Price Is No Longer A Factor
The Tampa Tribune reports from Florida. “Big-money investment firms called hedge funds are calling real estate agents daily seeking to buy homes before they’re even listed for sale on the Multiple Listing Service. Realtors report that investors are buying homes they wouldn’t have touched several months ago, including townhomes and homes in the upper $200,000s and $300,000s. Most investment firms don’t buy townhomes, real estate agents say, because they prefer easy-to-rent single-family homes. However, Tampa real estate broker Dale Hunter is noticing big investors snapping up townhomes lately, including one firm that bought up a $300,000 townhome in Tampa.”
“MLS statistics show Blackstone Group and Fundamental REO, a New York firm started by a former Goldman Sachs banker, rarely went above $200,000 when they started buying in Hillsborough County last year. But in recent months, about a quarter to a third of their purchases have been above $200,000, with a few dozen over $300,000. A big question is just how deep the Tampa Bay area’s market for rental homes is, especially for the $200,000-plus homes hitting the rental market.”
“David Kirschner has been renting out single-family homes in Carrollwood and southern Pasco County for decades and wonders that, too. Rental homes in the area fetch about 70 cents to 80 cents per square foot, so a typical 1,500 square foot home might rent for at least $1,050, Kirschner said. MLS records indicate Blackstone Group has bought at least 49 houses with 3,000 square feet or more of living space, a size that normally would command more than $2,000 a month. Renting those out for more than $2,000 a month might start testing the area’s limits.”
“He also shares a worry with many others in the real estate business: what will happen when the hedge funds sell off their homes for a profit in a few years? The fear is they will flood the market and cause another housing slump. ‘Will the market be able to absorb it? Hopefully, the demand will be there,’ he said.”
The Herald Tribune. “Two of the largest real estate investors in the country are manipulating home values across Southwest Florida through rapid price inflations that could form another bubble here, an analysis shows. The Blackstone Group and rival Colony Capital have bought 522 single-family homes from Parrish to North Port since last fall, spending nearly $84 million on those deals, according to a Herald-Tribune review of property records.”
“The strategy has created a slew of potentially adverse impacts — from fewer short-sale approvals to a rise in home squatters and bidding wars among buyers — all resulting in what some analysts consider dangerously false inflation. ‘They’re out to buy as many homes as they can, and price is no longer a factor,’ said Jack McCabe, a real estate consultant in Deerfield Beach.”
“Most troubling to some, the firms routinely outbid owner-occupiers by paying significantly more for houses than what the same properties fetched just months earlier. Colony, for instance, bought one home in May for $172,000. The same residence sold the previous November for $64,000 — a markup of 275 percent in six months. The two-bedroom, one-bath home measuring 1,013 square feet was built in 1956 and valued by the county at $66,500 last year.”
“Colony took the same tack when it bought a home in Venice in April for $136,000 — an appreciation of $62,500 over its last sale, shortly before Christmas. Then, it sold for $73,500. The Herald-Tribune’s analysis shows Blackstone, too, has overpaid — sometimes significantly compared with market rates — for many of its homes. In May, it paid $265,000 for a five-bedroom in Sarasota that was built in the 1980s. That same house changed hands just two months earlier for $185,000.”
“Blackstone spent $142,000 for a home on Radnor Place in Sarasota in January. Less than two months earlier, the 1,400-square-foot house went for $79,000. With dozens of similar examples of Blackstone purchases in excess of market rates, some Realtors fear the region could again be crippled by the artificial price appreciation that was a staple of the mid-2000s real estate run-up. ‘These purchases are ridiculous,’ said Robert Goldman, a Realtor, real estate attorney and developer in Venice. ‘I think the strategy is going to backfire in their face. I just don’t see how they can charge enough rent to recover these prices.’”
“Already market watchers say they are concerned that Blackstone’s purchase prices have influenced so-called ‘comparables’ — similar transactions that appraisers use to value homes. The more houses Blackstone buys at inflated prices, experts say, the more those prices will be used as a gauge to the value of all other similar properties nearby — a phenomenon that could skew prices throughout the market.”
“Bulk buyers last year paid an estimated 45 percent more than assessed value for the 5,289 foreclosures they bought in Florida. As more of those institutions now turn to short sales and traditional listings, industry analysts believe prices will balloon marketwide. ‘These big companies are paying way over market in general,’ said Shannon Moore, broker and owner of Green Lion Realty, which works with smaller competing investors in North Port. ‘What they’re paying at auction is ridiculous. It definitely seems like they could be creating another false bubble.’”
The Orlando Sentinel. “With about half of all resales these days closing as cash deals, and a quarter of all properties going for more than their asking price, the region’s house ‘flippers’ have been selling hundreds of homes and condominiums in the past year to equity companies and institutional investors, an Orlando Sentinel analysis has revealed. Local radio ads now advertise: ‘Do you want to make a ton of money buying and flipping houses?’ The real question, though, may be: How much longer can the investor frenzy continue?”
“‘Right now a bubble is not a serious concern, but we can’t sustain the 20 percent price gains,’ said Ron H. Richards, whose family has been in Orlando for generations and whose company is now one of the most prolific flippers in the region. ‘We saw a nice spike in prices, but a lot of the larger groups are not finding the returns they thought they would.’”
“The biggest buyer of flipped homes in the four-county Orlando metropolitan area has been an investment group affiliated with Blackstone Group LP. A review of 57 recent Central Florida home purchases by the New York-based investment group found that it chose to deal with a broad pool of sellers rather than one source. The group paid a median price of $110,950 for the properties.”
“‘The No. 1 concern with institutional investors is that they control big swaths of real estate and, if they decide at some point that it’s time to sell, how that’s going to affect these markets,’ said Daren Blomquist, VP for RealtyTrac. ‘To me, it always makes me nervous when there are large corporations that control big pieces of real estate. It’s like Shadow Inventory Part II.’”
The News Journal. “Sales of vacation homes in the U.S. rose 10.1 percent in 2012 from the previous year, according to the National Association of Realtors. Anne and Brian Fuselier searched about a year and half before they finally found their dream second home. The Orlando-area couple’s patience paid off. They waited out the market and snapped up a three-story, $600,000-plus home nestled along the Mosquito Lagoon south of New Smyrna Beach. Bill Roe whose firm brokered the Fuseliers’ purchase, said second home sales represent about 30 percent of his business, with the buyers mainly from the Central Florida market.”
“And Roe said his agency’s total pending sales are up more than 100 percent over last year. Roe said that there was a ‘ton of money’ lying around after the housing bubble burst and the economy was slumping. Now that home values are on the rebound, he believes many people are looking to invest that cash in other ways than buying municipal bonds or taking the plunge in the stock market. ‘So what’s that leave? It leaves real estate. And most of them wanted to buy that second home anyway,’ he said.”
“Pre-preliminary tax roll estimates released last month by Volusia County Morgan Gilreath’s office last month forecast the county’s property values would increase about $800 million this year — a 2.3 percent increase. Values are estimated to rise in almost every city, including New Smyrna Beach, with a $124 million or 3.8 percent uptick over last year. ‘The message is: if you want to buy real estate in Volusia County or probably anywhere in Florida, you may already be a little bit late, but you’re not too late,’ Gilreath said. ‘Come on down and buy.’”
“Gilreath said while sellers should feel more comfortable putting their homes on the market than they did last year, they may want to wait. While he couldn’t forecast exactly how much property values would rise next year, he believes the increases will only continue. ‘If you can hold on to it, prices are going up,’ he said.”
From Miami Today. “Experts say the economy is on the mend, yet home foreclosure filings are still on the rise in Greater Miami. Much of the reason, they say, is because property values are rising, making it more appealing for banks and other lenders to initiate proceedings to seize financially distressed properties. ‘Banks are seeing good values, so they’re trying to get their money out’ of distressed properties through foreclosures, says Dan Mackler, a lead attorney with the Gunster law firm in Miami who has represented banks and investment groups in the process.”
“The number of properties receiving a foreclosure filing in Greater Miami was 21% higher in April than it was the same time last year, according to RealtyTrac. Of the 55,896 properties in some stage of foreclosure in Greater Miami, only a small fraction — 2,215 — are for sale, RealtyTrac reports.”
“Mr. Mackler says that’s because banks have tended to hold foreclosed local properties without putting them back on the market as they have waited for housing prices to rebound. Meanwhile, Greater Miami and Florida as a whole continue to have some of the highest foreclosure rates in the country — and one of the unfortunate byproducts of that trend has been a glut of vacant properties.”
“In some markets, investors have been reselling previously foreclosed properties — a practice known as ‘flipping’. That includes Miami, where property flippers have been churning out profits at an average of more than 35%, according to RealtyTrac. Data show the highest foreclosure rates in the area have been in the suburbs around the city, places such as Kendall, Hialeah and North Miami. ‘A lot of them have come from South America,’ Mr. Mackler says about the cash buyers. ‘They see [Miami properties] as a safe place to [invest] their money and let it appreciate for three or four years and sell it.’”
‘A lot of them have come from South America,’ Mr. Mackler says about the cash buyers. ‘They see [Miami properties] as a safe place to [invest] their money and let it appreciate for three or four years and sell it.’
This round of musical chairs is destined to end shortly after it got started.
as a safe place to [invest] their money and let it appreciate for three or four years and sell it.’” ??
The first part of that sentence may be accurate…I do believe that across the globe many think the USA is the safest place to park your money…The second part of the above sentence is just BS….
I am not sure of how soon it ends. In fact, I am already shocked at how high prices have risen. Perhaps this doesn’t end for years.
“when the hedge funds sell off their homes for a profit …they will flood the market and cause another housing slump…”
Kind of like holding a wolf by the ears.
Blackstone owns 40,000 single family homes in the US in various markets ($5 Billion worth). They are the biggest holder of single family rentals to my understanding.
First off, they would not dump the homes at the same time, it would take them time to do so…in part because (contrary to popular belief) they are not stupid, and in part because many of the homes will be encumbered by leases where the landlord can’t simply kick out the tenant. The 40k homes would likely be sold onto the market over a period of quarters or years.
Also, if they were to act to dump these homes on the market quickly, two things would occur:
1. All the occupants of those homes would need to find another place to live, some might even want to buy the home they are currently occupying, but at a minimum, those tenants trying to rent another place would put some pressure on those rental markets (in some cases where there is high vacancy, this pressure would be nearly zero, and in other markets where there is low vacancy, this pressure would be more significant).
2. The 40,000 homes represents approximately 3 days of sales in the US (about 5,000,000 homes sold per year).
In the grand scheme of things, the large owners of “buy-to-rent” don’t own enough homes to move the market…even if they wanted to.
“MLS statistics show Blackstone Group and Fundamental REO, a New York firm started by a former Goldman Sachs banker, rarely went above $200,000 when they started buying in Hillsborough County last year. But in recent months, about a quarter to a third of their purchases have been above $200,000, with a few dozen over $300,000.”
It’s great to know that hundreds of billions of dollars in bailout seed money that was loaned out to Wall Street at rock-bottom rates is getting put to good use!
What a concept! Push up the prices of houses you don’t yet own and the prices of the houses you do own go up as well.
This should act to swell the balance sheet just a bit. And a swelling balance sheet does what? Attract investors, maybe? Attract new money?
Ah, the joy of extracting an easy two-and-twenty.
Need some earnings from your hedge fund so as to demonstrate you are a financial genius? Sell off a few of your earlier holdings bought at a lower price to another hedge fund (or arrange it so you can sell to yourself) and presto! you’ve got some earnings.
If your investors expect, say, a 15% return on invested capital then you only need to generate enough earnings to meet this 15%.
They give you 100%, you arrange it so as to return 15% back to them.
Oh, and this 15% return is not money you return to them in a physical sense, only in an accouting sense.
Hmmm, I hadn’t considered that angle. Could Blackstone be selling to its own shell companies?
“A big question is just how deep the Tampa Bay area’s market for rental homes is, especially for the $200,000-plus homes hitting the rental market.”
This is a totally irrelevant question.
The relevant question is that of exactly how many flippers can escape from the door of the burning theater before the rest of them are consumed in the flames. We’ll find out soon enough.
I think the relevant question is a little different. It’s “how many of the innocent are going to be consumed along with the guilty?”
But even that question presumes that the guilty will pay, which is a big presumption in the United States at this time. We’ve managed to pervert justice, and any sense of right and wrong in financial matters has been totally debauched. And today we’re going to have one of the lead players in this unfortunate social experiment perform its periodic performance-art piece.
“how many flippers can escape from the door of the burning theater before the rest of them are consumed in the flames.”
Once bitten…
“Gilreath said while sellers should feel more comfortable putting their homes on the market than they did last year, they may want to wait. While he couldn’t forecast exactly how much property values would rise next year, he believes the increases will only continue. ‘If you can hold on to it, prices are going up,’ he said.”
Is he like saying like that real estate always goes up?
Technically, real estate does “always go up.” Sometimes it “goes up” in value, other times it just “goes up” in smoke.
LOL
“Mr. Mackler says that’s because banks have tended to hold foreclosed local properties without putting them back on the market as they have waited for housing prices to rebound.”
Has there ever been another point in the history of organized U.S. real estate markets when so many home owners have been waiting on the sidelines for housing prices to rebound?
idk
And rebound to bubble prices! Stupid is as stupid does, I guess.
‘These big companies are paying way over market in general,’ said Shannon Moore, broker and owner of Green Lion Realty, which works with smaller competing investors in North Port. ‘What they’re paying at auction is ridiculous. It definitely seems like they could be creating another false bubble.’
Easy money is easily gambled away on foolish investments.
‘Already market watchers say they are concerned that Blackstone’s purchase prices have influenced so-called ‘comparables’ — similar transactions that appraisers use to value homes. The more houses Blackstone buys at inflated prices, experts say, the more those prices will be used as a gauge to the value of all other similar properties nearby…Bulk buyers last year paid an estimated 45 percent more than assessed value for the 5,289 foreclosures they bought in Florida. As more of those institutions now turn to short sales and traditional listings, industry analysts believe prices will balloon marketwide’
One would be tempted to think cash buyers would drive a harder bargain, not pay even more.
As this goes on, it looks like it’s picking up steam, not slowing down. With comps now being driven up, what’s to stop it? Is it possible these investors and flippers will wake up one day and announce; Tampa house prices are fairly valued and we won’t pay a dime more? Or is it more likely they will keep flipping and paying more until someone loses an eye?
Here’s another example of where the buyer money is going:
‘It took several years for a wooded 110-acre site in the north part of this city to sell, but after finally selling for $1.1 million last month, its buyer turned around and resold it the same day for a tidy profit of $515,000. The property’s newest owner says his company is eager to start building. The tract has approval from the city to accommodate up to 150 homes.’
‘In November, Hoyer and his partners sold a 43-acre subdivision in Boynton Beach to Pulte Homes for $3.5 million, earning them a $1.4 million profit in eight months. “We’re from South Florida and the market here is getting overpriced. There is nothing left to invest in, so we’re moving our way up the coast to Vero, Brevard County and Edgewater,” Hoyer said.”
‘Developed but long-idle subdivisions have been recently purchased in DeLand, Deltona, Palm Coast and Holly Hill. The buyers are primarily the larger national homebuilders that include D.R. Horton and K.B. Home. Their interest in quickly capitalizing on the recovering residential real estate market and low inventory of homes for sale by buying shovel-ready lots is also driving up the land costs, which could lead to middle parties flipping the property, local real estate observers say.’
“Or is it more likely they will keep flipping and paying more until someone loses an eye?”
Ben, I laughed my ass off when I read that one. You are my hero and I want to be you when I grow up. Here is one of the fundamental reasons that I am betting this thing collapses spectacularly- and sooner rather than later. This is median FAMILY income in Florida for 2011:
2011 1 Year Change 3 Year Change
US $50,502 -2.18% -7.08%
Florida $44,299 -3.30% -11.24%
It has decreased over 11% in the past 3 years. Who in Florida will be able to afford these houses? Who in Florida will be able to afford these rents? How long will hedge funds and landlords hold on to these empty, depreciating structures before they cut and run? There simply ain’t no money.
This is a low-wage state. And getting lower. That fact needs to inform every decision here, but it informs none.
“until someone loses an eye…”
It is amazing how few of these transactions it takes to make it look like the whole market/economy is going up dramatically. Reading that they are paying so far above assessed value makes me suspect that this will end in scandal, missing funds and missing fund managers.
Reading that they are paying so far above assessed value makes me suspect that this will end in scandal, missing funds and missing fund managers.
And here I thought I was the only one with these suspicions. This will NOT end well.
A group we know buying homes to rent has slowed down purchases considerably. The reason is that their only angle was a quick close…they would offer a price they were comfortable with for rent, regardless of how far below the asking price it was. They would offer a very quick, all-cash close (within a week). A short time ago, it would take 100 such offers to get 1 taker. Now is more offers per 1 acceptance.
Previously, they were buying at auction until the big boys came in and essentially bought everything they could find–and overpaying in many cases.
What is happening?
What I think may be happening is analogous to what happens sometimes with a commercial REIT before it goes public. They know the appetite for yield based on what they are seeing from other public entities’ stock prices, and they hear of the appetite for their “product” from bankers. So, before they go public, they buy more assets, even if they are overpaying relative to other buyers in the market. As long as the yield on those assets is higher than the yield the public is willing to pay, the large players can make a “spread” when they go public…and the more of these assets they have where they can make the spread, the more money they make.
So, if the public markets are OK with the homes for rent strategy at a 4% cap…they buy as long as the cap rate gives them a decent spread above that 4% yield (5%? 5.5%?).
The big risk is whether the public market is going to change their appetite before they can go public…and this (I think) is why these groups are on a buying spree, and rushing to the public exit ASAP, while yields are still low.
“The strategy has created a slew of potentially adverse impacts — from fewer short-sale approvals to a rise in home squatters and bidding wars among buyers — all resulting in what some analysts consider dangerously false inflation. ‘They’re out to buy as many homes as they can, and price is no longer a factor,’ said Jack McCabe, a real estate consultant in Deerfield Beach.”
The federal reserve, obama administration, and congress…lookin’ out for the little guy!
‘Believe it or not we’re hearing from some builders - self-admittedly - that they are slowing production of new homes because they want to take advantage of these rising home prices,” Olick tells The Daily Ticker in the accompanying interview. “In the last new home sales report we actually saw a huge spike in new home sale prices, and they like that. Of course they want to sell the homes for more money so they’re actually keeping the supplies lean in some cases.”
‘Lean inventories have been pushing up home prices. According to Olick - home price gains have been “completely driven” by this limited supply, which has been “pushing prices up far too fast.”
http://finance.yahoo.com/blogs/daily-ticker/homebuilders-holding-off-construction-game-rising-prices-160552087.html
Weird, isn’t there already a glut of excess houses in every single US state? But, oh yeah, they’re vacant because they’re shadow inventory. How can anyone be so blind?
sounds like a monopoly.
Builders slow because demand is going up.
I don’t believe this is even remotely logical.
Nope, it would only make sense if they were all in cahoots. And as much as I like a good conspiracy I think there are too many of them for that to make sense.
In California during the worst of the crash, very little land was entitled for development. As such, there are fewer and fewer active subdivisions in many markets…until the next round of construction begins (in some cases from finished lots that were owned by investors until they have recently sold, in some cases from raw land getting entitled).
Not all subdivisions are created equal (amenities, lot sizes, home sizes, etc.).
When you are the only subdivision in a particular market that is selling homes of a certain size/price point, you have quasi-monopoly power, with your competitors being either in a different market, or different price point.
And building homes isn’t secretive…everyone knows what you are building, how you are pricing, etc. The name of the game is to differentiate yourself from the other guys–the fewer subdivisions are active in your market, the easier it is to differentiate yourself. The easier it is to differentiate yourself, the less competition (and more pricing power) you have.
It is logical if the builder thinks that demand will get more desperate, not less. It feels like a parlor game of chicken. How far can each builder the price before the customer loses patience and finds another builder? How far can builders raise their prices before the customer walks away entirely? (oh if only they’ed built for $15K less they could have made a sale) Which builder will finally cave and offer a house to the buyer?
A similar situation already exists with commercial rental complexes, and you don’t need collusion. LL’s watch each other’s rental rates closely, trying to outmaneuver the competition for tenants.
Blackstone et al are just demonstrating the lack of potential in bond purchases.
This should help interest rates go up.
Then down goes the housing market.
Why cannot someone concentrate on the root of the problem. The real unemployed /underemployed.
“Why cannot someone concentrate on the root of the problem. The real unemployed /underemployed.”
That’s what’s so funny but stupid about this whole thing. They are desperately trying to bring back peak home values- the same values which were completely unaffordable to the masses. Nobody has ever asked “How is this sustainable? Where are the jobs to support these prices?” Instead, it’s just “We need to get home prices back up.” It is insane.
NOOOOOOOoooooo. An article with the phrase “snapping up” in it.
NOOOOOOOOOOOOOOOOOO.
no
no
no
Uncle Fed, no worries, that just indicates the beginning of the bubble. Once the phrase expands to “savvy buyers snapping up”, then it’s reached the end.
At least they didn’t use the word *SYNERGY*
Yes, when “snapping up” appears in any real estate article, the author immediately loses credibility with me. Even if it turns out to be a reasonable piece of reporting, the phrase just comes across as a weak choice by a writer with a narrow vocabulary (or one with an agenda). Two of the Florida pieces above use the phrase.
Pet peeve, I guess. But “snap” articles usually also involve explaining how a person “had” to participate in a bidding war, waive every contingency known to man, camp out, etc. Such articles rarely explore the possibility of NEVER participating in a mania/bubble.
Here’s a random thought. We hear about contracts being signed on the hoods of cars in order to get offers in. I wonder if they do that in Bubble 2.0 Metro Phoenix when it is 110 degrees. I am picturing new FBs and their UHS doing that. Fun image.
“MLS records indicate Blackstone Group has bought at least 49 houses with 3,000 square feet or more of living space”
Oh, do a lot of people want to rent houses with 3,000 sq ft or more of living space? Have those houses typically been considered reasonable units to add to the rental pool? How many landlords have made a profit by purchasing these gigantic monster houses, and then renting them out? I have never heard of that before.
Perhaps Blackstone is making its debut into the Fraternity House business.
“Colony, for instance, bought one home in May for $172,000. The same residence sold the previous November for $64,000 — a markup of 275 percent in six months. The two-bedroom, one-bath home measuring 1,013 square feet was built in 1956 and valued by the county at $66,500 last year.”
OK, that’s it. I am ready to accuse these “people” of mischief. I think they are purposely causing a rebubble, all with the hopes of helping their conspirators (the large banks that lend the money) to get their bad paper off the books. Now is the perfect time, since the Federal Reserve has already begun tapering its MBS purchases. Time to unload on Fannie Mae and Freddie Mac.
I C a conspiracy.
“Roe said that there was a ‘ton of money’ lying around after the housing bubble burst and the economy was slumping.”
Yes, of course, if the economy is slumping, then it stands to reason there must be a ton of money lying around. And why would all these people with all this extra cash spend it on anything but real estate? After all, anyone with the inkling to buy real estate has just recently lost at least 1/2 their money, so that should incentivize the same group to try it again right away.
They could have bought stocks in the hugley profitable stock market. They could have bought a yacht. But instead, the 1% all got together and decided that they should keep their cash in a shoebox until the price of the vacation home went down to $600,000. Now they’re all spending it.
Or maybe it’s just Blackstone and Friends (BS and F) creating their own bubble.
Interestingly, Blackstone just hired former NATO Supreme Commander Wesley Clark “to advise on its energy investments.” This follows KKR hiring David Petraeus.
I am extraordinarily uncomfortable with private equity and financial firms hiring former Army generals. If this was Latin America, I’d say a coup was coming.
http://tinyurl.com/mgmme5r
Margin loans. “fools gold”
“‘A lot of them have come from South America,’ Mr. Mackler says about the cash buyers. ‘They see [Miami properties] as a safe place to [invest] their money and let it appreciate for three or four years and sell it.’”
ru serious? South America. First its the rich Chinese (most are peasants), and now it’s the rich South Americans (most live in brick chit houses).
Let’s all chant it folks: “Bu_bble, bu_bble”. I don’t know why it annoys me so much.
I have not seen a single south Florida real estate professional with the courage to question whether any of the cash being ponied up is stolen, or comes from the drug trade.
They’re interested in staying alive, rather than knowing the answer to the question.
“The strategy has created a slew of potentially adverse impacts — from fewer short-sale approvals to a rise in home squatters and bidding wars among buyers — all resulting in what some analysts consider dangerously false inflation. ‘They’re out to buy as many homes as they can, and price is no longer a factor,’ said Jack McCabe, a real estate consultant in Deerfield Beach.”
And there is the money quote. Not doubting Jack McCabe- his observations are notoriously accurate- and that is, to me, the most telling. …” They’re out to buy as many homes as they can, and price is no longer a factor.” Now ask yourself, ‘How delusional is it for a profit oriented company to buy anything as an investment and believe/behave as if price is no longer a factor?’ Now ask yourself, ‘How far along the Bubble 2.0 continuum must we have ALREADY traveled to get to this level of idiocy?’ There is light at the end of the tunnel. And it is the headlight of an oncoming, high speed, mag-lev train.
Margin loans in the guise of “cash” is a very dangerous sport.