elite of the country at everyone elses expense.
4. Give the EU time, I still expect a wall of money once Germany and Bankers get’s what they want. I’m not sure it will help as I think the bankers think they can stimulate the country by concentrating the wealth so the wall of money will not end up in the hands of hte many.

Note
From 2008 to 2010 States saw a 200 billion drop in income. Cities and municipalities suffered as well. Factor state and local job cuts, increased fees, and decreased services and this took a big bite out of total gov spending.

Don’t invest of businesses you don’t own yourselves these days.

My sentiments exactly!

There are plenty of millionaires in that area, I agree.

I still can’t get over how many seasonal residents Skan has. It’s NOT cheap.

Not meaning to pile on but I’ve made the same point before Carrie. This notion that anything is underpriced in Syracuse is baffling to me too.

Or were one and the same person?

Eloped?

When people ask about home prices going up…I point to vacancy rates.

Ultimately, supply and demand will cause prices to rise, regardless of whether the homes are being rented or “owned”.

If you have low vacancy, either prices will rise, if people are inclined to buy, which will pull up in it’s wake rental rates, or, if people are inclined to rent, will drive up rents, which will pull up in it’s wake home prices.

Regardless of any other data (shadow inventory, foreclosure rates, etc.), reduction of vacancy will come before a housing rebound.

Food for thought: If purchase demand shows any sign of life the builders will come out of the woodwork and start building like crazy.

Agree. However, in CA, the lead time can be substantial. Few new finished lots are being built today, and most homes that are being sold today are were built on finished lots that were constructed during the boom.

So, if there is to be a significant ramp-up in activity, it will be going from land to homes, not finished lots to homes. In CA, if you want to go from raw land (even if it is mapped) to actual completed homes, it will take at least 6 months (4-5 months to build a home off of a finished lot, and 1-3 months to do underground work, etc.), and potentially a year or longer if you need to do any work with a City, bringing utilities to the site, earthwork, etc.

Some of this work can happen concurrently, but my bet would be that builders will start out cautious.

And once that happens, lots of new jobs will be created, giving a boost to the rest of the economy.

Hmm. And ultimately Volcker raised the Fed Funds rate to get inflation back under control. And the government engaged in a borrow and spend spree to help employment.

You obviously haven’t been around a $hitload of Red State Republicans like I live with every day.

To a man/woman, this summarizes their world-view precisely.

Pointing out this inconsistency just makes them mad.