The Housing Bubble

3x of two silly valley techie incomes, sure, but 3x of the median income, I don’t think so.

The median home is afforded by the median couple; if the median couple has 2x silly incomes, then the median house will be 6x = 3x 2x silly incomes.

Sure it does, but that’s offset by the inflationary pressure created by the counterfeiting money printing used artificially lower rates. The overall economic effect is the same whether it be directly by interest rates, or via opportunity cost and time value of (spent) money.

As long as wages are stagnating(and they are), these prices cannot hold.

Interest rates are only as low as they are because of the Fed™ activities described in my earlier post. If they continue for much longer, one of two things must happen - either the dollar becomes worthless and we turn into Zimbabwe/Argentina/Weimar, or house prices crash.

I’m betting that the Fed’s™ owners will let housing crash before they allow all their dollar denominated assets to become worthless.

I’m willing to listen if anyone can make a case for the former scenario, but it doesn’t seem too likely. If I were a cynic, I would be thinking that the PTB were waiting for just the right moment to let housing tank. Politically, it’s an extremely powerful hammer, but you can only use it once.

I remember hearing a radio show talk about how interest rates have had major effects on presidential elction outcomes. I decided to search it out and came up with this gem of a pdf.

One part of particular interest:

“During the previous 11 presidential cycles, only once has the funds rate increased more during the June to February period that precedes the election. That increase occurred in 1979 -1980, when Paul Volcker’s Fed launched a draconian anti-inflation campaign that doomed Jimmy Carter’s chances of reelection.”

No president in the last 11 elections has been re-elected in an environment with increasing interest rates.

Thank god the constitution requires that only congress can create money, thus insuring our money supply is stable and not in the hands of private interests. Oh wait….

I’m betting that the Fed’s™ owners will let housing crash before they allow all their dollar denominated assets to become worthless.

How many billions of dollars of MBS are the Feds buying each month? Seems to me like a lot of their assets are in housing…

Mike McAnus the realtor…….

How many billions of dollars of MBS are the Feds buying each month? Seems to me like a lot of their assets are in housing…

That’s actually a really good point. The big difference is, the owners of shares in the fed don’t get to actually own the real estate. And it was all bought with counterfeited conjured money. this is the only exposure they have to the MBS real estate. They get their money by skimming off the cash that goes through their hands in the form of bank bond purchases and loans in turn made with that money. Broker fees, bonuses, etc.

The whole point of the Fed(from their POV) is to have a place to offload their crap.

Now that you mention it, it’s pretty obvious they are going to let it crash - otherwise they would hold on to that paper(MBSs) if they really thought the underlying asset was going to eventually appreciate.

They then use the skimmed money to buy the crashed assets. Wash, rinse, repeat, and in a few generations or so we are all serfs with the bankers owning all or nearly all real estate. Gawd that sounds horrible when I read it, but isn’t that basically what’s been happening with all the investment outfits buying up RE after the crash? I’m sure many/most/all of them were direct beneficiaries of the Fed™’s counterfeiting easy money policies.

Doesn’t that constitute some kind of control fraud or something?

They’re beating us with our own stick! Not only that, they have us running on a treadmill to generate the power to swing the stick.

I think I need a drink….

No, the 3-4x income ratio holds even at 4% .. Why? because at 4% interest rates, when rates rise, prices will drop and you will have a big loss on paper. A big loss on 3x your income is much better than a big loss of equal percentage on 6x or 10x your income… If you never need to sell, no worries. The median person stays in a house for 7 years though, so if you are a normal person, normal rules apply.. don’t buy more than 3-4x your household income… even when rates are low. Bonus: your payment will just be lower than normal and you can *gasp* save the money and /or invest it (the horror).

“You talk about 3X median as if it’s the 11th Commandment.”

It was when banks were responsible for the losses when their due-diligence failed; that 20% down payment cushioned the hard landing.

The metric was 2.2x annual.

They then use the skimmed money to buy the crashed assets. Wash, rinse, repeat, and in a few generations or so we are all serfs with the bankers owning all or nearly all real estate.

Unfortunately, THIS is the so called “historical mean” that we will revert to, not the mythical 1950’s - 1970’s that the HBB bears are wishing for. The lords and serfs are a thermodynamic minimum, if you will, the end result of unfettered capitalism. Left to its own devices (i.e. no government helping out the middle class), we will become a society of a dozen lords and a million serfs, just as we were in Rome, in the Middle Ages, in the antebellum South, and in the Gilded Age. Bootstrapping and “hard werk” will not be enough to enter the halls of priviledge.

Bears?

Dear Debt Donkey…. you’re in for the disappointment of your life.

THIS is the so called “historical mean” that we will revert to, not the mythical 1950’s - 1970’s

Exactly. Most people calling for unfettered capitalism would pit their shants if they were ever to experience what it really meant.

I think the 3x or 2x or 4x income is missing the main point.

Housing is shelter.

End of story.

If rent of the kind of house that you want to live in is $1 per month, and the same house costs you 1x your income, and that gives you a mortgage payment of $1,000 per month, you should NOT buy. You are way better off renting.

At the same time, if the kind/quality/location of a house that you want to live in (for at least the next 5-10 years) is not available to rent, but you have the cash to buy it, how much of your income it represents is almost irrelevant. What matters is if you are overpaying based on similar homes in the area, and whether there are enough jobs in the area to likely supply a buyer for you in the future.

Mike McAnus the realtor…….

Ok, I gotta say it: that was downright juvenile. And not the cute kind.

I’m sure many/most/all of them were direct beneficiaries of the Fed™’s counterfeiting easy money policies.

I think I need a drink….

I like the way you think, Biggvs. You drink is on me at the next Seattle HBB Meetup… Were you at the last one, btw?

And by virtue of the fact that housing prices are still falling (liars like to exclude foreclosure transactions) combined with moratoriums in effect in all 50 states, we’re still in the third inning of the housing debacle.

Beware and look out below.

Ben,

I’m speaking specifically about California (as I frequently do).

I think that article is absolutely what I’ve been talking about. The states with the backlog are judicial states–this is completely consistent with the data that LPS and others provide.

CA is non-judicial, and has been getting through the distress at a steady pace over the prior 3+ years.

Florida is judicial and hasn’t done squat;
NV is non-judicial, but AB 284 changed that, and things are now all stopped up.

Consequently, vacant foreclosures are rampant in Florida and NV. There is a massive backlog of distressed housing in IL, NY, NJ, NV.

You cannot say the same thing about AZ or CA.

With 4.4 million excess, empty and defaulted houses in CA, I don’t think there is a question as to what’s coming for California.

More unsubstantiated BS.

How do you get your 4.4MM?

Still posting on behalf of NAR and lenders huh RentalWatch you liar?

Don’t like the message, attack the messenger. A strategy as old as time.

How about attacking the message. Do you have any substantiated data to counter what I have presented?

That sounds about right.

How about refuting the data? Anything?

Or are you going to continue pimping for NAR and lenders here like you are over on Ritholtz’es blog?

Where else on are you pimping for lenders and NAR?

Housing Analyst:

I’m right there with you, but I’m also very curious - do you have a source for the 4.4 million number? Honestly wanting to know - I have family with money in housing/RE in CA.

Rental Watch
I’m in So Ca (east Ventura County) and I believe the Ca HomeMoaners Bill Of Rights that went into effect Jan. 01, 2013 turned Ca into a judicial foreclosure state technically. If a lender even tries to move forward for justice they’ll be sued.
Your opinion?

Your data is unsubstantiated and simply made up. There are a total of about 14MM housing units in CA (multi and single family). I rounded up to make your number slightly less ridiculous.

4.4MM is 30% of all housing units in the state that you claim are “excess, empty, and defaulted”. I rounded down again to make your number slightly less ridiculous.

Excess and empty are the same thing, a vacant home. If they are occupied, they are not excess.

Of the 14MM housing units, the homeownership rate is approximately 55%, so 7.7MM homes are “owned” and the rest, 6.3MM are rented.

Per the Census, the vacancy rate for rented homes is 5.8%, and owned homes is 1.4%. Doing the basic math, that gets you to: 473k housing units that are vacant.

Now onto your “defaulted” category.

There are about 6.8MM mortgages in California. Fannie Mae’s multi-family credit losses in CA were $2MM in 2013…not even worth talking about.

Fannie says that there are about 1.6% of their loans that are “seriously delinquent” or in the foreclosure process in CA.

LPS says that 6.3% of all loans in CA are in some stage of default. Again, I’ll use the higher number to show how ridiculous 4.4MM is.

6.3% of 6.8MM is 430k homes that are in ANY stage of delinquency.

Add the two together and you get a grand total of about 900,000 vacant or delinquent homes in the state of California.

This ignores the fact that:

1. Some of the vacant homes are also delinquent, so taking out the double-counting would reduce the number further (RealtyTrac’s “zombie foreclosures” fit into this camp–vacant and in the foreclosure process–CA has about 30k of these, IIRC);

2. Just like 0% unemployment isn’t normal, neither is 0% vacancy. Some level of vacancy is normal, so not all the vacancy is “excess”. Some would argue that 5.8% is pretty close to “full employment” for rental property. Taking this into consideration, it would reduce the number further.

3. Just like vacancy rates, you won’t get to 0% delinquency rates. As I’ve shown over and over again, non-current loan rates of less than 4% are pretty rare, and typical is about 5%, so the “excess” delinquency over “normal” times to get to 6.3% is about 1.3%. Taking this into consideration, it would reduce the number further.

Your 4.4MM is ridiculously high. Even the 900k that I calculated is ridiculously high based on the three points noted above. The real answer is likely 10% (or less) of the number you quote every day.

You’re a liar.

And now you are free to say that I refute nothing and stand behind your completely made up number while declaring Fannie Mae’s data, the Census data, and LPS’s data are completely wrong from your chair on the eastern time zone.

How long did it take you to personally count the 4.4MM homes in CA? If you came by my house mid-day, it probably seemed empty, but I was just at work and my kids were at the park. At least reduce your number to 4,399,999.

The penalties for screwing up aren’t nearly as big as they are in NV. I think in NV if you screw up under AB 284 (their law), it’s a felony for officers at the foreclosing lender. In CA, it’s something like a $7,500 fine. Lots of the things in the CA Homeowner Bill of rights is what the major services already agreed to under the national settlement. That national settlement didn’t convert the country to only judicial processes.

Property Radar only tracks non-judicial actions, and those actions haven’t stopped.

RealtyTrac started looked for an uptick in judicial actions in the state as a result of the law, and at the time I read the article, they didn’t see any noticable uptick in judicial actions.

I haven’t seen them look again since that initial look, but as noted, per the LPS data, the non-current loan rate has continued to fall as it did before 1/1/13. You’ll note that in judicial states, the non-current loan rate was very sticky on the way down, not falling nearly as fast as CA’s. If CA went judicial, you should be seeing a less reduction in non-current loan rates.

I think the law is simply increasing the number of homes that are sold through a short-sale process as opposed to going fully down the foreclosure process. I have seen NO evidence that the law has created a judicial state out of CA.

Rental Watch aka “RW” continues to float garbage data on behalf of NAR and lenders.

The reality is there are 4.4 MILLION excess empty houses in the state of California and that number is growing.

If you’re in California and you’ve been sucked into the housing scam by the likes of liars like “RW Rental Watch”, you best be looking to exit and do so very soon.

And make no mistake about it, Rental Watch is paid to lie.

inchbyinch:

http://news.investors.com/newsfeed-marketwired/050913-141476565-judicial-foreclosure-auctions-hit-30-month-high-in-april-overall-us-foreclosure-activity-drops-to-6-year-low.aspx?p=full

Take a look at the article above. It references how CA’s foreclosure process was temporarily impacted in January, but NOD activity has since picked up.

This is still a non-judicial process, NOT judicial.

Take a look at the judicial process:

http://www.propertyradar.com/foreclosure-guides/foreclosure-101/foreclosure-laws/california-laws/

“The owner has the right of redemption allowing them to buy it back from the successful bidder at auction for one year after the sale.”

Can you imagine as a bidder at a judicial foreclosure auction how little you would want to bid in order to deal with a ONE YEAR redemption period?

The result of this is that a lender would get much less for a judicial foreclosure auction than the same home at a non-judicial foreclosure auction, where there is no right of redemption.

No wonder they are sticking with non-judicial processes.

Yes, let’s all focus on month to month foreclosure numbers, when the lenders never sold the vast majority of the houses they foreclosed on years ago. Not to mention the 2 million FB’s refinanced under HARP/HAMP that re-default at close to 40% within a year.

“Look at how CPI is calculated (excluding food and fuel? Please…).”

Ugh. I hear this nonsense the time. If food and gas were included inflation numbers would be meaningless since one month it would be +3.6% the next it would be -4.7%. Gas and food (and especially gas) vary wildly in price in short periods of time. That’s why they are excluded. Why people refuse to understand this very simple concept is one of life’s great mysteries.

There are alternative measures of CPI that people point to often as reality…there is evidence of book cooking there by people doing the math (Shadow Stats for one).

LIBOR was under one group’s control (more easily manipulated).

NAR controls all of their data (more easily manipulated).

Delinquency and Foreclosure data is reported by multiple sources, which is possible since many of the filings are publicly available.

LPS, FHFA, Corelogic, RealtyTrac, PropertyRadar (formerly Foreclosure Radar), all point in the same direction: Declining levels of distress in California. Unlike the CPI, I have yet to see anyone present data to the contrary. And since notices of default and foreclosure filings are of public record, someone should at least be able debunk these data sources.

So, what we are left with are people claiming that defaults are going unreported. Except the same providers of data that are supposedly underreporting default/delinquency data in California are reporting massive default and delinquencies in judicial states.

Does that mean that banks happen to be reporting defaults in judicial states and specifically NOT non-judicial states? Is that why there is a massive discrepancy in the reported data between the two types of foreclosure processes?

Or, is the most likely explanation that a slower process (judicial) leads to slower declines in levels of distress than the faster process (non-judicial)? This is what I believe.

In February 2010, the top 10 worst states with respect to non-current loans were reported by LPS as:

1. Florida (Judicial)
2. Nevada (Non-Judicial, but AB 284 effectively changed this)
3. Mississippi (Non-Judicial)
4. Arizona (Non-Judicial)
5. Georgia (Non-Judicial)
6. California (Non-Judicial)
7. Illinois (Judicial)
8. Michigan (Non-Judicial)
9. Rhode Island (Non-Judicial)
10. New Jersey (Judicial)

Starting out, a full 7 of 10 worst were non-judicial.

Now only Mississippi, Nevada, and Rhode Island remain in the top 10. Nevada is non-judicial in name only, I don’t know if laws changed in either of the other two.

Now 7 (or of the top 10 are judicial.

Isn’t this change over time what you would expect?

Loan modifications have been happening at about a pace of 1MM per year, so a lot of the redefaults have happened.

In other words of the 2MM refinances under HARP/HAMP, many were done 12+ months ago, and their delinquencies are in the current data.

The last data I’ve seen per Fannie’s Credit Supplement is that the redefault rate 2 years out is approximately 30%.

Month-to-month data is useless, until you string 3+ years of that data together. Then trends either emerge…or don’t.

when the lenders never sold the vast majority of the houses they foreclosed on years ago.

Exactly. And the reality is that inventory is even larger today irrespective of what entity has it on their books.

“when the lenders never sold the vast majority of the houses they foreclosed on years ago.”

This would imply a continuing increase in the amount of REO, since foreclosures do continue to occur. What is your source for this statement?

Per the FDIC, the amount of 1-4 unit REO on the books of the banks have been in steady decline, so that statement doesn’t seem to be true for FDIC insured institutions.

Per Fannie’s reporting, the amount of REO they hold has generally be in decline, as they are selling more homes than they take in each quarter (the peak number on their report is 162k REO units at the end of 2010, now down to 101k). Fannie’s CA inventory peaked at about 22k in 2011, and is now at 7k (end of Q1).

Per Property Radar, in CA as a whole, the REO that has not yet been resold has been in steady decline and is now less than 47k, down from about 73k a year ago.

RentalWatch The Liar,

There are 25 MILLION excess, empty and defaulted houses in the US today…. and growing.

“Ugh. I hear this nonsense the time. If food and gas were included inflation numbers would be meaningless…”

Ok, now I know you’re some kind of shill. Food fuel and housing have gone up more than anything else, and account for most of people’s spending, yet we can’t even find a way to count a running average?

Inflation numbers are meaningless if you don’t count the things that actually inflate.

If it’s too difficult/meaningless for our overpaid government workers to do monthly, how about using an annual or semi-annual running average since these things have consistently inflated for years now?

You wouldn’t object to that now would you?

I’m assuming you mean modification after modification. Because if they simply left the homes in delinquency, you would expect the non-current loan rate to move up.

Likewise, if the modifications won’t work in a sustainable fashion, then you should expect the non-current rate to eventually stall out on its way down, as you would end up with the “normal” level of delinquencies, and then on top of it this continuous layer of redefaults. I guess we’ll find out within the year if the non-current rate settles in at a higher than typical number…

Barack! Tell us all about about your Recovery again! Testify, brother!

the only recovery I see is in asset prices. The real unemployment is closer to 20%.

play the game and make some cash.

“play the game and make some cash.”

I’ve always believed that the 3 necessities of life were food, clothing and shelter. I also believe that only a sociopath would gleefully participate in the intentionally price escalation of one of life’s necessities until it becomes unobtainable for a large swath of the population. Maybe you should do the same thing with food?

‘do the same thing with food’

that’s goldman sachs’ job.

oh please.

“A ‘recovery in housing’ is falling housing prices to dramatically lower and more affordable levels.”

Correct. Housing is going to be doing a whole lot of recovering in the coming months and years.

HA you need to refocus. Even if you know something to be true sometimes you have to put aside your own thoughts to make money. Even if you know its BS just get in the game for a bit and profit from it.

We’re quite profitable.

“I’ve always believed that the 3 necessities of life were food, clothing and shelter.”

I think you left one out there.

“I think you left one out there.”

Beer?

HA I know you cant unload those shanties your throwing up at 50.

And the defaults will continue to skyrocket, driving housing prices ever lower.

Look out below

““I think you left one out there.”

Beer?”

“Women! Can’t live with them. Pass the beer nuts.”

Beer?

Sorry, Bechtel’s got private-sector dibs on the water. In at least one country they went after you if you tried to collect rainwater from your own roof.

How long are you gonna sit around and wait for the next big crash? U obviously didnt buy anything in the last crash. whats going to be different next time around for you?

What will it take for you to buy?

A real crash that isn’t short circuited by bales of cash from helicopters. One that brings prices back in line with incomes, even in the “it’s different here” areas. The last one wasn’t really a crash…it was just starting to think about being a crash…

“A real crash that isn’t short circuited by bales of cash from helicopters. One that brings prices back in line with incomes, even in the “it’s different here” areas. The last one wasn’t really a crash…it was just starting to think about being a crash…”

So in other words…..never.

So in other words…..never.

I’m prepared for that. Better that than a slave. But I still think it will be sooner than “never”.

Imminent.

I think we just figured out who the RealTORs are on the forum….

azdude: What will it take for you to buy?

That’s a good question.

• If it presents a credible opportunity to build wealth, not lose it. Since I’m going to be putting down real money, 20%, 40% or more, I want to be confident that the house will reliably retain its value.

• That point will be reached when I can be confident that the central bank and the government are not heavily supporting prices. They never allowed prices to reach market clearing levels. And makes me very cautious.

• I’m not at all confident that the Fed and government will be able to continue their massive price supports.

• And today, it’s hedge funds, who have the rent-to-flip model. And they’re driving up prices.

My net worth has grown while renting. I know people who bought the sales pitches and devastated their finances by buying overpriced houses in questionable areas. Housing is not the path to riches that marketing made it out to be.

Here’s one potential black swan too. Obviously, the conventional wisdom in economics is that Keynesianism is correct. Keynes himself uttered that houses are a good way to add stimulus to an economy. Which makes it nearly Gospel to a lot of people. He said the effect houses have on an economy are a lot like the effect that burying bottles full of currency, and allowing the citizens to dig them back up would have. (find the word “bottle” on the page, and it’s the next two paragraphs that talk about this).

But he neglected one very important side effect with housing, that digging up bottles of currency does not have. And that is that houses trigger a multi-decade deleveraging event, in which the consumer draws down other spending in order to service the house. And multiple studies since the mid-90’s have shown a correlation between high home ownership rates and high unemployment rates.

This points to the core problem with a large government and quasi-government entity massively intervening in the economy - the fortunes of the smaller participants are based on the large entities’ whims.

The only way to win in this case, for the small player, is not to play.

“I think we just figured out who the RealTORs are on the forum….”

It’s quite evident who they are and those who have a stake in the direction of prices.

If price increase taper off, we might just get into a more normal elongated cycle, as opposed to a mania driven rebubbling of home prices.”

Probably this one

back to back bubbles ? how often does that happen ?

“back to back bubbles ? how often does that happen ?”

Not often in the same asset class. Working against this occurring in housing is that the same suckers that:
1. Bought the CDO-squared’s;
2. Provided “piggie back” loans that allowed more rampant 0% down purchases; and
3. Blindly accepted AAA ratings for pools of poorly underwritten loans (Option ARMs that only worked at the teaser rate, no doc loans, etc.).

Are either out of business, or highly unlikely to do the same thing again (at least so soon).

This financing was the juice that brought the bubble to insane levels.

My concern is that we peak much sooner than we would in a “normal” cycle because a) the Fed is keeping rates so low in the context of b) a market where there isn’t much in the way of new construction going on.

I’m wondering what asset class gives us the next epic bubble. Over the past 15 years we had internet stocks and we had housing. What’s next?

The stock market as a whole?
Commodities?
Precious Metals?

All of the above?

In our current system I think housing is the only one that you can actually convince most people to sign up for large amounts of debt to own. So I suspect that’s what will always get pushed until collapse.

“Houses depreciate….. rapidly.”

I’m wondering what asset class gives us the next epic bubble. Over the past 15 years we had internet stocks and we had housing. What’s next?

The stock market as a whole?
Commodities?
Precious Metals?

All of the above?”

I think Gold was in a mini bubble that has popped.

whats next ? I don’t know ? worth thinking about though

You’re getting ahead of yourself. It won’t happen until the current bubbles collapse.

“whats next ? I don’t know ? worth thinking about though”

The housing bubble required a debt bubble in tandem for it to get as massive as it did. When the housing bubble burst, the money had to go somewhere and went into stocks, commodities, the relic, etc. Unless velocity really slows, the money has to be floating the price of some asset(s). At least some is working it’s way back into housing, but it seems very unlikely it can remain without better wages to fund end user purchases.

If the supply of debt money starts declining (rising interest rates?), the velocity slows, or the money gets routed to average folk who are less inclined to spend it on assets, we might actually see asset prices return to normalcy. I’m not sure any of the above is likely in the near term.

cactus:I’m wondering what asset class gives us the next epic bubble. Over the past 15 years we had internet stocks and we had housing. What’s next?

You need a “magic asset” to have a bubble. An asset which there is absolutely, positively no chance it will go down in value - ever. At best, it could reach a permanently high plateau.

One people believe that about some asset, physical (houses, tulip bulbs) or virtual (stocks), then you have your bubble.

People believed houses to be that magic asset. The government and central bank are currently doing everything they can to maintain that belief. While the belief exists, you have a bubble.

It takes a nimble player to not be left standing when the music stops.

I agree with Cactus that gold was a little mini-bubble. And Neuro, the only thing that allowed housing to get to epic bubble proportions was that there were allowed to be ever greater and greater numbers of “greater fools” who were created through financial engineering.

The Fed’s low rates didn’t stop home prices from falling. IMHO, what stopped them from falling were people stepping to buy with cash.

That said, the Fed’s policies are a significant risk of creating the next bubble in housing. However, unless Option ARMs, etc. come back the bubble won’t reach “epic” proportions, the near term increases in home prices will just be far more rapid than other cycles.

I think the next epic bubble will be the stock market. You need something that is accessible to the masses (housing was made accessible to the masses with crazy finance), that people can see go up and gets them excited.

I heard a story of a guy who was speaking to a room of investment professionals several months ago, and he noted how he though Apple was set for a fall…everyone chuckled. When he asked how many people in the room were long Apple, everyone raised their hand. He said THAT was why Apple was ready for a fall…everyone was already on the same side of the trade, and it couldn’t get any better.

On the stock market similarly, I saw a chart that showed flows into the bond market from 2009 to early 2012 were about $870B above the trendline, and that flows into equities during that same timeframe were about $1T BELOW the trendline.

I think many would argue that we are in the midst of an “epic” bond bubble currently…as that deflates, I think capital could flow into equities in the “great rotation” that people have been talking about, and create an “epic” stock market bubble to follow.

If there is any “reversion to the mean” in capital flows, the bond bubble will deflate, and more capital will flow into equities.

Neuromance, the “magic” in these assets bubbles is that they are needs industries.

People need to live somewhere; therefore J6P is is almost forced into buying housing. Yeah, HBB may laugh, but will they be laughing when they’re 65, their income is a pittance, and the rent on a 2-bed flat is upwards of $3000/month?

People need/want to retire in comfort; therefore J6P is almost forced into playing the stock market via the 401K. HBB may laugh here too, the mattress market sure won’t give you the necessary 6-8% minimum return.

The only asset bubbles for non-needs are rich-man playthings like fine art and possibly precious gems.

Yeah, HBB may laugh, but will they be laughing when they’re 65, their income is a pittance, and the rent on a 2-bed flat is upwards of $3000/month?

Sigh.

My goal if housing fundamentals never matter again, is to do my best to NOT have my income be a pittance, and to NOT pay $3k a month for rent (I’ll live somewhere cheaper as needed), and to do what I want with the money I have accumulated from NOT spending it on housing now.

But its a real overstretch to suggest upstate is even remotely stable. Depopulation, raging chronic underemployment, oppressive weather, rapidly aging population and crushing taxes of all types make it an economic dead zone.

I like liz claman on fox. I think she was a cnbc reject too.

she looks good.

http://www.youtube.com/watch?v=n7rkHQAFUl0

I hope Kudlow and Kramer get the boot.

Be honest you like Liz Claman for other reason than her financial “reporting.”

she is an attractive woman for sure.

“she is an attractive woman for sure.”

+1 She should exercise more and watch those calories.

+1 She should exercise more and watch those calories.

Really? Please don’t say so…..I don’t get fox business, so I haven’t seen her in yrs.

Pastey white boys

“Really? Please don’t say so…”

Google Images (”Liz+Claman”): look at the first image, upper left corner. I wasn’t being pernicious. Realize that it’s easier to “keep it off” than to “get it off.”

She should exercise more.

http://www.huffingtonpost.com/2011/08/09/liz-claman-completed-the-nyc-triathlon_n_921599.html

Marathons, triathalons, and 90 minutes of cardio a day since 2005, yet she still can’t “get it off” or “keep it off.” Perhaps it’s not about exercise after all? Perhaps a diet based on whole grain waffles, GMO soy butter, sugar heavy Clif bars, and brown rice has something to do with it?

Then again, she does nicely fill out those low-cut blouses that FOX “business” channel dresses her in.

Bingo. Well, it’s about both. But bingo on the point that if you’re training for or competing in a marathon or long bike race, you’re shoveling as much in as possible to maintain energy. On the centuries (100 mile bike rides) I’ve done if you get to the point where you’re feeling hungry, it’s too late.

On the other hand, burning 500 more calories in a given day, through exercise, than you’re taking in should shed some pounds. At least, that was my experience when I needed to drop 10.

“Perhaps it’s not about exercise after all? Perhaps a diet based on whole grain waffles, GMO soy butter, sugar heavy Clif bars, and brown rice has something to do with it?”

I make a strawberry-banana smoothie with almond milk and orange juice in my Vita-Prep-3 every morning for breakfast, and prepare three Wasa Multi Grain Crispbread crackers with almond butter spread and a thick stripe of natural honey for lunch. Wife’s cooking, largely vegan, ends the day with a hot meal. Weekends are different — dark beer, pizza, etc., with friends. I bicycle commute two round trips daily, and I did fun rides totaling 1700-miles last year and that’s really 8-months due to winter.

Housing Analyst: “Pastey white boys”

Hehe…not even close.

I have a bag of cheetos and a can of coke.

You’re on track with the Cheetos, but … Coke? No way. I have you pegged for Yoo-hoo. With a bendy straw.

This isn’t right at all. Economics can be used to generate hypothesis and come to a better understanding of what has happened. This does not require making predictions about the future and doesn’t require “all or nothing” thinking. As far as making predictions, this is very tough, particularly when you are adding variables. When you remove variables, predictions can get pretty accurante, it is the addition that is difficult. Modern economies seem to always be adding variables, which makes blowing things up and starting over attractive until you realize how many entrenched interests are against this.

I think what you’re describing as behavioural economics is better described as manipulative economics. Behavioural tries to predict what will happen by observing behaviour, while manipulative economics tries to achieve an outcome by influencing behaviour.

Well I guess you have a point but can you name any economic model/policy that doesn’t employ manipulative tactics? What I think is different now is we actually have a compliant population with a very short memory. The tipping point came in 2008 when we elected Mr. “Hope and Change”.
Thanks to the integration of networks, news media and government it’s working… for now. The world outside the US is operating under different economic models since they don’t have the integration we do but they will adopt it if it’s better than what they use now. Japan is using our model but from a different base. I can’t claim their actually is such a thing as behavioral economics but surly someone has a more comprehensive definition. Should be worth a Nobel Prize.

Yes, but what does it mean? How is there a convention? How did this start?

It means that a non trivial number of adult males (of high school and college age) are infatuated with a cartoon show (My Little Pony: Friendship is Magic) that is supposed to target girls under the age of 12. And they are infatuated.

How is there a convention? I guess someone organized it. It does seem to have a very narrow audience, unlike a Comic Con, but apparently there are enough Bronies out there to justify it.

How did it start? You got me. At my adult daughter’s insistence (she is also a fan of the show) I watched an episode. Not my cup of tea, but apparently sometime in the past some guys discovered the show and liked it.

From the Wikipedia article:

http://en.wikipedia.org/wiki/My_Little_Pony:_Friendship_Is_Magic

“The show has been critically praised for its humor and moral outlook. Despite the target demographic of young girls, Friendship Is Magic has, in addition, gained a large following of older viewers, predominately teenagers and adults, largely male, who call themselves “bronies”. Reasons for this unintended appreciation include Faust and her team’s creative writing and characterization, the expressive Flash-based animation style, themes that older audiences can appreciate, and a reciprocal relationship between Hasbro, the creators, and the fans. Elements of the show have become part of the remix culture and have formed the basis for a variety of Internet memes. As a result in part of this unexpected cross-demographic audience interest, the series has become a major commercial success, becoming the most highly rated original production in the Hub’s broadcast history.”

It does seem to have a very narrow audience, unlike a Comic Con, but apparently there are enough Bronies out there to justify it.

Many budding fanhoods are large enough to sustain a few single-fanhood events. But when the population inevitably dwindles, the remnants gather as just one more booth at the umbrella Comic-Con convention. Or if the fanhood is already small, they go directly to Comic Con. Sams, Spocks, Sherlocks, and Sparrows all meet at Comic Con.

What’s so amazing (or pathetic?) about Bronycon is that they’ve been able to sustain a single-fanhood event for years.

Like the Kiss Army, ICP fan Juggalos, or people who dress up in Star Wars or Star Treck suits are any different. None of it makes any sense.

Aha! Smithers is LDS!

“I’m sure if anyone would have asked Eisenhower about gay marriage, he would have been against it.”

Well, so would JFK or Truman. But he said “old school Eisenhower-TYPE Republicans. So I think he meant it in an “if their modern counterparts ruled the party today” kind of way.

Who are the modern counterparts of Eisenhower in the Republican party? Would it be someone like Olympia Snowe? I think that Joe is making assumptions about these people. It may be that Republicans like would support gay marriage once the majority of her state was behind it, but I doubt that Joe knows that for a fact.

I don’t think Joe was saying that they would throw their full support behind it, just that they would probably think, “what the hell do I care, let them get married like anyone else so that they don’t become a distraction from other burning issues”.

Modern counterparts of Eisenhower? I would say Lincoln Chafee, Grassley, Voinovich, possibly McCain if he wasn’t so inflammatory, and your purple-state dems like Evan Bayh or Max Baucus.

50-60 years ago, gay marriage would probably be a bridge too far for almost anyone. However, Teddy Roosevelt invited Booker T. Washington to the White House for lunch.

You should see how many people come here just for 4/20.

______

People do that all over the world. Your article says so as well. Nothing special about Denver/Boulder. When I was in college we celebrated 4/20 too….which was hard seeing how it was smack in the middle of exams.

“When I was in college we celebrated 4/20 too”

And you grew up to be a right winger. You must be a boomer.

He celebrated 4/20 by narking on the stoners to his RA.

People do that all over the world.

You said no one would come. Then you say they do. It has become so popular here that CU has to become a closed campus on 4/20.

“He celebrated 4/20 by narking on the stoners to his RA.”

I was an RA for a year. That was cool actually. They gave me the transfer dorm since I “was the guy from NY and could deal with all of the non-southerners.” LOL.

Our RA was awesome. If done right, RA’s engender mutual respect. She did it right.

She lived next door and trusted us enough that she’d walk in amongst our piles of beer cans with hands over her eyes like horse-blinders saying, “I see nothing…but can you turn the music down a bit?”

We came to her defense on several occasions when a few bad apples tried to take her down for their own douche-baggery.

Probably not. At least I’d like to think I wouldn’t be caught up in that. But who can say?

I’m no longer 17, so if someone was following me I’d probably get in their face to see what their damage was but I wouldn’t hit them unless they got physical with me first.

OTOH, how far is too far? If I AM attacked physically, the way to defend myself is to incapacitate the other person. If slamming someone unconscious accomplishes that, that’s what I’d do.

That’s the rub here. I’d like to know what the first encounter was and what happened immediately after. I think TM reacted with violence when approached/provoked by GZ. If TM had questioned him, then called the cops, we might not be having the discussion…But there’s no doubt in my mind that GZ wanted to provoke TM. Saying that, I still think he’ll walk.

Are you implying that it’s not okay to slam a guy’s head into the “hard pavement” in self-defense but shooting someone dead (again, in self-defense) is? I don’t follow.

Also, along the lines of “getting caught up in that” and “how far is too far” what I mean is that at some point the pounder has to realize that it’s the poundee whose life is now in danger.

So, how do you weigh your need to incapacitate an attacker and the poundee’s need to defend THEMSELVES? Not exactly, er…black and white.

I am implying that Trayvon made a wrong assumption. He assumed that he could take pudgey George, and so he jumped him and proceded to pound his head against the sidewalk. That’s pretty extreme. Trayvon’s assumption was incorrect. If anyone ever does that to me, I sure hope I’m armed (with more than just my little girly arms).

I am implying that Trayvon made a wrong assumption.

Well, apparently he WAS taking pudgey George.

But I agree on what I think is your larger point. I speculate that the provocation was not physical (more likely verbal) but that TM’s “self-defense” was. I would expect an immature 17-year-old to react more emotionally than rationally.

“Are you implying that it’s not okay to slam a guy’s head into the “hard pavement” in self-defense but shooting someone dead (again, in self-defense) is? I don’t follow.”

Saint Trayvon slammed his head into the ground after GZ merely talked to him. GZ shot Saint Trayvon after having his head slammed into the pavement.

You really don’t see the difference? I hope you’re never on a jury.

Here is my take on this. You are walking down the street and I think that that you are going to do some crime and I have a gun. I start following you and then a fight erupts between you and me (does not matter who started it) and you are stronger and better than me and when I realise that I would lose or get killed, I take out my gun and shoot you.
Who is at fault here?

after GZ merely talked to him.

Is that true? THAT is the big question, which I think is what I was clear about.

Don’t be obtuse, Smithers.

and then a fight erupts between you and me

Define “fight.” If you mean physical, then I think it does matter who started it.

If I call your wife a dirty wh*re and you break my nose, who is going to win the court battle when I accuse you of assault?

Sure, I’m a d-bag for calling your wife a wh*re, but you’re going to pay for my broken nose every time, no?

Now, what if I hit you first?

I think GZ’s a d-bag, but I think he’ll walk because it will come down to how the physical altercation started…which I don’t think will be proven.

“Who is at fault here?”

George ZImmerman.

You really don’t see the difference?

Actually, I’ll indulge you a little more on this. No, there really isn’t a difference because, the point being, at some point they both thought they were acting in self-defense.

As it pertains to this case, the question remains…did GZ put TM’s life in danger, physically, with the initial provocation? THERE is the difference…

I speculate that no, he did not. I speculate as you said, that GZ provoked him verbally and TM reacted physically. But to my knowledge there isn’t proof GZ did or didn’t. Therefore, as much of a d-bag as I think GZ is, I think he’ll walk.

Since when does “provoked him verbally” give ANYONE the right to beat the living crap out of someone?

It doesn’t.

TM was in the wrong no matter how you look at it.

I speculate as you said, that GZ provoked him verbally and TM reacted physically.

“Define “fight.” If you mean physical, then I think it does matter who started it.”

“Now, what if I hit you first?”

although I think it does not matter who started fight but if you say that we should consider it. Who is going to decide who started fight? There are 2 people involved and one is dead.

2ban,

Do you consistently score low on reading comprehension tests?

I pointed out that it DOESN’T give one the right to “beat the crap out of someone.” That was the whole point. That’s specifically why I’m saying GZ will walk!

The ONLY way I see GZ being convicted is if it is proven that he provoked TM physically initially.

Geezus.

Who is going to decide who started fight?

Seems to be central to those cases where physical harm has been inflicted.

If it is proven that the initial provocation was verbal, followed by a physical reaction, it’s the physical reaction that gets punished.

If it is proven that the initial provocation was physical, followed by a physical reaction (self-defense), it’s the provocation that gets punished.

Who is going to decide who started fight?

Sorry. Didn’t completely address your point.

The answer is…nobody. Which is why I think the jury won’t convict.

“TM was in the wrong no matter how you look at it.”

Except he was being given unwanted attention, as in being stalked.

This trial is an outrage! It’s clear that Zimmerman punched himself in the nose then beat his head against the sidewalk while Martin watched, screaming in horror. Then when Zimmerman was done mutilating himself, he pulled Martin on top of him and shot him in the chest.

How did everyone miss this?

Who exactly are the people who exaggerate the existence of racism?

Even if they exist, there are probably people or businesses who exaggerate the existence of all kinds of maladies in society, like cancer or single-parent families or federal deficits.

crater.

When I ask someone from Denver “where do you like to ski” the answer is usually “oh I don’t really ski all that much, maybe once a year we take the kids”. Not unlike people who live in Miami that never go to the beach.

I suspect a lot of this “We live in Colorado therefore we ski or climb or ride the rapids every weekend” is a lot of BS.

I suspect a lot of this “We live in Colorado therefore we ski or climb or ride the rapids every weekend” is a lot of BS.

I’d say that kayaking is pretty minor here. Lots of people do ski, not everyone of course. Lots of cycling too, a lot, of the tight shorts and super skinny tire variety (I’ve never seen so many bicycle shops).

Colorado is the leanest state in the country. We didn’t get that watching TV while eating a bucket of fried chicken. The one KFC near my house closed.

not surprised that all your friends in denver are boring.

The sad thing is that I skied a lot before coming to Colorado. And I was so tired of little podunk areas and so looking forward to “real” skiing. Only took a couple of times to cure me of that. Anybody with a little podunk area where the weather is nice and the snow is good and the drive is less than an hour from home has it good compared to the front range of Colorado. There is no such thing as a ski area good enough to make me want to try to run up I70 for a quick Saturday half-day. I haven’t skied in years now. Tried to take my son a few years ago and expose him to it and that was a bust. So I guess I’m done.

Colorado is the leanest state in the country. We didn’t get that watching TV while eating a bucket of fried chicken.

You get there by importing mostly white people in 20’s and 30’s.

I bet the white people in 20’s and 30’s compare well regarding the state.

You get there by importing mostly white people in 20’s and 30’s.

Aren’t they the chubby generation? The one the plays Xbox all day while guzzling Mountain Dew?

But yeah, we probably do import a lot of young, physically active people. The couch potatoes probably stay in the parent’s basements, somewhere out of state.

My friends and I definitely saw many women going for the MRS degree, but at least that was at a reasonably priced state school.

Even then we ran at the first sight, or whiff, of them.

Marriage right after school and divorce in 30’s. That is all too familiar.

“Marriage right after school and divorce in 30’s. That is all too familiar.”

Economic insecurity, i.e., lack jobs or ones that pay the bills with something left over for fun, will do that to relationships.

“So she’s fat, broke, up to her eyeballs in debt, next to no income, has kids and is hoping some dude is going to bail her out?”

I read it to mean that she wants kids, doesn’t have them yet. So maybe there’s hope.

“I read it to mean that she wants kids, doesn’t have them yet.”

+1 You read it correctly. No kids, but likely wants ‘em for security.

“A marriage proposal? Dream on.”

You’d be surprised how many married guys there are around here that have only had one woman, ever. The guys are usually chain smokers, cadaverous but muscular due to manual labor employment while their gals just let themselves go, I mean a totally sedentary lifestyle (think: bible channel, ho-ho’s and pepsi?) eventually resulting in morbid obesity. The him/her juxtaposition is spellbinding.

“Most men lead lives of quiet desperation and go to the grave with the song still in them.” –Henry David Thoreau

Yes, basically. But I think they word it even more to make it sound like the job (or the title) is going away, not you.

It’s not so much “We don’t need you anymore” as it is “We don’t need that position any more. See? You feel better already, don’t you?”

I see what you mean, but technically, that’s a layoff, not a firing.

Again, I agree. I just think they feel the need to soften the blow even further and don’t even want to call it a “layoff” anymore.

Fancy words hardly soften the blow of getting your walking papers. But that won’t stop them from using their corporate Newspeak.

The corporate Newspeak doesn’t get them out of granting UI. If no one else is placed in your position, then you get UI, no matter what they call it. At least in the state I was in.

I see. When I read your comment below, I took it to mean that they’d be covered…

I do know however, that in the past 45 days, the airlines have been offering six figure salaries, and (reportedly) six figure signing bonuses to former airline guys currently fling corporate.

CRATER!!!

Is that… Pat?!

What’s THAT? It’s Pat!

Wheat today is nothing even remotely close to wheat was thousands of years ago. Salt is.

“How could wheat be so poisonous? According to Dr. Davis, the vast majority of wheat grown and harvested today is only a distant ancestor of the real wheat that your forebears ate. Over the years, wheat has been genetically modified in order for American farmers to produce a high-yield crop of dwarf-size plants that was never tested to see if it was healthy for human consumption. While mass production of wheat has allowed us to feed more people, it has also resulted in producing a “supercarbohydrate” wheat plant that is far less healthy than its predecessor.”

It’s not the wheat per se that’s bad, it’s the TYPE of wheat.

Smithereens, you are not very educated. Yet another way I can tell that you do not really earn $250/hr, teen.

People have been modifying food genetically for thousands of years, so as to make it meet our nutritional needs better. Modern wheat is better because it provides more nutrients to the human, in exchange for less water/land/sowing/reaping/processing. The starch, protein, and vitamin content are higher than wild wheat.

Good luck trying to live off of wild wheat, Smithereens.

You;re right Housing Analyst, errrr I mean Fed. Keep stuffing yourself full of bread. It’s good for you, reall it is. All the evidence to the contrary is just an NAR conspiracy to keep you fat.

Lemme guess you also think salt is bad for you? LOL.

I can picture you now getting on the scale, another 10 lbs gained and you wonder why? Why? Why? I am doing everything right? I’m eating bread and avoiding salt and fat. What’s wrong?

Guess what Smithereens?

1) I’m not HA. I’m Big V.

2) I’m a chick who is 5 feet tall and about 95 pounds.

3) I eat bread and salt whenever I want, and always have.

4) Bread has been around a lot longer than obesity has been around.

5) I have a BS in molecular cell biology. No, your superstitious, uneducated stance on wheat does not ACTUALLY trump scientific study. Starch is a metabolically available macromolecule. It’s food.

6) Your brain requires glucose to function optimally, and glucose comes from carbohydrates. Humans were designed to be omnivores. You don’t have to eat any particular type of food to live, but it isn’t poisonous to you either. Overall, you will be happier if you eat a little starch.

Damn slithers, you are one dumb and sick puppy.

You come here everyday and get your butt handed to you, every day, and yet you still keep coming back.

Seek help.

Ease up on Slithers.

Smithers are you Primal or Paleo? And how did you lit upon it?

Big V, do you really want to flaunt your pedigree? Your BS is paltry compared to the MD’s who are behind practically every diet, everyone from Robert Atkins to David Kessler (who?) to Ancel Keys (who?) to Dean Ornish to Dr. Oz (who is semi-paleo) or even to Gary Taubes the MS applied physicist.

The only “scientific studies” I’ve seen are funded by groups pushing whole grains, or meta studies of older uncontrolled data. Or, I guess you could use your high-falutin’ education to read the dozens of pre 1970’s metabolic studies which trump the later studies. (or you could just check out a copy of Good Calories Bad Calories).

I get my carbs from vegetables. Plenty enough. “Pasta makes you fat” isn’t Grandma’s urban legend. It’s the truth. And wheat — the new stuff — IS poison. All it did was give me GERD, for which I took Prilosec for a decade. Since I stopped the wheat, I don’t need it anymore. That’s enough for me.

“I’m eating bread”

Bread is my favorite food, they will have to pry it from my cold dead hands. Bread will not make you fat unless you eat too much of it…kind of like everything else. I stay in 34 waist jeans in my mid 40’s and over 6′ tall by eating smaller portions per meal and moderate exercise…works every time it’s tried.

“No, your superstitious, uneducated stance on wheat does not ACTUALLY trump scientific study.”

What? Are you suggesting that an endless copious flow of bullsh!t doesn’t trump objective fact?

Obviously you don’t understand real estate.