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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.
About Me
Name:Ben Jones
Location:Northern Arizona, United States
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I had to take 2 courses to
renew my Ca R E License.
This time I had to study,
they actually made you work.
My take away (one of many)
was the buyer must ask direct questions,
or the REIC can skate around disclosure
and statutes of limitation laws.
oops, sorry Ben.
It was early, pre-java.
Tears of Joy. Skating around the law and withholding the truth, liscensed. You are actually a professional! I think you forgot what blog you were posting on. It’s OK though.
A lot of the market movements both RE and stocks now depend on Fed move. Would their be a taper? Probably yes, but it is still increasing the balance sheet. The new Fed chief announcement in August will have a big impact. BB will not be renewed. Janet Yellen most likely is the next candidate for this job. But she is dovish too. One good thing is she likes higher short term rates.
“One good thing is she likes higher short term rates.”
When you get down to it, the entire banking system pretty much shuts down at interest rate levels such as those the Fed has recently engineered. Not to suggest that they would ever acknowledge their role in driving the banking system into a cryogenic state.
Consider for a moment that the Fed is not really in charge of the universe. Interest rates are near zero because we are in deflation. Borrowing now is really not a good bet. Just consider it.
“Consider for a moment that the Fed is not really in charge of the universe.”
Oh no, rates are at rock-bottom levels because QE3 pushed them down there. Or so says The Ben Bernanke.
we are in deflation
What can I buy more of now than I could a year ago, for the same price?
How do you go on an “administrative paid leave”?
Is it available in private sector? I would like one for the whole summer.
How do you go on an “administrative paid leave”?
Be a cop and shoot your gun?
That isn’t private sector.
Private university professor with tenure should do it, though.
Play grab-azz with your administrative assistant, until she files a complaint.
Works at most companies/organizations with “for-real” HR Departments.
Doesn’t typically work at the typical small, Mom and Pop business…..they usually go straight to the lawsuit. You know, one of those “excessive regulation” deals.
(As the father of three daughters who are considered “hot” in certain circles, you would not believe the amount of grab-assery that goes on. As a standard, prototypical hetro-male, it’s pretty damn maddening and embarrassing.
Jetfixr - i figure i have another 10 years before i get a double barrel and a ‘burka’.
It’s interesting how the media and REIC have embraced things like flipping houses so casually. Or making written offers with no contingency to the conditions. Pocket listings. Besides the obvious lack of consumer protection, can’t these people remember how open some of this stuff is to fraud?
Holy sufferin’ $hit Jonesy…… the entire housing sales business is rife with fraud even under the best of conditions where there is oversight. Hell…. turn on the radio and listen for 5 minutes. “In most locations, it’s cheaper to buy than to rent” is what I hear. We know this isn’t true yet it continues. And the advertisers have no hesitation to attach their name to it.
When advertising is this blatantly false, the level of hubris at the core is clearly criminal.
urgency is the biggest tool the lying realtors have. and it is sick the way the media/real-estate-industrial-complex play up the emotional aspect, i.e. the suzanne researched it commercial. see also recent new york times piece identifying nar as the second largest lobbying contributor.
I’ve always stated here that the lying realtors favorite tool is to develop a sense of urgency. To put your twist on it, stumbling over the dead bodies to get to the punchbowl. From our perspective? There’s a turd floating in it.
urgency is the biggest tool the lying realtors have
Lots of hype going around. I hear the desperation at the lunch table.
Do you tell them that realtors are liars?
I saw Facebook Realtor in Aspen last weekend and he was pimping overpriced debt shacks to another friend and I just had to interrupt (not the first time I’ve done this) and call him out on his tidal wave sh*tstorm of NAR-babble.
And I later explained to this friend privately that realtors are liars, and provided all of the correct reasons that the economic fundamentals to support the alleged recovery are quite simply, non-existent.
Facebook Realtor hates me, but we have enough mutual friends that running in to him is unavoidable.
You are a true friend. You saved him from a lifetime of losses.
Do you tell them that realtors are liars?
They won’t believe that. Most have been brainwashed into believing that the crash in 2008 was an anomaly.
Belief matters not. In the interest of truth, it is worthy to statey.
“…he was pimping overpriced debt shacks to another friend…”
A real friend, huh?
I hear the desperation at the lunch table ??
Desperation in what context Colorado ??
He is talking about the north Denver / Broomfield / Boulder County burbs.
He is talking about the north Denver / Broomfield / Boulder County burbs.
Correct.
As for the desperation … it’s of the “there’s nothing to buy” variety.
Exactly Ben….There is an easy fix to some of it which would help first time buyers in rooting out speculative competition…No federally insured loan on a house that was not owner occupied for at least one year prior to new loan…
That’s not very Invisible Hand Of The Free Market, now is it?
It actually sounds kinda commie.
It actually sounds kinda commie ??
Well, having the government insure loans is not what I would call free market either…SO, if you were to want to engage in that practice, In the interest of providing loans to people who want to buy houses, then, IMO, you should restrict it in a way that would root out speculation…
Any big purchase a salesperson will try to make seem trivial, of no more import than buying a candy bar. I’ve seen this with cars in particular. Of course, the same approach will be used with houses.
Problem is, it’s a lot of money, and you’re on the hook for it. They don’t want you to think to much about that.
Heck, my dentists use the same approach.
*Refer to making a large expenditure like it had the same impact on your life as going out for a cheeseburger.
Ahhh yes, the old “the very fibre of your being depends on having straight teeth” plan……
My dentist tried to sell me on getting braces. At age 46. All kinds of bad stuff was going to happen if I didn’t…..high blood pressure….migranes….bad breath…..”TMJ” problems. My lower jaw was going to become unhinged, and would flop around on my neck. Yeah, right.
It’s amazing the human race survived without modern dentistry/orthodontics.
Comment regarding dentists. I am 63 and not a dentist, but a nurse. My wife did Invisalign 2 years ago and I am doing conventional braces now. Why? Pay a little now or a lot later. My teeth were very mis-aligned. My goal is to keep my teeth until I die and minimize dentist visits/complications. In addition, since I am in senior management and in health care, how I look is important. I do not want to deal with dental problems that could have been avoided when addressed earlier in my life. A learning story regarding my father. He developed a hernia when he was in his 60’s. He used all the gizmos to avoid surgery, but was always uncomfortable. In his late 80’s it became so bad he needed surgery but now was not a surgical candidate. Had to have an internal catheter. He was constantly uncomfortable, in pain and multiple infections. He eventually died from the toll the infections took on him. Needless to say, I had my hernia repaired 5 years ago.
“When the only tool you own is a hammer, everything looks like a nail.”
Like most people, they do what they know how to do…….
Are recent hints by members of the Fed’s inner circle that they may soon begin to withdraw the QE3 punch bowl no more than a giant head fake?
Why would they do this, if it threatened to reduce the huge housing and stock market wealth gains they have successfully conferred upon members of the U.S. Ownership Society?
P.S. Does the Equal Protections clause of the U.S. Constitution apply to renters?
Any thoughts on why gold seems to get hammered on a regular basis, independent of whatever else is going on in the global economy?
June 7, 2013, 9:41 a.m. EDT
Gold battered as jobs data top forecasts
By Michael Kitchen, MarketWatch
MADRID (MarketWatch) — Gold prices fell sharply on Friday, putting a third week of gains in peril, after key jobs growth data came in slightly better than expected, driving Wall Street stocks higher and pulling investors away from the metal.
Down $7.40 ahead of the data, gold for August delivery (GCQ3 -2.15%) bounced around before making a firm push lower, tumbling $32.70, or 2.3%, to $1,383.80 an ounce, surrendering ground beyond its 1.2% climb Thursday on the Comex division of the New York Mercantile Exchange. The metal is on track to lose 0.7% on the week after two straight weeks of gains for the most-active contract.
…
Any thoughts on why gold seems to get hammered on a regular basis, independent of whatever else is going on in the global economy?
People think the Fed has succeeded in engineering a soft landing and it’s blue skies from here?
The profit is in the churn?
A true “free market” price for gold would cause all kinds of problems.
The price of gold will be allowed to rise when the banksters own 99.5% of it.
Like oil/gasoline……the price around here went from $3.29 to $4.00 between May 1 and Memorial Day. It has dropped from $4.00 back down to around $3.46 in the last 10 days.
Yeah, no price-fixing around here…….
Gold? Or Jobs?
I’m betting on both. Win on one, lose on the other. I win on both if…job outlook looks great and improves through early October. Then goes bad. Through October I buy more gold than my staffing company stock. On first trading day in October I am eligible to sell the batch of shares I bought at $6 and change a couple years ago without disqualified compensation.
So I’m hoping…hoping. Could pocket $28k on that one batch, which would be over $17,000 gain after capital gains and ordinary income taxes at today’s price. And add back the $6500 principle comes to $23,500 more cash…
Are Happy Daze Here Again, or does the current rally simply represent Dead Cat Bounce number 9,999?
June 6, 2013, 4:04 p.m. EDT
Beware the dead-cat bounce
By Thomas H. Kee Jr.
This market is under pressure for a reason. Mid-term, downward-sloping channels have developed, and my longer-term macroeconomic analysis which is called the Investment Rate, tells us that we are in the third major down period in U.S. history. The asset bubble we have all been witness to may be beginning to burst. And based on the current market action, dead-cat bounces are possible.
Thursday’s trading, as well as the mid-term chart patterns that we watch for swing-trading purposes, tell us that a dead-cat bounce can come. A dead-cat bounce is when the market increases within an existing downward-sloping channel, makes a lower high, and then falls again within the existing downward-sloping channel to make a lower low. This is the inverse of buying the dips conceptually, and instead of a series of higher highs, a series of lower lows exists in downward-sloping channels.
When sentiment changes from bullish to questionable as it has recently, many investors find themselves stuck on the bullish side of the fence. This is especially true for investors who are not, or refuse, to be nimble and control their risk. For those investors who are simply taking whatever the market dishes out, our longer-term analysis tells us that you are in for a tumultuous ride, but eventually the market will increase back to these levels again.
…
http://www.davemanuel.com/images/dead_cat_bounce.jpg
Has the Fed lost control of the long end of the yield curve?
June 7, 2013, 10:46 a.m. EDT
Treasury yields turn up as payrolls beat forecasts
By William L. Watts, MarketWatch
NEW YORK (MarketWatch) — U.S. Treasury prices turned south Friday, pushing up yields, after May jobs data did little to alter expectations the Federal Reserve will begin scaling back its bond purchases later this year.
The yield on the benchmark 10-year Treasury note (10_YEAR +3.27%_ , which moves inversely to price, rose nearly 5 basis points, or 0.05 of a percentage point, to 2.12%, according to FactSet.
The 30-year T-bond yield (30_YEAR +2.03%) rose 5 basis points to 3.297%. The yield curve steepened, however, with the 2-year yield (2_YEAR +1.34%) trading at 0.298%.
…
7:02 pm
Jun 6, 2013
Junk Bond Funds See Record Outflows
By Katy Burne
Bond funds saw waves of outflows in the week ended Wednesday, with funds dedicated to low-grade, or “junk,” debt seeing record withdrawals, according to fund tracker Lipper.
As much as $4.63 billion was pulled from mutual funds and exchange-traded funds dedicated to junk bonds, the data provider said late Thursday, compared with $875 million in outflows the prior week.
That reading contributed to what was the second largest weekly outflow on record for taxable bond funds overall, at $9.1 billion.
One third of the money from junk bonds, or $1.4 billion, came out of ETFs, a record that surpassed the previous weekly record outflow of $1.1 billion set in February.
Investors are yanking money out of bond funds in anticipation of the Federal Reserve winding down its monetary easing policies as the economy appears to gain steam. A pullback in that stimulus should cause interest rates to rise from their rock-bottom levels, hurting the price of fixed-rate bonds. Bond prices fall as yields rise.
The previous record weekly outflow from junk bond mutual funds and ETFs was $3.4 billion in June 2011, and for all taxable bond funds it was $12.6 billion in October 2008 in the depths of the financial crisis.
…
June 7, 2013, 5:30 a.m. EDT
Where to put your money when bond yields rise
Commentary: The best defense is a good stock-driven offense
Stories You Might Like
Bond Links: Dangerous Divergences
SEC warns U.S. investors about binary options
Greenspan: Fed should ‘get moving’ on tapering
By Jonathan Burton, MarketWatch
SAN FRANCISCO (MarketWatch) — The investing paradigms, they are a-changin’ — and it’s time to get your stock portfolio in synch.
Bond yields have been rising as the U.S. economy improves, and so has market volatility. The defensive, income-rich stock and bond strategies that have rewarded investors for years won’t lead the markets when the economy is less distressed.
In such an unfamiliar situation, what sort of stocks do you add to your portfolio, and what do you trim?
First, it helps to understand where we are. U.S. stocks in coming months will tell a tale of the taper. Investors are concerned that the Federal Reserve will unwind its quantitative easing program — the massive bond purchases that have suppressed yields and succored stock buyers.
The mere thought of “QE-lite,” floated in several Fed-launched trial balloons, has sent investors into withdrawal. Buyers have shown displeasure by punishing Treasurys, dividend-paying stocks and other interest-rate sensitive assets.
The spike in the 10-year Treasury (10_YEAR +3.75%) yield is alarming but shouldn’t be surprising. Investors know the day will come when the economy will have recovered enough for the Fed to normalize its policies. Yields in that environment will go higher and bond prices will drop, which will be more than a bit disturbing for income-focused investors.
The reckoning isn’t here yet, but bond funds’ losses and dividend-stock funds’ underperformance in May offered a grim glimpse of what could be. The largest bond fund, Bill Gross’s Pimco Total Return, shed 2.2% in May — its worst month since 2008.
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June 7, 2013, 10:13 a.m. ET
Dollar Selling Triggers Bumper Foreign-Exchange Volumes
By Clare Connaghan
The dollar’s selloff Thursday triggered another a blowout trading day in the $4 trillion-a-day foreign-exchange market.
Citigroup Inc. (C), the world’s second-biggest foreign-exchange trading bank by market share, said it processed a record number of trades Thursday, breaking the previous record made May 23, as the dollar dived against almost all currencies. The trigger came from concerns that the U.S. economy may not be strong enough for the Federal Reserve to start reeling in its easing program as soon as investors had recently come to expect.
The bank didn’t reveal the number of trades it handled Thursday but did say that, so far this month, the daily average being processed is 20% higher than May and 60% higher than the flows it handled at the same point last year.
“The number of tickets generated is at levels that were almost unimaginable just two years ago,” said Stuart Riley, global head of IT for the bank’s currencies division. “We’ve had to plan very carefully and ensure that our systems are scalable to cope with these demands. Looking forward, the only way to plan is to now think the unthinkable. That is a serious challenge for most institutions.”
Citigroup wasn’t alone. The CME–the parent company of the Chicago Mercantile Exchange–said it handled a record number of trades in FX options Thursday, while Barclays PLC (BCS), the third-largest currencies dealing bank, said Thursday was the second busiest day for trade in the dollar in the past year.
The surge in activity Thursday came as investors called into question the strength of the U.S. recovery. Investors had been counting on a recovery in the U.S. to speed a rollback of the Federal Reserve’s stimulus policy, but a series of weak data including Monday’s Institute for Supply Management report showing U.S. manufacturing activity contracted in May to its lowest level in almost four years, has undermined that view, resulting hefty dollar selling.
“The latest wave of unwinding has been in long dollar positions,” said Jens Nordvig, managing director at Nomura Securities in New York.
…
Amazing factoid: MSM financial reporting has almost completely missed the massive bond market correction currently underway.
I guess if they don’t report it, it didn’t happen?
What if increased home ownership actually does cause increased unemployment? What would the implications be for government and central bank policies geared towards increasing employment?
How Home Ownership Causes Unemployment
Published: Friday, 7 Jun 2013 | 11:38 AM ET
By: John Carney | Senior Editor, CNBC.com
Before the housing market in the United States went into convulsions, you heard a lot of talk about the positive “externalities” of home ownership.
The best-known dissenter was the British economist Andrew Oswald. As early as 1996, Oswald was producing papers that forcefully argued that home ownership causes unemployment. The effect Oswald claimed to have discovered was strong: Every 5 percent rise in home ownership resulted in a 1 percent rise in unemployment. Oswald’s original paper set off a cascade of others that largely confirmed his results.
http://www.cnbc.com/id/100798861
And we know exactly how “home ownership causes personal bankruptcy.”
“What if increased home ownership actually does cause increased unemployment?”
More riches for real estate investors.
“What would the implications be for government and central bank policies geared towards increasing employment?”
Bald face lies to hide the truth.
Can anyone report the score in the longstanding matchup between Housing Bubble Bloggers and the well-funded liar’s brigade?
Just wondering…
How much longer can the banksters manimpulate gold before the average Joe’s and Xian’s, and Patel’s gold buying overpowers the banksters?
mysterious gold move 62 milliseconds before job report
http://video.cnbc.com/gallery/?video=3000174208&__source=yahoo|headline|quote|video|&par=yahoo
“for the moment, thank you very much. now we have some breaking news on mysterious gold move. ayman, what can you tell us? good morning, kelly. i want to show you a chart here you’re not going to this see anywhere else. take a look at this chart and what it shows. there’s a line down the middle of the screenlp that shows 8:30 this morning. that’s when the jobs report came out.n<=ng now just milliseconds you see this down. you see trading volume popping. and three strong legs down. before 8:30. this is taking place before the jobs numbers were released this morning. gold is trading down now still. we don’t know what caused this. we don’t know who the traders were. we don’t have any information on what this was. 62 milliseconds before the jobs number? or was there something else going on? on monday we saw a market mystery that turned out to be subscribers. we don’t have information on what happened this morning. there you see the three legs down on gold. now let me bring you something after 8:30. this first started by the folks who now have it confirmed. they said they had a stopped logic circuit breaker. that circuit breaker is in place to prevent markets from spiralling down. that is the kind of thing that happens from time to time. when it does happen, regulators will typically look into it. there was a five-second halt in trading this morning. and i can tell you that regulators are aware of this move in gold this morning. no indication of what they may do about it. it’s a big deal. it is a big deal.ñ6nvñ a trade goes through on gold before the employment data is released and what? what more do we know from that? nothing. i’m not clear what we’re saying here. it’s a lot of trading volume in the 62 milliseconds before the numbers came out for gold that did in fact happen later in the day it would have been the type of trade you wanted to make beforehand. i have a hunch we’re going to see a jobs number that indicates gold goes down. that’s definitely a possibility. but on monday we saw a move 15 milliseconds ahead of the ism report. after we investigated what we found out, thompson reuters had high frequency traders. we need to be very clear about that. we get the moves out to people as we can. thanks for bringing us the details. jcpenney made headlines for all the wrong reasons.
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