May 30, 2013

Free Money And A Seller’s Utopia

A report from The Street. “National home prices are still about 20% below their June 2006 peak, but in Texas home prices are now at a new peak, according to data from Lender Processing Services. Despite soaring home prices in Arizona and California, home prices in Arizona are still down 35% from their May 2006 peak, while in California, home prices are nearly 32% below the April 2006 peak. Colorado is another state that is very close to its previous peak with home prices just 0.7% off June 2007 highs. The housing market in Denver is at a new peak.”

The Denver Magazine in Colorado. “Not long ago, real estate in Denver was in the weeds. In January 2009, the average home price in the Mile High City hovered around $225,000, a 30 percent drop from the market’s peak in June 2007. Homes listed on the lower end were hit even harder, dipping by closer to 40 percent. But this grim picture is now history. The catch? Per capita, there have never been fewer homes for sale in Denver. Why potential sellers aren’t selling is anyone’s guess. This is, of course, a potentially lucrative situation if you’re in the latter camp. ‘We probably have the strongest seller’s market we’ve ever had,’ says Charles Roberts, co-owner of Denver’s Your Castle Real Estate.”

“If would-be sellers realize how good the market is for them right now, come summer, Denver housing should see solid prices, quality buyers, and a healthy inventory. If the number of available properties remains low, however, bidding wars could inflate prices across the Front Range and once again create skyrocketing appreciation rates. For now, forget all that. If you’ve put off even thinking about selling your home since the market crashed, it’s time to focus, strategize, and (hopefully) capitalize on this seller’s utopia.”

The Denver Business Journal in Colorado. “Wells Fargo & Co. and JPMorgan Chase & Co. — two of Colorado’s biggest banks — have nearly halted foreclosure sales after federal regulators revised orders on how troubled borrowers were to be treated before losing their homes. Citibank Inc. is another big lender that has greatly slowed sales of homes in foreclosure, the Los Angeles Times reports.”

The Salt Lake Tribune in Utah. “With Utah’s recovery from the recession outpacing the nation, would-be homebuyers returning to the housing market are stepping into the best interest rate environment in memory. But choose sooner than later or run the risk of losing the best mortgage rate. ‘Over the last week, our interest rates have gone up 0.375 points for a 30-year loan, so you can lose by shopping around too much,’ said Chris Bennett, a mortgage consultant in Midvale. ‘Don’t spend two weeks looking. Spend a couple of days and then make a decision.’”

“Think before refinancing to a 15-year loan. Over the past 12 months, the rate for a 15-year loan has slowly fallen, from slightly more than 3 percent to as low as 2.6 percent in January before starting a gradual rise to 2.8 percent today. To many people, rates that low are ‘free’ money. There is a risk, though, said Tim Roberts, a senior loan officer at Bank of Utah. ‘I’ve helped somebody refinance to a 15-year mortgage [from a 30-year loan], and six months later they came back and said they can’t afford it,’ Roberts said.”

From KTAR in Arizona. “The latest Case-Shiller home price index showed that home prices in the Phoenix area jumped by 22.5 percent in the past year. Diane Brennan, host of ‘That Real Estate Show’ on KTAR, said said some areas of the Valley have home prices that are rising much faster than that 22.5 percent figure. ‘It might be 22 percent on average, but we’ve seen some places jump 100 percent in some of the hardest hit areas,’ she said, adding that those areas include south Phoenix, Queen Creek, San Tan Valley and other outlying areas.”

“Brennan does not believe in predictions that Phoenix is in a second housing “bubble” that is about to burst. ‘I think that ‘other bubble’ is a bunch of malarkey,’ she said. ‘I think those people who are panicking and calling doomsday again is unfounded.’”

From Fox 5 Vegas in Nevada. “Buying a home in southern Nevada is like grabbing a bite to eat. ‘The greatest part is that when you used to go to a restaurant last year, you used to walk in and eat. Now if you don’t get a reservation, you are waiting in a line,’ said Dave Tina, president of the Greater Las Vegas Association of Realtors. ‘With low interest rates at 3.5, everybody bought and we created an inventory shortage.’”

“‘There is a lot if competition out there among home buyers. There are investors trying to make profit from flipping a house or putting it up for lease and first time home buyers have to compete with that,’ said Luis Lopez, data analyst for UNLV’s Lead Institute of Real Estate Studies.”

The Las Vegas Sun in Nevada. “Las Vegas builders continue to sell homes at a faster clip than last year as they pull more permits and buy land at higher prices. The price per acre of raw land in prime locations has more than doubled in the past six months to the $350,000 to $400,000 range, according to Home Builders Research President Dennis Smith, who reported in March that land prices were rising at an unsustainable and ‘downright scary’ pace.”

“The median sales price last month was $238,820, up 19 percent from a year earlier. Given the valley’s rising land prices, ‘it would be foolish’ to think the median sales price of new houses won’t reach $250,000 by year’s end, Smith said in the report. ‘This housing recovery has a LONG way to reach levels that were considered the ‘norm’ not too long ago,’ he wrote.”

“Lobbyists representing investors, debt collectors, property management companies, real estate firms and banks large and small have been discussing legislation that could result in higher association dues for homeowners and changes to who pays the lien on foreclosed homes in a neighborhood. The negotiations essentially consist of what HOAs could or should be allowed to do when it comes to homeowners who stop paying their dues and how much HOAs can collect from the proceeds a bank eventually earns once a foreclosed property is sold.”

“This longstanding battle has carried over from the 2011 legislative session, when legislators nearly reached agreement about who pays for debt collection costs on delinquent HOA dues once a house is foreclosed on, said Michael Buckley, real estate attorney and former commissioner on the Nevada Commission on Common Interest Communities.”

“‘It’s a mess because banks are taking so long to foreclose,’ Buckley said.”

From 8 News Now in Nevada. “According to the Nevada Real Estate Division, HOAs foreclosed on nearly 650 homeowners last year, an increase from 2011 of more than 250 percent. Paul Terry, an attorney for a law firm that represents homeowner’s associations explains the increase in HOA foreclosures with the decrease, or near halt, of bank foreclosures. ‘Before the economic crisis, we almost never foreclosed on anybody’s house,’ Terry said. ‘The thing that’s driving this is that it takes the banks so long to foreclose that the HOA and the homeowners don’t really have much choice but to proceed, or start writing bigger checks every month.’”

“It happened to Venise Abelard and hundreds of others who once thought the only thing they had to fear was their bank. A notice of sale taped to her door that informed her that her homeowner’s association planned to sell her house in 30 days, unless she paid some $4,000. ‘I was surprised, because I didn’t know I owe anyone,’ she said.”

“Abelard insists she was current on her $56 a month payments to the Fort Apache Square HOA. So she gathered years of canceled checks and bank statements to make her case. But her evidence failed to convince the HOA’s law firm. In July of last year, she awoke to another notice on the door. This one said her house had been sold and she had three days to move out. ‘I just dropped and sat down on the stairs here,’ she said. ‘I said, ‘OK, I have three days to vacate my home. I still, you know, didn’t get it.’”

“For now, Abelard remains in her home. And although she doesn’t own it, the mortgage is still in her name. ‘It’s a mess,’ Abelard said. ‘I don’t understand it myself.’”




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40 Comments »

Comment by Mr. Smithers
2013-05-30 05:49:38

“The latest Case-Shiller home price index showed that home prices in the Phoenix area jumped by 22.5 percent in the past year”

That’s a lie. I have been told numerous times by Housing Analyst that demand is down 8176%.

Comment by Whac-A-Bubble™
2013-05-30 06:25:37

How much have you lost by now on your Atlanta real estate investments?

 
Comment by Ben Jones
2013-05-30 06:29:06

Yeah, just focus on your little blog squabbles. Meanwhile the feds threw yet another roadblock in the foreclosure path recently:

‘Chief economist Mark Fleming said in the new CoreLogic report that the decline in Arizona’s foreclosure inventory rate is more rapid than in most other states. “Six states have year-over-year declines in the foreclosure inventory of more than 40 percent, and in Arizona and California the year-over-year decline is more than 50 percent,” Fleming said.’

http://www.bizjournals.com/phoenix/news/2013/05/29/phoenix-home-foreclosure-rate-down.html

Ordinarily, when people are being played by big powerful forces, they don’t like it. But if it comes to the most expensive thing we pay for, it gets no attention.

‘Due to the release of new guidance issued by the Office of the Comptroller of the Currency, Wells Fargo among several other banks have halted a great number of their foreclosure sales. The Federal Reserve released similar guidance to the banks under their radar. Wells Fargo’s foreclosure sales have seen huge declines due to the freeze. Foreclosure sales in California, Nevada, Arizona, Oregon and Washington all went from seeing over 300 sales a day in April, to less than 10 a day, according to Foreclosure Radar.’

http://www.loansafe.org/certain-foreclosure-auctions-halted-while-banks-examine-new-guidance

Comment by Whac-A-Bubble™
2013-05-30 06:32:07

“Ordinarily, when people are being played by big powerful forces, they don’t like it. But if it comes to the most expensive thing we pay for, it gets no attention.”

Lesson learned: Laws are temporary and illusory, and can be summarily changed at any moment as needed to increase profits for the rich and powerful.

Comment by Ben Jones
2013-05-30 06:37:31

Let’s take this:

‘Practically every house listed for sale in Las Vegas — distressed or otherwise — gets multiple offers, and prices are rising. That’s due in part to the seemingly endless appetite of cash buyers to turn cheap homes into rentals, according to brokers and analysts.’

http://www.vegasinc.com/news/2013/may/29/distressed-home-prices-nevada-soar-inventory-shrin/

‘roughly 13,900 single-family homes were listed for sale at the end of April on the GLVAR’s listing service, down 22 percent from a year earlier.’

Why down only 22%? If the brokers and analysts were right in the first statement, there would be zero inventory. Jeebus, these people are laying it on thick and no one even questions the obvious distortions.

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Comment by Beer and Cigar Guy
2013-05-30 06:59:50

Yes, the propaganda is everywhere, but it feels a little different to me this time. Aside from the obviously delusional, the dedicated crook or rabid flipper, there are fewer ‘Baghdad Bobs’ out there pumping the market. More RE industry-sponsored articles in the media, but fewer true believers in the “value” of RE. It seems like the DENIAL is missing. The press is also full of articles that use the term “bubble”. The FED has acknowledged ‘froth’ and rapid price escalation in certain asset classes instead of denying that a bubble could exist. The current meme seems to be, ‘Yeah, its a bubble, but I’m gonna get mine while I can and get out before everyone else’. Since everyone saw this movie just 5 years ago and knows how it ended, I think that this time the action (both upwards and downwards) will happen much faster. And with larger investors/hedge funds already slipping out the exits as you pointed out yesterday, it appears like that exodus has already begun.

 
Comment by Ben Jones
2013-05-30 07:33:52

‘It seems like the DENIAL is missing’

I was struck by the contrast of quotes in the Florida and California posts this week. The Floridian public and UHS were not bashful to say it looked like 2003 or 06, and the tone was obviously wary. The Californians were in full cheerleader mode. But I know what you mean. Only the deer in the headlights buyers really believe this “buy now or be priced out forever” stuff. These flippers we read about know full well this will end, but are betting they can get out with some of the loot.

Take this Queen Creek statement. This area was one of the worst wipe-outs in real estate history; is it really up 100% YOY? Come on, Bloomberg. If that’s true you are missing a story! So who would drive up prices in Queen Creek but flippers looking for a greater fool. Man, I wish I had the time to drive down there and check it out.

 
Comment by Beer and Cigar Guy
2013-05-30 08:21:17

That Queen Creek blurb resonated with me as well, because I remember you covering that topic/area very well during Bubble 1.0. There are still tons of abandoned/empty houses around here, weeds in the yards, fences falling down, rotting newspapers in the driveway and no lights on at night. A drive through the subdivisions can be a real eye-opener. A coworker still lives in his house, but has not made a payment in over 3 years. I personally know other people also in that same situation. Here in the Orlando area RE folks are chanting the mantra, but the fervor is simply not there. When asked where the jobs and money will come from to support these increased prices you generally get a polite smile and a shrug. I think there is finally a realization that, no matter how many times it is sold, it isn’t “real” until someone moves into it. Someone with a steady job… Who can actually afford to make the payments for longer than 9 months… Who won’t stop making payments again when the value decreases…

 
Comment by "Uncle Fed, why won't you love ME?"
2013-05-30 13:46:18

If your coworker hasn’t made a house payment in three years, he should have enough money stashed to buy another house with cash by now.

 
Comment by Whac-A-Bubble™
2013-05-30 14:53:22

“The Californians were in full cheerleader mode.”

Housing is a religion out here.

 
 
 
Comment by "Uncle Fed, why won't you love ME?"
2013-05-30 13:41:11

I think these “guidance” changes are just an excuse for the banks to continue what they’ve been doing for years now (trickling out the inventory). There used to be too much to trickle, so they would release it in waves. The inventory is still high, yet low enough to trickle with the right excuses.

 
 
Comment by Beer and Cigar Guy
2013-05-30 07:28:51

“Comment by Mr. Smithers
2013-05-30 05:49:38

“The latest Case-Shiller home price index showed that home prices in the Phoenix area jumped by 22.5 percent in the past year”

That’s a lie. I have been told numerous times by Housing Analyst that demand is down 8176%.”

I wonder if there was a reliable way to break out how many of these sale numbers and price increases resulted from flippers flipping them to other flippers? Certainly there is a substantial portion of it that is simply speculators selling to other speculators. Who knows, maybe this ‘inbreeding’ is more prevalent than anyone would imagine. Look at the decrease in mortgage apps- how many Joe6packs just happened to stumble across $300,000 cash in the backyard and decide to go buy a house with it? If it ain’t end-users buying these, then its just short-term speculators.

Comment by Ben Jones
2013-05-30 07:52:10

‘resulted from flippers flipping them to other flippers’

We’ve already seen a report of a FL “investor” paying over asking when they were the only bidder. And the one report from the Inland Empire where an investor bought a house, over asking, expressly to up the comps of other properties they owned nearby.

A couple months ago realty trac came out with a best markets to rent report. At the time I told people I know that we should watch the media for a turn from ‘rental boom’ to ‘flipping boom.’ The next month realty tracs report was best markets to flip. I have already found reports of speculators selling to speculators. But it’s being spoke of in less speculative tones. There was the same day flip I found reported in the Sarasota area this week. The buyer was an LLC, paid 22k more for it than the first sale.

If or when we read about a condo or house being flipped multiple times, we will probably be close to the end. If we see flippers descend on the “yet to be built market”, run for the hills.

 
Comment by HBB_Rocks
2013-05-30 07:52:56

Man, it would be hilarious if the flippers were buying from other flippers, ripping out some of the new granite the previous flipper had put in for a different color, repainted some rooms, and were putting them back on the market only to be purchased by another flipper who did the exact same thing.

Comment by Rental Watch
2013-05-30 11:13:30

At least it’s not the government hiring people to dig ditches and fill them back in again…it’s someone else wasting money.

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Comment by Carl Morris
2013-05-30 12:59:15

it’s someone else wasting money.

Which is fine as long as they take the potential losses with no bailouts, even backdoor ones achieved by artificially inflating prices across the board at the expense of savers.

 
Comment by "Uncle Fed, why won't you love ME?"
2013-05-30 13:49:53

Actually ….

Isn’t the government funding this “rescue” of the banks (er, housing market) with borrowed money, to be repaid by taxes?

 
 
 
 
 
Comment by 2banana
2013-05-30 06:22:52

There is just so much more to this story.

$4000/$56 = 71 months or almost 6 years of not paying the HOA?

How much of that is fees and interest?

And if Abelard can prove she paid the HOA fees and they still took her house - the HOA just opened itself to a huge lawsuit.

PS - I hate HOA. Hate them.

—————

“It happened to Venise Abelard and hundreds of others who once thought the only thing they had to fear was their bank. A notice of sale taped to her door that informed her that her homeowner’s association planned to sell her house in 30 days, unless she paid some $4,000. ‘I was surprised, because I didn’t know I owe anyone,’ she said.”

“Abelard insists she was current on her $56 a month payments to the Fort Apache Square HOA. So she gathered years of canceled checks and bank statements to make her case. But her evidence failed to convince the HOA’s law firm. In July of last year, she awoke to another notice on the door. This one said her house had been sold and she had three days to move out. ‘I just dropped and sat down on the stairs here,’ she said. ‘I said, ‘OK, I have three days to vacate my home. I still, you know, didn’t get it.’”

Comment by Beer and Cigar Guy
2013-05-30 07:09:09

I will never live in one of those cattle-pen gated communities or anywhere with an HOA. Who deliberately seeks to have another monthly fee in perpetuity- with the ability to have it raised without warning or cap- AND add another layer of quasi-governmental, nanny-bureaucracy to complicate their daily life?

Comment by Carl Morris
2013-05-30 09:49:37

Who deliberately seeks to have another monthly fee in perpetuity- with the ability to have it raised without warning or cap- AND add another layer of quasi-governmental, nanny-bureaucracy to complicate their daily life?

Someone who wants to be protected from “them”.

 
 
Comment by "Uncle Fed, why won't you love ME?"
2013-05-30 13:52:40

1) The article implies she was behind on her mortgage as well.

2) She probably failed to pay the special levies that get charged when everyone else moves out and stops paying their HOA.

3) HOA = raw deal.

 
Comment by m2p
2013-05-30 18:47:55

How much of that is fees and interest?

From the comment section of the article.

The HOA originally claimed she owed $1200.00. She disputes this and provided enough evidence to a court to convince a judge to stop her eviction while both sides go through the discovery process. Due to late payment penalties, collection costs, management and attorneys fees, that $1200.00 swelled to $4,900 at the time of foreclosure. Unlike a credit card for example, HOA’s do not have to send you a bill or a notice prior to beginning the foreclosure process. That is the issue now before the legislature.

 
 
Comment by Whac-A-Bubble™
2013-05-30 06:30:14

“Despite soaring home prices in Arizona and California, home prices in Arizona are still down 35% from their May 2006 peak, while in California, home prices are nearly 32% below the April 2006 peak.”

Note that this is after massive, unprecedented Fed stimulus, including over a year’s worth of $40/bn a month in QE3 MBS purchases to artificially drive down mortgage rates.

Once QE3 housing market punchbowl spiking ends, the greater fools are going to be deeper underwater than the bottom of the Marianas trench.

Comment by 2banana
2013-05-30 06:43:49

It sure did not go a long way.

Imagine all the teachers we could have hired with that money.

Obama has borrowed $7 Trillion in new deceits since taking office
Obama has borrowed more money than all the other presidents combined (and also accounting for inflation)
The Federal government now borrows 46 cents of every dollar it spends.
QE3 now spends $80 billion/month with no end date

 
Comment by Ben Jones
2013-05-30 06:55:38

‘Mortgage bonds are limping toward month-end after a sharp sell-off in May amid broadly rising rates. Mortgage REITs, a favorite sector among income investors during this prolonged period of low bond yields, have also had a terrible month. Shares in Annaly Capital Management (NLY), which traded at $15.83 on May 1, are since down 11.6% to $13.99 at the start of the trading day Thursday. American Capital Agency Corp. (AGNC) shares are down 20% during that same period to $26.40, and the iShares FTSE NAREITMortgage PLUS Capped Index Fund (REM) is down 9.8% in May to $14.05.’

http://blogs.barrons.com/incomeinvesting/2013/05/30/mortgage-bonds-slump-as-mortgage-reits-dump-them/?mod=yahoobarrons

Look at where these mortgage REITs were last fall.

 
Comment by sleepless_near_seattle
2013-05-30 19:09:19

“Despite soaring home prices in Arizona and California, home prices in Arizona are still down 35% from their May 2006 peak, while in California, home prices are nearly 32% below the April 2006 peak.”

Of note here is that they keep comparing to peak prices, as if those were real, as if they were part of a normal economy.

 
 
Comment by sfhomowner
2013-05-30 09:43:48

Why potential sellers aren’t selling is anyone’s guess.

This statement is odd, and doesn’t take into account that when someone sells their house they still have to live somewhere.

I have noticed that most people who have owned a house don’t want to go back to renting. Not sure why this is the case, especially if renting is cheaper.

My guess is that people aren’t selling because they would have to pay even more to buy another house. Duh.

Comment by perkonkrusts
2013-05-30 11:05:04

“My guess is that people aren’t selling because they would have to pay even more to buy another house”

Massive price increases really mess up people’s ability to move up in house. If previously you had a $150,000 and wanted to move up to a $250,000, you had to make up a difference of $100,000. When the price doubles, you’re in a $300,000 and the house you want is now $500,000, so you need $200,000. Not to even mention property tax increases.

Comment by doom
2013-05-30 11:54:59

You are upside down but you are still making your payments and of course why sell only to pay another inflated price which got you in trouble in the first place?

Consider the market is now seeing over price homes who want to get from under their mortgage and buyers who can afford these are started to shrink who is left are prospects who won’t qualify and sellers who may have to readjust their thinking and pull the home off the market.

This will create possibly another low inventory scenario.

Comment by Beer and Cigar Guy
2013-05-30 13:05:54

“This will create possibly another low inventory scenario.”

You can always just buy a lot and have a builder knock one out for you. That is what they do for a living, after all.

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Comment by Arizona Slim
2013-05-30 12:29:01

My guess is that people aren’t selling because they would have to pay even more to buy another house. Duh.

Back in 2004, my then-landlady gave me notice to vacate. Why? Because she wanted to fix up the ole duplex and sell it.

No worries. I was about to move into the Arizona Slim Ranch.

Well, then came 2005. She fell ill and the house fixup plans went on hold. The cost of buying another place kept them there.

She still lives in the back of said duplex while renting the front half.

 
Comment by "Uncle Fed, why won't you love ME?"
2013-05-30 13:59:44

During the last bubble, everyone was moving all the time. They were ALL selling and moving up (on borrowed money with 103% LTV, of course). If they aren’t doing that now, it means one of two things:

1) They can’t get a 103% loan, which would have made the transactions seem “free” at first.

2) They can’t compete with the cash “investors”, which would make the investors great fools.

 
 
Comment by Whac-A-Bubble™
2013-05-30 12:45:57

NOW they tell us!

In many markets, it’s cheaper to rent than buy — but that’s not stopping home builders
May 30, 2013, 11:01 AM

In many top markets, it’s cheaper to rent than buy.

That’s according to an analysis done by Stern Agee home-builder analyst Jay McCanless, who compared the “fully-loaded price” (mortgage + fees, insurance and taxes) vs. renting. In the 25 top markets of the builders he follows (which excludes New York and Los Angeles but includes Chicago, Indianapolis, Houston, Washington D.C. and San Francisco among others), it’s cheaper to rent instead of buy in 13 markets at an interest rate of 3.5%.

That number grows to 17 in the “rent” camp when rates reach 4%, and to 20 when rates reach 5%. The five markets where it would still be better to buy than rent at rates of 5% are Chicago, Tampa, Sarasota, Miami and Atlanta.

 
Comment by Whac-A-Bubble™
2013-05-30 14:27:37

“Why potential sellers aren’t selling is anyone’s guess.”

Collusion?

Price-fixing?

Comment by Rental Watch
2013-05-30 17:48:40

There is no secret meeting of homeowners out there…it would take a big room. Major owners (banks as REO, etc.), don’t control enough of the market to move the market.

 
 
Comment by Whac-A-Bubble™
2013-05-30 14:45:19

“‘I’ve helped somebody refinance to a 15-year mortgage [from a 30-year loan], and six months later they came back and said they can’t afford it,’ Roberts said.”

It was the home’s sale price, not the loan, that they couldn’t afford.

But stretching the payments out over 30 years has a way of masking that fact.

 
Comment by Whac-A-Bubble™
2013-05-30 14:57:58

This will put a serious dent in the pace of summer home sales:

May 30, 2013, 10:10 A.M. ET
30-Year Mortgage Rate Jumps To 12-Month High 3.81%
By Michael Aneiro

Mortgage rates predictably spiked this week following a similar sharp jump in Treasury rates. The average 30-year fixed-rate mortgage rate hit 3.81%, up significantly from 3.59% one week ago, according to Freddie Mac‘s (FMCC) latest Primary Mortgage Market Survey.

It marks by far the rate’s highest reading of 2013, topping the 3.63% registered the week ended March 14, and the highest level overall since the 3.83% rate seen over a year ago during the week ended May 10, 2012. A mere four weeks ago that rate fell as low as 3.35%, barely missing its 3.31% all-time low registered last November, before now rising for four straight weeks.

Comment by sleepless_near_seattle
2013-05-30 19:07:05

This will put a serious dent in the pace of summer home sales

…which means prices will have to come down.

 
 
Comment by Housing Analyst
2013-05-30 17:42:33

“Get what you can get for your house while the gettins’ good because it’s going to be much less later for many years to come.”

That’s right. The housing price bottom is right on front of us and it’s a very long way down.

 
Comment by Whac-A-Bubble™
2013-05-30 22:54:19

Can’t speak to the rest of America, but after losing $2K or so to the payroll tax increase this year, our customary spending has our our bank accounts close to the bone, which is leading us to reduce spending.

But I am sure we are the exception, and most of middle America simply shrugged off the 2% tax increase.

U.S. consumer-spending numbers may be grim
Euro Pacific’s Peter Schiff holds on to his doomsday view
Ex-IMF economist Simon Johnson calls for Bernanke’s head

 
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