The Housing Bubble

“Falling housing prices to dramatically lower and more affordable levels is bullish optimism.”

Rand Paul did a 180, he’s ok with domestic use of drones now. On fox news he gave the example of cops should be able to use a drone to find and kill someone accused of robbing a liquor store.

Frontline was good last night, i saw about 2/3 before falling asleep. 401k’s started off as a tax dodge for the well off, not as a replacement or supplement to pensions. Most 401k plans are poorly run, the tax advantages are offset by fees and illiquidity (also rules about distribution) and the system is designed to benefit wall street. It’s not a bug, it’s a feature.

Apologies if my screed on boomers offended anyone our made me look more extremist than usual. Almost without exception, blb is very skeptical of power. My attempted point was to observe the contrast in the open minded, logical, and intellectual bent of 60s and early 70s culture and the turn for the worse this country took when boomers rose to take leadership positions. Boomers in power have been horrible, both parties, clinton sold out to corps just as much as W for example. I think it’s basically agreed that boomers sold the country out and created the problems that need fixing, just as people credit boomer parents as the greatest generation. This clearly want meant as an observation about a generation’s effect on the country as a group, not about individuals.

That said, you guys did have some awesome music!

Mayor Bloomberg: Interpretation of U.S. Constitution Will ‘Have to
Change’ Following Boston Bombings

By Billy Hallowell | The Blaze – 9 hrs ago

New York City Mayor Michael Bloomberg believes that the Boston Marathon bombings have created a unique scenario — one in which traditional interpretations of the U.S. Constitution must change. Rather than shying away from cameras and other security mechanisms that some view as infringements upon individual privacy, the politician claims that the most recent attack calls for a new paradigm.

As for those who fear government intrusion and express serious concerns about how these technologies and other policies could impede privacy, Bloomberg is sympathetic — but only to a point.

“The people who are worried about privacy have a legitimate worry, but we live in a complex world where you’re going to have to have a level of security greater than you did back in the olden days, if you will,” Bloomberg said during a press conference on Monday. “And our laws and our interpretation of the Constitution, I think, have to change.”

He went on to note that we live in a dangerous world and that there are some who wish to take away Americans’ freedoms, the Observer’s Politicker reports. But in order to protect these sentiments, Bloomberg argued that more intensive security is necessary.

http://news.yahoo.com/mayor-bloomberg-interpretation-u-constitution-change-following-boston-122045169.html - -

Really?

Americans Ordered Out Of Homes At Gunpoint By SWAT teams

Steve Watson
April 22, 2013

The video, shot by a resident from their own house across the street, shows police barking orders at men and women as they order them at gunpoint to identify themselves, put their hands on their heads, and get out of their own home. They are then ordered to run down the street to be further frisked by police as scores of armed militarized cops look on.

The story floated in the mainstream media that the door to door searches were conducted with the voluntary consent of the residents of Watertown is clearly false. 9000+ Police locked down an entire city and went in with full force, with armored vehicles and combat gear, all to search for an injured 19 year old kid who turned out to be cowering in someone’s back yard.

http://www.infowars.com/shocking-footage-americans-ordered-out-of-homes-at-gunpoint-by-swat-teams/ - -

Oh well, it’s not like they would actually shoot anyone.

DHS Contractor Apologizes For Selling Shooting Targets of Children

Paul Joseph Watson
February 22, 2013

In its apology, posted on the company’s website as well as Facebook, LET acknowledged that the targets were requested by law enforcement agencies.

http://www.infowars.com/dhs-contractor-apologizes-for-selling-shooting-targets-of-children/ - 53k -

City fines flipper & contractor $11,550 for removing trees from city property
Traverse City, Michigan

An out-of-state homeowner found out how much Traverse City values its trees when city officials hit him with an $11,550 fine for removing three large trees in the city’s right-of-way.

Stuart Walker of Louisville, Ky., and Deering Tree Service of Maple City together paid the fine without complaint after receiving a letter from the city attorney. Deering Tree Service removed two maples and an oak tree from the corner of East State and Franklin streets on Feb. 18. The trees were in city-owned property between the street and sidewalk.

“It’s very important that city residents understand that portion is city property, and you can’t trim or cut those trees in any way, shape or form without permission from the city,” said Mayor Michael Estes. “You can’t even plant a tree there without permission.”

Not just city residents need to know that. How about absentee homeowners and out-of-town contractors?

Walker could not be reached for comment.

Josh Deering of Deering Tree Service contends the two maples were rotten and unsafe, while the oak had a split and wasn’t shaped well. The owner wanted them removed and replaced with new maple trees. Deering said he didn’t realize he needed a permit to cut the trees.

“We’ve been cutting trees in the city for forty years,” Deering said. “We’ve gotten right-of-way permits, but in my mind we never needed to pull a permit to take down a tree in Traverse City.”

…
Neighbor Deven Larrance said he wasn’t pleased to see the trees removed.

“I was pretty angry; that one on Franklin was a big old oak tree. It was beautiful,” Larrance said. “You would think a big outfit like that would know it needed a permit.”

Larrance said an older woman previously owned the home and her yard was both beautiful and meticulous. The current owners bought it and started to gut the inside of the house and removed the trees. They then apparently changed their minds and put the house back on the market.

“It’s a beautiful old house, and it’s going to be hard to find someone to buy a house that’s been gutted, with no trees,” Larrance said.

Buckets of money and boxes of stupid.

Now if we could only get bankers and politicians under the same rules…

——————

Ireland’s cash-strapped borrowers face ban on vacations, limits on food spending
Financial Post | 13 April 2013

Irish borrowers struggling to meet their loan repayments may be banned from taking vacations and face limits on how much they can spend on food under guidelines published by the country’s personal insolvency service.

Monthly individual living expenses for people seeking debt relief may be capped at 35.73 euros ($46.7) for clothing, 247.04 euros for food and 33.40 euros for personal-hygiene items, the Insolvency Service of Ireland said in Dublin today. Households in towns with “adequate public transport links” may not need a car, while private health insurance may also be banned, the ISI said.

The guidelines set a “standard of living that is based on needs, not wants, but it is more than survival and allows for meaningful participation in society,” the ISI said. “It should not be regarded as a standard of living for people in poverty.”

Sacramento which was one of the hardest hit major metros for foreclosures …Latest article;

http://cl.exct.net/?ju=fe5213797c66017c761d&ls=fe1b1d777d6c017e741275&m=fefc1172766306&l=fed1157376640678&s=fe35157277640d7d711074&jb=ffcf14&t=

How government killed a rational housing market…
How government killed affordable higher education…

and

How Government Killed the Medical Profession
Reason | Apr. 22, 2013 | Jeffrey A. Singer

Government interventions over the past four decades have yielded a cascade of perverse incentives, bureaucratic diktats, and economic pressures that together are forcing doctors to sacrifice their independent professional medical judgment, and their integrity. The consequence is clear: Many doctors from my generation are exiting the field. Others are seeing their private practices threatened with bankruptcy, or are giving up their autonomy for the life of a shift-working hospital employee. Governments and hospital administrators hold all the power, while doctors—and worse still, patients—hold none.

Coding was one of the earliest manifestations of the cancer consuming the medical profession, but the disease is much more broad-based and systemic. The root of the problem is that patients are not payers. Through myriad tax and regulatory policies adopted on the federal and state level, the system rarely sees a direct interaction between a consumer and a provider of a health care good or service. Instead, a third party—either a private insurance company or a government payer, such as Medicare or Medicaid—covers almost all the costs. According to the National Center for Policy Analysis, on average, the consumer pays only 12 percent of the total health care bill directly out of pocket. There is no incentive, through a market system with transparent prices, for either the provider or the consumer to be cost-effective.

The persistence of price controls has coincided with a steady ratcheting down of fees for doctors. As a result, private insurance payments, which are typically pegged to Medicare payment schedules, have been ratcheting down as well. Meanwhile, Medicare’s regulatory burdens on physician practices continue to increase, adding on compliance costs. Medicare continues to demand that specific coded services be redefined and subdivided into ever-increasing levels of complexity. Harsh penalties are imposed on providers who accidentally use the wrong level code to bill for a service. Sometimes—as in the case of John Natale of Arlington, Illinois, who began a 10-month sentence in November because he miscoded bills on five patients upon whom he repaired complicated abdominal aortic aneurysms—the penalty can even include prison.

As doctors become shift workers, they work less intensely and watch the clock much more than they did when they were in private practice. Additionally, the doctor-patient relationship is adversely affected as doctors come to increasingly view their customers as the hospitals’ patients rather than their own.

In a nutshell, hospitals, clinics, and health care providers have been given incentives to organize into teams that will get assigned groups of 5,000 or more Medicare patients. They will be expected to follow practice guidelines and protocols approved by Medicare. If they achieve certain benchmarks established by Medicare with respect to cost, length of hospital stay, re-admissions, and other measures, they will get to share a portion of Medicare’s savings. If the reverse happens, there will be economic penalties.

A June 2012 survey of 36,000 doctors in active clinical practice by the Doctors and Patients Medical Association found 90 percent of doctors believe the medical system is “on the wrong track” and 83 percent are thinking about quitting. Another 85 percent said “the medical profession is in a tailspin.” 65 percent say that “government involvement is most to blame for current problems.” In addition, 2 out of 3 physicians surveyed in private clinical practice stated they were “just squeaking by or in the red financially.”

In the not-too-distant future, a small but healthy market will arise for cash-only, personalized, private care. For those who can afford it, there will always be competitive, market-driven clinics, hospitals, surgicenters, and other arrangements—including “medical tourism,” whereby health care packages are offered at competitive rates in overseas medical centers. Similar healthy markets already exist in areas such as Lasik eye surgery and cosmetic procedures. The medical profession will survive and even thrive in these small private niches.

In other words, we’re about to experience the two-tiered system that already exists in most parts of the world that provide “universal coverage.” Those who have the financial means will still be able to get prompt, courteous, personalized, state-of-the-art health care from providers who consider themselves professionals. But the majority can expect long lines, mediocre and impersonal care from shift-working providers, subtle but definite rationing, and slowly deteriorating outcomes.

We already see this in Canada, where cash-only clinics are beginning to spring up, and the United Kingdom, where a small but healthy private system exists side-by-side with the National Health Service, providing high-end, fee-for-service, private health care, with little or no waiting.

high home prices will get the economy back on its feet.

does this mean pimp watch won’t be able to build my aspen ski chalet for 55 dollars a square foot?

‘even as u.s. housing rebounds from its worst downturn since the 1930s, production bottlenecks are pushing up building-materials costs, land prices are rising (so my lot in aspen will cost 6,000 and not 5,000?) and skilled labor ready to begin work is hard to find.

suppliers of glass, drywall and wood products, who reduced output during the slump, are testing the vigor of the rebound by boosting prices before committing to restore capacity.’

http://mobile.bloomberg.com/news/2013-04-24/housing-rebound-in-u-s-hampered-by-own-success-as-costs-climb.html

obama recruiting more takers to the free sh1t army

http://m.washingtonpost.com/national/in-florida-a-food-stamp-recruiter-deals-with-wrenching-choices/2013/04/23/b3d6b41c-a3a4-11e2-9c03-6952ff305f35_story.html

food stamp photo gallery

http://m.washingtonpost.com/national/the-snap-program-in-florida/2013/04/23/e68375c4-a54a-11e2-8302-3c7e0ea97057_gallery.html

Dear gawd…

“Unfortunately, Treasury officials have an insufficient understanding of factors behind failures, according to the report.”

Welcome to SIGTARP

The Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), a sophisticated, white-collar law enforcement agency, was established by Congress in 2008 to prevent fraud, waste, and abuse linked to the $700 billion Troubled Asset Relief Program

Quarterly Reports
April 24, 2013

http://www.sigtarp.gov/Pages/home.aspx

————————-

“Troubled homeowners who received modified mortgages through a federal program are seeing high default rates, a troubling trend that officials inadequately understand, according to an investigator’s report released Wednesday.

The oldest permanent modifications made through the federal Home Affordable Modification Program, which launched in 2009, were redefaulting at a rate of 46.1% as of March 31, according to the report from the special inspector general overseeing the Treasury Department’s efforts to shore up the U.S. financial system. HAMP’s permanent modifications from 2010 have redefault rates ranging from 28.9% to 37.6%.

“The number of homeowners who have redefaulted on a HAMP permanent mortgage modification is increasing at an alarming rate,” the report said. “Treasury’s data shows that the longer a homeowner remains in HAMP, the more likely he or she is to redefault out of the program.”

Unfortunately, Treasury officials have an insufficient understanding of factors behind failures, according to the report.”

Channeling Whac-a-bubble and AlbuquerqueDan

I expected this to happen a year from now. I am in the buying mode of quarter ounce American Eagles, so I am good for now. But another article about the enormous physical demand. I am predicting gold will go above $1800 spot price per ounce between now and the end of the year. ETFs are finished. When physical demand is the primary driver, the price plunges will be less severe than last week’s.

http://www.bloomberg.com/news/2013-04-23/u-s-mint-runs-out-of-smallest-american-eagle-gold-coin.html

Don’t take a hosing on housing. Resale housing prices are massively inflated.

KEEEEEEEEEEEEEYRAAAAAAAAAAAAAAAAAAAAAAAASH!!!

What was that?!

Beware reading public. Beware.

Japan is shaping up to be a ticking time bomb. They have already declared a currency war.
Prime Minister, Shinzo Abe declares Japan never started WWII.

“Abe told lawmakers on Tuesday that he does not believe Japan’s occupation of other Asian countries during World War II can be considered “invasions.”
Abe claimed there are no set international or academic definitions of the word. “It depends on the point of view of individual countries,” he said.”

http://english.chosun.com/site/data/html_dir/2013/04/24/2013042401169.html

I don’t like buying Chinese products and I’m putting Japan on my sh*t list too. Screw Toyota, Honda and Nissan.

What’s the magic with inflation? How does inflation create jobs?

I came across this article: http://www.bloomberg.com/news/2013-04-22/bernanke-peer-quits-in-sweden-as-inflation-targeting-tested.html

From the article: “A former colleague of Federal Reserve Chairman Ben S. Bernanke has given up trying to persuade his fellow central bankers in Sweden to cut interest rates.

Svensson, who taught together with Bernanke at Princeton University more than a decade ago, has spent the years since the onset of the global financial crisis arguing that Sweden’s failure to spur inflation has killed jobs. Annual headline inflation accelerated to zero in March from minus 0.2 percent a month earlier and has been below target since January 2012.”

And then it occurred to me how the Fed is wrong on inflation: Inflation doesn’t create jobs, it’s a side effect of a hot economy. Economists see the Philips curve, and they think, “Wow, look at that. High inflation correlates with low unemployment. I guess that means high inflation causes low unemployment.” A classic post hoc ergo proper hoc logical fallacy (”Because of this, that”). I’m not the first to reach this conclusion.

There are two types of inflation - demand-pull, when high demand drives prices higher, and cost-push, when higher costs drive prices higher. The Fed’s money printing hopes to generate the latter type.

Inflation doesn’t create jobs, but high employment does create inflation.

Of course, the “high inflation to create jobs” meme might just be a canard, and the real desire for inflation is the desire to inflate away the debt to a more desirable level. The “stealth tax” angle.

The government thinks inflating away people’s currency in bad times will force them to spend. No, it forces them to restrict spending even more , while the financial companies engage in speculation with the excess liquidity. The people are already spooked and in damage control mode. And expecting them to get into risky assets which are already frothy doesn’t make sense. And companies don’t spend money for fun. They spend it when they see demand for their product. So they too are sitting on their record stacks of cash, in damage-control mode. With inflation or deflation, if a company sees an opportunity to increase profits, it’s going to spend. If it doesn’t see that, it won’t.

If however, they were to spark a strong inflation with no end in sight, then people would likely start buying anything they could get their hands on. So, low inflation might cause them to pull back even more, whereas high inflation might drive them to spend like the Fed wants. But that would cost most politicians their jobs:

“The flight from currency that had begun with the buying of diamonds, gold, country houses, and antiques now extended to minor and almost useless items — bric-a-brac, soap, hairpins. The law-abiding country crumbled into petty thievery. Copper pipes and brass armatures weren’t safe. Gasoline was siphoned from cars. People bought things they didn’t need and used them to barter — a pair of shoes for a shirt, some crockery for coffee. Berlin had a “witches’ Sabbath” atmosphere. Prostitutes of both sexes roamed the streets. Cocaine was the fashionable drug. In the cabarets the newly rich and their foreign friends could dance and spend money. Other reports noted that not all the young people had a bad time. Their parents had taught them to work and save, and that was clearly wrong, so they could spend money, enjoy themselves, and flout the old.”

– from a PBS documentary on the Weimar Hyperinflation.

But, if the central banks wishes to create an environment where the currency is losing value so it’s better to buy junk now - that is playing with political fire.

We’ve got five years of data. We’ve got central banks driving economic policy, and their view is more debt is the key to economic growth, as a global debt crisis continues to smolder. They’re banks, and they have a bank-centric view, they can’t help it. Their focus is on the banks and the financial sector. And that’s doing fine, buying and selling logical constructs, with their rich Uncle Fed spending money on them and ready to bail them out should things go south.

Bernanke’s has degree from MIT. He’s a smart guy. He said that aggregate statistics can mask important details. But he’s a creature of the economic orthodoxy. And the orthodoxy says that more inflation means more employment. However, I find it hard to believe someone like him and Krugman would mix up cost-push and demand-pull inflation. And mistake what is the driving variable (employment), and what is the dependent, resultant variable (inflation). I have to conclude all the inflation talk is an effort to reduce the value of the debt, under the cover of increasing employment happy talk.

April 24, 2013, 10:53 a.m. EDT
Everything you ‘know’ about the Fed is wrong
Commentary: 5 misconceptions about the effects of QE and monetary policy
By Mark Dow and Michael Sedacca
Reuters
Federal Reserve Board Chairman Ben Bernanke makes remarks at a news conference last month.

NEW YORK (MarketWatch) — Few would still argue against the assertion that the Federal Reserve has been central to the financial stabilization and economic recovery from the 2008 crisis.

It fixed the plumbing and are now trying to incentivize animal spirits to pump water through the pipes. The debate has now migrated to exit strategies and whether the accumulating side effects of exceptional monetary accommodation outweigh incremental benefits. Read Minyanville’s “The Givers and Takers of the Boston Bombings.”

Nonetheless, it is the Fed, so views are heated, and many mis-perceptions persist. The concept of money-printing resonates strongly and intuitively with almost everyone, but most of the intuitive reactions to the Fed’s quantitative easing are turning out to have been wrong. Here are some of the major myths that linger.

Money printing increases the money supply

The Fed does not control the money supply; they control base money (or inside money), which is a small fraction of the broader money supply. In our fractional reserve system, the banks (loosely defined) control the other 90% or so of the money supply (a.k.a. outside money). And the banks have not been lending. This is why the money supply has not grown rapidly in response to years now of QE.

QE is ‘pumping cash into the stock market’

The truth is, little of this money finds its way into the stock market. When the Fed implements QE, they are buying low-risk U.S. Treasurys and agency mortgages from the market, mostly from banks. About 82% of the money the Fed has injected since QE started has been re-deposited with the Fed as excess reserves. With the remaining 18%, banks have tended to buy other fixed income assets of a slightly riskier nature — moving out on the risk spectrum for a bank doesn’t mean jumping into equities, especially given the near-death experience that most of them have just experienced.
…
QE will create runaway inflation

“Yet” has become the favorite word of the inflationistas. As in, “Oh, it’ll come, just hasn’t yet.” And the magnitude of that expected inflation has been dialed down from “hyperinflation” to “high inflation.”

…
QE is the reason we have high oil/gasoline prices

This very deeply held view is just as deeply mistaken. As the chart here shows, post crisis/post QE, oil prices on average (red line) have gyrated around $80 to 90 per barrel with no ascending trend. The ascending trend came well before we knew what QE even was, in the 2002-2007 period. And the most rapid phase of its rise took place as the Fed was raising rates from 2004-2006.
…
QE has debased the dollar

Good luck convincing people this hasn’t been the case. This is an excellent example of repeating a falsehood until it becomes accepted as true.

Again, roll tape…

This chart shows the trade-weighted broad-dollar average. It, much like the oil chart referenced above, shows all the action took place before QE and the crisis. From 2002 to 2007, the Big Dollar, as currency specialists like to call it, depreciated some 20%. And the fastest depreciation came…that’s right, when the Fed was raising policy rates. Since the crisis oil has been roughly unchanged, with gyrations suspiciously similar to those of oil. Read Minyanville’s “Microsoft’s Solid Quarter Solidifies Rally.”

Bottom line

Anyone alleging debasement is working from hearsay and priors, not the scorecard. And there are some pretty high-profile people still throwing around the ‘debasement’ word.

In fairness, the Fed did assume that their exceptional monetary accommodation might result in some depreciation of the dollar. But because the U.S. is a closed economy (exports and imports make up a relatively small share of GDP) the Fed felt — correctly in my view — that it should be setting monetary conditions based on the larger domestic economy. And if dollar depreciation were to ensue, so the thinking went, it would at the margin be positive for U.S. growth, as long as the depreciation was orderly.

Why, then, did the dollar depreciate so much in the 2002-2007 period? For pretty much the same reasons that the price of oil went higher: It was a period of risk-taking, leverage, and deepening optimism regarding emerging markets. All three factors led to dollar selling — and that was well before QE ever made its first appearance in the U.S.

In sum, much of the received wisdom surrounding the Fed and the effects of its actions is misplaced. Through repetition and ex-ante biases, deep misunderstandings have become engrained in market psychology.

Importantly however, the recent rise in the dollar and fall in commodities suggest that these long-held misguided views are becoming dislodged. There is plenty of risk ahead and the Fed’s task is far from easy or over. But the Fed, for the most part, is ahead of the curve. Make sure you and your views don’t get caught behind it.

More evidence that my estimate that only 14% of the global warming between 1978 and 1998 was man made was spot on:
http://www.theregister.co.uk/2013/04/22/climate_sensitivity_down_down/

During those 20 years about 40 ppm of co2 was added to the atmosphere which would have been just over a 10% increase in the ppm in the atmosphere. A doubling of the ppm would cause less than a 2C increase in the temperature. 10% would just be around .2 c. As the article says it will take a long time for man to meaningfully change the temperature. Let us just hope that man put enough co2 in the air to offset the decline in solar activity or the late Spring this year will become the norm.

part of the article states: The differences may not sound like a lot. But the global mean temperature has risen by around a degree since 1850, and the current CO2 concentration is rising by a mere 2 ppm (parts per million) annually - it’s around 390ppm at present. Any changes will be slow, giving policy makers and technologists a long time to prepare, and develop economical low-carbon alternatives.

The objection to short-term measures is that renewable sources of energy are not currently economically viable. As the firmly warmist Economist noted, if a mere 2°C rise over a long time scale is likely, then “perhaps the world should seek to adjust to (rather than stop) the greenhouse-gas splurge. There is no point buying earthquake insurance if you do not live in an earthquake zone.”

There are reports that there were riots after France passed gay marriage but none of the MSM will identify the rioters. Here is a clue: http://www.eutimes.net/2013/04/beaten-gay-couple-who-walked-through-muslim-suburb-of-paris-causes-shock/

This is very difficult for the PC. What really is our future? Who do you think is going to breed faster Muslims or gays? Those that think that 50 years from now the US will be much more progressive since the old Christians will be dead, may be in for a terrible surprise.

11:11 am Apr 24, 2013
Credit
Pimco Unloads Spanish, Italian Debt
By Min Zeng

Pacific Investment Management Co., home to the world’s biggest bond fund, is cutting holdings of Italian and Spanish government bonds amid a sharp rally in the two markets this month.

The money management firm has “lightened up” in the past couple of weeks in the European debt as part of a broad reduction in exposure to riskier assets in the fixed income markets, said Andrew Balls, Pimco’s head of European portfolio management, in an interview with The Wall Street Journal on Wednesday.

Balls declined to specify the dollar amount Pimco has sold of Italy and Spain bonds. Pimco manages over $2 trillion in global assets.

Balls said the recent rally in prices of Italian and Spanish debt, which recently sent yields on 10-year debt to their lowest levels since 2010, was driven by liquidity from major central banks, which has overshadowed the euro zone’s economic and fiscal problems for the moment. Yields on bonds fall when prices rise.

“This central bank-inspired rally has made the markets more expensive,” said Balls. “Yields could go lower still in Spain and Italy but we have sold into the rally because we remain worried over the fundamenals (SIC) in the euro zone.”
…

http://www.reuters.com/article/2013/04/22/uk-spain-population-idUKBRE93L0J420130422

Interesting and I think the declining population will make inflating the bubble much harder.

How much do you think NAR and MBA pay the owner of Patrick.net?

There is a fifth dimension beyond that which is known to man. It is a dimension as vast as space and as timeless as infinity. It is the middle ground between light and shadow inventory, between science and superstition, and it lies between the pit of man’s fears and the summit of his knowledge. This is the dimension of imagination. Your next stop, the Twilight Zone!

“Buyers wait in line at Valencia Cove opening”

New Boynton community sells 73 homes in two hours

by Kim Miller
Wednesday, April 24th, 2013

Valencia Cove, a new GL Homes community in Boynton Beach, sold 73 homes in just two hours during its grand opening weekend.

When the dust settled, a total of 74 homes were sold on April 20-21 for a total of about $35 million.

Marcie DePlaza, division president for GL Homes, said she hadn’t expected so many eager buyers, some of whom were waiting in line when the sales office opened.

“This is our eighth Valencia community in Palm Beach County and there is tremendous pent up demand for lots, especially select lots,” DePlaza said. “We had more than 2,300 people on our waiting list to get more information about Valencia Cove.”

The 55-plus development located on Lyons Road between Boynton Beach Boulevard and Atlantic Avenue features a 39,000-square-foot clubhouse on more than 10 acres of recreation space. The 823 homes in the community are priced from nearly $400,000 to about $650,000.

DePlaza said construction will begin in the fall with the first homeowners moving in during the summer of 2014.

And Valencia Cove isn’t the only GL Homes community with a fan base.

The Bridges in Delray Beach opened new lots this week and had people camping out to get the best spaces. The average home in The Brides cost $850,000.

DePlaza said she took pizza to those camping out at The Bridges’ sales center.

“Their feeling was they had been waiting years for the right home, and people will wait in line for concert tickets, so why not camp out for the biggest purchase you’ll make in your life,” DePlaza said.

Many buyers, especially for the 55-plus communities, are baby-boomers from the Northeast readying for retirement.

“People have finally realized that there really is no inventory out there and the interest rates aren’t getting any better than they are now,” DePlaza said.

This entry was posted on Wednesday, April 24th, 2013 at 6:53 am and is filed under Housing affordability, Housing boom,

http://blogs.palmbeachpost.com/realtime/2013/04/24/new-boynton-community-sells-73-homes-in-first-two-hours-of-grand-opening/ - -

April 24, 2013, 12:01 a.m. EDT
10 investing rules for the coming bond crash
Commentary: Warning: Your bond funds could lose 25%
By Paul B. Farrell, MarketWatch

SAN LUIS OBISPO, Calif. (MarketWatch) — “The best piece of advice I could give long-term investors today is don’t own bonds. And if you do own them, you probably ought to move out of them,” warns Charles Ellis, acclaimed author of the classic “Winning the Loser’s Game: Timeless Strategies for Successful Investing.”

Sound familiar? You bet. Ellis’ warning came during a CNN/Money interview with Penelope Wang, just one month after the cover of InvestmentNews was screaming the same warning in huge bold type: “Tick, Tick … Boom!”

In that “special report on the impending crisis in the bond market,” InvestmentNews the newspaper of record for 90,000 professional advisers, I-News was predicting a “bond bomb” will explode, asking rhetorically: “What will your clients’ portfolios look like when the bond bomb goes off?” Answer: Bonds will crash, with huge loses.
When the Fed raises rates, your bonds could lose 25%

Here are the numbers: “Right now the Federal Reserve is set on keeping rates down,” explains Ellis, because “the yield on a 10-year Treasury bond is under 2%. When yields go back to their historical average of 5.5%, an intermediate bond fund could go down 25% in value.”

Remember that warning when Bernanke and the Fed signal the next rate increase, because it is coming. And sooner than you think. But unfortunately, Wall Street insiders, 90,000 advisers and America’s 95 million Main Street investors with trillions in retirement accounts are in denial of that highly likely event … why else are the warnings getting so loud?

What happens after the crash? Investors will get hit hard: Ellis says “people who are putting their retirement money into [so-called] safe-bonds can get hurt badly,” echoing I-News warning “when the bond bomb goes off.”

Forget individual stocks, buy index funds

Wang then asked: “So they should be buying stocks?” Ellis was emphatic: Not stocks. “They should absolutely invest in a low-cost index fund … forget about stock-picking.”

Why no individual stocks? Very simple: The fact is that most investment advisers are losers. Or as Ellis more delicately puts it: “Most active managers underperform because of the fees.” In fact, 80% of all investment advisers lose money for their clients because “after fees, their returns end up being below the market.”

Yes, they are losers. They are losing their investors’ hard-earned retirement money. Solution: Investors should switch to index funds to save 30%. But year after year they remain in denial and just keep throwing away their hard-earned retirement money.

Most financial news is misleading. Why? Because it helps market insiders, the pros with itchy fingers who love short-term trading. They’re different from you and me. They spend all day tracking the markets with their sophisticated algorithms that think in milliseconds.

In time, most of them get it wrong: How else can you explain why in the first decade of the 21st century Wall Street has already triggered two $10 trillion crashes, two long recessions and an inflation-adjusted 20% market loss for Main Street’s retirement portfolios? And yet Wall Street’s cheerleaders just keep distracting investors with predictions of perpetual bull markets, ignoring the fact that we’re in the fifth year of an aging bull.
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April 22, 2013, 7:31 a.m. EDT
Before becoming a landlord, add up the costs
By Anya Martin, MarketWatch

One of life’s luxuries is being able to afford a vacation home. But don’t underestimate its true cost—especially if you plan to rent it out.

Doug Lebda, chief executive of Lending Tree, made a bigger down payment and pays higher interest rates because he plans to rent out the $960,000 beach condo he bought with his dad in Wilmington, N.C.

To get the three-bedroom unit, Lebda put down 25% of the purchase price and received an interest rate of 3.86% for a seven-year fixed/20-year adjustable-rate mortgage. He estimates that their interest rate is one-quarter percentage point higher because it is a second property, and an additional one-eighth percentage point higher because of their plan to rent.

“Everything across the board was tighter,” Lebda said. “Thankfully I was well within the guidelines for debt-to-income ratio and credit score.” The beach condo is a joint investment with his father, Bob, who has bought and managed rental properties for years. They expect to collect as much as $3,500 per week during peak summer season from vacationers, but before Lebda took out the mortgage from a bank in the Lending Tree network, he also calculated anticipated costs, including maintenance, marketing and insurance premiums.

“If you are smart about what you buy and you are really detailed about the costs, there are certainly opportunities out there which will be cash-flow positive,” Lebda said.
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Why does the MSM pay clueless writers to offer dumb financial advice?

April 24, 2013, 6:53 p.m. EDT
Best financial decision? Paying off mortgage
People also valued starting to save early
By Andrea Coombes

Quick, what’s the best money move you ever made?

For 40% of people aged 55 and older, it was paying off their mortgage, according to a Harris Interactive survey of about 1,540 people for Northwestern Mutual, an insurance and financial-services firm.

And 40% of the over-55 group also said starting to save early was one of their top decisions. (Survey respondents were asked “What are the best financial decisions you ever made?” and could offer more than one option.)

The survey also asked younger people—ages 25 to 54—what are the most important financial decisions they’ll ever need to make: 53% of that group said starting to save early is one of their top goals, while 52% said “making sure that my family is protected” is key.

Paying off the mortgage didn’t even make the cut for the under-55 age group. But that makes perfect sense, said Greg McBride, a senior financial analyst with Bankrate.com.

“Paying off the mortgage becomes a higher priority later in your career, after you’ve amassed sufficient savings for emergencies, after you’ve paid off other debt, after you’ve put the kids through college, and after you’ve spent years accumulating your retirement nest egg on a tax-advantaged basis,” said McBride, who wasn’t involved with the Northwestern Mutual survey.

“All are higher priorities than pouring more money into a low-cost, tax-deductible debt like a mortgage, particularly when rates are as low as they are today,” he said.
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