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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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It looks like the Brazilian protests got even larger last night, with about 1 million people in 80 cities rioting/protesting in the streets- even AFTER the government rescinded the fare increase on public transportation. China is in a liquidity crisis so advanced that they can’t even hide it anymore. Europe is toast. It looks like the BRICs have ended their sprint. What about the BRICs? Where are all the rich foreigners now? What new kabillionaires will swoop in to buy up all of our millions of shadow inventory using solid gold bars, absorbing the oversupply, driving prices into the stratosphere and saving us all? Where is Scrooge McDuck when you really need him?!?
Brazil’s meeting with reality is going to be painful. 2.3% GDP growth pretty much says “stagnant”.
“What about the BRICs?”
BRICs are falling out of the sky; try not to let one land on your head.
I’ve been hoping Rio would show up with some on-the-ground reportage and observations on the last two weeks’ protests.
You out there, son?
Brazil’s president just announced that all her country’s oil royalties would henceforth be used in education, among other social reforms.
Can you imagine what might happen if the US were to announce that all oil royalties would no longer go towards upkeep of our military industrial complex but rather to support our nation’s domestic infrastructure?
http://www.bbc.co.uk/news/world-latin-america-23012547#sa-ns_mchannel=email&ns_source=inxmail_newsletter&ns_campaign=news_bbc%20news_email%20sent%20220620130036&ns_linkname=alert%20image-sa%22
Yesterday it was suggested that Dems have their eyes on confiscating IRAs and 401K moneys. I would thank to Bill in LA for providing a link to a collection of links conveniently pre-compiled on lew rockwell’s website. I looked at them, there are only 4-5, and they are all easily debunked.
The short version is that NO plan confiscated existing monies (except the crazy socialist private citizen, who has no power at all). The plans that try to divert present contributions all had opt-outs. And then, [as usual
] “Obama’s gonna” boil the frog and get rid of the opt-out. At worst, I can see the government rolling back the tax break for future contributions, but I don’t see how they could do that retroactively.
IMO the Libertarians would do better with their time by working to reverse Kelo v.s Connecticut. That’s far more dangerous than the “Automatic IRA” cooked up by… oh wait, The Heritage Foundation.
Donkey,
The 401k money grab is under review by your government you love so much. It’s called means testing SS.
Hee Haw!
For the entitlement programs, we can:
1. Go bankrupt by printing money/increasing the debt;
2. Eliminate the progams (lol, just typing it makes me laugh);
2. Raise taxes;
3. Means test; or
4. Some combination of the above.
As far as I’m concerned, the more they push toward #3, the better.
the more they push toward #3, the better ??
Give some parameters on how it would function…
Based on income ?? Assets ?? Would you advocate that if you had sufficient income or assets that you would not receive medicare ??
I would advocate based on income (so each person isn’t forced into investment risk positions that are not palatable to them), and I would advocate higher co-pays/premiums/deductibles for those who have the ability to pay more.
advocate higher co-pays/premiums/deductibles for those who have the ability to pay more ??
Okay…But how much more is my real question….
Couple has $250,000. in income from combination of pension & investments…They are mid 60’s…and on medicare…She has a double mastectomy due to cancer along with some Chemo & radiation therapy…All in the cost is $200,000. by the time she is done…
How much should they pay ??
http://www.surgerycenterok.com/
@scdave
That is the question. I don’t think it can be done by means testing alone, there will probably also need to be some increase in taxes.
However, don’t think about the big ticket items. Those should clearly be nearly entirely covered by Medicare.
Perhaps there should be a standard deductible of 2% of your income annually (in your case, the first $5k of medical is on the individual, the rest is covered by government).
I’m not talking about bankrupting people for getting sick. I’m talking about taxing the people who have the capability a bit more for the services they are using.
Because, let’s face it, on average, people who are receiving Medicare today are going to use more medical care than they paid for based on the taxes they paid over their career (I think the number is something like 3x…they will use 3x the amount of Medicare than the taxes they paid).
Either we dump that additional cost on those working today (who will need to then pay some for prior generations through higher taxes and pay for their own Medicare as well), or we find a way for those with the means to pay for more of their own Medical care.
Rancher,
Interesting new development as Obamacare is about to allow insurers to solicit interstate policyholders. Coupled with competitively-priced surgical care such as this one in OK, the cost of medical care should continue to decline — as it has started to do in California these last few months.
My health insurance premium has gone down 11% since March, and I’ve gotten two 6% refund checks.
cooked up by… oh wait, The Heritage Foundation.
Gotta keep the plebs confused, and voting against their own interests.
Note the opt-out:
The Automatic IRA: A Conservative Way to Build Retirement Security
David John
“The Automatic IRA is a conservative, market-oriented solution to help address our retirement savings crisis. It would increase the proportion of Americans who can save for retirement at work from 50 percent to 90 percent, make it simple for small business owners to offer IRAs to their employees, and create low-cost accounts that an employee can understand and use without having to be a financial expert.
The new version contains a number of new ideas that will even further increase the value of the proposal. The basic idea was unveiled at Heritage in February 2006, and it has support from both conservatives and liberals.”
http://blog.heritage.org/2010/08/13/the-automatic-ira-a-conservative-way-to-build-retirement-security/
Such a good the dems adopted it:
Automatic-Enrollment IRAs Get A Test Run In California
Ina Jaffe
“A lot of kinks have to be worked out before California’s automatic IRA goes into effect, but basically it would work like this for companies that don’t offer private retirement plans: 3 percent of a worker’s paycheck would automatically be sent to a conservatively managed retirement fund, though who will be in charge of it hasn’t been determined yet. Employers wouldn’t have to do anything but deduct and forward the money — the same way they handle taxes.
A worker who didn’t want to participate could opt out. But that automatic enrollment is the key, says Richard Thaler, a behavioral economist at the University of Chicago.
http://www.npr.org/2013/05/01/179823303/automatic-enrollment-iras-get-a-test-run-in-california
—————–
Note the opt-out.
Of course if the dems adopt their idea, the Heritage Foundation will suddenly be against it. They’re funny that way.
Ghillarducci is on record. She is your folk. We are now past mobocracy stage. Hence I am very likely going to be proven correct. Gold is insurance against mobocracy.
I personally think the way they will confiscate more money from the masses is one of two ways:
1. Higher taxes on income…doesn’t really get to the IRA/401k pool, except indirectly–as that money is spent, someone makes some money on it; HOWEVER
2. VAT. No better way to fleece the people than through a national sales tax OR VAT system…just to take a little off the top of the IRA/401k $ every time to want to spend some.
You did not even read the link which itself had links to US News. Your hatred of evil non-aggression libertarians blocks your perceptions.
“They are all easily debunked” - lame.
Exactly.
The reality is our Blog Donkey was debunked long ago.
Did you lose money on the “Taper Tantrum”?
New York Markets Open in: 1:05:21
Pre-Market Indications | Analyst Ratings
Futures: S&P 500 +0.5% DOW +0.4% NASDAQ +0.5%
Bullard: Fed should have waited on taper plan
• Gut checks: Bubble, bubble, toil and trouble after the ‘taper tantrum’
• Nutting: Bernanke’s deflation complacency | Stock futures rise
There is no taper. Instead they have expanded buying MBS.
I certainly lost (on paper) a lot less than I made (on paper) from 2008/2009 until today.
And the losses on the massively inflated price u paid for that depreciating shanty extends your losses into how many hundreds of thousands of dollars?
I was in cash since 2007, and I went heavy into REITs in late 2008/early 2009, and have stayed there ever since…you should be able to do that math. I’m happy with a 3-5x return over that timeframe as an investment, an ongoing inflation hedge, and quarterly dividends.
Regardless of whether my home went up or down in value since 2011, it’s a home I plan to live in for the next approximately 20 years…not an investment.
But it sure is a loss.
Why don’t you disclose the extent of those losses?
http://www.zillow.com/local-info/CA-San-Mateo-County-home-value/r_2842/#metric=mt%3D34%26dt%3D1%26tp%3D5%26rt%3D6%26r%3D2842%26el%3D0
Is gold the only way to go from here if you want to keep playing with fire in commodities?
Marc Faber: More S&P downside, commodities ‘horrible’…except gold
June 21, 2013, 4:57 AM
Bloomberg
Marc Faber
With the S&P 500 SPX down 2.4% after the Fed laid it on the line, it shouldn’t come as too much of a surprise to see the bears out there growling away.
…
Yahoo finance gold bears in full force. Confiscation of electronic assets in our future to give to the Pollys and Alphas and Oxides who are the majority of voters…makes me cheer on the beard. I am buying!
Confiscation of electronic assets in our future to give to the Pollys and Alphas and Oxides
Yay!
Commie. And you regard that as a complement…
Where do gobzillions of dollars to pay federal government contractors originate?
What about a topic on debt pushing?
Oddly enough, I haven’t had a lot of new credit card offers in the last few months. Maybe they go on a cycle and pre-summer isn’t on for the credit cards? I used to get offers for that Saphire card with the TV commercials twice a week. Recently it has just been a few affinity cards.
Anyway, what I got yesterday was a giant envelope (with a special personal *code* just for me) for Discover student loans. Please note, I do not now, nor have I ever had a Discover card, so they didn’t get my name from customer lists. The last time I took a college class was in 2006 and I paid for it with cash, so no particular reason for my name to have popped up from that. I have not recently applied to take any college classes, not even no credit ones.
I think it may just have been a mass mailing at a time when people who have reserved spots in college classes with small deposits are a few months away from needing to pay big bucks. The text was all about how easy the process was going to be. They emphasized that the loan could cover ALL expenses and that the college would decide how much that was so it would protect “me” from borrowing too much (really?). Also, of course, if you borrow everything from one private lender, you are giving up the chance of borrowing from the federal program which has better protections in place (like income based repayment plans, etc.).
Very disturbing piece of junk mail. One of the worst I have seen in a long while. What has everyone else been seeing?
Now that you mention it Polly, I haven’t been seeing much in the way of credit offers. I don’t need or want them, so their absence does not offend at all. It used to be I’d get those stupid checks you can write against a credit card (at brutal interest) on a regular basis, but my shredder hasn’t had a taste of one in quite a while.
No explanations I can think of.
I’m not getting very many of them either. I feel SO deprived. (Not.)
Some fly-by-night bank was nurtz enough to mail ME a credit card offer this week. First one of those I’ve seen in three or four years, and the wording seemed geared for a recent grad, not a near-retiree. No idea where they got my name or why it might be associated with a need for credit….
Edward Snowden just got indicted on espionage charges. Julian Assange is in exile. Bradley Manning rots in jail. Legitimate journalists are harassed, intimidated, and threatened with imprisonment.
How long will we in the “land of the free” continue to tolerate a Soviet-style security apparatus that criminalizes those who attempt to bring transparency into the inner workings of what in any other context would be considered criminal activities?
I’m not talking about fake “scandals” of diversion here, I’m talking about an out-of-control DoD abetted by an increasingly militarized NSA/CIA. And now they’re discussing militarizing the US/Mexico border with an additional 20-30,000 border “agents”.
You expect a government that is run by “progressives” to be transparent?
I have a bridge for sale.
There is nothing “progressive” about a $60B allocation for militarizing our border with Mexico. That was a sop from the Gang of Eight to get Republican Senators on board the immigration reform act.
Get your memes straight.
Just to refresh your memory, the “sequester” that was supposed to bring the end of the world as we know it, was only $42B.
So have Treasury bond yields pretty much leveled off at this point?
Nope.
Date
May 2, 2013 2.820 $1,000.00
June 21, 2013 3.560 $864.25 -13.6%
Trying again:
30-year Treasury bond values
Date / Yield / Market Value
May 2, 2013 2.820 $1,000.00
June 21, 2013 3.560 $864.25 -13.6%
Who (if anyone) besides the Fed is buying long-term Treasury bonds these days?
Would this be a good time for Wall Street investors to assume the crash position?
June 21, 2013
7 ways to spot a market top
Key signals chart watchers use to find the peaks
SAN FRANCISCO (MarketWatch) — What do you look at to tell a market has topped? MarketWatch reporters posed that question to investment strategists, traders and technical analysts as the U.S. stock market trades at record highs and the Federal Reserve plans to rein in its massive bond buying program that’s kept interest rates very low. From the price of oil to small cap stocks in Spain, the answers provided a broad mix of insight.
While the U.S. stock market is trading at record highs, three blue-chip Chinese companies — Petro China, China Mobile and Yanzhou Coal YZC — are trading near 52-week lows, points out Brad Lamensdorf, chief investment officer of the Lamensdorf Market Timing Report. All three stocks peaked in January and have been skidding ever since. Given the key role China plays in the global economy, “this looks like a bad sign for US stocks,” Lamensdorf said. Interestingly, he adds, these Chinese stocks broke down before the Shanghai Composite Index hit a 52-week high in mid-February.
Two mildly maddening developments here in yahooland:
1. A relatively new 3/2 mobile on 20 acres went on the market last week for $150K and sold three days later for $168K. (Bought new in 2009 for $175K, probably sunk another 100K into improvements.) Realtor friend reports that the regional RE syndicates have stopped buying altogether and the market it being driven by upscale weekender families from Los Angeles, not full time county retirees from Bakersfield.
This is the first (livable) house that’s sold up here in nearly a year, and was occupied by the last of the bubble-era (local) flippers, who finally gave up the ghost and moved on. (No jobs at all, more work to maintain the place than they bargained for. Also a bobcat ate her chihuahua.)
Secondly, I saw my first broadcast TELEVISION ADVERTISEMENT for CalFresh, the California food stamp program. It wasn’t a public service announcement, either, and was aired just before the evening news on the CBS affiliate tonight.
People argue about FED involvement in the economy and whether it will end. Everything ends- often not in the way hoped or intended. I don’t have answers, but I do have questions.
I believe that there is an unspeakable amount of hubris in DC and that most of these idiots actually believe (or did at one time) that they ‘have it under control’.The fundamental facts that they attempt to ignore (markets seek equilibrium and the gross imbalances all around us) are all taught in ECON 101. These morons know what they have done.
It cannot be lost on the sociopaths that the longer they try to stave off equilibrium/reality, the more catastrophic the eventual collapse. If semi-educated people like us can realise this simple fact (and see its effects all around us), then they must be aware of it as well. For this reason I would like to think that they will begin to pull away the punchbowl and face reality before it gets even worse.
Speaking of worse, QE has made systemic imbalances worse. Everyone with half a brain and a minimal amount of objectivity knows it and acknowledges it. Even in the MSM. It is also acknowledged that every successive dose of QE has had a smaller positive effect and a shorter half-life. So if they elected to continue, they would be forced to ’spend’ (create additional debt) ever-increasing amounts of money at shorter intervals to obtain decreasing results. Within a couple of years the US would be injecting 1 Trillion $ each month. How feasible is that? Once it becomes dubious- much less farcical- then nobody has any faith in the system and the whole thing collapses anyway. Look at Zimbabwe and their 1 Billion Dollar bill.The FED knows this. For this reason I would hope they are going to pull the punchbowl: They know that continuing to refill it forever is simply not possible.
75 years ago it would have been much easier for the FED to perform some action and be fairly confident of the outcome. There were no economic peers to the USA like there is today and the markets were not as complicated. Information was also not as readily available and communication/transactions were not instantaneous (HFT, anyone?).
But now the genie of Unintended And Unforseeable Consequences is well out of the bottle. In every country, every Central Bank and every boardroom the Masters Of The Universe are furiously flipping switches and throwing levers, all either trying to stay afloat or make a killing. They have manipulated stock exchanges, the Libor rate and many politicians in order to work their plans. Many of these plans compete for the same resources and conflict with one another. There is little coordination, yet a great deal of poorly understood interdependence and interrelationship. There is blind chaos and while it may blow over this time, there WILL be a ‘next time’ and both the cost and probability of failure will be even higher. It is now an extremely complicated, uncontrollable and unknowable environment to be operating in.
Lets be rational: If they could have prevented this, then they would have. If they could stop it now, then they would have already done so. If what they had (repeatedly) tried so far had been effective, then the market wouldn’t have sharted and we would not be having this conversation now. I am not confident that they will do the right thing.