Weekend Topic Suggestions
Please post topic ideas here!
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
About Me
Name:Ben Jones
Location:Northern Arizona, United States
To donate by mail, or to otherwise contact this blogger, please send emails to: thehousingbubble@gmail.com
PayPal is a secure online payment method which accepts ALL major credit cards.
Links
-
April 2025 M T W T F S S « Sep 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
Photo Submission: hbbphotos@gmail.com
View the HBB Photo Gallery *updated 4/13/2008
Donuts.
Dognuts.
Dougnuts
Are you implying that Doug is nuts?
Coffee.
Are you in a higher effective tax bracket than the Romneys?
My wife and I are, with a net income under $50k.
What percent of the collective is not receiving the Romney
advantage as well?
Don’t forget to count Social Security payroll tax.
Much worse if you are self-employed (like my wife and me, in my sideline…).
Fed dissident says latest easing won’t help economy
By Reuters
Dallas Fed President Richard Fisher is worried about inflation.
The U.S. economy does not need more liquidity in the form of Federal Reserve bond purchases because it will not induce businesses to borrow, invest and hire, a top Fed official said on Wednesday.
Dallas Fed President Richard Fisher, a policy hawk who opposed the central bank’s decision last week to launch a third round of quantitative easing, or QE3, also warned that the “slightest deviation” from the Fed’s 2 percent inflation target could be “debilitating” for financial markets.
Fisher, in remarks prepared for delivery to the Harvard Club of New York City, said his arguments against more accommodation did not convince fellow policymakers at the Fed’s meeting last week, after which Chairman Ben Bernanke received broad support from colleagues for buying $40 billion in mortgage-backed securities per month in an effort to boost U.S. employment.
“I felt an urge at the meeting last week to tie the chairman to the mast, Odyssean-style, and to stuff wax in the ears of my fellow committee members, in order to resist the Siren call of further large-scale asset purchases,” said Fisher, a former hedge fund manager who in the 1960s was a Navy midshipman.
“But I have no such powers,” he said. “I am only one officer in the loyal crew that sails under the command of Admiral Bernanke.”
…
Now that QE3 is here, would this be a good time for dips to buy stocks?
Sept. 21, 2012, 12:03 a.m. EDT
Obama or Romney, stock market loses 20% by 2016
Commentary: Recession, more taxes no matter who wins
By Paul B. Farrell, MarketWatch
SAN LUIS OBISPO, Calif. (MarketWatch) — “2013 is gonna be a bummer,” warns Bloomberg BusinessWeek. “Whether it’s Barack Obama or Mitt Romney … someone will have the misfortune of overseeing an economy” with “low growth, persistently high unemployment and huge amounts of debt.”
Worse, the magazine’s poll of 79 economists warns GDP growth will fall further, to 2.1%, with a real “chance the U.S. will be in recession.”
Flash forward through 2016: Politicians still warring, spending billions on re-elections. Recession? Yes. And Wall Street losing another 20% in the new presidential term.
How? Remember, between 2000 and 2010 Wall Street lost an inflation-adjusted 20% of the retirement portfolios of 95 million Americans as the Dow swung violently between a bottom of 6,470 and a top of 14,164. And it’ll do it again this decade, according to many reports we’ve covered in recent years predicting down markets this decade, probably before the end of the next presidential term.
Why? As BusinessWeek put it, economic trends are so bad, “fixing them will be beyond the immediate grasp of an Obama or Romney administration.” You must plan on a recession, inflation, retirement losses, higher taxes.
So what’s your best investment strategy? Get defensive — you’ll have ride out economic storms and bigger political wars the next four years, driving markets down.
10 reasons Wall Street stocks lose another 20% by 2016
Seriously, folks, why bet on the Wall Street casinos again? Didn’t work last decade. Why trust their relentless propaganda? Why bet on a losing game when the house always wins thanks to high fees and high-frequency trading? They’ll repeat the losses of the last decade in a world far more dangerous for investors than it was in the “Lost Decade” of 2000-2010.
…
Dumb prediction: No stock market slide until after Election Day…
Sept. 21, 2012, 7:12 a.m. EDT
Dumb money sees a rally, so gird for a dip
By Jon D. Markman
Action on Wall Street continues to look like a prizefight in which the combatants are too exhausted to do more than wrap each other up and lean against the ropes while they catch their breath.
It is tempting to think that the flat action since last week is just a quick time out for the bulls. And it could be. But there is some evidence emerging that a longer rest period may be in store.
Jason Goepfert over at Sentiment Trader has for years been keeping record of the differing expectations for a rally from what he calls the “smart money” vs. the “dumb money.” At present, 67% of the dumb money is expecting a rally vs. 29% of the smart money.
Back in August, when prices were much lower, the smart money and dumb money were split 50/50 on the likelihood of a rally. Now with the market up 10%, the differential in expectations is the widest since March, which preceded a three-month slide.
…
Check out that dip on the DJIA, just before the weekend. Must have been due to HFTs, Wall Street hobgoblin du juor…
Dow Jones Industrial Average
DJI: DJIA
Market closed 13,579.47
Change -17.46 -0.13%
Volume 429.61m
Sep 21, 2012, 4:30 p.m.
Previous close 13,596.93
Day low 13,572
Day high 13,647
Can the nation survive another four years of Bernanke?
Opinion »Letters to the Editor »
Bernanke/Obama policy of printing more money won’t help
Posted: 09/19/12 12:01 am
Last week, Federal Reserve Chairman Ben Bernanke once again made a case for the devaluation of the United States Dollar through inflation. We have heard many misnomers referring to the devaluation of our currency, such as quantitative easing or economic stimulus, but what is the FED chairman really doing and what are the long term effects going to be? What are the economic principles that are being touted or those being ignored by the Mr. Bernanke?
Bernanke’s argument for inflation, as usual, rests on the slow growth and high unemployment currently apparent in the American economy. Bernanke maintains that “It is important to achieve further progress, particularly in the labor market.” The medicine that will fix these ills of course is currency expansion brought on by asset purchases made by the Federal Reserve Bank, many of these assets being treasury bills. The underlying thought here is that more money being injected into the economy will spur economic growth and therefore lead to lower unemployment. However, there are fundamental problems to this argument.
A fundamental principal of economics is that paper currency has no value in and of itself. In other words, nothing comes from simply having more money. If tomorrow, everyone in the world had exactly twice as much money as they do today, the result would have to be a doubling of prices. Goods and services being equal, if prices did not rise as per the currency increase, we would have vast shortages of goods and services. If money itself created wealth, why not just print enough money for everyone? Nobody would have to work. Everyone could have a yacht! But alas, goods and services are scarce, and so printing more money doesn’t really create any more wealth. Work and production are what creates wealth.
A second important principal is that economic expansion is a zero-sum game. As we discussed in the last paragraph, nothing new is created by money. However, expanding the supply of money does benefit some at a cost to others. As new units of currency appear, all other things being equal, the value of each unit of currency drops. So, as the FED pumps out more dollars, the value of your wages and savings go down. As the money supply is inflated, your dollars buy less and less. You can see this by prices of commodities constantly rising. If your wages rise faster than the value of commodities, you perhaps may be on the winning side of this monetary expansion. But for the rest of us, we are paying for it.
…
You have made a correct analysis of what is going on with the “FEDERAL RESERVE SYSTEM”, a gang of Crooks who provide no service but to cover for the Banksters.
But you miss the KEY ingredient to the theft.
It is true that if you double the money supply overnight, that basically everyone would have 2x the money and everything would be 2x more expensive.
But, the Key is that the money is not distributed EVENLY. The Banksters and their buddies get the money FIRST. That is the KEY.
Since they have first access, they begin buying up the assets that are currently around them, with the cheaper dollars. It isn’t until 2x the money makes it’s way to the average man that the prices have doubled and the average man has seen his earnings and savings destroyed.
So, it’s a rigged system. The Bankster Class always has the advantage of being in on the “ground floor” as the prices go up.
This is seen as, and reported as “clever” business investment. It’s not. It’s the way the system is rigged. That is WHY the rich get richer and the poor get poorer.
It is a DIRECT result of the Federal REserve and the game they have been allowed to play with our money for nearly 100 years.
Arrest Ben Bernanke on charges of TREASON and Pass legislation ending and Banning the FED as a Criminal Racket.
That is the solution to America’s and the World’s problems. The WORLD BANK, the BANK of International SEttlements, the INternational Monetary Fund, ALL of them, are a world-wide RACKET, whose bankster cronies are living extravagantly rich at the expense of working people, while claiming to provide “financing” for business. They do no such thing. The pass out the money the FED PRINTS, being the sole beneficiaries of the Printing.
That is the problem. that is the key.
Wake up, dammit.
The 1%ers while thrive under another four years of Bernanke.
The Lucky Duckies’ standard of living will continue to erode. But as long as they’ve got High Fructose Corn Syrup and Cable TeeVee, it’s all good
We killed our cable. The inevitable conclusion was that, even with 100’s of channels, more often than not there was nothing worth watching.
Well C-SPAN and the weather channel have some merit. Other than that the rest of whats on TV is poison to rational thought.
The squad gets both of those via internet and but does not pay Comcast for TeeVee.
The Comcast salesdrones call us occasionally pushing upgrades, one even asked “you don’t have TeeVee, what do you do?”
Ever hear of a f*ing library card? LOOSERS!
The Comcast salesdrones call us occasionally pushing upgrades, one even asked “you don’t have TeeVee, what do you do?”
Ever hear of a f*ing library card? LOOSERS!
You sound like me.
And the Cox Communications salesdrones don’t even bother calling me. Must be because I keep tossing their fabulous offers in the recycle bin.
Can the nation survive another four years of Bernanke?
Now that we have perma-QE its only matter of time until it all comes crashing down. I can see everyone staring blankly at their iPhones, mesmerized by the “No Service” messages displayed as they can no longer afford to pay the bill.
They can still use it to make their calls via Skype over wifi. The revolution starts when they can’t get a wifi connection.
‘its only matter of time until it all comes crashing down’
And for what? Bernanke said the day he announced this that he didn’t think it would ’solve the problem’!
Let’s put this in context; one advantage of these actions is to give a comparative advantage. But Japan, Canada, Europe, Australia, China and India are all doing the same thing, some for the second go-round.
I don’t use survive lightly. After all, we’ve heard that the US$/economy was about to be destroyed by money creation for decades. But we’re looking at an almost global zero interest rate policy. Has this ever happened before? And all of these countries, excepting Japan, are near the peak of real estate bubbles, or still falling.
Here’s something else new; they have flat out said they are trying to re-inflate stock and housing prices (bubbles). No more nuance. No attempt at painting this as some ‘fine tuning’ of the economy. And practically no one believes it will work:
‘The Federal Reserve and Chairman Ben Bernanke not only are willing to tolerate inflation but actually are trying to create it, with a “mess” left behind for their successors to clean up, Pimco’s Mohamed El-Erian told CNBC.’
‘The reason, the Pimco CEO said, is that the risks outweigh the rewards as the central bank tries to stimulate an economy that still is foundering three years after the financial crisis recession ostensibly ended.’
‘El-Erian has called the policy a “reverse Volcker moment,” in reference to former Fed Chairman Paul Volcker, who raised rates and deliberately put the nation into recession in the early 1980s to control runaway inflation.’
“Not only will they tolerate higher inflation, not only will they wish for higher inflation, but they actually may target higher inflation,” El-Erian, who helps run the largest bond fund in the world, said’
http://finance.yahoo.com/news/fed-wants-inflation-now-clean-150823877.html
‘they actually may target higher inflation’
Good luck with that. These central banks have been at this since at least 2000. Maybe we should change the saying from ‘don’t fight the Fed’ to ‘don’t fight deflation.’
“Here’s something else new; they have flat out said they are trying to re-inflate stock and housing prices (bubbles). No more nuance. No attempt at painting this as some ‘fine tuning’ of the economy. And practically no one believes it will work:”
Exactly! It really is different this time!!
How do bovines navigate the cross current between crumbling economic fundamentals and accelerating liquidity injections?
Many S&P 500 companies forecasting third-quarter misses
September 21, 2012, 5:30 PM
With revenue streams drying up and fewer places to cut costs, corporate America’s outlook for third-quarter earnings is looking grim.
So far, 103 companies in the index have provided guidance for the third quarter. Of those, 80% have guided below Wall Street consensus estimates, according to John Butters, senior earnings analyst at FactSet. That’s the most negative outlook since FactSet began tracking the figures in the first quarter of 2006.
The outlook doesn’t bode well for a market that’s at multi-year highs and will soon be facing added volatility as the November elections and the January “fiscal cliff” come closer.
Adding insult to injury, S&P 500 companies are projected to see earnings drop year-over-year for the first time in 12 quarters. Third-quarter earnings are currently estimated to drop by 2.7% for the S&P 500 as a whole, the worst forecast growth rate over the past 12 quarters, Butters added. At the beginning of the quarter, analysts had been forecasting earnings growth of 1.9%.
Financial stocks are expected to have the best growth rate, compared with large reported losses last year. Earnings for the sector are expected to grow by 9.9%, with American International Group Inc. and Goldman Sachs Group Inc. expected to be the largest contributors, according to Factset.
Sectors expected to see the worst declines are energy, with a projected 21.5% decline, and materials, with a 20.1% projected decline, even though commodities prices have risen.
…
It seems that they refuse to see the 800 lb gorilla in the room, namely that the world is awash in goods that low paid workers around the globe have no hope whatsoever of being able to afford or buy. Meanwhile the middle class has become an endangered species in the first world. Who is supposed to buy all the crap?
“Who is supposed to buy all the crap?”
Credit junkies?
“Who is supposed to buy all the crap?”
People with Fed-funded home equity wealth gains?
“Can the nation survive another four years of Bernanke?”
What does the inevitable collapse look like? He may win his battle but at what cost?
“…at what cost?”
No more bullets.
Amen. Beautiful, prof.
The Fed cannot push money into the economy as fast as it is dissolving away. It can only do so with willing borrowers, whose ranks are thinning.
And even those who can, won’t borrow. I see this at work, lots of modest cars with lots of miles on them in the parking lot (I have noticed that my Indian colleagues like having a nice set of wheels, though)
And even those who can, won’t borrow.
They must be reading this:
The Debt Resistors’ Operations Manual
Good reading Slim. Thankx.
Don’t forget this timeless lesson:
Don’t Buy Stuff You Cannot Afford
“What does the inevitable collapse look like?”
Like nothing we have ever seen.
Where ya been dude? Spend some more time here if you can.
Been busy, but I am always lurking. You are certainly the best at taking it to the liars, funny how all of our predictions are coming to pass sooner than even I thought.
Can a nation free itself from behavioral economics? Can they reverse 6 decades of quick gratification consumerism? Will the population shrink?
There will always be another chairman like Greenspan/Bernanke but will there ever be another Volcker?
“Can the nation survive another four years of Bernanke?”
I say yes, but it won’t be pleasant.
Our economy has a lot of inertia. I’ve seen large companies take decades to dwindle after their business model no longer worked. We have been sitting here watching this meltdown in suspended animation for the better part of a decade already.
Half the country is so happy with where we’ve been for the past few years that they want to keep the current administration. Then we’ll get six more years of Bernanke. The other half is so clueless about what is happening, they think a new, yet clueless administration will make everything better. The very few who think we have more than a flesh wound to deal with cannot be heard over the party music.
I don’t believe we will get any real changes from our leadership until a significant number of the citizens see clearly what has happened and get animated about it. Change will come when the pols are more afraid of the citizens than they are of their campaign contributors. We are not even close to that.
Change will come when the pols are more afraid of the citizens than they are of their campaign contributors. We are not even close to that.
+1
The Federal REserve is a Creature of Congress. While the method it was devised is detestable, it is still the product of Legislation.
The legislation that created it could UNDO it.
Think of the Repeal of Prohibition. It took a dozen years, but it was done.
We don’t need to constantly think that the FED can do this or do that, that a new or past “chairman” will control our fates.
The Congress has the authority to provide oversight or to END THE FED.
As soon as any Ron Paul type discussions begin, however, the PRESS starts with the end of the world propaganda if the Fed were reigned in.
INDEPENDENCE. INDEPENDENCE, they will rant, because the Banksters that own the papers don’t want any changes. they are fleecing us just fine, thank you, very much.
NO more Bernanke. NO more FED.
Can I expand the question slightly? Can the World survive another four years of central bankers?
I would like to hear a discussion about NYC. The prices are still prohibitively high in the boroughs and the houses are staying on the market forever. NY has a large shadow inventory, but it is unclear how potential buyers, not investors, should proceed in regard to waiting, or trying to find short sales of which there are very few.
As you recall, the previous bubble/bust cycle in the 80’s to 90’s, the wings came off in different areas at different times. This is no different.
I just got an updated REO list this morning. Notable is a herd of new listings in the northeast. This is a new trend…. really new as of this morning.
I just got an updated REO list this morning. Notable is a herd of new listings in the northeast. This is a new trend…. really new as of this morning.
Is it a thundering herd? Or is it just a herd that’s out grazing in the pasture? Or is the herd just standing there, chewing cuds?
C’mon, Watcher, we need some bovine details here.
Perhaps it was a discouraging word that never was herd?
Houses are selling and our local toothless handyman is so busy making the garage/basement into an $12-1500 a month Illegal apartment…
I’ve seen a handful of garages with picture windows and they are new. Without the illegal apartment no one could afford to live here… so at least a 1/3 reduction in price is necessary to break even…if they ever crack down on these conversions..
“Houses are selling”
Not really. Not remotely close. Why else in NYSAR withholding sales data in half the state?
“Houses are selling”
The (male) phlebotomy technician who drew my blood yesterday bragged about his recent acquisition of a condo for $160K or so. It was a short sale of a place that went for $250K at the peak. I complemented him on his financial wisdom, while silently noting that I was witnessing yet another housing bubble era shoeshine boy moment.
The biggest mistake one can make when purchasing a house is comparing the price they will pay to the “peak” price. The only way to measure value is to compare their offer to the pre-bubble price.
The hits are coming fast and furious in the financial sector.
Mostly in Investment Banking.
13-14K at Bank of America.
“large restructuring” at DB.
UBS.
Barclays.
Nomura.
The list is just fast and furious. You think this might have some effect?
Nah…trickle down economics only works when a booming economy results in spillover wealth to Joe6Pack. It can’t work in reverse.
CAN IT?!
IMO, we are going to get some major legislation dealing with entitlements & tax reform….I think the best chance of this happening in the near term will be a decisive Obama win and solid wins in the senate…Not because he is some special talent, more so because it will be an outright rejection of the right wing agenda allowing the moderate centrists in the republican party cover to make a deal….Take your pledge Norquist and shove it where the sun does not shine…You are already seeing fractures in the Rep’s…Some likely want to get ahead of the curve if, in fact, there is a mandate election in November….
So, get ready for “getting less & paying more”….Everyone….
Magical thinking. Those who vote this year won’t be voting “for” something, they will be voting against something that they loathe. How can a mandate come from that? Both sides with nothing to offer except that they are not “that guy”.
The mandate comes from a solid rejection of the Grover Norquist Base…They are holding the House hostage right now…It could go the other way also which would provide tail wind to Norquist…We shall see…
Austin home sales sizzle in August, expected to stay hot
Home sales surged 21 percent in August compared with August 2011, and the median sales price was up 6 percent year-over-year, the Austin Board of Realtors said Wednesday
The $212,000 median price is the highest for the month of August in the past 10 years.
August was the 15th consecutive month of year-over-year sales volume increases and the seventh month in a row of median price increases, the board said.
“The story of Austin continues to be jobs, jobs, jobs,” said Mark Murrell, vice president of JB Goodwin’s Westlake Division office. “We are predicted to add 45,000 jobs in the next couple years, and those new-to-Austin employees will have to live somewhere.”
Tom Polk, a broker associate with Stanberry & Associates in Austin, said the August numbers track with what he’s seeing in the market. He had four deals in a row where the homes had multiple offers. He said he listed a home in Hyde Park in August that got 12 offers within 24 hours.
“Each year, we can count on things slowing down in September, but this year, they’re not,” Polk said. “This is the first time in my 34-year career that I’ve ever seen an increase in activity (showings) at the end of summer in my listings.”
“As the (Federal Reserve Board) continues to pump money into the economy to spark growth, it continues to keep interest rates depressed, which allows homeowners to have more purchase power than ever before” — as much as 20 percent greater compared to even five years ago, Schneider said. “Interest rates are so low that it is almost like free money.”
And this is the story of central Texas
Each listing is higher than the previous one, listings go pending within hours, multiple offers across the board, near zero inventory
And what are median household wages in Austin?
¦ The median household income in Austin grew by about $600, to $49,987 in 2011. Still, it was below the national figure of $50,502.
Sounds like a local bubble to me.
All I know is that the last 7 years has been a big waste as far as the Powers doing anything that would correct the problems that got us into the jams to begin with . Nothing but policies designed to either bail out the Money Changers or keep the corrupted systems going .
I won’t be able to stand another 4 years of Ben Bernanke .
You want Glenn Hubbard instead?
Which is more pleasant: The frying pan or the fire?
Eventually the fire.
Instead of moving to protect consumer deposits from the Wall Street gambling machine, breaking up the TBTF entities, nothing of consequence has been done to reign in Wall Street over the four years since Lehman.
The US economy is morphing from one where a cautious financial sector serves to provide loans to the real economy, we’ve moved to a system where the rest of the economy is bled to keep Wall Street profitable. This makes a small group of people fabulously wealthy. Is this sustainable? Is it just?
Data. I hear people saying things, “The bailouts were profitable for the taxpayer!” Or “The Financial Sector didn’t do anything wrong. This is just a normal business cycle.”
Data - how can these assertions be countered with concrete rebuttals? Even for those of us who’ve followed the financial sector, it can become tedious to dig up the data to counter these assertions. Where are the good data sources that can quickly be pointed to to debunk the nonsense?
Oct. 1 will be National Draw Mohammed day. Don’t forget!
Progressives…you can participate also…just draw Jesus, Shiva, the Buddha or Moses instead of Mohammed and send an apology letter to Mecca for all of the other drawings.