Bits Bucket for April 28, 2013
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The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
Location:Northern Arizona, United States
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Posted: 7:28 p.m. Saturday, April 27, 2013
Post Special Report: Wall Street buys Main Street
Will ‘Rental Nation’ plague your property?
South Florida homeownership is down and neighborhoods brim with renters, who don’t care as much about upkeep and issues that keep values high.
By Kimberly Miller
Palm Beach Post Staff Writer
The fragile sense of community in homeowner Bryan Melzard’s neighborhood — the impromptu chats on the sidewalk, shared gripes about overzealous condo commandos — is fading.
More renters are moving into his Greenacres development of about 100 homes, filling investor-owned properties bought at foreclosure fire-sale prices with cash on hand and dreams of big returns. The conversion has meant regular U-haul sightings on the 30th of each month and anonymous neighbors with fewer scruples about loud music.
Read the complete story on the all-new MyPalmBeachPost.com »
Investor homes in your area: Find out who’s scooping up bargain houses and where. Click here: http://www.mypalmbeachpost.com/investor-homes
http://www.palmbeachpost.com/list/business/real-estate/real-estate-headlines-post/aDfm/ -
“…who don’t care as much about upkeep and issues that keep values high…”
Isn’t keeping values high the landlord/investor’s problem? Like for instance, our lls spent a good chunk of time yesterday morning figuring out what to do about the rotted out pipes that caused their sprinkler system to leak. At the end of the day, they decided on having the dirt filled in, then having rocks piled on, and mulch put on top, but only after ‘waiting for a while’ to finish the work, as it turns out that Keynesian ditch digging and refilling is mighty expensive around these parts. And they hope the HOA’s architecture committee doesn’t notice the green grass has been replaced by dead red mulch.
How this kind of personal landlord TLC gets doled out from Wall Street investors to Main Street rental properties remains to be seen. But a really good guess is that lots of America will soon resemble some of its worst slums, as it turns out that maintaining rental properties doesn’t pencil out well for the smartest guys in the room.
Comment from this story.
lifesabeach
Report The hedge funds like Blackstone own 2 homes on my street. Both vacant for several months, no upkeep, repairs, or HOA dues being paid. These investors are purchasing blind and have no infrastructure in place to manage/maintain the properties. I’m sure I’m not alone and this is going on in many HOA’s. Investors in these funds should be VERY concerned!
10:32 a.m. Apr. 28, 2013
“Investors in these funds should be VERY concerned!”
Also owner occupants who live in neighborhoods with investment properties owned by Wall Street slum lords…
Comment -
Blackstone type investors are not equipped to manage single family residential tenants - nor the accumulating black mold, etc.
I think they are looking for a major investment vehicle to offset their upcoming losses when interest rates rise.
But they don’t have enough money to create a sustainable housing bubble nor the sales firepower to dump a lot of units quickly.
I so totally agree with your post.
Blackstone type investors are not equipped to manage single family residential tenants -
Couldn’t they just hire local property management companies?
“Couldn’t they just hire local property management companies?”
Sure they could…at a loss, once rents start declining because too many greater fools tried to cash in on the U.S. version of the buy-to-let craze; bigger losses still are in store when interest rates eventually rise.
‘Couldn’t they just hire local property management companies’
Blackstone is hiring a company out of Dallas to coordinate the property management. Yet another layer of cost. They are paying for every single step of the landlord process. I’d bet their returns are less than 5%. Now they are borrowing money to buy houses. Down the returns go. I’m still guessing they are counting on appreciation, and will try to get out at the first sign of trouble.
“anonymous neighbors”
You know how they become un-anonymous? Go introduce yourself. I know it sounds crazy.
Rocky Balboa:
“Let me tell you something you already know. The world ain’t all sunshine and rainbows. It is a very mean and nasty place and I don’t care how tough you are, it will beat you to your knees and keep you there permanently if you let it. You, me, or nobody is gonna hit as hard as life…
But it ain’t about how hard you hit; it’s about how hard you can get hit, and keep moving forward. . It’s How much you can take, and keep moving forward. That’s how winning is done…
Now, if you know what you’re worth, then go out and get what you’re worth. But you gotta be willing to take the hits, and not point fingers and blame other people. Cowards do that and that ain’t you. You’re better than that!..!!!
And above all else, do not buy a house at current massively inflated prices. Rent for half the monthly cost and buy later after prices crater for 65% less.
I am pumped. I think I will go visit few open houses today.
Thanks Rocky.
You’re bad! Be sure to grab handfuls of cookies at each open house.
You get no respect.
Why don’t you? Because you hang out
with them coconuts on the corner.
You hang around with coconuts,
you get nowhere. They’re lemons!
Hang out with nice people,
you get nice friends.
Hang out with smart people,
you get smart friends.
Hang out with yo-yo people,
you get yo-yo friends.
It’s simple mathematics.
What the hell happened to the Housing Bubble Blog I used to know? Where’s the spirit? Where’s the guts, huh?
Nothing is over until we decide it is! Was it over when the Robo signed victims got to live free for years? Hell no!
And it ain’t over now. ‘Cause when the goin’ gets tough…
[thinks hard of something to say]
The tough get goin’! Who’s with me? Let’s go!
[Puts a low bid on a house; then returns]
Bluto’s Big Speech - Animal House (9/10) Movie CLIP … - YouTube
http://www.youtube.com/watch?v=q7vtWB4owdE - 232k -
What the hell happened to the Housing Bubble Blog I used to know?
It was overrun by trolls.
And youre right there with them.
Uh oh, trolls in the nabe.
That’s like that post at the top where it said….
“The conversion has meant regular U-haul sightings on the 30th of each month and anonymous neighbors with fewer scruples about loud music.”
I prefer hood but since this was a response to Colorado I went with nabe.
“I’ve always been kind of a pacifist. When I was a kid, my father told me, “Never hit anyone in anger, unless you’re absolutely sure you can get away with it.” I don’t know what kind of soldier I’m gonna make, but I want you guys to know that if we ever get into real heavy combat… I’ll be right behind you guys. Every step of the way.”
- Russell Ziskey, “Stripes”.
Rocky was a wuss.
(And Stallone once splashed gasoline all over my new suede stilettos at the Malibu Shell station and never ever bothered to apologize– like he’d done me a favor or something.)
I’m sure you towered over him in those heels. What is he, 5′3″?
Considering I’m all of 5′1″, no. I’d guess he’s about 5′ 9-10″. But I should have stomped his dorsal with them.
“But I should have stomped his dorsal with them.”
Well, at least he tried. Too Big To Jail is apparently how it is.
http://articles.marketwatch.com/2013-04-26/commentary/38832342_1_ceo-john-stumpf-wells-fargo-big-banks
Comment by PeakHubris
2013-04-27 18:14:07
The banks and the government are ripping the country off blind.
—————————————————————————–
Truth.
And the pathway they use is housing sales. Don’t be one of their targets.
SAVAR, Bangladesh
At least 377 people are confirmed to have died in the collapse of the 8-story building on Wednesday. Three of its floors were built illegally.
http://news.yahoo.com/video/video-show-bangladesh-cracks-collapse-183257098.html
http://news.yahoo.com/collapsed-building-owner-arrested-india-border-092723478.html
The “how are we screwed” debate between inflation, deflation and mass default, and Japan-style stagnation continues, with number 3 in the lead at the moment. The debt level will only take 40 years or so to normalize at this rate, assuming medical cost inflation and baby boomer retirement doesn’t make it grow again.
But thanks to the falling price of solar panels, may I suggest that if you believe in the inflation scenario having solar panels on the roof is a good investment. The cost of electricity is frozen for the 25-30 years the system is likely to work. And by that time, the replacements should be better and cheaper still.
“The debt level will only take 40 years or so to normalize at this rate, assuming medical cost inflation and baby boomer retirement doesn’t make it grow again.”
Won’t half the Baby Boomers be six feet under 30 years from now, with many of their homes added to shadow inventory?
People seem to NOT count all the kids who are 0-20 years old today (and those yet to be born) when coming up with their “boomers die and their houses get added to the excess” claims…why not?
Did you mean the ones who are currently or soon-to-be unemployed at generation-high rates, the ones who are currently or soon to add to over a trillion dollars in college debt, or some other group of 0-20 somethings?
No, I’m talking about the younger people who are going to be taking the entry level positions and rent, while those renting are going to step into the mid-level positions and buy, while those formerly in the mid-level positions take the roles left by the boomers who are no longer working (because at a minimum, they’ve passed away).
You expect the challenges faced today to create wholesale differences in how EVERY person lives their life.
What’s the difference between 10% unemployment and 5% unemployment?
90% of people are working instead of 95% of people. NOT 0% vs. 95%.
Add on top of it that those struggling more to get work are lower skilled, lower wage employees (renters anyway), and you can see how I’m skeptical that somehow all of a sudden there will be NO one able to buy homes.
Case and point: people are fretting about the few numbers of first time buyers in the market.
Instead of the 40% people expect, we are running at 31%. How many more would be buyers today if they weren’t competing with Blackstone? How many more would be buyers if there were more homes being built?
Do I expect there to be more trouble in general for people starting out? Yes.
Do I expect them to buy fewer homes?
Yes.
Do I expect them to be living with mom and dad in the basement?
No.
The trouble with your argument (and I don’t mean to single you out in particular here, because many of your fellow economists make the same error) is that it suffers from the bean counting fallacy: You assume today’s 0-20 somethings are perfect substitutes for the wealthy Baby Boomer home owners who will soon be trying to downsize and sell to new entrants or move-up buyers in the housing market.
Based on the dismal economic outlook for today’s 0-20 year old set, plus the large negative wealth effect suffered by today’s 20-40 somethings due to the Great Recession, their permanent incomes will not enable them to buy Baby Boomers’ homes at anywhere near current prices. The only way for this to have a prayer to work is if the taxpayer-funded financial backstop of federally guaranteed loans at principle levels new buyers cannot afford continues indefinitely.
Japan deflation: June 1993: Toyota (TM) stock price at $28.06. April 26, 2013: Toyota stock price at $115.48.
Average annual gain? Over 7% over 20 years.
That is only one company’s stock. The fact that two of the cars they made sit in my garage may somehow reflect that price gain…
Yeah. And I drive one too. The thing about a car that I like is that for most people who do not live on the east coast, a car is an important tool to create your income stream. The most bang for your buck will survive economic turmoil.
I have to work out. Many people feel the same. Fitness adds life to your years and years to your life and helps ward off illnesses that could keep you from earning income. So I think fitness businesses thrive in any economy these days.
We have to eat. I would bet on the industries who produce and deliver the foods that provide more nutrients per calorie to survive in any economy.
We have to have power to heat or cool our residences, fuel for our vehicles.
Then there are trends. I’m gambling on a trend that is profiting from Obamacare’s ill effects on employment. Over ten percent of my assets is in that gamble.
There are trends, indeed.
And the trend in Japanese asset prices for the past quarter century has been down, Toyota and other exceptions notwithstanding to the contrary.
“I’m gambling on a trend that is profiting from Obamacare’s ill effects on employment.”
I similarly have a 20%+ stake on the trend set off by Ben Bernanke’s QE3 MBS purchases to reflate the housing bubble. So far I am up something like 20% (I don’t track it closely, but the gains are baked in…).
“I have to work out. Many people feel the same.”
Yes, I agree.
“So I think fitness businesses thrive in any economy these days.”
That doesn’t logically follow, as fitness club memberships are luxury consumption, not necessities. For one thing, people can opt to sit on the couch and watch the boob tube instead of working out, even if they know it is a poor choice for their health. Secondly, for those who do opt to make the effort to stay fit, it isn’t necessary to own a fitness club membership; one can play tennis for free at the local municipal courts, take long walks, or even just take the steps instead of the elevator at work to avoid obesity and needlessly rapid physical decline.
I opted to get physical therapy for my aging knees last fall. All of the prescribed exercises can be done with no or inexpensive equipment at home. I picked up an exercise bike for free a few years ago. My favorite exercise is walking in my neighborhood.
Fitness club not required.
If I get to the point where I cannot find employment in my profession, I may take up housecleaning. Then I will get my exercise and get paid at the same time.
Unfortunately for me I have been a fitness swimmer (at times masters swimming) for several decades and require a dedicated lap pool of several lanes. The lanes have to have lane line buoys to dampen the splashing. LA Fitness and Lifetime Fitness, as well as some college pools have this. The typical lap pool I see owned by private homeowners do not prevent the annoying waves like the multi-lane pools prevent.
I can never give up swimming for fitness.
I would like to take up swimming for fitness, but the fees have so far inhibited my interest.
Ditto here -
Japanese deflation or pre-Hitler inflation?
Debate goes on, but the more you accumulate in several buckets of assets (some hedge against deflation while others hedge against inflation), the more likely you will survive.
Sorry to break the bad news to perma-depressed people who get high on doom!
‘perma-depressed people who get high on doom’
Uhhh:
‘pre-Hitler inflation’
Good morning Sunshine!
Prices falling to dramatically lower and more affordable levels is doom?
Seriously?
” Prices falling to dramatically lower and more affordable levels …”
Good. All one needs in order to buy is the cash.
But, on the other hand, a shortage of cash among the masses may explain why prices are falling to dramatically lower and more afforable levels.
FWIW: I’ve been away studying what is going on with the stock Questcor (QCOR). For anyone who cares about such things what is going on with QCOR is very interesting.
Disclaimer: I am very long QCOR.
Again, FWIW.
Been following this for the last month or so, but very little movement. Rheumatologists I spoke with aren’t enthusiastic about the hugely expensive, largely-unproven product. “Selling false hopes to desperate patients” is how one described it. The major shareholder of the delivery system has fallen off the map, and I suspect is deceased– ironically enough through failure of his own product. (I doubt the family will proceed with any buy-out plans.) What are we missing here?
What are we missing here?
I’d like to know, too. I’ve been trying to get excited on this stock based on what you’re saying and so far I haven’t been.
From ‘cash is king’ to pushing individual pharm stocks that promise miracle cures? In the midst of a stock bubble?
I though I just had to wait until everything crashed and the market had a PE of 7 or less. This seems more like picking up nickels in front of the steam roller.
Have you given up fighting the Fed, combo? Or even waiting it out?
The cost of electricity is frozen for the 25-30 years the system is likely to work ??
In our city (95050-95054) we own our own power utility company through both geo-thermal & gas fired plants….Its a massive revenue generator and we are able to offer cheaper electricity which has help attract lots of companies….
I have oft wondered what would happen to our city budget if we ever got to critical mass in solar power generation…In other words, it would be so inexpensive that it would be foolish not to switch over….
The revenue lost would be massive…It would bankrupt the city and we are a pretty well to-do city exampled by the fact we are building a 1-billion dollar NFL stadium in this little town of 100,000 people…
I suspect that the lost revenue would be made up with higher rates on everything else and if in fact that were to be the case you would not be saving any money at all by switching to solar even if it was cheap to do…
You have geothermal plants? I didn’t know there were geysers/major hot springs in the silicon valley. Is it something in the water that makes the tech wizards so smart?
“I have oft wondered what would happen to our city budget if we ever got to critical mass in solar power generation…In other words, it would be so inexpensive that it would be foolish not to switch over.”
You’ll never get 100 percent solar. But maybe you’ll get 100 percent of the peak demand increase = solar. That would be good for utilities — less max demand on the grid.
Gold may normally be uncorrelated from stocks and bonds, but does QE3 make it different this time? My guess is yes: QE3 has made stocks, bonds, housing and gold all correlate much more strongly than in normal times, as they move in the same direction as QE3 liquidity influxes.
April 24, 2013, 7:01 a.m. EDT
Don’t fixate on gold in your portfolio
By Robert Powell, MarketWatch
Those living in retirement are often told to strike a balance between investing for safety and investing for growth. And when it comes to investing for growth, some pundits are fond of telling investors to put their money in commodities, including gold. Doing so, the experts say, is one surefire way to keep pace with inflation.
It’s also one surefire way to lose money as some retirees and would-be retirees are finding out today: Gold has fallen roughly $400 from its 52-week high of $1,803 to $1,420 and now, some say, might be a good time for retirees to revisit their decision to put their money at risk in commodities and gold.
Take a broad approach to commodities
To be fair, most advisers suggest that retirees and other investors ought to commit some of their funds to commodities. But they suggest doing so only after drafting what’s called an investment policy statement (IPS). And they also recommend against betting the entire portion earmarked for commodities to just gold. Doing that, they say, is pure speculation and folly.
“I think commodities are a great diversifier in portfolios because of their low correlation to stocks and bonds,” said Nathan Erickson, an investment strategy manager with Miller/Russell & Associates. “The data do show that including commodities in a well-diversified portfolio of stocks and bonds can lower overall portfolio risk,” said Erickson.
…
Commodities’ price crash: Recovery sign or a new recession?
Swaminathan S Anklesaria Aiyar Apr 21, 2013, 11.51AM IST
The price of gold, oil and many other commodities crashed last week. The stock markets zoomed and economists smiled, suddenly seeing positive consequences in three areas: inflation, the trade deficit and the fiscal deficit.
These three factors had earlier dragged down the economy to its lowest growth rate for a decade, just 4.7 per cent in the last quarter. But the global commodity crash should reduce inflation in India too, cheaper imports should shrink the trade deficit, and the fiscal deficit should shrink because oil and fertiliser subsidies will reduce. This is a triple helping of manna from above. Does it mean that the worst is over, and that the flagging Indian economy will now take off?
…
Panos Mourdoukoutas, Contributor
Markets
4/15/2013 @ 10:12PM
Does The Crash In Precious Metals Signal The Beginning of Another Financial Crisis?
For precious metals investors, the last five days have been like 2008-9 all over again, as the end to the sell-off doesn’t seem to be anywhere in the offing.
Is the precious metal crash the beginning of another financial crisis that will touch equities?
Judging from the performance of major equity indexes on Monday, the answer is yes–though it is hard to say whether the decline in stocks will be sustained. What can be said, however, is that the crash in the precious metals provides a taste of the next financial crisis that will be nastier than the 2008-9 crisis.
…
Commodities tipped to drop further on demand fears
by: Alex Macdonald
From: Dow Jones
April 29, 2013 12:00AM
MACQUARIE Research has cut its price forecast for several commodities, including copper and gold, due to renewed concerns about future commodities demand as optimism about the global economy erodes.
Macquarie Research, a unit of Macquarie Group, said that despite China’s economic growth, apparent demand for metals remained weak, particularly in the US, Europe and South Korea.
“Certainly, industrial production is stuttering rather than accelerating and metal consumers are maintaining minimum working capital — this situation should improve as lead indicators rise. However this process does not seem aggressive enough to drive commodity prices,” it said.
The bank cut its 2013 copper price forecast by 5.2 per cent compared with its January forecast, to $US7459 a tonne, and cut its 2014 copper price forecast by 14.7 per cent to $US6550 a tonne.
It noted that the rise in copper stocks was forecast to gather pace in the second half of the year as new supply entered the market.
Digital Pass $1 for first 28 Days
It also cut price forecasts for 2013 by as much as 5.4 per cent for aluminium and lead and as little as 0.1 per cent for tin.
In the precious metals sector, the bank cut its 2013 gold price forecast by 4.3 per cent to $US1467 a troy ounce and cut its 2014 gold price forecast by 3.1 per cent to $US1385, noting that the changes were moderate because it was already bearish on gold.
It noted that “the short-term outlook for gold is unusually murky — heavy disinvestment from ETF (exchange-traded funds) investors is being offset by strong physical demand in key markets such as India and China, but neither of these is likely to continue indefinitely, and which runs its course first could determine whether the price moves $US100 an ounce higher or lower.” The bank said one of the few areas with potential was the platinum group of metals, even though it cut its price forecast for platinum and palladium in 2013 and 2014.
…
Commodities slump sends out ripples
April 28 2013 at 03:48pm
By Reuters
Gold is refined at a mine in Indonesia. Photo: Bloomberg.
Lower airfares, cheaper food and rising profit margins are among the benefits that should flow from tumbling oil and commodity prices, but only after a long lead time
Having poured $400 billion (R3.6 trillion) into commodities over the past decade, many investors are now selling. Their confidence that risky assets could only float higher on a rising tide of cheap central bank money has crumbled as the global economy fails to respond to the stimulus.
Even China, an important buyer of natural resources, is slowing. Inflation, against which gold in particular is a classic hedge, is falling nearly everywhere.
Price pressures will ease further if natural resources keep depreciating. That is bad news for exporters such as Saudi Arabia and Brazil but good news for importers.
Weaker commodity prices should be positive for the world economy on average because falling inflation supports consumer spending, according to ABN Amro economist Han de Jong.
Standard & Poor’s GSCI index of global commodity prices has fallen 6.6 percent so far this year.
…
Despite the recent weakness in asset prices from stocks to gold and other globally-traded commodities, there is one bright spot which may pull the global economy through this rough patch: U.S. residential real estate.
Go out and buy ten homes today, borrowing the money if necessary, as real estate always goes up here in the U.S.!
Home builders report greater pricing power
April 25, 2013, 2:51 PM
Even as home builders are concerned about costs and scarce skilled labor, they are also enjoying more pricing power thanks to growing demand, recent data show.
With interest rates hovering near record lows and household formation rising, it’s clear that home builders are benefiting. PulteGroup, one of the largest home builders in America, reported Thursday that first-quarter home-sale revenue rose 35% from the same period in the prior year, as closings gained 23% and the average sales price increased $26,000 to $287,000.
…
yet average prices fell about $60,000 YoY.
I just did my periodic search on Redfin for “houses, condos and townhouses” in San Diego County, including MLS-listed homes, MLS-listed foreclosures and for-sale-by-owner homes. The results:
- A total of 4,330 homes are currently listed at the start of the red-hot spring sales season, near the lowest number I have ever seen in many years of life as a San Diego County looky-loo.
- Of these homes, 1,314 (more than 30% of the homes on the market) are listed at prices of $1 million or more.
- I can guarantee without checking that far less than 30% of people looking for a home to buy in San Diego this spring will be able to buy in the $1 million+ price range. Hence the huge affordability gap between the homes on the market for sale and the ability to buy them continues, just as it did during the peak bubble years.
Housing bubble hero
Christopher Thornberg was among the few economists who predicted the housing crash. It helped bring a wealth of clients to his firm, Beacon Economics.
April 26, 2013|By Ricardo Lopez, Los Angeles Times
Chris Thornberg’s housing analysis accuracy has attracted clients to his firm, Beacon Economics.
The gig: Christopher Thornberg is founding partner of Beacon Economics, a Los Angeles-based economics consulting firm. Since its founding in 2007, Beacon has provided economic analysis and forecasting for cities, counties and corporate clients.
He also worked as chief economic advisor to the state Controller’s Office from 2008 to 2012.
While he was at the UCLA Anderson Forecast, he began sounding the alarm about an impending housing market crash — and the ensuing recession. He eventually left UCLA after disagreements, he said. When his prediction panned out, his credibility led to lots of work for the newly started Beacon.
…
From housing bubble hero to echo bubble housing shill…
THE OUTLOOK
Updated April 7, 2013, 7:31 p.m. ET
Housing Prices Are on a Tear, Thanks to the Fed
By NICK TIMIRAOS
The U.S. housing market has broken out of a deep slump, and prices are shooting up faster than anyone thought possible a year ago. For many homeowners, that is a cause for celebration.
Nick Timiraos explains how the Federal Reserve keeping interest rates low is causing home prices to grow faster than they normally would during a recovery, and that has some experts worried. Photo: Getty Images.
But the speed at which prices are rising is prompting murmurs of concern that the Federal Reserve’s campaign to reduce interest rates could be giving the housing market a sugar high.
Prices of existing homes rose 10% in February nationally from a year ago. They have been rising during the seasonally slow winter months—and they show signs of jumping further as the spring buying season gets under way. What’s going on?
Prices of existing homes rose 10% in February nationally from a year ago. Above, a home in Mariemont, Ohio.
First, inventories of homes available to buy have fallen to 20-year lows. Home builders have added little in the way of new construction since 2008. Banks are selling fewer foreclosures. Investors have scooped up more homes, converting them to rentals.
Many borrowers, meanwhile, aren’t willing or able to sell at prices that are down sharply from their 2006 highs, despite a greater inclination among banks to approve short sales. Tight lending standards mean some owners will hold back from selling because they aren’t sure they would qualify for a mortgage on their next home.
Demand has also revved up, first from investors buying homes below their replacement costs, and later as rising rents and falling interest rates encouraged more first-time buyers to purchase homes that have monthly payments that are less than what it costs to rent.
Improving home-price expectations have also unleashed pent up demand. The U.S. added around 1.3 million households a year for the 10-year period ending in 2007, after which household formation fell to more than half that level. Household formation was lower in the five years following the housing bust than any period since the 1960s, according to Altos Research, an analytics firm in Mountain View, Calif.
But the population never stopped growing. Households simply doubled up. Between 2008 and 2010, the country had around two million households that “couldn’t wait to launch on their own,” says Mike Simonsen, chief executive of Altos Research. Many of those new households have been renters, but more are opting to buy.
The upshot is that, in a reversal from just two years ago, demand is outstripping the available supply. Even though sales volumes could be constrained this year by low inventories, some economists say prices are set to soar. “A lot of folks are realizing, ‘Wow, there is no second wave of foreclosures. Interest rates if anything could head up. Prices are rising. If I’m going to get in I better get in now,’” says Christopher Thornberg, a housing economist with Beacon Economics in Los Angeles.
…
Have you seen any MSM writers who have yet connected the dots between the hair-of-the-dog hangover cure and the continuation of the housing bubble after the Fall 2008 financial collapse?
I haven’t. The articles I see generally treat ‘The Housing Bubble’ like some kind of flash in the pan which came and went in 2007-2008, but which some rumor mongers are incorrectly suggesting may soon return.
It is no longer an international housing bubble. Rather there are a few “mini-bubbles” at risk of price corrections which will only inflict local damage.
Because All Real Estate is Local.
Here is a little prediction for you: After the global credit bubble is clearly receding in a few years, with housing prices in steady decline on five continents, guys like Redfin CEO Kelman will claim they called it.
Signs of a new housing bubble
April 25, 2013|Mary Umberger | On Real Estate
Los Angeles is one of four housing markets that are in mini-bubble territory, at risk of price correction. (Allen J. Schaben, Los Angeles Times)
Um, don’t look now, but out there in the real estate trenches, they’re whispering the B word again. That’s B as in “bubble.”
That’s because agents in various parts of the country are using such terms as “overheated” and “buying craze” and “skyrocketing prices” to describe what they’re seeing in their markets, according to a recent trade journal report.
It isn’t an isolated discussion: Redfin, a real estate brokerage that does business in 20 markets around the country, recently ranked 15 major metros it perceived as most vulnerable, and least vulnerable, to experiencing another housing bubble.
Redfin Chief Executive Glenn Kelman said he doesn’t see housing, as a whole, headed for another fall. But in an edited interview, he explained that although he’s advising clients in some places that now might be the perfect time to dive into buying, in others, he’s suggesting that renting might be a safer move.
Q: Your company’s analysis of potential bubble areas came with a caveat that, even with the relative frenzy in some places, this time is different. I wish I had a dollar for every broker, agent and housing economist who uttered that same phrase to me during the couple of years before the bubble burst. How is it different this time?
A: Though I think there are places that are really vulnerable to some kind of setback, in general, talk of a bubble is just that.
…
Yet housing demand is at 17 year lows.
Real estate is getting a bit frothy over in Yangon, Myanmar.
A new housing bubble
Will the end of EU sanctions pop Myanmar’s real estate bubble?
By Tim Fernholz @timfernholz April 22, 2013
It’s going to be hard to get a room for next year’s water festival in Yangon. AP Photo / Khin Maung Win
Today the European Union lifted economic sanctions against Myanmar, but European businesses still face obstacles to operations there as the troubled Asian country re-enters the international community. Chief among those problems: a real estate bubble.
EU officials joined the US in re-establishing commercial relations with Myanmar after it transitioned to a civillian government and released political prisoners. Their hope is that foreign investment will lead to more effort from the government to address attacks on the country’s Muslim minority and other human rights abuses.
For businesses, there’s an obvious interest in doing business in a country with more people than South Korea or Malaysia. But forget crony capitalism, the immediate problem is simply finding a hotel room, visitors say. Travelers are advised to make reservations for rooms well in advance, thanks to a shortage caused by foreigners who have flocked to the country as the US and EU have relaxed restrictions on trade. There are reportedly only 27,000 hotel rooms in the entire country.
And it’s going to be hard to rectify that situation because land is so expensive. Myanmar, perhaps eager to join the world’s advanced economies, has a housing bubble.
Until recently, there weren’t a lot of options for investment. Sanctions made it difficult to invest outside the country, and there was no domestic stock market to speak of. Investors, then, turned to real estate as a place to stash their cash, which has created high land prices around the commercial center of Yangon, according to Paul Wilson of Myanmar Capital Advisors.
“The real estate prices in Yangon—which is twenty or thirty years behind Thailand—are as high as some places in Bangkok,” Wilson said recently at a conference in Los Angeles. “The country actually has a lot of cash. There’s jade sales: official reports of jade sales are $4 billion a year, the unofficial are like $36 billion worth of jade going to China, so people have tremendous amounts of wealth. There’s a lot of illicit money, through narcotics, that’s still a problem. There’s nowhere to put the money. There’s no stock market, you couldn’t convert the currency, so they put it in land.”
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Are Wall Street Investors Pumping Up The Next Housing Bubble?
By Chris Morran April 22, 2013
Areas like Las Vegas, Phoenix, and Miami — all hit pretty hard by the collapse of the last housing bubble — are now seeing home prices rise at rates above the national average. But rather than this being an indicator that these areas are finally recovering, some worry that it’s just a lot of hot air being pumped into another bubble by Wall Street investors.
The Washington Post reports on the huge amounts of money that institutional investors are putting into single-family homes in some areas hit the hardest in recent years. They are rushing in to buy properties at what is hoped to be well below market rate, with the goal of reselling for a tidy profit as the economy recovers.
According to some in the Florida real estate business, these investors now buy 7-in-10 homes on the market there, and may account for the majority of home sales in other distressed areas over the last two years.
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5 Reasons We’re in a New Housing Bubble
By Rick Munarriz
April 24, 2013
NVR (NYSE: NVR ) reported disappointing quarterly results on Monday. The historically conservative homebuilder posted revenue and earnings growth that fell short of Wall Street expectations. The shares recovered most of Monday’s losses, but the Virginia-based developer still closed 2% lower on the day.
This is going to be a busy week for homebuilders. Pulte and D.R. Horton will join NVR in reporting later this week. Analysts see strong growth at both companies, but investors shouldn’t be surprised if Pulte and D.R. Horton also fall short.
The housing market may be booming right now, but buyers are starting to get cold feet judging by a surprising year-over-year spike in the cancellation rate of new orders at NVR.
The increase in folks backing out of their contracts is just one of the five signs that longtime Fool contributor sees in arguing that we’re in a housing bubble in this video. Agree? Disagree? Check out the video, and then post your thoughts in the comment box below.
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How did these companies like Pulte and DR Horton survive the downturn?
Building more and more houses further and further out but asking the same prices or higher prices
Building more and more houses further and further out but asking the same prices or higher prices
And how on earth did they get buyers under those conditions?
The gray media certainly called this:
Yet Another Bailout: Housing’s Hair of the Dog
by Barry Ritholtz - September 8th, 2009, 11:13am
One of the arguments I keep making is that the folks pushing “Less Bad = Good” are ignoring the impact of Uncle Sam’s largesse.
Let’s look at how much the U.S. government is pushing a housing recovery via a hair of the dog.
As the WSJ reported last week, the number of loans backed by the FHA has soared, and “its market share reached 23% in the second quarter, up from less than 3% in 2006, according to Inside Mortgage Finance.”
Even worse, the FHA is now insuring mortgages with as little as 3.5% down. Add in the $8,000 first time buyer tax credit, and you have all the makings of a government sponsored boomlet.
The downside?
Rising delinquencies, for one thing. The FHA delinquency rate has soared. The Journal noted that “At the end of June, some 7.8% of FHA-backed loans were 90 days late or more, or in foreclosure, according to the Mortgage Bankers Association, up from 5.4% a year ago.”
Then there is this WSJ article:
…
I love these articles that start off with a disclaimer about the possibility of another bubble, then rattle off twenty or thirty reasons that bubble conditions continue unabated from the peak mania years.
First Person: I’m Not Worried About Another Housing Bubble
By Laura Quinn | Yahoo! Contributor Network – Wed, Apr 24, 2013 5:58 PM EDT
Some real estate experts are suggesting we are in the midst of another housing bubble. Although it’s true home values have made 16 straight months of gains, most of us are just closing the gap between what our home is worth and what we originally paid. According to a recent article by CNBC, online searches for “real estate listings” are up 256 percent compared to a year ago.
I’ve noticed a lot of people will go to great lengths to twist the facts around so they feel as though they made good real estate deals. Some of the people I know who purchased their current home at the “bottom” still had to sell their other property at the bottom. Some people may have felt like they made money when they sold at the “top” of the bubble, but often purchased at the top as well. I know I personally made some mistakes and did some things right when it came to the last housing bubble. I hope I can share what I learned with my sons as they hunt real estate deals as young adults.
Shaking off the negative equity
According to the CNBC article, many homeowners are now free of negative equity, which means they are more willing to list their homes. Even though we now have positive equity in our home, that doesn’t mean we would actually turn a profit by selling. To the contrary, we bought our home for about $180,000. It could now sell for about $135,000. We would be far better off renting out our home if we wanted to move. We could rent out our home for $1,200 a month. With a mortgage of $900 and $100 fees to a property manager, we’d pocket $200 a month. But the real benefit would be having someone else pay our mortgage for us until housing prices truly recover.
Becoming a renter versus a homeowner
Although my husband and I plan to stay put, we do have two sons who will be eventually buying real estate properties. I’m not worried about another housing bubble. The fact is most of their older peers can’t afford to purchase expensive homes because of their high debt-to-income ratio due to student loan debt. Also, there will be no real shortage of housing inventory as baby boomers move into assisted living facilities and nursing homes. In fact, there will be a surplus of homes. If there is a mini housing boom, I’ll encourage my sons to rent until home prices are more reasonable. Although my son in college considered buying a condo, he ended up finding an apartment with reasonable rent that included utilities.
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Kentucky Derby?
Stay away from the drills.
Do some big name economists believe they have the power to make bubbles vanish by either lying about them or pretending they don’t exist?
Discuss.
*** RADIO SILENCE ***
What happened to the army of trolls who were posting here just a few days ago, crowding out any useful discussion of the future course of the Housing Bubble with dilatory, nonsensical ad hominem attacks?
Only paid to work weekdays? Regular shill jobs where they can hang out on the Internet all day and troll?
Good point. Why would a paid troll spend their weekends reading and posting here?
PR scumbags need a rest too. Lying and trolling is a lot of work apparently.
It must not be a labor of love, the way that pointing out their lies and deception is. And their feeble and futile attempts to divert attention away from the inevitability of the next leg down in the collapse of the greatest real estate bubble in human history are completely pathetic.
Fascinating…just sayin’…looser MASTURdeBATOR manual point number 999…
Theyre Rich And Famous And In Foreclosure | Bankrate.com
http://www.bankrate.com/finance/mortgages/they-re-rich-and-famous-and-in-foreclosure-1.aspx - 60k -
Is it different in Newport News, VA?
If so, WHY?
Neighborhoods still smarting from housing bubble bursting
April 23, 2013|By Joe Lawlor, jlawlor@dailypress.com | 757-247-7874
NEWPORT NEWS — Some neighborhoods are still feeling the aftershocks of the housing bubble bursting.
According to a Newport News reassessment report released this spring, some neighborhoods — especially condominiums or townhomes — were again hit with double-digit decreases in property value.
The reassessment evaluates properties for the previous year. So when the new tax year starts on July 1, the properties will be taxed according to their 2012 values.
On average, residential properties declined 3.64 percent, which was less than half the rate of decline from the previous year.
Assessor Charles Vester said that could mean that for the 2014 reassessment, property values could be back on the upswing. But he said it’s too early to tell.
“It’s like shaking the magic 8-ball — the future is not clear,” Vester said.
Vester said most of the lost value in 2012 was in the first six months of the year as properties seemed to hold their values better in the second half of the year.
Turnberry Two condos in Denbigh led the decline for the third year in a row, with the condos losing 22.75 percent of their value, the steepest decrease for any neighborhood with more than 50 units. The condos have lost more than 72 percent of their value over the last three years, according to city records.
Losing almost as much in value were Warwick Townhomes in Denbigh, which suffered a loss of 22.55 percent for the 2013 re-assessment.
Foreclosures continued to be the story for financially distressed neighborhoods, city officials said.
“We didn’t have one (non-foreclosure) sale in Warwick Townhomes,” said Earl Scott, a city assessor.
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The Fed wants to foam the runway with your face.
In fact, every entity plans on foaming something with one of your limbs.
All we are is foam in the wind.
Foam in the wind.
All we are is foam in the wind.
Close your eyes and tap your heels together three times.
Markets
4/17/2013 @ 11:49AM
Fed’s Bullard Says He’s Ready To Increase QE As Inflation Is ‘Too Low’
James Bullard, president of the Federal Reserve Bank of St. Louis - Photo credit: Wikipedia
St. Louis Fed President James Bullard spoke in New York on Wednesday, warning that inflation remains too low and suggesting he’d be ready to increase the rate of asset purchases, or QE, to defend their target “from below.”
Making sure to dispel any rumors of the Federal Reserve looking to tighten its monetary stance any time soon, St. Louis Fed chief Bullard told academics easy money is here to stay. The Fed has “room to maneuver,” and the capacity to increase its rate of purchases, Bullard explained at the Levy Economic Institute’s Minsky Conference, adding that quantitative easing is a better tool than forward guidance to signal the central bank’s intention to markets.
It’s commonplace these days to attribute recent risk asset strength to the Bernanke Fed. Even the International Monetary Fund is doing it. Market participants have been nervous about the future path of Fed policy, which has sent U.S. stocks to record highs, particularly as recent FOMC minutes seem to suggest consensus within the committee, which has supported Ben Bernanke’s expansive policies consistently, might begin to break.
Bullard was sure to dispel those rumors as well, noting that as Fed transparency has gone up, subtle differences in opinion have surfaced. “I don’t think there has been any breakdown of consensus,” said the St. Louis Fed boss, who didn’t dissent last meeting, adding there are “nuanced positions.”
Interestingly Bullard suggested strong unemployment targets shouldn’t be part of policymakers’ toolkit. “Should the Fed, or any central bank, put more weight on unemployment than price stability?” he asked the crowd, before presenting research by economists Ravenna and Walsh suggesting that those targets would further distort labor markets. The Fed currently has a soft target for both inflation and the unemployment rate.
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* IMF Warns Of ‘Dangerous’ Recovery As It Cuts U.S. And Global Growth Estimates
( Hedge Fund Billionaires John Paulson And David Einhorn Lost $640M In
Gold Market Collapse
* Germany Can’t Escape Its Own Crushing Austerity As Exports Fall And Imports Tank
‘Should the Fed, or any central bank, put more weight on unemployment than price stability?’ he asked the crowd’
The crowd? Why do they bother asking “the crowd” anything? They have no accountability to anyone except their wall street masters.
And price stability? We’ve got bubbles in real estate all over the globe. In some commodities, stocks, bonds. And this clown is talking about price stability?
Italy shooting was ‘tragic criminal gesture’ – video
Italy’s interior minister says Sunday’s shootings near the presidential offices in Rome were a ‘tragic’ gesture by a suicidal unemployed man. Angelino Alfarno says the suspected gunman, who was arrested at the scene, wanted to kill himself but had used the bullets on two policemen. The shooting took place 1km from where Italy’s new president, Enrico Letta, was being sworn in
News from the brother front….electrician brother no real work for over a year, ran out UI 2 months ago finally gets a job 25 miles away in stop and go traffic…each way…. it will be a year before its finished
so where did the $150 million come from?
http://www.newstimes.com/local/article/Danbury-hospital-Expansion-on-schedule-3546837.php
Boughton noted Wednesday that Danbury Hospital,
with 3,300 employees, is the largest employer in the city.
Some of the Beats are throwing their checks away because they look like a collection notice.
Third wave of foreclosure checks mailed today, $1.1 billion already cashed
by Kim Miller
Nearly $1.1 billion in foreclosure restitution checks have been cashed or deposited in the past two weeks by 1.2 million recipients nationwide.
The program, which is the result of agreements reached with banks when the Independent Foreclosure Review imploded, mailed out its third wave of checks today. This third group contains 927,000 checks worth $794 million.
The Office of the Comptroller of the Currency and Rust Consulting, the company hired to distribute the checks, have worked out early kinks that resulted in bounced checks.
But there is still a concern that homeowners will toss out their payoff thinking it’s junk mail or a collection notice.
In fact, Palm Beach Post reader Gillian Beach Cieri accidentally chucked hers into the recycle bin and it wasn’t until after seeing a story in The Post that she retrieved it.
It’s an easy mistake. The envelopes are pretty benign looking.
“I was reading about the mortgage foreclosure checks when a terrible thought struck me: Days ago, I threw an unopened envelope into my recycle bin, assuming it was a collection agency notice,” Cieri wrote in a letter to the editor. “Although I had signed up for this foreclosure refund a long time ago, it was only a ‘cross my fingers’ type of thing.”
This entry was posted on Friday, April 26th, 2013 at 10:55 am and is filed under Florida economy, Foreclosures, Housing affordability, Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
and not a dime for renters with a perfect record of paying on time……what an idiot i am.
“and not a dime for renters with a perfect record of paying on time”
“it was only a ‘cross my fingers’ type of thing.”
Maybe you should blow out your birthday candles and wish for 5 years of rent free living and a $5,000 check at the end of it for all the stress you had not paying rent for 5 years. It worked for Gillian Beach Cieri and millions of her Deadbeat friends.
This is way beyond stupid. Makes me cry tears of joy that I never set foot inside a Wal-Mart store.
Customers Flee Wal-Mart Empty Shelves for Target, Costco
By Renee Dudley - Mar 26, 2013 1:10 PM PT
Last month, Wal-Mart placed last among department and discount stores in the American Customer Satisfaction Index, the sixth year in a row the company had either tied or taken the last spot. Photographer: Andrew Harrer/Bloomberg
Spencer Platt/Getty Images
A Wal-mart store in Valley Stream, New York.
Margaret Hancock has long considered the local Wal-Mart Stores Inc. (WMT) superstore her one- stop shopping destination. No longer.
Enlarge image Wal-Mart Loses Premium to Target as Shoppers Flee Stores
During recent visits, the retired accountant from Newark, Delaware, says she failed to find more than a dozen basic items, including certain types of face cream, cold medicine, bandages, mouthwash, hangers, lamps and fabrics.
The cosmetics section “looked like someone raided it,” said Hancock, 63.
Wal-Mart’s loss was a gain for Kohl’s Corp. (KSS), Safeway Inc. (SWY), Target Corp. (TGT) and Walgreen Co. (WAG) — the chains Hancock hit for the items she couldn’t find at Wal-Mart.
“If it’s not on the shelf, I can’t buy it,” she said. “You hate to see a company self-destruct, but there are other places to go.”
…
Here is a prediction: In the year 2024, at the end of Hilary Clinton’s second term, the Fed will still be jawboning about its plans to increase freakishly-low interest rates at some unspecified point in the indefinite future.
Commentary / World
Zero-interest rates harder to quit than IMF thinks — just ask Japan
by William Pesek
Bloomberg
Apr 29, 2013
Christine Lagarde wants her staff at the International Monetary Fund to examine what might happen to the global economy when central banks begin to raise interest rates. She’s wasting their time.
If Japan has taught us anything, it’s that slashing rates to zero and beyond is a lot easier than returning them to normalcy. Japan is on its sixth central bank governor since its bubble imploded in 1990, and like his predecessors, Haruhiko Kuroda is doubling down on quantitative easing. Why? Politicians, bankers, investors and businesspeople alike get addicted to free money all too easily and clamor for more.
Once central banks start embracing assets such as corporate debt, commercial paper, mortgage-backed securities, exchange-traded funds, real-estate trusts and the like, monetary officials tend to get stuck. That’s especially so in nations carrying large, and growing, debt burdens.
“They simply can’t afford any meaningful increase in interest rates,” says Simon Grose-Hodge, head of investment strategy for South Asia at LGT Group in Singapore. “The Japan experience suggests very low rates are going to be around for a long time.”
What Lagarde should ask her staff to do is study how the nature of economics and capitalism will be altered by most Group of Seven nations maintaining zero-rate policies for another decade or more. The “liquidity trap” that deadens the benefits of monetary easing is morphing into a “stimulus trap,” which is much harder to shake.
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April 18, 2013, 9:38 AM
Fed’s Kocherlakota: Very Low Rates Could Persist for a Decade
By Michael S. Derby
A Federal Reserve official said Thursday interest rates are likely to stay very low for years to come, which raised the prospect that chronic financial instability risks will dog the economy for a long time.
“For a considerable period of time, the [Federal Open Market Committee] may only be to achieve its macroeconomic objectives in association with signs of instability in financial markets,” Federal Reserve Bank of Minneapolis President Narayana Kocherlaktoa said.
“For many years to come, the FOMC will have to maintain low real interest rates to achieve its congressionally mandated goals,” the official said. “Unusually low real interest rates should be expected to be linked with inflated asset prices, high asset return volatility and heightened merger activity,” he said.
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Low Interest Rates Are Hurting, Not Helping, the Economy: Sheila Bair
By Morgan Korn | Daily Ticker – Wed, Apr 17, 2013 8:26 AM EDT
Historically low interest rates have helped the U.S. housing market recover by attracting new buyers into the market and allowing current homeowners to refinance their mortgages at a lower rate and save money. The Federal Reserve has kept short-term overnight lending rates near zero since 2008 to encourage consumer and business spending.
Economic growth has yet to return to its pre-recession levels and the latest GDP report showed that the economy grew at an annual rate of 0.4% in the fourth quarter of last year. The Commerce Department will release its first reading of Q1 GDP on April 26.
Homeowners are not the only group that have benefited from the mortgage-refinancing trend. The nation’s largest banks have seen their mortgage businesses skyrocket as more Americans took advantage of super low interest rates. But recent reports by JPMorgan (JPM) and Wells Fargo (WFC) indicate that the rush to refinance may be slowing and the lucrative profits earned in recent years could be falling.
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MARKETS
April 25, 2013, 8:26 p.m. ET
Fed Zeroes In on Vulnerability to Rate Rise
By VICTORIA MCGRANE
The Federal Reserve is scrutinizing the nation’s biggest banks to ensure they can handle an eventual rise in interest rates, as concern grows among regulators about the risks posed by a long low-interest-rate environment.
On Thursday, a panel of federal regulators charged with identifying market risks warned that a sudden rise in interest rates could have a destabilizing effect on financial markets. The Financial Stability Oversight Council, in its third annual report, cited interest-rate risk as one of seven major vulnerabilities to financial stability.
“A sudden spike in yields and volatilities could trigger a disorderly adjustment, and potentially create outsized risks,” the council said in its report.
Ben Bernanke is part of a panel charged with identifying market risks.
The Fed’s chairman, Ben Bernanke, sits on the FSOC. Using detailed data that the central bank started collecting after the financial crisis, Fed officials are regularly running big banks’ portfolio holdings through models to gauge their exposure to various changes in interest rates, according to Fed officials.
For the first time this year, the Fed asked banks to gauge their ability to withstand a hypothetical inflation and interest-rate shock as part of an annual “stress-testing” exercise.
According to Fed officials, none of the 18 largest U.S. banks saw their capital levels fall below regulatory minimums under the scenario, which featured a mix of moderate recession, rising consumer prices and rapid increases in short-term interest rates, as might occur if oil prices were to shoot sharply higher. The Fed didn’t publicly release results of the scenario.
The Fed found that banks are protected in part because they have increased capital levels and because their net interest income would increase with a rate rise. They also have an inexpensive source of funds in customer deposits, which would insulate them, it found.
The Fed isn’t expected to raise rates any time soon, and the monitoring isn’t a signal that the central bank might shift its position—it has committed to holding rates low for a long time, at least until unemployment falls below 6.5%, as long as inflation remains stable.
The vast majority of the Fed’s 19 policy makers don’t believe the central bank will raise short-term rates until 2015 at the earliest.
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Yellen Backs ‘Lower for Longer’ Fed Rate Policy Amid Risks
By Craig Torres - Apr 16, 2013 2:48 PM PT
Federal Reserve Board Vice Chairman Janet Yellen said she favors holding the benchmark interest rate “lower for longer” while cautioning that some bond-market investors may be paying too much for higher yields.
The Fed vice chairman said the central bank’s low-rate policies are intended “to promote a return to prudent risk- taking” in credit markets. “Obviously, risk-taking can go too far,” Yellen said today at an International Monetary Fund panel discussion on monetary policy in Washington.
The Federal Open Market Committee in December pledged to keep the main interest rate near zero so long as the unemployment rate remains above 6.5 percent and the forecast for inflation doesn’t exceed 2.5 percent over one to two years. Last month the committee said it will continue buying $85 billion in bonds until the labor market “improves substantially.”
“I don’t see pervasive evidence of rapid credit growth, a marked buildup in leverage, or significant asset bubbles that would threaten financial stability,” Yellen said. “But there are signs that some parties are reaching for yield, and the Federal Reserve continues to carefully monitor this situation.”
In response to an audience question, Yellen said she didn’t expect financial stability concerns to grow so acute that they become “the dominant factor that should control our policy.”
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I went to the bathroom with the blinds open as my new neighbors were setting their patio table for dinner.
WHAT?! I’m not used to having neighbors.
“If you don’t eat your meat, you can’t have any pudding, how can you have any pudding if you don’t eat your meat!”
Just in case this might happen to someone who might not know what to do. If you find yourself in a rip current heading out to sea fast, relax, don’t try to out muscle the rip current, you won’t, swim parallel to the shore until you are out of it and then turn and swim towards the shore. Happens every year.
Posted: 6:11 p.m. Sunday, April 28, 2013
Sixteen caught in rip currents, one in critical condition in Jupiter
By Charles Elmore and Emily Roach
Palm Beach Post Staff Writer
At least 16 people found themselves caught in dangerous rip currents along Palm Beach County beaches Sunday that left one swimmer in critical condition in Jupiter and sent at least eight others to area hospitals.
Eight swimmers were pulled from the ocean in two separate incidents at Ocean Cay Park in Jupiter with one reported in critical condition at Jupiter Medical Center, Palm Beach County Fire Rescue said. Two others were taken to the hospital for follow-up treatment.
Read the complete story on the all-new MyPalmBeachPost.com »
SocGen repeats $10,000 Target as Central Banks Buy Gold, ETFs Sell, Indian Dealers Run Out - April 25, 2013
http://goldnews.bullionvault.com/buy-gold-0425020132
Just Testing the new computer.
It works!
After lurking here at the HBB since 2008(if not earlier) I can now post.
Must have been the Computer change that finally did it.
I must thank all of you who post, for sharing your knowledge.
It has really helped.
Thanks.
P.S. what ever happened to the Taco Bell Guy in Socal with all his houses?
Care to guess?
April 27, 2013, 6:03 a.m. EDT
Capitalism is killing our morals, our future
Commentary: In a Market Society, everything is for sale
By Paul B. Farrell, MarketWatch
SAN LUIS OBISPO, Calif. (MarketWatch) — Yes, capitalism is working … for the Forbes 1,000 Global Billionaires whose ranks swelled from 322 in 2000 to 1,426 recently. Billionaires control the vast majority of the world’s wealth, while the income of American workers stagnated.
For the rest of the world, capitalism is not working: A billion live on less than two dollars a day. With global population exploding to 10 billion by 2050, that inequality gap will grow, fueling revolutions, wars, adding more billionaires and more folks surviving on two bucks a day.
Over the years we’ve explored the reasons capitalism blindly continues on its self-destructive path. Recently we found someone who brilliantly explains why free-market capitalism is destined to destroy the world, absent a historic paradigm shift: That is Harvard philosopher Michael Sandel, author of the new best-seller, “What Money Can’t Buy: The Moral Limits of Markets,” and his earlier classic, “Justice: What’s the Right Thing to Do?”
For more than three decades Sandel’s been explaining how capitalism is undermining America’s moral values and why most people are in denial of the impact. His classes are larger than a thousand although you can take his Harvard “Justice” course online. Sandel recently summarized his ideas about capitalism in the Atlantic. In “What Isn’t for Sale?” he writes:
“Without being fully aware of the shift, Americans have drifted from having a market economy to becoming a market society … where almost everything is up for sale … a way of life where market values seep into almost every sphere of life and sometimes crowd out or corrode important values, non-market values.”
Sandel should be required reading for all Wall Street insiders as well as America’s 95 million Main Street investors. Here’s a condensed version:
In one generation, market ideology consumed America’s collective spirit
“The years leading up to the financial crisis of 2008 were a heady time of market faith and deregulation — an era of market triumphalism,” says Sandel. “The era began in the early 1980s, when Ronald Reagan and Margaret Thatcher proclaimed their conviction that markets, not government, held the key to prosperity and freedom.”
…
“…Ronald Reagan and Margaret Thatcher proclaimed their conviction that markets, not government, held the key to prosperity and freedom.”
Well, it worked for them….
“Ronald Reagan and Margaret Thatcher proclaimed their conviction that markets, not government, held the key to prosperity and freedom.”
Behold the difference between North Korea and South Korea. Two distinct economic systems. Or of East Germany versus West Germany before the collapse of the Berlin Wall.
Now tell me which side had a higher standard of living?