Bits Bucket for December 27, 2012
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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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Interested in an informal poll to see how many here would look positively on sequestration if Congress doesn’t pull together some interim budget deal in the next three business days. Personally, I think it would be an excellent start to changing the spendthrift mindset around DC., but suspect it would hit federal government employees (and DoD/E contractors) disproportionately — until its ten percent austerity starts to trickle down into the private sector over the coming months as well.
Has anyone given serious thought to how 10% less each pay period will affect your daily life over the next year or three– especially if we ALL have to deal with it? And what about the FED buying up 45B in MBS Bond issues a month? Do those billions get subjected to a 10% cut (and payout reduction) too?
Bring it on!
What on?
- Another uptick in unemployment?
- Another dreary year for the stock market?
- Falling housing prices?
- Cascading debt default into depression?
Fed workers are in for a very big hit. In addition to salary cuts, they will have overall higher tax rates, payroll tax, and possible AMT. Many of them (not too bright) were also counting on COL adjustments. I’m not sure when, if ever, feds will see those.
I can afford such cuts and pay freezes, especially now that my rent will never go up. I will gladly take the cuts knowing that the rich are “suffering”
even more, but renovation work on the house would have to slow to a crawl.
I fear for the middle-class contractors.
I fear for the middle-class contractors
We would too if we were still at Dept of Energy. No fear here at the new gig deep in the churning, murky bowels of the Military Industrial Complex. And yes, we are hiring
Siphon it while you can!
Since when is it just federal workers who will have higher tax rates, payroll tax and possible AMT?
Sorry, my micrograsp of English style is less than perfect when I’m writing off the cuff. Try this:
In addition to overall higher tax rates, payroll tax, and possible AMT, they will have salary cuts.
(and I suspect that it won’t be only federal workers who have salary cuts either.)
“And what about the FED buying up 45B in MBS Bond issues a month? Do those billions get subjected to a 10% cut (and payout reduction) too?”
No way.
I would be OK with 10% less, even 20% less. If it caused some real and constructive changes in the nation’s financial picture, I would be all for it. I’d be totally willing to have less money to sack away now if it meant some steps to address the long term picture. I would also not mind if smart infrastructure spending was done. Even if I did not personally agree with some things here or there, if we moved towards a more balanced picture the extra money would be worth it in the long run.
The generations that ran up this debt are well into middle age and many are retiring now. We can’t reverse their mistakes and poor leadership overnight–especially since this current Congress still has many 10- and 20- year veterans with vested interests. But it will happen, it has to happen. We had a bad generation or two (not individuals, but as a nation) and everyone knows it can’t continue forever or we might as well pack it in.
“… everyone knows we can’t continue forever …”
If only this were true.
It is true. Eventually our debt will be called.
“It is true. Eventually our debt will be called.”
I think he meant, “if only it were true that everyone realized this”.
“I would be OK with 10% less, even 20% less. If it caused some real and constructive changes in the nation’s financial picture, I would be all for it. I’d be totally willing to have less money to sack away now if it meant some steps to address the long term picture. I would also not mind if smart infrastructure spending was done. Even if I did not personally agree with some things here or there, if we moved towards a more balanced picture the extra money would be worth it in the long run.”
+1 I’d like my children to live and work in a better economy.
Everyone will have to accept compromises, but the simple act of having a credible plan would be a big boost to the nation. We can disagree on the exact plan, but what we’ve been doing for generations just doesn’t make any sense at all.
“the simple act of having a credible plan would be a big boost to the nation.”
Confidence is a huge factor, but how likely are the present players to draft and agree on one?
Too many long time incumbents, too much lobbying and outside spending (everyone fears being “primaried”).
Probably not much chance of a good deal being made.
But hey, Citizens United is the law of the land :-/
I look positively on sequestration but negatively on the associated tax increases. Prop 30 in CA is an example of revenue declines in response to tax increases. We are over taxed and increasing rates and even adding new taxes fails to increase revenues.
The housing bubble bursting initiated a reset in our economy by our tax dollars were used against us to prevent a normalization of the housing market.
The charade will end one way or another, sequestration will hopefully initiate a reset that will be allowed to run its course.
The 10% question isn’t valid, the pain isn’t evenly distributed. As a building contractor who was highly leveraged due to a poor result in divorce court I have lost 100% of my wealth and 85% of my earnings. 10% one way or the other isn’t going to make the difference.
In order to prosper in the next few years ( I’m turning 60 ) I will have to pursue money spent on housing while it lasts. After 4 1/2 years the local demand for my service is growing and demand in other parts of CA has us traveling and working in other markets.
Time to face facts, at your age you have no choice but to continue pimping housing.
As for the leverage and the bad divorce, ouch, but maybe you should’ve planned better. These were the result of things you ultimately had some control over/influence on. It sounds like you want to be considered a victim, not much different than a single mom in Cleveland or a homedebtor in some shitty FL or AZ suburb. Here’s to hoping at least your ex wife is enjoying the profits from your house-pimping activities.
Sorry if this was harsh, I’m not a fan of victims.
I don’t want to be considered a victim, I was responding to the 10% question and to some that have been highly impacted a 10% cut just isn’t the right question.
I do have other choices, I also have an internet buisness that also is struggling but I can pursue both or either one.
I don’t pimp housing, I provide a service, I’ m a sub-contractor. My services can be sold to new construction contractors or to existing owners.
I know many old, broke contractors. The theme is always the same: They thought the good times would never stop, they liked to spend, and they never saved for a rainy day. They are the types who will be eating dog food and living off a paltry social security check . Worse, many of their bodies are decrepit beyond their years.
I swear, some (most) days, waiting for Karma is like waiting for Godot.
Charlie, unfortunately you may not see much business for a while. Home improvement is one of first things to be dropped in an economic downturn. Even if the improvements eventually save money on utility bills later, the key word is “later.”
Charlie, unfortunately you may not see much business for a while.
What we are seeing now are old homes and lodges being remodeled. Some of these projects have dozens or even hundreds of units. The owners of the bigger projects had planned to tear down the existing and build new but that type of development stopped in 2006/7. Now they are improving the 40 year old existing projects instead.
The number of remodels and retrofits is beyond what I have seen here in the last 30 years by a big margin. Tribal housing is up currently too.
We got 18′ of snow in recent weeks and yet this is the busiest we have been in 4 years, something is changing.
Interesting when lawyers claim no sympathy for victims.
Churn ‘em and burn ‘em - over as long a period as possible. Right?
Extend the pain, increase my gain.
Bully for you.
All of our clients are “invisible hand of the free market” private CORPORATIONS. The same private corporations the bootstrapping, job creating 1%ers (and their vociferous less-well-off wannabes) exhort.
And yes, they complain a lot. They sue the government like crazy. They screw over the little guy ALL. THE. TIME. (Best example I’ve seen in my professional career is how iTunes screws over people who sell apps through the iTunes store.)
But, you know, they are job creators. And they pay “too many taxes” (even though the benefits given to them by the gov’t often outweigh the corporate taxes paid, sometimes to an extreme degree).
Free enterprise. Land of the free, home of the brave. This is are country.
‘invisible hand of the free market’
This is an often misused term IMO. By that I mean I don’t usually know what people are referring to, but it isn’t what it is describing.
Milton Friedman explained it pretty well using a pencil as an example. He said that someone has to produce the wood, the lead, the paint, the eraser. Then someone has to coordinate the supplies to be where they are needed. That means transportation has to be in place. Then you need factory space, energy for the factory, and workers, who need a place to live. Then there has to be a way to get these pencils in the hands of those who use them. You get the idea. But unlike planned economies, there is no one person or persons sitting in an office somewhere who is making sure all these things fall together. For-profit enterprise fills the needs without bureaucratic direction.
It doesn’t mean businesses operate perfectly along these lines. Just that a lot of logistical stuff happens because there is a need, a related profit to be made and people who are willing to fulfill that need in exchange for the profit.
Ben, I use it in reference to the meme that has grown up around it, from the GOP who truly believes in anything except an invisible hand of the free market.
Many people do not realize how aggressive so-called “private industry” is about taking advantage of the law, of accounting rules, etc. I guess you could say it is free market in one way–they spend money to do lobbying, buy campaign ads, donate to candidates… and they get a return on their investment. Big time.
“That means transportation has to be in place.”
+1 And our infrastructure is government’s responsibility.
Not for long. Developers can’t wait to get their hands on privatizing the infrastructure. It’s the ultimate in needs industries and captive market.
It’s also the modus operandi of the supposedly “more efficient” private sector: let the taxpayer put up the huge expense for initial infrastructure and R&D; then swoop in for the profits.
‘our infrastructure is government’s responsibility’
To contract out to private firms. The government couldn’t build a road if the fiscal cliff depended on it. I’ve worked in the ‘infrastructure’ business as an accountant. The government doesn’t lay one foot of concrete or asphalt. You might see a truck load of state DOT guys putting a couple shovels of black stuff in pot-holes, but that’s about all they can handle.
We are over taxed
Are you French? USA Effective Federal tax rates are the lowest in 3 decades.
Chart- Fact: Federal taxes lowest in 30 years under President Obama
http://thepoliticalcarnival.net/2012/07/12/chart-fact-federal-taxes-lowest-in-30-years-under-president-obama/
He’s referring to the tax increase in CA to 13% of income on highest earners via Prop 30.
Overtaxed lives in FL, I thought?
FL has no income tax.
I think Rio was responding to Charlie Tango.
“We are over taxed and increasing rates and even adding new taxes fails to increase revenues.”
You do realize that, from a historical perspective, the current income tax rates are among the lowest–if not the lowest–ever?
You do realize that, from a historical perspective, the current income tax rates are among the lowest–if not the lowest–ever?
If you buy health care for your pet or even a device for your pet that concerns its health you now have to pay a tax to fund obamacare.
Right now our town is going to get hit with 9 1/2 % sales tax plus and increase in lodging tax plus a new entertainment tax. This doesn’t even take a vote, a few individuals can decide this for the taxpayer by controlling the largest businesses in town and creating a ‘Business Improvement District’.
I have employees, Obamacare costs are new. My “usage” tax is through the roof, property taxes keep going up with new measures, … Its not the federal tax rate that matters but the total taxation.
CAL-OSHA has learned how to cut costs, they don’t send an inspector all the way to Mammoth Lakes they simply send a fine.
I just did a job for the state of California and in order to get paid I had to send a check to a union in southern California. I have no affiliation with any union but the state makes me send them a check.
I call BS on your claim to historically or effectively low tax rates. Food has become a luxury.
After 4 1/2 years the local demand for my service is growing and demand in other parts of CA has us traveling and working in other markets.”
has it not always been like this in CA ? up down bust boom ?
has it not always been like this in CA ? up down bust boom ?
No, this bust in the bust/boom cycle has been catastrophic. Prior busts within the last 30 years meant adjustment, this one killed most players.
Prior busts within the last 30 years meant adjustment, this one killed most players.
IMO is because this one is structural. The middle-class did not share in the productivity gains the past 30 years. Many saw this coming. It’s sad.
Most of us are being ‘adjusted’ to death.
If Congress was required, after the 31st of Dec., to work for free from home until a deal was in place, this would have been handled long ago. Grandstanding pigs. Suck it, politiscum.
When I was an intern with my current company back in 2007, R&D employees endured a 20% pay cut for a whole fiscal year to avoid massive layoffs… And you know what? The majority stayed…. It is done in the private sector, and I don’t see why other entities can’t do it too…
Wow, 20% is a serious hit.
Was it only one year? And did R&D know it was only one year?
Wow, 20% is a serious hit.
20% is a serious hit to the average American. To me, an actual type of “bootstrapper”, 20% is on the mild side. During the SoCal Recession of the early 90’s my income dropped over 40% for over 2 years. It didn’t much change my modest lifestyle because I had saved.
When my income hit about 20% lower I was talking to a techie friend who looked at me like I was nuts. He said “I’d never accept a 20% pay cut even if I was self-employed like you”. I asked him what difference does it make if I’m making 20% less this year if I made 30% percent more than I needed the past 3 years?
He didn’t get the concept. 10 years later he had been laid-off and was living in his friends garage in Oakland.
Curious–are you supporting a family, Rio?
I agree with Rio on this one.
My income is never guaranteed so we save and live within our means … seems most cannot understand this basic concept with all the cheap money floating around.
Too little, too late, ahansen.
A 10% cut won’t do much at all, and will only “teach a lesson” to those already on the ropes.
A 10 percent cut to a $100K salary isn’t all that much when one considers there’ll still be $90K left.
If you can’t cover your bills on $4000 take home per month, you have a spending problem, not an income problem.
Our country is addicted to spending. Revenues do not solve a pathological need to spend.
“If you can’t cover your bills on $4000 take home per month, you have a spending problem, not an income problem.”
Absolutely true. Even in California, Maryland, Connecticut, New Jersey, etc.
In flyover, it could probably be done on $3000 take home.
America became addicted to spending over the past 30-40 years, a time when a lot of the spending was on things not produced here. Most of which is of very limited value, especially in a marginal utility sense. American McMansions often had (have) chinese wallboard in them–how f***ed is that? We import the supplies and labor (unskilled). We make the… mortgages? But that’s just Fed/FHA policy… so what do we make?
“If you can’t cover your bills on $4000 take home per month, you have a spending problem, not an income problem.”
I agree, but it is amazing how fast you can burn it if you eat out much and have a car payment or two. Especially if you’re spending much on housing.
House poor. I have many friends like that.
I work with many people who couldn’t miss a single paycheck without problems.
And we reelect the same people to carry out same policies.
Technically I thought it was “house rich, cash poor.” Oh well.
Technically I thought it was “house rich, cash poor.” Oh well.
That would be my parents. They have houses and properties fully paid. Most rental income, goes directly to savings. But whenever I ask them, they are always low on cash.
The term has always been “house poor”, as it is much more succinct, conveying the identical concept - living like a pauper as a result of buying too expensive a house - in half as many words.
“House poor” has the added benefit of not requiring that the house be anything special. If you are “house rich, cash poor” there is at least an implication that you have a nice house in addition to not having much cash.
“If you can’t cover your bills on $4000 take home per month, you have a spending problem, not an income problem.”
That spending problem may include some bills that cannot be cut. I know folks who have child support payments of $2500 per month.
My alimony payment was $4k / month even after she remarried. I took it all the way to the supreme court but all I did was loose.
Without ever agreeing to it I had to support her and her lawyer husband until death.
jeeez… no wonder you hate the system.
Ouch!
You must be rich.
” I know folks who have child support payments of $2500 per month.”
Or child CARE payments. I’m lucky my job gets me home by noon, and my wife works evenings. We have a 2-year old, and the second (and last) due in March. If we had to pay for child care, we’d scrape by ok, but save absolutely zero. It would be ~1200/month for one child, not sure if there’s a discount for the second.
I wouldn’t notice it.
All the extra money from the tax cuts has been banked in my house, over and above “normal savings” for retirement.
But with stocks overpriced and interest rates near zero, I have no idea what to do with that money anyway.
“Has anyone given serious thought to how 10% less each pay period will affect your daily life over the next year or three– especially if we ALL have to deal with it?”
I had that premonition about four or five years ago, which pushed me to triple mortgage payments during the summer months and double during the winter when work is slow. Debt free since 10/2011.
yeah last night CBS news was going through what would happen, and I thought “what’s not to like?”
There is possibly a silver lining to the coming recession. 2013-16 will be great for the environment. If we can cut 8% from GDP over the rest of Obama’s term it will slash emissions, toxic waste and help nature recover from decades of abuse.
Global warming is a big scam Al Gore made up to sell more movie tickets.
It’s true, it was in the Washington Times.
“It’s true, it was in the Washington Times.”
+1 Thanks, I needed that!
Within two weeks the data will come out and 2012 will be cooler than 1998. Of course, the spin will be that it is still within the top ten years but that is only since 1880, part of the normal interglacial warming period. Being on a heat mesa will mean an number of years within .1C of each other. Unless 2013, has an el nino it too will be cooler than 1998. The average yearly high for an interglacial period is still 1.3 C higher than 1998, it does not look like we are going to make it this interglacial period. Hope we have put enough Co2 to avoid an ice age.
Your demographic horoscope says you right-wingers will cease be relevant in the not to distant future.
But who knows what might happen if a lot of liberal muggings were to occur. Sometimes people change philosophies.
They will never come to a “Great Compromise” agreement… Philosophically they are miles apart…Besides that, they don’t like each-other which you would think should be irrelevant to the business of the country but for them its personal…I need to win so you loose…
The sequester is the best possibility for real restructuring for the benefit of the entire country…And if we can’t get a grand bargin after sequestration, then next up is the debt ceiling…
These guys will only respond to crisis because, thats when their constituents will then hold them accountable…As long as they can limp along, kick the can you might say, they will never come to a meeting of the minds that accomplishes real solutions…
Off the Cliff & into the Debt wall is my vote….
Off the Cliff & into the Debt wall is my vote….
I agree. It would be better for America.
Now just pure politics:
If I were Obama I would go over the fiscal cliff. Why? Because it would get much more of what the Dems want and the Repubs would get most the blame. This is clear.
The tax rates would go up for everyone to Clinton era levels. So then Obama says let’s lower the taxes on the middle-class. What would the Repubs say? No, we won’t lower taxes on the middle-class unless you lower for millionaires too? Yea right. That’s gonna play well. They’d lose the house in 14 sure as shootin’. (a Bushmaster)
The Repubs would BEG to cut deals if only to save a little pork for the Pentagon. Obama could never be in such a strong position as going over the “fiscal cliff” would put him in imo. Thoughts?
Similar thoughts have crossed my mind. Though I still think they will come up with a moratorium (say a month or two) to buy time.
I think just the opposite, the Republicans get more by going off the fiscal cliff and then allowing the 98% to get their tax cuts. Obama will never allow spending to be cut as much as the going off the cliff cuts. His proposal to “solve” the problem had 140 billion in new taxes on the rich but he only gets 50 billion by going over the cliff. Once government spending is cut the economy does poorly and we see a result in 2012 much closer to the 2010 result then the 2012 result. But I guess this is why I think we will go over the fiscal cliff both sides see the advantage of going over.
Republicans get more by going off the fiscal cliff ??
I don’t think so….How do they argue against it when they voted for it…
I think just the opposite, the Republicans get more by going off the fiscal cliff
I hope all the Repubs in office are thinking that too.
The republicans want spending cuts to come mostly from SS, Medicare and Medicaid and none from defense. The sequester cuts don’t do that. They are very worried about the cuts.
Well they don’t seem to be folding do they?
I don’t think the government will do as “poorly” as the pundits suggest. Government adjusts to its available funding as water seeks its own level and I’d like to think that public apathy will absorb any sudden shock to the collective lifestyle. Once we get used to living with less, markets will adjust to the new normal. Then the second round of cuts will be instituted. I believe that this has been the long-term strategy since Obama was elected in 2008.
Those of us who are used to living in relative privation (the Lucky Duckies) will likely not see one iota of change in our day-to-day. Folks won’t be getting their fat medicine on the government dime, but basic public services will remain in place.
The middle class will whine and moan as salaries readjust to actual value produced, but they, too, can remember when they had to drive a clunker or eat peanut butter and ramen, (why, even Mitt and Annie had to live in a basement!), and as long as there’s a public perception that the burden is being equally shared, the grumbling will remain manageable.
The 1% may have to send the kids to State U. and cut the masseuse back to twice a month, but it will give everyone something to talk about at cocktail receptions and after racquet ball. And the .01’s are going to find that their markets and power bases are shifting as radically as the economic landscape. What trickles down also evaporates back up and their free ride on the back of the tax code is coming to an end. (It will be interesting to see what bonuses for WS average this year as compared to four years ago.)
What WILL change if sequestration goes through is a repurposing of the labor force currently engaged in war fighting and its support systems as budgets are cut to help subsidize the diminished pensions of baby boomer retirees for the next twenty years. But after the big die off, a leaner, more efficient, more domestically-oriented economy will boom for those who are left to carry on. So take heart!
Well they don’t seem to be folding do they?
They are known as the “stupid party” for a reason,
So take heart!
The state will grow and the population will be poorer and dumber and more manageable. You must be thrilled?
“The state will grow and the population will be poorer and dumber and more manageable. You must be thrilled?”
Why would this be true? The generations dying off are the generations that caused this budget problem. The best we can hope for is that the younger generations have the good sense to clean up this mess and not create new messes in the process.
If you look at what the Baby Boomers stood for as a group, it’s actually pretty sickening. Especially when compared to previous generations. Heck, the Baby Boomers still favor wars, the “war on drugs” and abortion restrictions while opposing marriage equality, if the 2012 exit polls are to be believed. And then, when you look at what they did the economy, it’s really a knee slapper. Lower taxes throughout their working years, huge defense spending… but now it’s all “hands off our medicare and SS benefits!!!”
Why would this be true?
Allena just predicted it. I don’t really believe that increasing spending alone solves everything or for that matter anything, spending is the problem. Allena thinks we just need more govt and that more spending will accomplish that in some sort of beneficial way.
I can’t agree that the budget problem was caused by ‘generations’ I suggest it was caused by a philosophy, one that permits spending of money that doesn’t exist. One that permits the borrowing of money with no intention of repayment.
Or the state will grow more efficient and less financially intrusive, and the population will live a more equitable and mutually-beneficial lifestyle predicated on knowledge and culture rather than war and consumption.
In any case, you and I will not likely be around to see it. It’s time for the Boomers to pay for the mess they made of the mess we were left by our parents. We let our brethren eat our dessert while we were dutifully finishing our vegetables.
“…Allena thinks we just need more govt and that more spending will accomplish that in some sort of beneficial way….”
And CT needs to learn how to read critically instead of posting knee-jerk reactions. Please explain how you got this conclusion out of:
-”…Personally, I think (sequestration, a 10% CUT) would be an excellent start to changing the spendthrift mindset around DC…”
“…Once we get used to living with less, markets will adjust to the new normal. Then the second round of cuts will be instituted….”
Government spending/employment has sharply increased over the last generation to absorb …the last generation. When it goes, so will the need for the make-work jobs that it supported. If we can dump the oligarchs in the process, perhaps our generation will have redeemed itself.
It’s time for the Boomers to pay for the mess they made of the mess we were left by our parents.
I’m done paying, millions have been confiscated from me in the past and what did the state do with them? Squandered them I tell you!
I started from broke, graduated the 11th grade made a few bucks and went back to broke a couple of times. I have one last chapter that hasn’t been written yet, at least 1 and I shall be so much more careful to work for my benefit. Being a businessman in California can feel rewarding till you pay all the taxes and comply with all the mandates and find out there isn’t enough left to even survive a few lean years.
If we can dump the oligarchs in the process
That is a big if. I don’t see the oligarchs leaving in situations short of catastrophe.
And CT needs to learn how to read critically instead of posting knee-jerk reactions. Please explain how you got this conclusion out of:
You are right, I read your first sentence upside down and then it stuck in my craw. I thought, when you were saying ‘Government adjusts to its available funding as water seeks its own level’ that you were implying that we just needed to get the govt more money and then govt will self adjust and become efficient.
Sorry, I guess I’m just not used to agreeing with you. Over the cliff I say, whatever leads to real cuts, even if they are not the cuts I want.
I suggest it was caused by a philosophy, one that permits spending of money that doesn’t exist.
Most the money did and does exist.
Being a businessman in California can feel rewarding
Sorry about all the crap you’ve gone through. Maybe I got out just in time. (About 2006-7)
The psychopaths and the FSA would not handle TEOTWAWKI very well. In fact, I think they will kill each other down to the last man as well as loot and murder others.
That being said, I am pretty sure they will strike a deal.
“TEOTWAWKI”
Wow, my illiteracy is kicking in today. Google. . .
TEOTWAWKI: The End Of The World As We Know It.
Well my pretties, eventually the can kicks back.
Debt DOES matter, despite what some Nobel laureates might suggest. People point to Japan with its debt being around 200% of GDP. As long as the belief in the currency as a store of value persists, they can keep adding to their debt by printing money. But a currency which is issued by a country with a 200% debt to GDP ratio will likely be viewed with some skepticism by foreign parties. The “cute” result in the short term will be currency devaluation. The “not-so-cute” result would be hyperinflationary as outsiders aggressively shy away from the currency.
Having a central bank buy government debt is simply one layer of misdirection away from direct money printing. And we know that direct money printing in order to increase an economy’s level of wealth has already been tried, with predictable results.
The reality is that economists do not understand the exact mechanisms by which individuals accept or reject the logical construct known as currency. But if the currency users get a whiff that currency doesn’t represent real value, they’re going to start shying away from it.
Thought experiment: What if Japan’s (or the US’s) debt was 1000% of GDP?
To you from Alan Simpson:
http://www.thecankicksback.org/
Seeing Alan Simpson dance to Gangnam Style not only puts the song in my head, but also the visual of Simpson dancing.
Thanks
Has anyone given serious thought to how 10% less each pay period will affect your daily life over the next year or three– especially if we ALL have to deal with it? ‘
Don’t know I’m not a government worker ? Maybe we will all find out ? IRS will probably go on the war path. Maybe homeland security won’t be able to spy on everyone as quick as they hoped too? Post office will cut serive and hours, defense contractors laying off, pork will get cut, stock market will crash, etc.
both good and bad things could happen
Other things being equal, I’d be all in favor of the cuts. Other things are not equal, however. Over the past year or so, there’s been a noticeable slowing down in renewal of option years, continuation of work, etc. Lots of time for people to sit around and let their lowest common denominators rule.
IOW, it’s not going to be a 10% salary cut. It will be - as always - management looking out for their own and throwing the rest of the population under the bus.
Growing numbers of elderly and sick Germans are being sent overseas for long-term care in retirement and rehabilitation centres because of rising costs and falling standards in Germany.
The move, which has seen thousands of retired Germans rehoused in homes in eastern Europe and Asia, has been severely criticised by social welfare organisations who have called it “inhumane deportation”.
But with increasing numbers of Germans unable to afford the growing costs of retirement homes, and an ageing and shrinking population, the number expected to be sent abroad in the next few years is only likely to rise. Experts describe it as a “time bomb”.
Germany’s chronic care crisis – the care industry suffers from lack of workers and soaring costs – has for years been mitigated by eastern Europeans migrating to Germany in growing numbers to care for the country’s elderly.
But the transfer of old people to eastern Europe is being seen as a new and desperate departure, indicating that even with imported, cheaper workers, the system is unworkable.
http://www.guardian.co.uk/world/2012/dec/26/german-elderly-foreign-care-homes
We may all yet meet in some tropical paradise or third world dung heap depending on your outlook on life.
I thought the Germans already figured out what to do with a demographic population nobody wanted around anymore…
Informative post…Thanks frankie…
If only there was some sort of camps in Eastern Europe they could send the oldsters to…
Filed under: going over to the Dark Side
We are going to look at a condo today in 80220 (http://www.city-data.com/zips/80220.html). Priced at 1x income, the mortgage and HOA would be close to current rent. And our commute would be cut in half.
We have also been looking at rentals in this area and found the selection and availability (sorry RAL) to be rather limited…
So how much are they going to raise your rent?
Rent is not going up but we are burning out on the 17 mile commute each way.
The entirety of Metropolitan Washington just busted its collective kidney with laughter.
And the entire blog laughs at your new found realtor optimism.
PS- Rental rates are falling in DC. You got suckered.
http://newsroom.transunion.com/MediaLibraries/TransUnion/Documents/graphics/1Q12/Q1-2012_SolutionsReport.pdf
Yeah, I commute almost twice as far but I work from home some days and I get into work super early so I never have to sit in traffic. I also use the gym at the office and run my errands nearby so I rarely/never have to drive at home, other than for leisure (skiing, biking, etc).
My wife has a 1 mile commute, so it also evens out that way.
Goon, I think you’re right to check out the condo, but isn’t it very possible you’ll move in 5 yrs? I’m sure it wouldn’t be a big loss either way (buying at 1x income is something I can support, with apologies to RAL), especially since you plan to remain childless. Good luck either way.
Wow, RAL, a decrease of $17/month within the past year. At that drop rate, the rent on my old 3-bed townhome will reach the PITI on my SFH in… 27.64 years.
You’re lying about rental rates. Knock it off.
I just paid my new rent (first month of the second year on a two year lease). Up 3%. Parking stayed the same (first time in two years that didn’t go up).
We’re happy for you.
I thought the point of a two-year lease is that your rent didn’t go up. Or maybe the deal is that your rent went up less than for a one-year renewal.
As for rent, I’m quoting my old lease contract, not some nebulous number from Zillow. How could I be lying about that? Serious answer, please.
Why would rents be going up when in fact they’re falling?
Why would rents be going up when in fact they’re falling……in my mom’s basement?
Case-Shiller Home Prices Show Strong Gain in October 2012
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REAL ESTATE-Olick
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The 3% is likely less than it would have been if I had not committed to the two years. The first year of a new lease would probably have been a 4% increase (at least). Also, the poster up in the laundry room on my floor which announces the “bonus” (kickback) that you get if you refer a potential tennant who is both approved and actually signs a one year lease is down to $250. The lowest it has been since I have been here. That means they are having no problem at all renting out units as they become available. The bonus has always been at least $500 before. Sometimes is goes up to $750.
RAL likes to post data that is nearly 1 year old to make his point (the Transunion data–which still notes OVERALL rent increases, BTW), but when the most recent data goes against his view (Case Shiller with price increases), he likes to note how things have since changed, since that reported data still lags a bit.
Disingenuous at best. Outright dishonesty at worst.
Spin, Spin, Spin.
Rental Pimp,
When the falling rental data came out, you ran, hid, ducked and weaved.
And what are you doing now? Running, hiding, ducking and weaving.
Rents fell in 2011…. Rents fell in 2012.
http://www.huffingtonpost.com/2012/02/08/rental-rates_n_1263987.html
Deal with it.
That article is a bit less than 11 months old…got anything more recent?
You donned your ballet slippers when it was released then, you’ll dance around it now.
It’s old data. It had relevance then…much less so now.
Spin spin spin… Lie lie lie. You’re a piece of work Rental Pimp.
T R A I T O R ! ! !
Gotta admit, after all his bragging about how great his apartment is, the squad is gonna get flamed.
At least I had the courtesy to hate on renting for a year or so before I bought.
The “squad” is male?
We don’t hate on renting. We hate on the time and money required to “own” single family housing. And we want to get a dog, no pets allowed in the current building.
There it is.
The cost to rent is half the total monthly carrying costs of buying the equivalent square footage.
Goon squad, my Christmas was spent visiting every dog beach in the San Diego area. It was great, it is a vacation the dogs will be talking about for many dog years.
Dog Beach in San Diego….Where ??
I stayed in Coronado and went to that beach and to the one near Sea World (Fiesta island) and Del Mar which is a dog beach only during the Winter.
Thanks Dan…
and Del Mar which is a dog beach only during the Winter”
I used to go there you can have dogs but on a leash in the Summer.
The Beach with the metered parking
I’ll be in San Diego tomorrow visting but probably no beaches
People who buy housing today will experience massive losses. Avoid inflated prices and lying realtors.
Why buy now when you can buy later for 60 percent off?
ralwarnings.docx
Why buy at all?
To capture the capital gains from the Fed’s reflation efforts.
60% later. When? How long until we reach this discount?
There you are. Howl boy howl!
How did you arrive at 60%? If you believe that 60% is accurate, surely you must have a general timeline for when it should happen?
It’s been explained over and over to you. Either you don’t understand it or don’t like it.
It’s been explained over and over to you. Either you don’t understand it or don’t like it.
See? He just explained it again. Right up there. In those two sentences. You just don’t get it.
And you’re another pimp who can’t seem to be honest.
All the times I have seen an actual explanation, they had something to do with the construction costs. But none of the explanations included any recognition that it costs something to buy the dirt.
Now I get it.
I need to reread Trolling for Dummies again. Then it all may be a little clearer.
No you don’t get it. But you will. Stick around with your new username for a while.
I’d say the same to you but I don’t know which one to pick from. I suppose it doesn’t matter, it’s the same tired message without any substance.
RealTard….. stick around and learn something.
I wouldn’t ask the question: When? If I weren’t interested in learning.
It should be clear to you by now that I am looking for an answer from someone other than you who may actual possess a shred of insight into the topic, not just name calling and meaningless statements.
You don’t like the depth or the duration even after it’s been explained to you many times over. Quit pandering.
It should be clear to everyone here that you’re pandering. Stick around and read my realtard friend.
I can give you a guess — I don’t think you’ll see 60% drop from today’s prices anywhere, barring some huge event. But you will probably see some places which have dropped 40% and will drop an additional 20%, but only for undesirable places:
1) Overimproved/new properties in Oil Cities and other areas with no jobs.
2) McMansions in outer exurbs of major cities where developers overestimated the distance people were willing to commute — I’m looking at you, Mason Dixon line, Panhandle of West Virginia, and Pahrump NV.
3) Badly built bubble condos and cheap 1970-’s condo conversions with foreclosing residents.
4) Downtown condos in the “Historic Town of [fill in].” You know, formerly sleepy towns now on the edge of sprawl trying to attract an artistic community or some such.
5) Any house that is in bad condition. Houses not lived in, SFH turned multifamily houses, or houses where a senior aged in place with little maintenance.
I expect all this to shake out in the next 2-3 years. But as for decent homes in cities where jobs are… I expect us to bounce along the bottom as long as the low interest rates hold.
If the interest rates don’t hold you’ll see people rushing out of real estate causing a major drop in price. Even so, If you’re locking in at 3.5% or less, as long as your P&I/T&I are substantially less than rent it’s all a wash in the end. The people who will be really screwed are the cash buyers.
I watched “Omega man” with Charlton Heston ” on Youtube or at least parts of it in my quest to understand the modern fascination with Zombies.
if anything like that happens I would expect massive declines in RE
barring this event and in light of Blackrock and other big investment groups buying up all the “affordable RE” and turning it into rentals then I would expect a outcome more inline with Oxides view.
This AM I switched out of a stock mutual fund and into a REIT mutual fund using all my rollover IRA money ( which isn’t that much considering I’m past 50 years old!!). interesting how REITs have beat the S&P for most of the last 10 years.
It depends Andy. It is just like gold, the nominal rate is not the key, it is the real rate. Rates can go up as long as the Fed is behind the curve and raising them slower than inflation is rising and both gold and real estate prices can increase. I think this is less true for real estate than gold but it took interest rates well into the double digits to kill the gold rally and home prices in the early 80s.
Until the Mayan calendar runs out.
Very long, like never due to the printing of money by the Obama Fed:
(Reuters) - U.S. single-family home prices rose in October for nine months in a row, reinforcing the view the domestic real estate market is improving and should bolster the economy in 2013, a closely watched survey showed on Wednesday.
The S&P/Case Shiller composite index of 20 metropolitan areas gained 0.7 percent in October on a seasonally adjusted basis, stronger than the 0.5 percent rise forecast by economists polled by Reuters.
“Looking over this report, and considering other data on housing starts and sales, it is clear that the housing recovery is gathering strength,” David Blitzer, chairman of the index committee at Standard & Poor’s, said in a statement.
While record low mortgage rates and modest job growth should keep the housing recovery on track, analysts cautioned home prices face downward pressure from a likely pickup in the sales of foreclosed and distressed properties and reduced buying investors and speculators.
Prices in the 20 cities rose 4.3 percent year over year, beating expectations for a rise of 4.0 percent.
Prices resumed their declines in October. Why misrepresent that Dan?
http://www.marketwatch.com/story/home-prices-tick-lower-in-october-2012-12-26
Carry on with your charade “Dan”.
Posting case shiller is a charade?
Carry on… “Dan”.
Take this info with a grain of salt it comes from a realtor.
From realtytimes, 12/14.
“Inventory continues to shrink with 311 active Single Family Residences in Bend. Inventory is low and Buyer’s are struggling to find homes that fit their needs. Homes $350,000 and below continue to have less than a 2 month supply of inventory. We are seeing multiple offers on many homes because the supply of homes is so low and the demand is so high. Right now is an excellent time to put your home on the market and we have Buyers!
Below please find the months of supply of residential homes by price range in Bend. This is based on sales for the past 6 months. If you’re considering selling your home, this would be a fabulous time as there are more Buyers than homes to be purchased!
$000,000 - $199,000 - .8 months of supply
$200,000 - $249,000 - 1.7″
I have no confidence that these conditions will continue to be favorable to sellers or prices rising.
It does seem bubbly to me as I see lots of emptybank owned homes that are not on the market at all. These numbers doubtful account for any of the shadow inventory that will need to be accounted for (someday).
Rather than instill confidence that prices are rising; this information makes me want to exit the game now while I may still have a chance before the tide turns again; and I believe it will.
The headline from RAL’s link:
Home prices tick lower in October
Longer-term trend shows ‘sustained recovery,’ Case-Shiller says
That’s correct. A “housing recovery” is dramatically lower prices by definition.
“Longer-term trend shows ‘sustained recovery,’ Case-Shiller says”
Does that mean that H=ML didn’t tell the whole story? THAT is untruthful. H=ML can’t be trusted.
Housing Recovery=Dramatically lower prices.
Get over it and get on with your life.
There he goes again…posting nearly year-old data on rents to make his point (Transunion–which, incidentally says rents are rising overall), and then saying that the most up-to-date, and respected data on housing price trends have reversed from the point of measurement.
He has said the same thing on Case Shiller (that prices have since resumed their downward fall), a couple of times before.
“Inventory continues to shrink with 311 active Single Family Residences in Bend. Inventory is low and Buyer’s are struggling to find homes that fit their needs ??
I had a little chuckle after reading that…
So, you have 311 single family homes available in a town of 77,000 people….You call that “lack” of inventory ??
Try this;
95050-95054….Town of roughly 108,000 people…Total inventory of single family homes available…19…..Thats right…Nineteen….
Rental Pimp…. you didn’t like it then, you don’t like it now. The truth is rental rates are falling.
Get over it.
Damn scdave…just damn…the crazy thing is that home values in Santa Clara are still pretty high relative to the peak, so the proportion of underwater borrowers is generally a lot lower than other parts of the country.
Also, the number of foreclosures are a lot lower in Santa Clara than in other parts of the state as well (on a proportional level), so, banks aren’t holding things back (they have very little to hold back). Foreclosure Radar notes only 27 homes on the books as REO.
So, in Santa Clara, low inventory is not caused by banks withholding, nor it is being cause substantially by people being underwater and unable to sell…what is causing the low inventories? I can take a few guesses:
1. Perception that prices are rising…why sell today when you can sell tomorrow for more;
2. Low interest rates…all else equal, it’s a lot cheaper to own my home, so even if things at work are looking less good, there is less NEED to sell;
3. Good economy…lots of jobs, so fewer people going without work for very long; and
4. Few new homes being built…if I don’t think I can find a new place to live because there is low inventory, I won’t be putting my house on the market, even if I want to move to different digs.
I think all four are in play to some level, with #4 being something that is rarely talked about…although I talk about it with my father frequently…they would like to move from their home (already paid for) to a different home (which they would also pay cash), but he is afraid that they won’t be able to find something to buy if they sell their home…so they are currently sitting tight.
What do you think scdave?
After all the BS you’ve posted? We think you’re a liar.
Gotta love that Marketwatch article. Prices increased, unless you (fill in the blank), in which case they decreased. But if you (fill in the blank), they increased.
All I care about is the YoY number. Nothing else. Unfortunately the YoY number increased 4.3% in aggregate.
What do you think scdave ??
#1..A; I think there is some of that…The ridiculously low inventory also has a little bit to do with the time of year but mainly, its that new availability is being met with overwhelming demand…Santa Clara is also down in the pecking order of cost as compared to Cupertino, Sunnyvale & Mt. View so that does create a little extra demand..Its a little more affordable as compared to…
#2..A; No question these interest rates are a driver of not only price but people refinancing and then saying I ain’t going to leave this sucker for a long time…
#3..A; Yes…No question the job market is on the up-swing here in the valley including the construction trades particularly union with commercial and the large multi-family projects…
#4..A; Unless you just had no reasonable alternative, it does not make much sense to sell and then buy 10 blocks away around here…Cost of sale going out, cost of sale going in, the hassel, coordination and higher property tax makes it very difficult & expensive…Selling your place blind, and betting you could find something after would be plain “stupid” in the current environment…
I will say this…If you were downsizing from a single family to lets say a Townhome or Condo that “could” make financial sense..The premium for single family is far higher then it is for a Townhome or Condo…
We think you’re a liar ??
We ?? Speak for yourself RAL…
So, the follow-up scdave, what changes the low inventory situation? Seems like a reversal in any number of the 4 points (of not reversal of other trends pushing down inventory). Big picture, I think the biggest needs to be new construction…unfortunately, that is a tall order on the Peninsula with land availability/cost and NIMBYism.
Do you see NIMBYism getting any better (with respect to allowing more residential development on the Peninsula)? I’m not seeing it…
Yeah…… WE
Big picture, I think the biggest needs to be new construction.Do you see NIMBYism getting any better (with respect to allowing more residential development on the Peninsula) ??
I’m not seeing it… ??
Well, you need to look a little closer because I see a 180 degree reversal of the contraints on development here in the valley…
There are a number of reasons…
First….ABAG…(Association of Bay Area Governments)..
Tremendous pressure on every municipality to provide more housing both affordable & market rate..Its happening everywhere you look…Very high density housing now not only being allowed but encouraged through General Plan amendments…Example; Santa Clara just amended their General Plan to allow “Mixed Use” development on the entire El Camino Real Corridor…This allows for retail commercial @ street level and residential above @ 60 units per acre..There are four projects already underway and a bunch more in the pipeline including one that will be more than 500 units..
Second…The threat that a lack of response will not only kill expansion of existing employers but discourage new employers from coming here lead by The Bay Area Business Round Table..
(A non-partisan publbic polciy organization providing leadership on critical public policy issues including economic development, employment, and education)
I think that message has been heard loud & Clear by city Planners, Managers & City Councils…
I have been around here a long time…I have seen the ups & downs…I also recognize the smell of growth and optimism…New power generating facilities…Expansion of roads…New water lines etc…
The big boys here are already underway…The jobs are now following with expansion of existing employers and new ones coming in…
Its here & its real….Don’t shoot the messenger…Just reporting what I see & have seen over a lifetime here…
I haven’t seen the residential development really start up where I am, but FWIW, I’ve started to hear some rumblings of what you are talking about in the northern part of the Peninsula…ABAG requirements are little understood by a lot of folks.
About a decade ago (maybe a bit longer), we wanted to invest in higher density apartments near a CalTrain station, thinking that the city would like to see density near rail lines (also to help with ABAG). Nope. Shot down, in favor of much lower density, and a lot more expensive condos (not rentals).
Now, I understand (in the same city), they are pushing for some new development along the El Camino Corridor (residential). I have just yet to see such projects break ground…and remain skeptical that they will be reasonably priced (from a rental or sale standpoint).
So I guess I’ve been hearing of changes, but I’m not yet seeing it in terms of sticks in the air up here…
I will be very interested to see how the development progresses, and whether it alleviates the pressure on for-sale housing. I can’t hurt…it will reduce pressure on rents, and alter the mindset of renters turned would-be buyers.
The pendulum swings…
I don’t doubt that development is starting from an apartment standpoint…plenty of capital that LOVES apartments these days…do you think the magnitude of development will be meaningful enough to alleviate the pressure…either for rent, or for-sale?
My gut tells me that the new multi-family will alleviate rental rate pressure somewhat, but that it won’t be enough to cause rents to fall (until there is some other economic shock). My gut also tells me that the new development, being largely multi-family, will do little to alleviate the pressure on single-family home prices. Are you seeing any meaningful single-family development in SC County?
About a decade ago (maybe a bit longer), we wanted to invest in higher density apartments near a CalTrain station ??
“A decade ago” is the key component of that statement…That same project would fly right through today…Any city that turned down high density development near a CalTrain station today would come under massive pressure from all fronts including any employers in their city…Its a paradigm shift…
I understand (in the same city), they are pushing for some new development along the El Camino Corridor (residential) ??
Yes…That is so….With ABAG, all the cities have reviewed their General Plans…The Grand plan now is to transform the El Camino Real to a mega corridor of Mixed use development even considering changing some of its area’s near the downtowns to one lane each way there-by allowing for a more pedestrian and bicycle friendly route…Please remember that when these planners get together they are thinking out 30-50 years…Also recognizing that the El Camino is “ripe” for what the cities need the most.. Developable Land…Most of the El Camino Real is underutilized with ad-hoc buildings, used car lots etc. and the lots are somewhat large…Sometimes very large and if you convert those to 60 unit per acre sites that has impact…25-30 years from now, I suspect neither of us will recognize the El Camino Real as compared to today…
do you think the magnitude of development will be meaningful enough to alleviate the pressure…either for rent, or for-sale ??
Likely…Is a race to the finish line when there is lots of demand @ profitable rates…They will over-build…They always do…Question is when do they hit the wall ?? hard to say but this cycle appears to be as strong as any I have seen…
Are you seeing any meaningful single-family development in SC County ??
Some Yes…Meaningful No…Summerhill has one of the larger ones going right now over by Valley Fair/Santana Row but generally the sigle family stuff is quite modest..No land…
Foot-Note….
There is tremendous pressure on cities to rezone industrial land to residential…Argument being this is the only way we (Big Boys) can provide single family housing near the job markets to alleviate the pricing pressure on SFR’s…Cities are resisting that very strongly…They do not want to loose their land that creates jobs…Commercial/Industrial is a revenue producer for cities…SFR’ are a money looser…This is why they have embraced the high density route…Everyone may not get a SFR but everyone should be able to get a roof over their head…
It’s funny you bring up the conversion of commercial land to residential…I was discussing just that point with a colleague this morning as we were catching up on residential news (that we will see a strong push to convert underutilized commercial into residential). However, the one big challenge with converting former industrial land will be environmental concerns. Contaminants in the ground in concentrations that are generally considered “OK” for commercial properties, are NOT “OK” for residential. This will put a monkey-wrench in some of the plans.
Overall, the big question with respect to the impact of the new rental stock on rental rates is how much will they build, and how soon…there are a total of approximately 2.6 million households in the SF Bay Area…the rental vacancy rate in SF/Oakland/Fremont was 2.5% as of Q3, and in SJ/Sunnyvale/Santa Clara was 5.3% at the same time.
To truly alleviate the rental pressure, I think you’ll need to see a few points of additional vacancy in these markets (taking it to 6-8%).
Recognizing that not all 2.6 million units are rentals (perhaps half are), how many units will that take? 25,000-35,000 throughout the Bay Area?
For perspective, through October 2012, YTD multi-family building permits in the two MSAs noted above (per NAHB) were about 8,800. Single Family permits were approximately 3,900.
Based on these numbers, even with a doubling of activity, it’s going to take a long time for the increase in supply to have a meaningful effect on housing availability and pricing. Do you think the activity is going to more than double in 2013? Triple? More? Good for jobs if so…
MSM with an article about buying real estate over the stock market as a contrarian the best argument to buy the stock market but I will stick with the oils and metals companies:
http://news.yahoo.com/ap-impact-ordinary-folks-losing-faith-stocks-181042940–finance.html
S. FL prices up 8.5%
http://www.palmbeachpost.com/news/business/south-florida-home-prices-end-streak-of-gains-stil/nTgK7/
Frankly, I think this requires some real massaging of the numbers, but, either way, it does appear that prices are starting to stabalize around 2003 levels in FL. Still too high, media prices in the 200s with median HH incomes in the 50-60K range, but getting more reasonable.
Florida… the land of very few good jobs and mostly bad schools. Great place for equity vultures from the northeast (if they’re old enough to be idle and not work or can score a cushy government job). Terrible place to “invest” in RE unless you’re a pro or an insider.
The thing is, Florida incomes are not stabilizing around 2003 levels.
Baby boomers (hello FL, oldest state in the nation) won’t live forever. Many NE “equity vultures” will stay put bc they can’t sell their own housing for what they want. And FL has some interesting demographics among its younger residents, to say the least. Less educated whites mixed with lots and lots of immigrants.
Eventually the senior communities and the already-weak infrastructure is going to have problems as well. I wonder if FL will be able to remain a no-income-tax state, given its demographics and it’s 1970s and 80s infrastructure…
Many NE “equity vultures” will stay put bc they can’t sell their own housing for what they want.
That is true. Worse yet, as the mid atlantic and new england is just entering its’ price correction phase, they will ride it all the way to the bottom leaving millions of excess empty houses as this demographic ages out permanently.
“… media prices in the 200s with median HH incomes in the 50-60K range, but getting more reasonable…”
Depends on the area. Palm Beach has always been out of whack when median incomes are compared to the median prices.
On a side note, I’m starting to notice some bubble practices showing up again. People telling me they’re buying homes and they don’t know what they’re going to do with them. It’s like the Twilight Zone.
I bought a house in June of this year and I’m already underwater.
R u Ben’s brother?
Ben can’t be related to a bubble buyer.
I bet every single one of us is, including Ben.
we told you not to buy in detroit.
We’re in Los Angeles.
The future Detroit.
That isn’t true. LA has alot going for it.
So did Detroit.
Detroit has a lot going for it, too.
“Detroit has a lot going for it, too.”
Including affordable housing prices…
Including affordable housing prices…
True that. If all we need is affordable housing to spur an economic recovery, then Detroit should lead the way.
…And if nanny state policies worked, Detroit would lead the pack.
…And if nanny state policies worked, Detroit would lead the pack.
Detroit does lead the pack but not in the way you think.
Detroit has become what it is because Detroit has lost its manufacturing base.
Detroit did not lose its manufacturing base because it was a nanny-state. Detroit became a “nanny-state” because it lost its manufacturing base.
Other countries do not allow entire industries to become prey of other country’s industries. Especially when those other country’s industries compete unfairly.
Detroit did not lose its manufacturing base because it was a nanny-state. Detroit became a “nanny-state” because it lost its manufacturing base.
Such a simple concept, yet it eludes so many.
> >“Detroit has a lot going for it, too.”
>”Including affordable housing prices…”
But then you’d have to live there.
But Rio, you ignore all the cars being made outside of Detroit but still within the U.S. including production by the transplants.
But Rio, you ignore all the cars being made outside of Detroit but still within the U.S. including production by the transplants.
I don’t ignore it. It’s a lot better than nothing, was necessitated by a bit of gov protection of our market but did not go far enough imo.
Life in the suburbs west of Detroit is very good
“I bought a house in June of this year and I’m already underwater.”
Technically you’d be under-water as soon as you sign the docs at the closing table due to origination, realtor, title, etc. For most folks this is roughly 6%-10% of the purchase price. The real crime is the gamed-up high prices by our commission dependent cubicle junkies in suits. No goods, just services.
What was your downpayment?…
Bloomberg - Defense Industry Seeks Relief as Fiscal Cliff Draws Near:
“The defense industry is urging Congress to delay the fight over taxes and focus on avoiding the automatic budget cuts that begin in six days.
While defense companies have lobbied for months against the budget cuts, their effort has been overshadowed by the partisan dispute over extending tax cuts as the deadline for the so-called fiscal cliff begins to approach.
If sequestration takes effect as scheduled, it would require cutting about $55 billion from the Pentagon’s fiscal 2013 budget, Deputy Defense Secretary Ashton Carter has said. That amounts to an across-the-board cut of roughly 9 percent from the department’s $613.9 billion total budget request, which includes war spending.”
Another symptom of the problem. There is no such thing as automatic budget cuts. Nor forced budget cuts. The Congress can always borrow more money. And so they will. Armies of lobbyists will appear in Washington (at least, those who aren’t there already) and stamp their feet that cutting their particular part of the budget will bring utter disaster. Summed across all interests, that means nothing will get cut.
The taxpayer has no lobbyists to cut his liability. So borrowing more is a certainty. It’s the only possible outcome.
Bootstrapping tea-tards are all raging about “Obamaphones” and little trinkets given to our underclass. Meanwhile, they allow “bootstrapping” “job creators” * to continue feeding at the trough:
“How much tax-free income do the wealthy enjoy each year? While we can all guess — and common sense tells us that the numbers are significant — we cannot know for sure. This income is not only tax-free, but there also is not even an obligation to report it.
To illustrate the perversion of this system, imagine two taxpayers, each earning a salary of $50,000. Suppose, however, that during that same year one of the taxpayers is also the beneficiary of a trust that pays for his mortgage and all other living expenses. Suppose the same taxpayer, during the same year, also receives a $25,000 gift from his aunt and uncle, a $7 million inheritance from one set of grandparents and a $50 million distribution from a life insurance policy from his other grandparents. Even though we can all agree that this taxpayer became significantly more enriched than the other over the course of the year, our income tax system ignores all of this non-salary income and regards both taxpayers as if they were identical. Most surprising, the federal government has expressed no interest in even learning about any of these payments.” (Link: http://www.washingtonpost.com/opinions/tax-fairness-and-the-wealthy/2012/12/26/983c1986-4e04-11e2-950a-7863a013264b_story.html )
* When I say “bootstrappers” here, I mean people with real money who are rent-seeking, reclassifying income, and playing the Mittens Game (TM). You know, the people who create all the jobs (LOL). I don’t mean idiots with a hobby spending dozens of hours writing an app that might make them a few thousand dollars.
Joe the best thing we can do for the underclass is to force them to speak English for their trinkets…..or for a get out of Jail early on parole card, I can’t believe we wont tackle the Massive Functional Illiteracy problem.
and little trinkets given to our underclass.
raging about “Obamaphones” and little trinkets
Because that’s what the Drudge Report feeds them!
Bootstrappers defined by Wiki,
Bootstrapping in business means starting a business without external help or capital. Such startups fund the development of their company through internal cash flow and are cautious with their expenses.
I am amazed that this is continuously used as a noun of disagreement or derision. Then you add tea party slang to it.
Do you really think that doing your business without outside or within cautious spending habits is bad? I just don’t get how the left can castigate such honorable intentions.
I just don’t get how the left can castigate such honorable intentions.
Then you don’t get it. He’s not castigating bootstrappers. He’s making fun at other type things.
1. Romney’s idea of rich boy’s borrowing 10s of thousands from their parents to “bootstrap” a business.
2. Billionaire sucking off the teat of government likening themselves to boostrappers.
3. The rich castigating the unemployed because they are not bootstrapping.
4. Thinking that everyone can bootstrap their way to success.
5. Implying that America still has the upward mobility of the past. etc.
Yup.
Thanks for the clarification Rio. So you think upward mobility isn’t possible any longer? It might be harder but IMO it’s still possible.
you think upward mobility isn’t possible any longer? It might be harder but IMO it’s still possible.
Upward mobility is always possible anywhere but the USA was not just “anywhere”. America was the land of opportunity because we were not a society divided as much by wealth and class as the “Old-World”. That is why we were exceptional.
There is no excuse why America has become the classist, static and even downwardly mobile country that it is today. We have the wealth inequality of a banana-republic. We produce far more product and wealth than we did 30 years ago but only the rich have benefited from America’s vastly increased production. Only rich benefiting from America’s bounty is not in keeping with the history of America.
When the Constitution was written, there were hardly any poor people in the USA. (besides slaves) Jefferson wrote about this. Why were so few poor? Because America’s production was shared more equally. Here’s a chart. It shows the broken American social contract starting about 30 years ago when American workers kept producing, but no longer shared in the benefits of their increased production:
http://www.washingtonpost.com/blogs/ezra-klein/files/2012/08/compensation_productivity.jpg
Today, much of Europe has greater upward income mobility than America and even American education does not provide the upward mobility as it used to for the poor. I’m telling you……. America’s gross wealth and income inequality is killing the American dream.
For Poor, Leap to College Often Ends in a Hard Fall December 22, 2012
The growing role of class in academic success has taken experts by surprise since it follows decades of equal opportunity efforts and counters racial trends, where differences have narrowed. It adds to fears over recent evidence suggesting that low-income Americans have lower chances of upward mobility than counterparts in Canada and Western Europe. .
….Thirty years ago, there was a 31 percentage point difference between the share of prosperous and poor Americans who earned bachelor’s degrees, according to Martha J. Bailey and Susan M. Dynarski of the University of Michigan. Now the gap is 45 points…..
…. While race once predicted scores more than class, the opposite now holds. By eighth grade, white students surpass blacks by an average of three grade levels, while upper-income students are four grades ahead of low-income
“The racial gaps are quite big, but the income gaps are bigger,” Professor Reardon said.
…One explanation is simply that the rich have clearly gotten richer. A generation ago, families at the 90th percentile had five times the income of those at the 10th percentile. Now they have 10 times as much.
+1 Rio….
Thirty years ago, there was a 31 percentage point difference between the share of prosperous and poor Americans who earned bachelor’s degrees, according to Martha J. Bailey and Susan M. Dynarski of the University of Michigan. Now the gap is 45 points…..
How about another explanation which the Bell Curve explored? Programs such as the GI Bill worked and the bright children of the poor joined the middle class and now we are stratified based on IQ. Solutions that worked 50 years ago, when you could find auto mechanics more intelligent than college educated engineers are no longer effective. Neither the left nor the right want to acknowlege that we have a population that does not have a sufficient IQ to compete on a global basis instead, we import more low IQ people.
+2
we have a population that does not have a sufficient IQ to compete on a global basis
Badlerdash. What a crock. America is as smart as any country and smarter than most. IQ? Not only does America have high IQ’s but we are creative, innovative and think out of the box - much more than the Chinese, the Japanese and Brazilians. I’d take a typical American with an IQ of 110 any day over a Chinese with an IQ of 120. Why? The intangibles that the American culture brings to the table.
All this talk about “competing” is just a ruse to get Americans to accept bending over more so the rich can send our jobs away so THEY can make more money. Compete my a$$. If Americans don’t benefit economically from being Americans, then what was the point of America? To produce billionaires who ship our jobs to China? Because we need to “compete” with foreign, right-less serfs? Give me a break.
Programs such as the GI Bill worked and the bright children of the poor joined the middle class
Yes. And this is an argument to quadruple the budget for Pell grants today and now. There are many bright children of the poor whom America needs to have join the middle-class. There is just one problem. The middle-class is shrinking rapidly because the middle-class no longer shares equitably in the bounty of their production.
And this has nothing to do with “competing”.
I’m referring to the “boot strapping” “job creating” memes. The ones the GOP ran on on 2012.
You realize most of these people (the successful ones) are not boot strappers, right? Most rich & successful small businesses feed at the trough of tax breaks, rent-seeking behavior, and underpaid lucky ducky employees (which are provided for by the gov’t).
LOL @ “cautious spending habits”. If by this you mean, small business people figure out how to show little income “on paper”, yes - they are great at cautious spending habits. Our tax code is a joke and it’s a joke because people like you buy the idea that we need special treatment for certain kinds of income, special deductions for “job creators”, etc.
It didn’t start in 2012. Remember Joe the Plumber in 2008?
It was more of a centerpiece in 2012. For my whole life there has been a strain of the “bootstrapping” meme in the GOP. In 2008 there was more of a discussion of national security (could Obama be trusted) and the immediate crisis at hand (McCain even offered to suspend his campaign to “deal with it”). Palin was also a big distraction… a whole mess of “traditional values” issues, immigration crap, etc.
By 2010, the emphasis on job creators, etc, was in full swing. Really started charging hard in late 2009, leading up to the Tea Party election in nov ‘10.
“it’s a joke because people like you buy the idea that we need special treatment for certain kinds of income”
Joe, if you’re referring to me, you don’t know me at all.
The tax code is a joke because we have special interests spending millions on elections and then get special favors. Take a look at the “green industry” if you’re against these special favors as they get a bunch of them (just before they go out of business).
On the other hand, if you tax the job creators too much, then they have no incentive to put their capital at risk and I believe we’re close to that point.
On the other hand, if you tax the job creators too much, then they have no incentive to put their capital at risk
This talking point meme makes no sense. Besides the fact that the “job-creators” are not American good-job creators, why would higher taxes dull an incentive to make more money? How?
If you were going to have less money because of higher taxes and you loved money, you’d have more of an incentive to make more money. Why? Because you’d have a little less of it.
We had much more American job creation and growth when taxes were much higher on the rich. Now this is fact, not some RNC, boilerplate fantasy land bullet point.
“LOL @ “cautious spending habits”. If by this you mean, small business people figure out how to show little income “on paper”, yes - they are great at cautious spending habits. Our tax code is a joke and it’s a joke because people like you buy the idea that we need special treatment for certain kinds of income, special deductions for “job creators”, etc.”
What do you do for a living smith? Perhaps we can cast dispersions on your like. You seem like one of those people always accusing their spouse of cheating when the only person cheating is you.
smith? Perhaps we can cast dispersions on your like. You seem like one of those people always accusing their spouse of cheating when the only person cheating is you.
Get of his back nickpapageorgio. You can’t say nada until you stop beating your wife.
(you knew she was a commie)
Only a fool would not capitalize on the system. at least if they want to make “real” money. Your dad is no fool.
Just like I would be a fool not to take the food stamps I qualify for; even though I have some assets I still qualify for aid.
Is it immoral to use the welfare system to get rich off the backs of welfare recipients? Or to use it before rising costs all around make a low income family destitute? Or would paying a living wage be a more noble goal?
If the system is messed up what is it going to take to fix it? The one percent use it to get richer and the poor use it to stay afloat. who is going to support changing it if not people like your father?
I should also point that politically my parents are card-carrying Republicans who were McCain and Romney supporters. They pretend to dislike Bush 43’s “big spending” and are skeptical of the Iraq War, but generally they are lock step Republicans, call Obama a “fraud”, etc. This is because of a lifetime of benefitting from “the system” to the point they think they “earned it”.
My father in law is also somewhat like NYCdjwhatever. He gets all excited anytime he sees Obama hand outs. He has a vague notion that he benefits from social spending, but nevertheless is steadfastly Republican.
People are easily confused about what they have “earned” compared to what they have gamed from the system. They will believe what they want to believe. I did an about-face towards the end of this campaign–Romney was positively vomit-inducing, but seeing how many modest, middle-class people earnestly supported him (and considered themselves enlightened and praiseworthy for doing so) assured me that I should make peace with abusing the system like anyone else with the means to do so. And laugh at the idiotic water-carrying middle class teatards while doing so.
Seeing so many middle class tools with maybe 100k income stand up for the “bootstrapping” and “job creating” memes is laughable. It’s one of my guilty pleasures here at HBB.
I will bet nothing in your family descriptions is accurate, I will go out on the limb and say that it’s complete BS. Just another progressive gamer who thinks he’s got it all figured out. I like you also have HBB guilty pleasures, one of my favorites is to expose lying progressives.
This blog seems to swarm with them. I’ve never seen anything like it anywhere else.
+1, joe. The subtexts here are often more informative than the postings. Appreciate your generous perspective and efforts to strive for common ground.
It’s not too late to position yourself for the ‘fiscal cliff’ relief rally!
Dec. 27, 2012, 8:59 a.m. EST
U.S. stock futures rise ahead of deal talks
By Sara Sjolin, MarketWatch
COPENHAGEN (MarketWatch) — U.S. stock futures pointed to a firmer Thursday open on Wall Street, with the focus on what’s next for fiscal-cliff negotiations, while a report on jobless claims came in better than expected.
Reports on home sales and consumer confidence are on tap.
…
Some local news for the COEXIST koolaid drinkers
Denver Post - Killing suspect told police he binged before stabbing girl, 14:
“Ezequiel Padilla-Villalobos told police he binged on beer and cocaine before he “began having bad thoughts” and fatally stabbed his girlfriend’s little sister, according to a police affidavit released Wednesday.
Padilla-Villalobos, 24, told Commerce City officers he spent Sunday night drinking at a friend’s house, then drinking at a bar — 12 to 14 beers, by his count — before his girlfriend, FlorMaria Acosta, sent him a text message asking him to get her 14-year old sister from their mother’s house in Broomfield.
U.S. Immigration and Customs Enforcement requested that local authorities hold Padilla-Villalobos, a native of Chihuahua, Mexico, indicating he is in the country illegally and could face deportation if he is released.”
http://www.denverpost.com/breakingnews/ci_22261805/no-bond-man-accused-killing-14-year-old
Thank you diversitard Democrats and Chamber of Commerce open-border Republicans! We know they only come here to work hard trying to put food on their families. Our differences only make us stronger
Imagine if he’d had a Bushmaster.
Bustmasters are a second amendment right (TM)!
Linked from the Drudge Report:
http://m.cnsnews.com/news/article/michael-moore-calm-down-white-people-and-put-away-your-guns
I will if he backs away from the Cheetos
People will want bushmasters due to police response times of twenty minutes. That is what we found out about the school shooting, but is being downplayed. Despite receiving a 911 call of an active shooter and the police station being two minutes drive from the school, the police arrived twenty minutes later, at least. The perp could have used a revolver and killed that many people, given how much time he was given.
Link?
The daily Kos had one story but I will try to find a link.
http://www.cnn.com/interactive/2012/12/us/sandy-hook-timeline/?hpt=hp_c2
Nothing seems to be posting but I have sent the link
From CNN:
First responders arrive
At the police station, dispatchers began to take calls from inside the school. Authorities say the first emergency call about the shooting came in at “approximately” 9:30 a.m.
“Sandy Hook school. Caller is indicating she thinks someone is shooting in the building,” a dispatcher told fire and medical personnel, according to 911 tapes.
Hear police dispatch from the scene
Police and other first responders arrived on scene about 20 minutes after the first calls
20 minute response times? Where?
My neighbor’s car alarm kept going off last month and I called the cops, clearly stating it was not an emergency, and they were on site in 2 minutes, maybe less.
I can’t imagine anything more than a few minutes unless you live in the sticks. In which case, yes, keep a gun if you see the need.
Sorry Joe and I think in many neighborhoods in Baltimore it might even be worse.
http://www.cnn.com/interactive/2012/12/us/sandy-hook-timeline/?hpt=hp_c2
We had a shooting in the building where I work several years ago. The guy shot his way in through a locked glass door and killed his estranged wife and himself. Also nearly killed the wife’s coworker (most likely he thought he did). 911 calls were immediate. It took the police 10 minutes to arrive on scene and more to get into the building. A coworker of mine was interviewed by the major newspaper. For the first hour or so the online article with his interview contained a sentence like “I was surprised it took the police 10 minutes to show up”. After an hour or so that line of the interview was deleted. They do not want people to know they take a long time to arrive in these situations. I’m sure they show up quickly for non-emergencies, but when it’s an emergency it seems to me like they wait to get their ducks in a row. When seconds count, they’re just minutes away.
This is not “in the sticks”. It’s in a subdivision of the biggest city in the state. With a siren going and running lights I imagine it’s 3 minutes or less from the police station and I’m guessing 1 minute or less than the nearest police cruiser at all times.
We had a shooting in the building where I work several years ago.
I’m mixed on gun control and I’m gun experienced and believe in the 2nd amendment. But FWIW, these shootings make us look like us Americans are a bit nuts in the eyes of foreigners.
I’m tellin’ ya, it makes us look really, really bad in foreign countries. Between that, kickin’ kids out at 18 and our health-care, they think we’re kind of barbaric.
Hey, I don’t know if we should care much about that but it’s the truth. Sometimes I listen to them and nod my head and sometimes I tell them to STFU.
I agree; foreigners are very keen to tell us what is wrong with the US.
I agree; foreigners are very keen to tell us what is wrong with the US.
That what happens when you have to borrow money from them.
I’m mixed on gun control and I’m gun experienced and believe in the 2nd amendment. But FWIW, these shootings make us look like us Americans are a bit nuts in the eyes of foreigners.
I don’t take their opinions too seriously in that area since they’ve benefited from our culture in huge ways. Such as still being able to speak their native languages.
I’m tellin’ ya, it makes us look really, really bad in foreign countries. Between that, kickin’ kids out at 18 and our health-care, they think we’re kind of barbaric.
Can’t disagree with them there.
they’ve benefited from our culture in huge ways. Such as still being able to speak their native languages.
Yep. And I’ve let non-Americans know that flat-out when they get too haughty. (lol, You can’t be surprised.)
But where I live, and to their credit, with Brazilians, I have a trump card. Brazil was our ally and fought alongside us in WWII. And fought admirably. They were the only Latin American country that did that. When they give me that anti-war stuff, I point out that sometimes, sh!t required it.
“I can’t imagine anything more than a few minutes unless you live in the sticks.”
If you are involved in a dynamic critical incident, you have seconds to save your life. What are you going to do?
When seconds count, the cops are just minutes away.
If you are involved in a dynamic critical incident, you have seconds to save your life. What are you going to do?
Die. We all do.
“Die. We all do.”
Well, good luck with that. Hope you are never faced with that decision.
People will want bushmasters due to police response times of twenty minutes ??
Really ?? I guess so if you are being attacked by a group of 10 or something…I feel quite confortable with a 357 mag. and two dogs for advanced warning…Dogs stop barking and someone enters my space they are dead….
The perp could have used a revolver and killed that many people, given how much time he was given ??
Didn’t the handgun guy in Arizona get tackled as he was trying to re-load thereby giving a window of opportunity to stop the killing ?
You know what Dan…I just conclude that you are a NRA troll…You make no sense whats so ever when you throw out justifications for the assault gun…
The reason I support people’s right to own a semi automatic weapon is not for home defense it is for the purpose of the 2nd amendment to allow people to protect themselves from tyranny. I guess Jefferson was a NRA troll too. I believe we need to fix our mental health system first since that is the real problem before we infringe on the 2nd amendment. More people are carrying guns and the murder rate has gone down not out.
Do you really think those six year olds would have jumped him? BTW, I use a .357 magnum with a six inch barrel for home defense and do not own an “assault” weapon.
Out=Up
“fix our mental health system first”
paid for by?….
Do you really think those six year olds would have jumped him BTW ??
No…But needing to re-load could have given the teacher “time” to disrupt him and there-by given the children or anyone for that matter time to run…
Kind of a stupid statement Dan…
Your “mental health” argument is a NRA stawman along with your 2nd amendment right…
Where is the line Danny-Boy ?? 50-Caliber 1000 round carbine mounted on the top of a F-350 truck ?? Shoulder rocket launcher ?? Can we own a tank ??
You NRA dudes are wacked…Mental Health problems ?? Might as well start right there at the NRA…
You don’t think he would have killed the teacher first? What is stupid is to not address the link between all the shootings which is a failed mental health system. BTW, I am not a member of NRA but might just have to join to prevent this attack on the 2nd amendment disguised as concern for children but unwilling to address the true problem in our society. It would not just address shootings but the rise in pedophiles that prey on children and use to be housed for life in mental institutions.
Mental illness is a separate issue for the country far removed from a 2nd amendment right…Clarifying that right is what we are confronting right now as a nation…A nation-wide vote IMO, would easily defeat the right to own an assault weapon…How many members in the NRA…4-mil in a country of 350 mil…You do the math…
“You know what Dan…I just conclude that you are a NRA troll…You make no sense whats so ever when you throw out justifications for the assault gun…”
Then you would be a statist fear mongering troll.
Got it, Dan. 20 minutes? Given the way this one played out, I don’t think a faster response time would have helped much. But 20 minutes is a disgrace.
Yeah and to think all he had to do was tell BATFE that he was a Mexican naro-terrorist and they would have just given one to him.
Good point.
“Imagine if he’d had a Bushmaster.”
+1 Yeah…he could depress the trigger with his big toe while holding the muzzle beneath his chin with both hands.
I’m going to harp on this one more time. Foreign all-cash buyers may make realtors excited, and create copy for those looking to write about a housing recovery, but the source of that money is highly questionable. According to the article, more illicit money is coming out of China than the next 50 countries put together. China’s illicit money is 8 times that of Mexico. Not that many people, comparatively speaking, benefit when our asset prices are propped up by criminality.
__________________________/
“Some 150 developing countries, led by China, have been the source of flows of tainted money totalling US$5.9 trillion over 10 years through 2010, Global Financial Integrity, a research and advocacy group in Washington, DC, said.
Flows of illicit money from tax evasion, crime and corruption in the developing world have roared back to pre-financial crisis levels, topping nearly US$859 billion in 2010, near the all-time high of US$871 billion in 2008, it said.
…
China tops the list of developing countries sending illicit money abroad, either to offshore havens or to financial institutions in developed countries, GFI said in a study.
GFI said the flows underscored a need for governments to increase exchanges of tax information; boost money laundering laws; reform laws allowing criminals to hide behind anonymous entities; and require corporations to disclose sales, profits and taxes paid in foreign countries.
In 2010, illicit money out of China totalled US$420 billion, the report said, and exceeded US$2.7 trillion for the decade ending in 2010 - nearly half that period’s total for all developing countries.”
http://tinyurl.com/ck952g3
But they’re helping the housing market, which translates into saving out economy, right?
Yup and to save our economy we should legalize money laundering.
There’s some truth to that. To save our economy we’ve suspended the rule of law as it applies to the financial services industry. There’s no indication as to when it will be re-instituted. My guess would be never.
When you think about it, is something that requires this degree of absolution really worth saving?
‘But they’re helping the housing market, which translates into saving out economy, right?’
You gotta wonder about that. Bring suitcases of cash into a town and drive prices up. The foreigners can only gentrify so much before the rest of us have no yachts.
This is the Chinese version of MBS/CDO etc:
‘Seven investors in a wealth management product sold by China Construction Bank (0939) complained to regulators after suffering losses, the National Business Daily reported yesterday. The seven, from Jilin province, filed a complaint with the China Banking Regulatory Commission and the China Securities Regulatory Commission, the report said, citing one of the petitioners.’
‘The investors said they were misled by CCB staff into buying a fund known as “Northeast Securities No 3″ - which required a minimum investment of 100,000 yuan (HK$124,178). Such products, which typically offer higher yields, make up about 10 percent of banking system deposits, Barclays wrote in a recent research note.’
http://www.thestandard.com.hk/news_detail.asp?we_cat=2&art_id=129543&sid=38566245&con_type=1&d_str=20121227&fc=7
‘China’s local government debts reached 10.7 trillion yuan at the end of 2010, equivalent to around 27 percent of the gross domestic product, according to a report issued last year by the National Audit Office. The nation’s overall risks are controllable despite concerns that some local governments are facing higher risks in repaying their debts, said Zhang. As they are regarded as corporate bonds, the government has no obligation to pay financing vehicles’ debts if they face a default, he said. However, many still expect the government will bail them out in the event of a default.’
‘Tightening measures on real estate in 2012 have affected local governments’ ability to repay debts as land revenues are a major contributor to local coffers. “If the property regulations remain in force, local debts and bonds won’t increase too much,” said Zhang.’
http://english.peopledaily.com.cn/102774/8070723.html
How long can the real estate market survive with the current non-existent inventory?
Good job banks and government! You’ve successfully cleared most of the inventory, increased prices and have created anxiety across sellers who are willing to go above asking prices.
I know realtors love it when prices go up l, but I am positive the NAR members can’t survive with a couple of sales a month…
My zip code (78701) is the most dense zip code in Austin, but there are just 28 active listings under 500k, 17 between 500k and 1M, and 17 above 1M… 62 condos for sale in the entire downtown area! That is crazy!!! 33 of them have been sitting on the market for over 90 days, which indicates they are oversized.
Is this the new normal?
lmao
The last time we saw a parabolic blowout in housing prices on low sales volume, there was a big crash in prices over the next few years.
Perhaps this time is different?
CIBT, what time are you referring to?
The housing bubble of 2002-2008 was high sales volume, not low.
The last time we saw a parabolic blowout in housing prices on low sales volume, there was a big crash in prices over the next few years.
Perhaps this time is different?”
Nope I will have to sell again and will try and time it right at the peak. we are in ramp up mode now. Peak mode is when I get unsolicted offers to buy, everyone is back in, newspapers are proclaiming a new normal, RAL gives in and writes BUY RE, etc.
What do you thin a few more years? peaks are always harder to find than bottoms IMO.
The scary thing is the frequency at which these bubbles are poping up. I guess until the FED banks quit trying to control the economy and let it alone we will bounce all over the place.
Yeah, except we never got true capitulation last time. So to me that makes this more complex than just the next cycle…it’s still connected to the last cycle.
Your time is running out. Buy now!
Should I buy one for you too?
I already got mine. Thanks though.
Perhaps you should do the politically correct thing and share some of “yours” with the less fortunate in our society.
Has there ever been another era in U.S. history when the MSM steadfastly cheered for ever less affordable housing prices?
GAINS IN HOME PRICES OUTPACE MUCH OF U.S.
By U-T San Diego
12:01 a.m., Dec. 27, 2012
Updated 8:01 p.m. , Dec. 26, 2012
San Diego County is closing out 2012 as one of the top U.S. metro areas that has experienced steady home-price gains throughout the year.
The S&P/Case-Shiller Home Price Index, released Wednesday, says San Diego ranks second in the nation for most consecutive months of price increases in 2012. Phoenix topped the list at 13 months. San Diego was second at nine months.
Other cities:
•Las Vegas, 8 months.
•Los Angeles, 8 months.
•San Francisco, 8 months.
•Denver, 7 months.
It is the only way to get the home equity ATM going.
“Has there ever been another era in U.S. history when the MSM steadfastly cheered for ever less affordable housing prices?”
If there was, I wasn’t aware of it. That’s the irony of this whole thing, the MSM cheers increases as if they are a “good” thing. Increases in home prices help a very small group of people, those selling to downsize/rent and real estate agents.
Falling RE prices help a very large group of people; new buyers, move-up buyers and renters. Yes, they are bad for banks and for those who paid way too much. But, other than that, they are generally a good thing.
Too bad we’ve become addicted to the MEW economy where, suddenly, increases in house prices = increase in yearly income. That’s the part that’s got everyone totally twisted. In general, falling prices of a required living expense is always a good thing.
Don’t increases in home prices help all homeowners (who are all potentially sellers at any given time)?
Aren’t homeowners the majority of households?
Of course, I’m ignoring property taxes, but for a $100 increase in value, it would take a long time for higher property taxes to erase the benefit of that value increase.
I think the question remains about the shadow inventory, whether it’s actually there and to what level. I just don’t know anymore. They can keep this charade going for a long time it appears.
Apparently not considering they’ve withheld the millions of excess empty houses for less than a year.
Apparently not considering they’ve withheld the millions of excess empty houses for less than a year.”
I hear on the East Coast this is true, out West inventory is clearing faster. Having to do with different laws dealing with foreclosures.
Oriental guy at work ( Korean I think ) was laughing at all the Chinese who are buying in Vegas ” over the phone” or in 1 week trips to America.
West coast inventory hasn’t even begun to be released.
Lip, post this tomorrow as a weekend topic. It’s a VERY good question.
I keep looking to the non-current loan rates as the best proxy I can tell for amounts of shadow inventory. Looking at that data, it would say that the shadow inventory is NOT evenly spread throughout the country, the amount of said shadow inventory has been diminishing (through foreclosures, but increasingly short sales and loan modifications), and that the release of shadow inventory on the market will generally go at the same pace as it has…UNLESS there is legislation that changes the rules.
IMHO, one of the biggest such legislative changes has happened in NJ and IL, where those states are dramatically shortening the foreclosure process for vacant AND abandoned homes. The start of those sped-up processes will be in the first half of 2013 (ISTR March 1 for NJ, and May for IL).
We should see release of shadow inventory in those two states pick up quite a bit in 2013.
This is an interesting test case that we all should be paying attention to…
IF banks are the bottleneck (ie. they are withholding inventory on purpose because they can, due to Mark-to-market accounting), then we should NOT see a pickup in foreclosures and foreclosure resales in IL and NJ, even with this law coming into play.
HOWEVER, if there is a dramatic uptick in foreclosures and foreclosure sales in IL and NJ, then I think there is a good argument that the judicial foreclosure process is to blame, not the banks.
http://www.businessinsider.com/michelle-meyer-foreclosure-process-home-prices-2012-12
Some good graphs showing the difference between judicial and non-judicial states and their foreclosure inventories…important to consider when thinking about shadow inventory.
DOW.
C R A T E R !!!
Something for people to think about in their particular market. So, we have frequently talked about two important topics:
1. Household budget constraints limiting home price increases; and
2. The need to have willing buyers on the margin to support home prices.
I would further argue that in a “normal” market (a market were there are NOT lots of people turning from owner to renter, as they are with high numbers of foreclosures) that the predominance of growth in number of households that “own” comes from renters deciding to buy.
So, as it relates to #s 1 and 2 above, a very important metric seems to be the number of new single family homes built in a market relative to the renter population, and the financial capabilities of the the likely buyers in that rental pool.
In other words, if you are adding 100 new owner-occupied homes to a market, and you have 1,000 renter households, then it stands to reason that the financial capabilities of the approximate top 10% of renters is what really matters when you are trying to figure out where the budget constraint kicks in. The bigger the renter market, the smaller the number of SFHs built, the higher propensity for prices to rise when attitudes shift, since by very definition, the budget constraints on average of the top 1% of a market are overall less than the top 5% of that same market.
As noted though, this really only comes into play as the number of owners-turned renters is reduced (ie. we need to get through the distress first to get back to “normal” dynamics).
Anyone disagree (other than Pimp Watch, who would disagree with me if I told him the sky was blue) with the overall premise?
Housing prices are grossly inflated… and falling.
No need to gloss over that fact.
Correct.
This idea also works in reverse, which is what is happening in my area (Orange County, California)
Where do demographics (aging population) come into the equation?
Are there really enough younger people with good jobs who can replace all the old people who will be dying off in the coming decades?
Demographics come into the equation when you look at the aging population and homeownership rates BY AGE COHORT, and the math shows that you have more net sellers than buyers of homes. The lead edge of boomers just turned 67, and homeownership rates of those over 75 is 80% or so.
IMHO, based on the data I’ve seen, demographics WILL have an effect, but the bulk of that effect will not be seen for some time (10-+ years into the future).
The first part of the effect will be a weakening of some types of homes, in favor of other types.
Only later will there be a net reduction in overall NUMBERS of people who own homes, but that could be much farther off.
I think that is about right but I do think that homeownership will also fall due to changes in racial composition as well as age. 2006 is the high mark for homeownership in all our lifetimes.
“racial composition”
Can you explain this? I’m assuming what you mean is that the racial composition of those post-boomer, are different than the boomer generation, and that the former are less likely to be owners…is there something else at play?
Subject to understanding more about the “racial composision” comment, I’m not so sure that 2006 will be the high water mark overall.
Is 2006 the high water mark for each age cohort in the population (in other words, the under 25 crowd will never have a homeownership rate higher than it was in 2006)? I think you could be absolutely right at this level.
However, I’m not sure this is the case when the population ages, and the proportion of the population in the more-likely-to-own age cohorts increases. I haven’t done the analysis, but I recall hearing someone of some authority on the subject dismiss a large part of the increase in ownership rates in 2003/2004 as largely due to demographic factors.
While the increase during the bubble was clearly skewed higher, the underlying demographic factors are still in play today–shifting a greater proportion of the population into the age cohorts that are more likely to own.
Can you explain this? I’m assuming what you mean is that the racial composition of those post-boomer, are different than the boomer generation, and that the former are less likely to be owners…is there something else at play?
Yes, exactly. Owning a house is a choice and not all people value it to the same extent and are willing to sacrifice other uses of money to obtain and retain a home. Can that change? Yes. But right now, I see that the reduced number of white youth means less buying of houses, certainly within the burbs.
LENNAR CORP : Rialto Capital Announces First Closing of Second Real Estate Investment Fund
http://www.4-traders.com/LENNAR-CORP-13380/news/LENNAR-CORP-Rialto-Capital-Announces-First-Closing-of-Second-Real-Estate-Investment-Fund-15708538/
It’s debt houses like these that account for what little housing demand there is. And this won’t end well for them either.
With housing demand at 1997 levels and falling, massive inventory sitting, housing supply increasing and ready to skyrocket as the boomer demographic ages out leaving many millions more additional housing, a housing recovery is on the horizon.
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Oh, the ASCII lolz. Can you also post a link to your Geocities page?
http://bit.ly/VEEJWF