Bits Bucket for July 16, 2013
Post off-topic ideas, links, and Craigslist finds here.
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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View the HBB Photo Gallery *updated 4/13/2008
This jewel came back on the market 6 months after it was sold in late December, and it portrays the basic pattern across Austin; properties changing hands very quickly and higher prices each time they’re listed…
MLS#: 7243550
Sq. Ft.: 711
$/Sq. Ft.: $391
HOA Dues: $294/month
Estimated Taxes: $4,952
Jul 15 2013 Listed (Active)
$278,000
Dec 05 2012 Sold (MLS)
$250,000
Jan 20 2010 Sold (MLS)
$190,000
Todays inflated sale is tomorrows default.
Correct. Multiplied by millions of inflated and corrupt trasactions results in perfect storm on the horizon.
“Multiplied by millions of inflated and corrupt trasactions results in perfect storm on the horizon.”
It’s remained safely on the horizon now for so many years, what makes you believe it will ever make landfall?
Even if they get the 278k, it looks like they’ll barely cover their transaction costs + moving expenses. Plus they’ve paid about 5k in property taxes (TX property taxes… NOT cheap!)
They just wanted the pleasure of paying this high high high Texas property taxes! Plus the HOA fees. Plus the trans costs. Plus the recording costs (also sky high in “low tax” Texas).
Huh??
Recording tax in Texas is $0.
What percentage of ex-Californians make up Austin’s present population?
“What percentage of ex-Californians make up Austin’s present population?”
Back in my automobile repossession days I was amazed at how many debtors skipped from Texas to California. Our skip tracer said it’s because California’s welfare system was easier to navigate and paid more too. Seemed like they all smoked heavily and the glove compartment was always jammed tight with past due bills. Plenty of cheap flashy clothes too.
An observation:
Why didn’t the girl on the phone with Trayvon call the police after the line went dead? How can you just roll over and go to sleep after a phone call with your friend ends like that?
That being said, the real question black people need to address is, “what do you do now?”
Wear a hoodie?
Buy some Skittles?
March with Al Sharpcoon and messy Jerkson?
Burn down some Korean owned stores?
I say none of the above.
If I had a class of black teenage students and I was the teacher, I would give them the following 3 assignments:
1. Identify all the ways if any; black people are mistreated on the basis of color BEFORE they are shot and killed.
2. What you think the reason is for black people being mistreated on the basis of color.
3. What you think black people should SAY and/or DO to compensate for being mistreated on the basis of color.
I would use 2 books to teach this class:
1. The Isis Papers by Dr. Francis Cress Welsing (Which contains the Cress theory of color confrontation) It is my opinion that no black child should be confused about WHY they are subject to mistreatment based on color (like I was growing up)
2. The United Independent Compensatory Code/System/Concept; A textbook/workbook for victims of racism/white supremacy — by Neely Fuller
The 2nd book would form the framework for each black child to produce his or her own compensatory code composed of suggestions they make for themselves regarding what they SAY and/or DO in all 9 areas of people activity; to compensate for, and ultimately prevent themselves from being mistreated on the basis of color.
Economics
Education
Entertainment
Labor
Law
Politics
Religion
Sex
War
Now,
will any black teacher do this?
I doubt it.
Why?
I suspect because they are afraid of losing their job (see assignment #1 above).
In conclusion, each black person needs to decide for him or herself, what they are UNWILLING to say and do in order to produce justice.
‘burn down some korean owned stores?’
already happening. rioting in oakland. walmart looted in los angeles. white jogger assaulted in mississippi. hispanic man assaulted in baltimore. allegedly in the name of ‘justice for trayvon’.
and btw, spelling al sharpton’s name like that sounds racis. you probably need some diversity training or some more coexist stickers.
yeah yeah…but its mostly peaceful.
It is my opinion that no black child should be confused about WHY they are subject to mistreatment based on color (like I was growing up)
Care to give a hint? I have no idea what you’re talking about.
also…whywould the reasons have to be the same?
I would be interested in spook’s answer as well. I have my own ideas but I’ve never been subjected to systematic racism.
You know how girls are given “the talk” when they start having their “period?”
You know how the gays say “silence = betrayal?”
You know how the Jews say “never again?”
Black parents have no similar discussion with black children about racism. I didn’t get one, and neither do most of the black people that Ive asked (and Ive asked many)
We are left to figure it out on our own and in the process we make colossal mistakes. Mistakes that often result in our early deaths.
What information we do get about racism/white supremacy does not hold up to scientific scrutiny and/or experimentation.
We don’t even know what a white person is to a white person?
But we try to blame them for all our pathology.
(((shakin my head)))
The result is confusion about racism in the mind of the nonwhite child/person.
Furthermore, a white parent of a nonwhite child provides even less constructive information about what racism is, how it works, and how to COMPENSATE for it. I know because I always ask their children and it turns out they were told even less than I.
The paradox of racism/white supremacy for black parents is because the very act of honestly warning/discussing it with their children discredits the parent.
How can you be a credible opponent of something you are a victim of?
Its embarrassing for a black parent, to admit to their black child: “when it comes to mistreatment based on color, I cannot protect you or prevent you from being harmed”
You are on your own.
Ive only found 1 black person that has ever done that and his name is Neely Fuller.
Fortunately for the rest of us, the Creator keeps a dear school because the fool will learn in no other.
The Trayvon case points out a lot that is wrong with our justice system. The all white jury decided that the Neighborhood Watch fool had all the rights once he figured he was scared. This jury result ends up in a reassertion of vigilantyism all based the feeling that some neighborhood watch loser has while drunk on his imaginary power. Trayvon responded with outrage at being followed by the rentacop. Most of us would. the jury was all-white and only interested in Zimmerman’s rights. This illustrates the strong divide that still exists in our country. The Feds need to pursue this case to send a message that the Zimmerman’s of the world cannot act with impunity no matter how bigoted the county they live in is.
Trayvon responded with outrage at being followed by the rentacop. Most of us would.
If we do it, we’re freedom fighters. If ‘they’ do it, they’re gangbangers.
‘If we do it, we’re freedom fighters’
‘The Government of Pakistan on Monday strongly condemned the US drone strike that took place in Mir Ali Tehsil of North Waziristan Agency late on the night of 13 July. Foreign Office Spokesman Aizaz Ahmed Chaudhry in a statement said these unilateral strikes are a violation of Pakistan’s sovereignty and territorial integrity. He said, “Pakistan has repeatedly emphasized the importance of bringing an immediate end to drone strikes.” He said the Government of Pakistan has consistently maintained that drone strikes are counter-productive, entail loss of innocent civilian lives and have human rights and humanitarian implications. Such strikes also set dangerous precedents in the inter-state relations, he added.’
http://www.nation.com.pk/pakistan-news-newspaper-daily-english-online/national/15-Jul-2013/pakistans-fo-condemns-us-drone-strike-in-n-waziristan
What if the two assassinated by drone were known to be planning to suicide bomb the girls’ school in Mir Ali Tehsil tomorrow?
Not saying they were, just wondering what if….
“…the Creator keeps a dear school because the fool will learn in no other.”
Nice turn of the phrase!
(from one of the Creator’s fools…)
I was mistreated growing up for being a wimpy white kid, and I see it happening now to my wimpiest son. And I am still confused about WHY we were (are) subject to mistreatment based on the wimpy nerd factor.
It’s not much different than the treatment the omega wolf endures. Our intelligence as human beings has not, unfortunately, prevented such animalistic behavior. Children can be mean as hell.
It’s going to be a rough day for my son if I ever find out he’s bullying other kids. My younger brother was mercilessly bullied and I will not stand for it.
i went to a high school that was 70% black…i would “hold” it all day to avoid being mistreated by the black kids that hung out in the bathroom during the break between classes.
a friend of mine was getting harrassed once simply because he was white. he beat the kid up fair and square and the next day was jumped by a group of his friends. he had to transfer to a new private “all white” school.
my yonger brothers girlfriend had to transfer schools due to relentless sexual harrassment from black males.
on the flip side…i had a black friend that needed a place to stay for ac ouple of weeks one time before the nearby all black universtity dorms opened. a week or so into his stay the landlady told me to ask him to leave since the all white tennants in the apartment complex were calling and complaining to the apartment complex owner. i did tell her that i would not do so and that he would be staying for another week.
effed up world…my father would tell me that life isn’t about black and white…it’s about shit asses and nice people.
“i went to a high school that was 70% black…i would “hold” it all day to avoid being mistreated by the black kids that hung out in the bathroom during the break between classes.”
And in my high school you had to know the code for going into the bathrooms or the girls who smoled there would beat you up for “making” them flush their cigarettes as you opened the door. As if the hall monitors didn’t know their password. All lily white. The parents of the black kids wouldn’t have put up with that sort of behavior and the kids that were bussed in from Boston knew that they would get kicked out of the program if they tried it. There were plenty in line behind them who wanted to go to a suburban high school even with the absurd schedule they had to keep.
The human brain is programmed to perceive the “Other” as a threat– and destroy it.
“The human brain is programmed to perceive the “Other” as a threat– and destroy it.”
Bingo! And thus it makes for some pretty easy political hay-making.
http://www.counter-racism.com is the most codified website I know of based on the UICCSC that Fuller came up with. Its not his site, but the person who runs it is quite codified.
BTW– Fuller encourages people with questions/suggestions about his book to contact him directly (I found a few typos). He’s in his 80s now but as he will tell you over the phone: “the code is incomplete because the problem is still here, I haven’t solved anything, I may be making it worse? But I am still learning”.
Francis Cress Welsing is an “academic”; so titles and citations play a large part in her “posture.”
In contrast, Neely Fuller reminds me of what you would get if a Martian was punished by being sentenced to life on Earth in the body of a black man (an old back of the bus country nigro from Kansas City)
His mind is somewhere else; its weird
I can’t post his PH# here but If I send it to Ben, maybe he can send it to you?
Test yourself!
https://implicit.harvard.edu/implicit/demo/selectatest.html
Ordered the books, spook, muchos gracias. I, too, am prone to contact authors for comments and clarifications, so if you’d care to leave a message, I’m at my screen name at wildblue network. Looking forward to delving into these two works with the hindsight of nearly fifty years (!) in the “movement”.
Comment by Whac-A-Bubble™
2013-07-16 11:31:26
I was mistreated growing up for being a wimpy white kid,
———————————————————————–
OK, but “wimpy” is a BEHAVIOR; behaviors can be changed; I know because I used to change mine all the time depending on whom I was trying to please, satisfy, get over on…
http://www.youtube.com/watch?v=78TAbjx43rk
Best syllabus ever suggested on this board. Thank you, spook. Will order and read both, then extrapolate.
Without outing yourself, can you link to further discussion along these lines? Thanks.
This blog has become more about left wing politics than any thing
else. The MSM wanted this case to be all about race and they didn’t get their way.
Brock,
If you think this blog is left wing, you’d positively sheish yourself if you ever encountered one that actually was….
I’d be interested to hear his read on the black racism that is now in vogue and successfully being perpetrated by the NAACP, New Black Panthers, etc. Not a joke or an attempted insult-I’m serious. Its like the open secret in the office. The KKK used to profit and benefit from creating an environment of inferiority and promoting a message of racial inequality and hatred, but now the NAACP fills that void. This is Al and Jesse’s career. If racial harmony broke out in this country and we all started acting like decent human beings, they would be out of a job. And they know it. People talk about equality. How can there be an NAACP without a NAAWP or NAAOP or NAALP? How can there be a National Black Caucus without a National White Caucus? Or a National Oriental Caucus? Or a National Latino Caucus? Thats obviously not equal. With regards to the NAACP, they talk a lot the children and equal rights for all people. In Orlando at least a dozen young black youths have been intentionally murdered by other young black people since the Zimmerman-Martin altercation and neither Al nor Jesse has shown up here to investigate or protest that- I thought they were all about the children? About 5 months ago a young black male (captured on security tape) here in Orlando walked into a Chinese restaurant to rob it. The 50 year old Chinese immigrant lady did not understand his ghetto-english commands, so he shot her in the face from roughly 2 feet away. She is dead and he is still at large. Where were Al Sharpton and Jesse Jackson for the last 5 months while her family grieved- why are they not concerned about her rights? Everyone knows that this is not about rights or children’s lives for them- it is about money and keeping the hate alive. Just like the Zimmerman-Martin altercation. If Zimmerman were black, no one would have even heard about it. No media outlet would have given it a second glance. It happens 2 or 3 times a week around here. But now Al Sharpton and the NAACP are in town, whipping the village idiots into a froth. Not because of the death of a young black guy, but because of an opportunity to demonize everyone who is not black. To ram-home the message of collective and inherited guilt. To keep the blessed hatred alive and the coffers overflowing. They are the biggest pimps of all, using the entire black population as their stable.
B&C guy; as savage and destructive as the black criminal class you describe is, they are NOT practicing racism because they are not members of a race. Like all black people, their qualification for racial category is externally given (enforced)
Think about it?
Why in the world would anybody want to be a black person if they weren’t forced to be one?
Im telling you as a real live black person, that if the price I had to pay in order to wake up tomorrow morning a white person was to Never see or speak to any of my siblings, cousins or family again and erase my entire black existence…
I would do it.
Where do I sign up for that deal.
The truth is, black people don’t like each other, because we are not USEFUL to each other.
Zimmerman freaked out over one Trayvon. Imagine what it does to a persons psyche to have thousands of Trayvons around?
And you can’t understand why black people kill each other?
(((shakin my head)))
Look man, I don’t have the solution for racism. But to pretend that black people have a collective affection, concern and organization approaching anything close to being qualified to be described as a race is ludicrous.
A “grab bag ” of people is not a race. Don’t get it twisted.
The truth is, black people don’t like each other, because we are not USEFUL to each other.
Imagine what it does to a persons psyche to have thousands of Trayvons around?
Come to Oregon. Despite BiLa’s post the other day about lily-white Oregon, there are hundreds of thousands of “Trayvons” here. Except, they aren’t black. Well, some Trayvons are. But the white Trayvons aren’t particularly useful to me either.
Look man, I don’t have the solution for racism.
because what becomes racism emanates from our reptile brain, there is no solution, no cure. but there is treatment. there can be improvement. there can be eternal recession. a constant ebb.
we are no longer reptiles. we have evolved and we can reason. we can discover what racism is, and see it and reject it within ourselves. we can be shamed into empathy. decent, honorable human beings will do it. but we are losing our decency and honor. and racism is on the rise. it is decency that is receding these days.
While there are certainly atheists in foxholes, I’d wager there are relatively few racists.
In a foxhole everybody is useful to each other. Interesting concept, spook.
spook,
I can’t speak to all of your points because I cannot experience them. But are you seriously believe that the NBP and others are not racist hate groups? The ones that walk around with signs and hand out flyers picturing a cash bounty for someone due to the color of his skin? I do understand that the category of race is externally given, but we are ALL externally categorized in the USA and Black is just as much a “race” as Caucasian or Hispanic or any other. This same external power (.gov) has granted direct and indirect financial benefits to many members of this racial category and that has created additional incentive for manipulators (primarily Al and Jesse) to:
1. Keep that racial classification system alive and functioning.
2. Keep emphasizing and exacerbating the differences between the categories.
3. Maintain and vocally protest the “unfairness” of this same system so as to justify their existance and leverage the external power (.gov) to legislate/mandate increasing benefits to members of this racial category. It is no more complicated than the old adage of, ‘Create the problem, sell the solution’. If this wasn’t working for them, then they wouldn’t still be doing it.
Don’t get me wrong, racism is a cancer- any type of racism. That is why it is cowardly and destructive to let this go unchecked. Its like society finally slapped the red-hot poker out of the KKK’s hands and the NAACP picked it up. I’m not naive enough to think that all black (or white or hispanic or oriental or native american or…) are racists, but I’m also not naive enough to pretend it doesn’t exist. Some may argue that it is not racism for some psycho-sociological technicality, but when a group behaves as racists, then they are in fact racists.
If you take on mortgage debt at current massively inflated housing prices, you’ll enslave yourself for the rest of your life.
“Debt is bondage.”~ Suze Orman, May 11, 2013
Don’t Be A Debt Donkey®
how much are you in the hole debt donkey?
That’s right folks….. Don’t Be A Debt Donkey®
u can share your bankruptcy with us.
I’m inclined to believe you, of all the people on this blog, will be going BK first. Anybody who is living off their equity to eat out and buy vehicles does not have a pot to piss in.
u can share your bankruptcy with us
As taxpayers, maybe we already do?
Dude, when you look in the mirror do you see a Debt Stallion?
“If you correctly understand that a “housing recovery” is dramatically lower prices by definition, then higher interest rates will accelerate the housing recovery.
Falling housing prices to dramatically lower levels is bullish optimism and will accelerate the economy.”
Beautiful truth.
If you understand that higher interest rates will increase the cost of obtaining cash then you will understand that any cash already obtained will increase in value.
If interest rates are low then cash on hand has to compete with cash that can be easily borrowed. But when interest rates are high then cash on hand tends to stand alone in that it doesn’t have the competition it would otherwise have if borrowed cash was readily available.
And if borrowed cash is not readily available to make a sale happen at a certain price then any sale must depend on cash already obtained, and this transfers bargaining power to the buyer. And bargaining power that favors the buyer is generally expressed by lowered prices.
Similar stuff using supply and demand:
As interest rates rise, people who are relatively more reliant on debt to make purchases have a decrease in purchasing power. At a fixed price for a good, they fall out of the demand equation because while they may be willing to purchase, they are no longer able at the higher interest rate. People that are relatively less reliant on debt are less affected and thus can still represent demand.
But since supply and demand is dynamic, prices do not remain fixed. With demand falling, activity falls as well. The supply side is forced to drop prices if they wish to sell. Collectively prices fall to maintain volume of sales.
Cash on hand becomes relatively more valuable compared to the good, as the good has dropped in price.
That begs the question; which is the independent variable and which is the dependent one? If borrowing is the independent variable, then low interest rates indicate a credit contraction.
Is the biggest expansion of credit in history over, or just getting started?
And remember….Housing is always a loss. Houses depreciate and the losses to depreciation are magnified by the fact that they cannot be written off as a loss on your tax return.
you can write off depreciation…if it’s a rental property…
“Housing prices will return to the historic price/income ratio. That means housing prices have a very long way to fall.”
No question about it.
HA, could you please elaborate on which “historical” p/i ratio you’re referring to? The historc” mean hast fluctuated throughout history. At least nail it down to a decade.
Thank you.
http://www.dailyfinance.com/2010/02/14/home-prices-must-drop-40-more-to-reach-normal-affordability-lev/
So, how do you define “affordable?” Depends. Are you an economist, or are you Mr. and Mrs. Howmuchamonth?
I took some data and added a couple quick Bankrate calculations.
1975: median income $42,936, median house price $148,800
Home price/income ratio: 3.46
20% down, 9% fixed, PI nut = $958
PI/gross income = 0.268
2008: average income $68,424, average house price $301,200
Home price/income ratio: 4.4
3.5% down, 6% fixed, PI nut = $1744
PI/gross income/PI = 0.308
10% down and 4% interest, PI nut = $1294
PI/gross income = 0.223
———
In other words, if you measure affordability by Howmuchamonth,* housing costs ~15% more in 2008 than in 1975. If you put a decent payment down and got a good interest rate, then housing was MORE affordable in 2008 than it was in 1975. HBB keeps looking for housing to “revert to historical mean.” Well, maybe it already DID, in 2008, and hasn’t changed all that much since then.
[of course now you need two incomes (not one) and Ben Bernanke's helicopters to maintain that historical mean, but that's another discussion.]
———-
*Keep in mind that many buyers started out as renters, so they budgeted according to Howmuchamonth rent. It’s a natural step to look at PITI in light of Howmuchamonth. And as long as PITI is fixed (not an ARM I/O type loan), why is Howmuchamonth not valid as an affordability measure?
Could we please have those numbers again using the median instead of the average?
oops sorry, I copied the wrong data line in the article. Let’s see if it works out differently comparing 1978 median to 2008 median:
———-
2008: median income $50,303, median house price $245,300
Home price/income ratio: 4.87
3.5% down, 6% fixed, PI nut = $1419
PI/gross income = 0.338
10% down and 4% interest, PI nut = $1053
PI/gross income = 0.251
———-
Comparing 1975 median to 2008 median shows that the 3.5% FHA buyer is pushing the limit. The 10% down buyer is still doing a bit better than 1975.
So the numbers are a little different, but IMO the conclusion is the same. Using Howmuchamonth as a measure, people can generally afford houses now as much as they did in 1975 (with the two-income caveat).
My understanding is that the true rule of thumb for affordability was 28% PITI/income. The 3x income ratio was just a quick and dirty shortcut to get to 28%. But as HBB posted before, that shortcut was based on 8-9% interest rates. With rates at 4-5%, you can go higher than 3x and still retain the 28%.
“The 3x income ratio was just a quick and dirty shortcut to get to 28%. But as HBB posted before, that shortcut was based on 8-9% interest rates…”
The sage advice in the 60s was 25% of take home, not 30% of gross. You could get a mortgage at 3%.
The difference in outcome is huge.
Long math, it’s a btch.
Long math, it’s a btch.
But Debt Donkeys know how to do long math. They choose not to as they already know the answer but just don’t want to face it.
Oxide, is that 42K median income expressed in 2008 dollars or did households make that much back then.
On reflection, the numbers must be adjusted because no way was the median house 148K in 1975.
Of course the household income has risen because there are so many more 2 income households. But factor in child care and commuting expense you can’t say it’s a better quality of life at 50K.
And no, “Donkey how much did you pay for your debt dump” does not meet the definition of “decade.”
This should clarify the extent of your losses.
http://img802.imageshack.us/img802/7812/caseshiller.jpg
Carry on DebtDonkey.
your bankrupt arent you?
Could you try saying that again, but differently?
If most people are homeowners (or homebuyers) rather than renters then who, other than people who want to buy a home, is there that will fight against the idea that homes should not hold their values?
If the majority rules because the majority votes and this majority that votes is also a majority that have an interest in the prices of homes remaining high then who is it that will act to push the prices of homes down?
It has somehow become in the national interest that houses retain their values, and because of this the idea of affordability is not translated to lower prices but rather it has been translated to easier financing.
You’re going to will prices? LOLZ
Prices don’t have to be willed, money that is targeted will do the trick.
If money is tough to get for most everything except housing then money will flow into housing.
Must be why housing demand is at 17 year lows….. and falling.
I’m not so sure the effort to maintain high prices is so much the will of the majority as it is the will of the financial institutions. It just so happens that the irrelevant will of the majority corresponds. Normally, the financial institutions would be in a catch 22.
They have a bunch of houses on their books they want gone, but in order to sell them they need customers. Many of those customers don’t have money so they’ll have to borrow from the FIs. So having high priced houses is good for the FIs to get rid of their inventory, but not so great if they end up with a loan that will default when the housing prices drop post manipulation.
Lucky for the FIs, FHA and investor pools are there to make the loans destined for failure.
If the issue was something that the majority of people had an interest in such as, say, low gas prices then backers of high gas prices would have a tough time of it. Even if the financial institutions had an interest in high gas prices they would have a tough time of it.
But the isssue of houses retaining their prices is something both the majority of people have an interest in and the financial institutions have an interest in thus there are few people around who will come against the idea that house prices are too high.
They may claim that houses are unafforadable but they do not say the reason is because of prices but instead they say it is because of financing.
“They may claim that houses are unafforadable but they do not say the reason is because of prices but instead they say it is because of financing.”
I think you’re right on this, which is pretty sad and an indictment of the financial literacy of the general public.
“high prices is … the will of the financial institutions”
They only need to say that the prices are high for now.
“If the majority rules because the majority votes and this majority that votes is also a majority that have an interest in the prices of homes remaining high then who is it that will act to push the prices of homes down?”
The invisible hand of the market.
“Housing Demand Continues To Sink In California”
http://picpaste.com/pics/8bea9437a62db7bb3de923643f0ee876.1373858653.png
Strange how sinking demand causes a huge increase in SALE prices.
http://www.zillow.com/local-info/CA-home-value/r_9?disambig=9827_51231_44405_37693&pri=9#metric=mt%3D19%26dt%3D1%26tp%3D5%26rt%3D14%26r%3D9%26el%3D0
The huge drop you’ve been hoping for ($496k in June ‘07 to $273k in Jan ‘12) has come and gone. Any declines (and there will be declines) from here on will be much less spectacular.
Apparently you have forgotten that prices peaked as demand faltered during the peak. My, how short your memory is. Oh, and how is it that you can predict the future?
“Any declines (and there will be declines) from here on will be much less spectacular.”
“how is it that you can predict the future?”
Well, you’ve got me there, but the price increases are pretty convincing that some sort of bottom was hit. I know the whole thing was rigged and propped up by low rates, but still, something happened in early ‘12. I just believe the huge bubble popped, and now some smaller bubbles might pop but with less price declines and less headlines, and few bank failures, etc. A boring second small bubble.
If you don’t know who the “sucker” is in a sucker’s rally……
Well remember…. Krusty The Realtor hasn’t been entirely honest in what he’s written here.
“Houses are never investments. Houses are a loss and depreciate, always.”
Correct. And you don’t want to be on the wrong side of this crushing loss.
Many home owners tend to forget about maintaining cost, such as $200 for roof repairing here or $300 for AC work there etc, but they strongly remember the buying price and selling price. It make them feel good.
robot
You either have been a lucky homeowner or a happy renter. A roof repair for $200 or HVAC repair for $300? In So Ca no less. Where on God’s green earth did you get those prices?
We had our HVAC units and vents cleaned and serviced for about $1,000. Saved us $9,000.
We’re all just visiting. I prefer to own my home and enjoy my life.
Yeah housing is now broken, but we can go to be at night knowing the roof over our heads is ours. I prefer to think long term. Hooray for a paid for roof over our heads.
HA
You’re a smart dude living in Baltimore, but you don’t know all the micro markets. I love ya anyway. I follow Benjamin Franklin’s 13 virtues.
$200 is kind of minimum for roof even if they just replace two or three shingles damaged by storm
$200 would get a roofer up there for half an hour to inspect and replace a few shingles. A new roof on a medium sized house would run at least 20x that much, assuming you’re not using random day labor & cheap a** shingles.
My home insurance covers my roof.
Because we cut a cash deal w/ the roofer, we saved $5K. $9,500 for a 50 yr/ with solar roof fans. House is a 2,000 sq ft one- story. Roofs are expensive. We bought a quality one. We’ll be dead before this one wears out.
In our EQ zone, a GC friend said it wasn’t a wise decision to put a heavy tile roof on. We toyed w/ a solar tile roof (new product from a San Diego firm), because it just looks like a regular tile roof. Really neato product.
All the roofers we interviewed wanted $100 just to quote the job and would rebate it at contract. We found one who didn’t ask, and he got the job.
HA (RAL, Exeter, etc.) lives in Westchester County NY (or somewhere reasonably closeby such as southern CT or northern NJ).
The only Baltimorons here are me (”Joe smith” etc) & “spook”.
Harpsichordist,
You have your internet characters mixed up.
RAL/Exeter/HA is from somewhere near Westchester County NY (maybe southern CT, nearby NY counties, or perhaps Northern NJ).
The Baltimorons here are me & spook.
As a renter though, I’m mostly stuck with sub-standard stuff. The HVAC unit is very inefficient, potentially costing me an extra $50/month or more. Windows aren’t great, refrigerator is weak, etc.
A downside to renting that isn’t normally brought up.
This is easily confirmed if you read LL message boards. Or, in my case, on the landlord cruise/conference I went to a little while back. LL’s put *some* thought into keeping utilities reasonable, but it’s generally thought that anything we do to increase efficiency should just be passed along in the form of higher rent over the next 2-4 yrs (accelerated pay off). For example, $2400 for new windows, doors, duct repair, and replacing 1 or 2 bad appliances would be addressed by increasing rent by $100 so that the repairs are paid off in 2 yrs. The renter will be more comfortable and save some money, but realistically it probably nets out.
Alternatively, the LL could skip the repairs and rent for less (be more competitive on price) but it promotes adverse selection. You end up with lower quality tenants and digging deeper into the screening pool.
When you see LL’s lowering their price or not charging enough, it’s usually a bad sign that they’re a bad businessperson. They borrowed against the house, they didn’t put enough money down to keep payments low, they don’t have the capital sitting around to handle evictions or make repairs, etc. Usually this is with amateurs or “accidental LL’s”.
Getting the right renters is the single most important rule in being a successful LL. My 30 year average is 5yrs per lease. I have had one eviction.
That is an excellent 30 yr track record and I agree. Buying at the right price (low) and therefore being able to actually afford the place and its upkeep helps a lot. I have been asking tenants lately whether they actually want the upgrades we have in mind or whether they’d just prefer a slight rent reduction in the next lease extention. Most people are living paycheck to paycheck and they’d rather have the extra $25/month (or similar) in their pocket.
wall street journal - a jobless recovery is a phony recovery:
‘more people have left the workforce than got a new job during the recovery — by a factor of nearly three.
the 7.6 percent unemployment figure so common in headlines these days is utterly misleading. an estimated 22 million americans are unemployed or underemployed; they are virtually invisible and mostly excluded from unemployment calculations that garner headlines.
the measure of those adults who can work and have jobs, known as the civilian workforce-participation rate, is currently 63.5 percent — a drop of 2.2 percent since the recession ended.’
http://m.us.wsj.com/articles/a/SB10001424127887323740804578601472261953366?mg=reno64-wsj
If you don’t understand why there is so much desire from the general public for housing to ‘recover’, this article should clarify. A lot of the jobs that were lost came from the housing and housing related sectors. Now that things are ‘returning to normal’, maybe they can get back to work. Not to mention the flippers. Let the economic over reliance on housing continue!
There was a post in the bits bucket recently that nobody makes anything in America, the only “work” anybody does is taking a cut.
So what are all those housing sector workers supposed to do?
My cousin’s husband’s brother was a mortgage broker in Cape Coral, FL during the bubble peak, he doesn’t have much education or real job skills. Today he sits on the couch smoking pot and playing video games, which is what he was doing before the bubble.
That was me, sharing an observation made by a European immigrant.
It seems that in our modern “economy” that for a individual with a low to average IQ, it’s either be a lucky ducky (low pay + welfare), or get a parasitic job where you get “a cut”.
We can’t all be engineers.
The reason that we all can’t be engineers is not only because not everyone has the necessary IQ. More importantly, only a small percentage of jobs in the economy are in engineering. If everone was an engineer, we’d have no farmers and we’d all starve to death.
May I ask how he can afford to sit on a couch and smoke pot? Who pays the rent? Who buys the pot? I keep hearing all these stories of people kicking back and doing nothing. How are they affording it? In my world, I am dead if I don’t earn money.
I just assumed that the couch he sits on belongs to his aging parents. Must get an allowance for pot.
Willing girlfriend’s sofa (or bed) and green thumb?
Relatives taking the black sheep in “for a few months until he can get on his feet?” and he moves on to the next relative?
Stories of ne’er-do-wells hopping family sofas are as old as the phrase “ne’er-do-well.”
VIVA OBAMA !!
SI SE PUEDE!!
WSJ:
“Ken Adams has been turning to more part-time workers at his 10 Subway sandwich shops in Michigan to avoid possibly incurring higher health-care costs under the new federal insurance law. He added approximately 25 part-time workers in May and June as he reduced some employees’ hours and replaced other workers who left. The move showed how efforts by some restaurant owners and other businesses to remake their workforces because of the Affordable Care Act may be turning the country’s labor market into a more part-time workforce.” In other words, the already worst paying jobs in the US are getting even more of the shaft, downgraded from full time to part time status. Precisely the New “part-time worker society” that we predicted would happen back in 2010.”
The fun part is that the low info morons who are getting hurt the most by this voted for St. Barrack of Chicago. Irony tastes delicious in the morning. Mmmm mmmm mmmm. May every one of these people suffer for decades to come.
It’s all good. Those below minimum wage part timers will have to buy insurance for themselves, probably at much higher premiums than group rates. Doesn’t that benefit the financial institutions?
Oh please, who has a full time job at a Subway, or any fast food joint? Those have always been part time, lucky ducky jobs.
This was already discussed yesterday.
Caution to economists who serve the home builders: Try not to drive while looking out the rear-view mirror.
July 16, 2013, 10:00 a.m. EDT
NAHB builder confidence jumps in July to 7-yr high
By Ruth Mantell
WASHINGTON (MarketWatch) — Led by sales expectations, a gauge of confidence among home builders rose in July for a third month, hitting the highest level in more than seven years, according to the National Association of Home Builders/Wells Fargo housing-market index released Tuesday. The builder-confidence index rose to 57 in July — the highest level since January 2006 — from 51 in June. June’s result was the first above a key reading of 50 since 2006. Readings above 50 signal that builders, generally, are optimistic about sales trends. “Builders are seeing more motivated buyers coming through their doors as the inventory of existing homes for sale continues to tighten,” said David Crowe, NAHB’s chief economist.
…
If you look in the rearview mirror though, to see what this index said pre-crash, it does seem to be somewhat of a leading indicator.
I generally only look at the West, but I think the pattern was similar for most regions.
However, for the WEST specifically:
If you look at a longer chart of this index, is predicted the collapse. The number in the West fell below 50 in the August of 2006 after being in the 80’s for pretty much all of 2005. By the end of 2006, the number was in the low 30’s. However, the Case Shiller Index had not yet turned downward.
It collapsed to the teens by the end of 2007, and hovered below 20 for 2008, 2009, 2010 and most of 2011, with the lowest reading a 4.
4 out of 100. That’s pretty pessimistic.
The reading was most recently at 62 in the West, up from 50 last month. Not yet euphoria by the builders, but heading in that direction.
It seems like inflation expectations are running wild this week on last week’s hints that the Fed didn’t really mean it when they suggested they would soon scale back QE3.
25 percent rise in gasoline prices, here we come. WOO-HOOOOO!!!
Gas Prices Surge Toward $5 in California
Posted: July 16, 2013 at 6:14 am
Most of the focus on the rise in gas prices, caused by the surge in oil prices, has been the effect of the march toward $4 a gallon. The focus is misplaced, at least to the extent that in several regions, most notably California, a gallon of premium may hit $5 before Labor Day.
…
California voted for Hope and Change when they could have voted for Drill Baby Drill.
Forward
US oil production is way up, thanks to fracking. It’s even predicted that we will soon be self sufficient and even export crude. But that won’t bring oil or gasoline prices down.
Isn’t it funny how refineries always go “offline” for long term maintenance when demand for gasoline is at its highest?
only high gas price can rein in QE3
“SACRAMENTO (CBS/AP) — Starting this week California drivers are spending more to fill up at the pump.
A 3.5-cents-per-gallon tax hike went into effect Monday.
The increase was approved by the state Board of Equalization in February, in order to make up for tax revenue shortfalls in past years.”
shortfalls …
July 16, 2013, 8:31 a.m. EDT
U.S. consumer price index jumps 0.5% in June
By Jeffry Bartash
WASHINGTON (MarketWatch) - U.S. consumer prices rose a seasonally adjusted 0.5% in June to mark the biggest increase since February, as the cost of gasoline, housing, medical care, clothing and food all rose, the Labor Department said Tuesday. The energy price index shot up 3.4%, spurred by a 6.3% gain in gasoline.
…
Weaker dollar => stronger gold, oil and other commodities.
July 15, 2013, 3:27 p.m. EDT
Gold futures gain for fifth session in six
By Myra P. Saefong and Saumya Vaishampayan, MarketWatch
SAN FRANCISCO (MarketWatch) — Gold futures closed higher on Monday, scoring their fifth session gain in six, with traders weighing financial woes in the euro zone and looking ahead to U.S. Federal Reserve Chairman Ben Bernanke’s testimony later this week.
…
To that, I would add: Weaker dollar => stronger equities.
All of this illustrates the importance of diversifying one’s portfolio across multiple asset classes.
“Weaker dollar => stronger equities.”
Yep.
Luckily the U.S. economy is decoupled from Europe’s.
European car sales sink to 20-year low in first half Add to …
Jennifer Clark
MILAN — Reuters
Published Tuesday, Jul. 16 2013, 7:11 AM EDT
Last updated Tuesday, Jul. 16 2013, 9:34 AM EDT
European car sales slumped to their lowest six-months total in 20 years in the first half of 2013, with a 6.3-per-cent drop in June suggesting no let up for an industry battered by overcapacity and weak demand.
European auto makers have been suffering for months from the effects of record unemployment and government austerity measures in the euro zone, with some such as PSA Peugeot Citroën seeking to close factories and lay off workers to counter heavy losses.
…
Europe’s Lucky Duckies (AKA the 1000 Euro jobs) can’t afford to buy cars.
This is the dilemma of capitalism and the race to the bottom: you can very efficiently produce goods and services, but no one has the money with which to purchase them. Current US auto sales have been described as “hot”, but are really still lukewarm by historical standards and like in Europe are likely to fall again.
U.S. car sales verdict depends on perspective. They are on track for 15.6 million sales this year. From 2000-2007 they were between 16.0 and 17.4 million, so down from that, but don’t forget everything was 0% for a long time after 9/11, so that pulled a lot of sales forward (I bought one in ‘02 and still have it). Compared to 2008-2012, U.S. sales are great, and the dealers are also doing better since there are many fewer of them than there were pre-recession.
Definitely bad in Europe.
I can remember being in a car with friends back in the 1970s. We were on an interstate highway near Detroit, passing a big sign showing the cumulative output of the U.S. auto industry for that year.
One of my friends looked at the number and noted that the yearly total might hit 10 million. Which was a big deal back then.
US car sales have been hot because prices of cars are really low right now, and you can get them with 0% financing and 0% down. Combine that with the fact that everyone’s been broke for about 5 years now, with aging cars, and yeah, car sales are up.
The Europeans can do something that most American’s can’t, they can turn to mass transit to get around. Also many european cities are more compact, walkable and bikable. It makes it easier to shift cost in your household budget from transportation to food and other higher priority needs.
ragerunner
We use the subways in Los Angeles, using the park and rides. Having been to Europe and using their great subway system, we are open to adventures using light rail, arriving at walkable destinations. We even see the Rose Parade Floats using the subway and the free shuttle buses to and from the subway station.
Public Transportation phobia is still alive in our middle-class suburbs. They ought to venture out more.
Life is short. We’re all just visiting.
Public Transportation phobia is still alive in our middle-class suburbs. They ought to venture out more.
Well said!
Feeling the effects of China’s slowdown
15 July 2013 Last updated at 01:14 ET Help
Rongsheng shipyard was once a symbol of China’s ambition - the country wanted to become the world’s biggest shipbuilding nation. Now, as the government tries to cool the economy, it has become a symbol of decline.
Our reporter John Sudworth has been to Jiangsu Province, where more than half of China’s shipyards are based, to assess the serious challenges now facing China’s economic planners.
…
to assess the serious challenges now facing China’s economic planners
That their export driven economy is utterly dependent on foreign customers who are broke?
Fast forward several years from now when mortgage rates are ~7%. Mortgage originators and and realtors will tell you rates are good and it is a great time to buy a house. If rates go to 10% it will still be a good time to buy a house. I mean, houses are like children. They are a joy to behold and a gift from the creator in this USA.
Getting tired of the noise. TV is shut off but internet is still full of crap. I am rooting for Goldman Sachs. Why not? They know we are suckers.
Realtors are salesmen. How do you know a salesman is lying? His lips are moving.
The bigger the lie, the more believable.
“I mean, houses are like children. They are a joy to behold and a gift from the creator in this USA.”
Actually, that’s a good analogy even if meant in jest. Houses are great because they keep the cold/heat out and rain off our heads, so they are a joy. If your house is owned, then you’re the parents. If it’s rented, then you’re the grandparents.
I need to bake some cookies for my house.
“I need to bake some cookies for my house.”
Said the realtor to Hansel and Gretel.
Actually a house is like a cat. It owns you.
If rates go to 7-10% again, it actually will be a good time to buy _some_ houses. If you pay cash and you only buy what you need. Or, in the case of an LL, what you can rent to someone who needs it. Smallish, in or near a major metro area, structually sound houses paid for with straight cash (or close to it) FTW.
What happens to home prices with 7% mortgage rates depends on the context:
Stagflation?
or
Marginally stronger economy with some inflation?
or
Much stronger economy?
One thing missing from the Zimmerman trial discussion: the “replacement prosecutor”, Angela B. Corey will have a bright future ahead of her as a political operator.
She has shown that she is willing to ignore the facts, and push the preferred political agenda handed down to her from above, using the apparatus of government as a tool for manipulating the masses.
She will go far…
…at least the protest are mostly peaceful…that’s what the MSM is actually reporting…mostly.
I correctly predicted here weeks and months ago that Justice For Trayvon™ would be sought by looting and random assaults on whites and hispanics.
For reporting on the post-verdict violence, read:
Drudge Report
Infowars
World Net Daily
Don’t bother looking in the coastal elitist, bedwetter libtard media for any reporting of violence. Even though they are responsible for creating the violence, they refuse to report on it.
Someone tried to pry open the door to my truck this weekend.
They must have been upset about the verdict.
Yes, unlike that foolish Sheriff who declined to arrest Zimmerman, just based on a complete lack of evidence.
One thing missing from the Zimmerman trial discussion: the “replacement prosecutor”, Angela B. Corey will have a bright future ahead of her as a political operator.
WEHT Marcia Clark?
Whoot. Got an interview coming up for a job position in Northern Virginia. As if Norfolk VA wasn’t already overpriced enough
But if the salary is good..
The economic downtown has caused such a huge stir in jobs it’s wild. So many people that were local all their lives scattered around the USA in search of better jobs and such.
So many people that were local all their lives scattered around the USA in search of better jobs and such
We get a constant stream of transients who come to use the computers in the public library to scan Craigslist for local job openings. The majority find nothing and move on.
Here in Tucson, the libraries have special banks of computers that are just for job hunters.
you must live in a nice neighborhood if they’re looking for jobs.
the ‘transients’ at the downtown denver library are all looking at porn.
By transients, I mean semi-clean cut migrants, who have beaters, and who roll into town, usually crashing with a friend, and look for a job.
There are about 50 PCs in the Loveland library and at any given time more than half of them are used by the “hobos”.
‘By transients, I mean semi-clean cut migrants, who have beaters, and who roll into town, usually crashing with a friend, and look for a job’
The nerve. Imagine that, people wanting to work? Not snarking you In Colorado, just the fact that people want to work gets no thumbs up anymore it seems. Companies don’t want a payroll but they want revenue. Working people get treated like they are asking for a handout by the companies they work for…………
I am grumpy. Yes. I remember a time when it was a quaint idea to go to a job. People were networking and going to make money off stocks and real estate and multiple sources of income. Guess that can still be done, but the joviality is lacking.
going to make money off stocks and real estate and multiple sources of income.
When was that the case? I’m perhaps a relative pup here, getting into the post-college workforce in 1994. But I don’t remember people showing such an affinity to stocks or real estate until about 1997 or so…at least not such an obvious one.
“the ‘transients’ at the downtown denver library are all looking at porn.”
I’d hate to be the one responsible for washing the keyboards.
For what it’s worth…..the latest on the B787 front.
Seems like the source of the fire was the Honeywell CVR or Flight Data Recorder (from news accounts it could be the ELT, but I don’t think Honeywell makes ELTs)
These units are powered by aircraft main bus power, with a battery backup (probably a NiCad, not a Lithium). A gazillion airplanes have NiCads. NiCads can catch fire too, in several different ways. I’ve seen a few “Chernobyl-ed” ones myself. NiCads really don’t like to be overheated and/or overcharged.
I’m guessing that the NTSB is going to start looking into summertime temps in B787 tailcones.
In short…….one of the minor things you run into with an all-new aircraft.
Thanks for this info, fixr!
Oh the humanity!
ft dot com
Last updated: July 16, 2013 8:15 pm
Bitcoin ETF plan struggles to find support
By Arash Massoudi and Tracy Alloway in New York
In the $2tn market for exchange traded funds, they are calling it the “Winkle wrinkle”.
The recent proposal from the Winklevoss twins to launch an ETF that tracks the volatile virtual currency known as Bitcoin has been met with scepticism from industry insiders.
The Bitcoin ETF will probably never hit the market because it is too difficult for “authorised participants” and “market-makers” – the banks and trading firms that typically sustain such funds – to profit from discrepancies between the underlying asset and the ETF, they say.
The suspicions cast over the proposed Bitcoin ETF are perhaps the starkest example yet of the complex cast of financial characters and motivations needed to launch investment vehicles that attempt to provide quick and easy access to sometimes esoteric and thinly traded assets.
“Bitcoin itself is not even a developed market, let alone to build an ETF on top of it,” says Reginald Browne, managing director at KCG Holdings, formerly Knight Capital, and a key figure in the development of the funds, which have surged in popularity over the past two decades.
Mom and pop investors, as well as larger institutional investors such as pension funds and insurance companies, have rushed into roughly 3,400 ETFs in recent years, using the vehicles that trade like stocks on exchanges to place their money into a wide range of assets.
The “Winklevoss Bitcoin Trust” will use fractions of the twins’ accumulated Bitcoin holdings to give investors greater exposure to the virtual currency, according to a regulatory filing made early this month. Investors would initially get exposure to one-fifth of a Bitcoin for each ETF share bought. The Winklevoss twins plan to sell 1m shares, giving the overall fund a $20m value.
…-
Things are worse than I thought, there is a “lack of confidence in the dong”.
Alright you got me, I wouldn’t have even read this if it weren’t for the headline.
Granny’s Gold Bars Are Key to Vietnam Push to Boost Dong
By Bloomberg News -
Jul 15, 2013 5:55 AM ET
The target of Vietnam’s campaign to stabilize its currency is in the locked bedroom wardrobe of retired civil servant Vu Thi Huong: gold bars.
“It’s been my habit for ages, buying gold whenever I can save up some money,” said Huong, 57, who watches the financial news every day to monitor the price of the precious metal. “With gold, I can save my fortune and later on have something valuable to pass down to my children and grandchildren.”
Huong is among millions of Vietnamese who hold an estimated 300 tons to 400 tons of bullion to store their wealth — valued at as much as $19 billion at domestic prices and equal to official U.K. holdings — a legacy of more than a century of war, revolution and economic turbulence. The central bank wants to convert the hoard, much of it smuggled in, into dong deposits to strengthen the currency, which has slid 21 percent against the dollar in five years.
Private gold holdings “reflect both the Vietnamese cultural values as well as the lack of confidence in the dong,” said Trinh Nguyen, Hong Kong-based economist at HSBC Holdings Plc. “High inflation and depreciation of the dong in the past have caused people to keep their savings in gold.”
Storing Gold
To reduce contraband and persuade people to sell their bullion, the central bank made itself the sole importer and Saigon Jewelry Co. the only legal producer of gold bars. To discourage people from holding the precious metal, it banned banks from paying interest on gold deposits from June 30. Banks now have to charge customers a fee for storing it instead.
The central bank has held gold auctions since March, selling 1.17 million taels, or about 44 tons, according to bank data. Nguyen Quang Huy, head of the central bank’s foreign-currency management department, said in a posting on the bank’s website in April that banks would prioritize the purchase of gold from auctions to close their positions by the June deadline.
State Bank of Vietnam will reduce the volume and frequency of auctions because banks have bought enough gold to return gold deposits, the Tien Phong newspaper reported last week, citing an unidentified central bank official.
http://www.bloomberg.com/news/2013-07-14/granny-s-gold-bars-are-key-to-vietnam-push-to-boost-dong.html - 164k -
How can the Vietnamese have a lack of confidence in the dong?
http://www.youtube.com/watch?v=Aj9VArxREqY - 125k -
I enjoyed a week in Vietnam in 2008. It was cool to put $US60 into the ATM machine and come out a millionaire in dong.
(Explanation: The exchange rate at the time was circa 16,666.67 dong / $1 = 1,000,000 dong / $60 .)
Best part: $US12 would buy you a delicious dinner at a fine French restaurant.
“lack of confidence in the dong”
Is this expected to impact their future population growth rate?
Boomerang Buyers Expected to Account for 19% of 2013 Phoenix Sales
By AF
Tue, 16 Jul 2013,
“Boomerang Buyers,” or those buyers who have previously experienced a foreclosure or short sale, are expected to account for almost 1 in 5 sales in the Phoenix area this year. While it was once expected that this particular demographic would have to have wait 5-7 years before becoming eligible to purchase again, they’re back on the prowl as soon as two years following a short sale and three years after a foreclosure.
Areas that were more affected by the housing crisis in the first place are, of course, expected to have higher rates of boomerang buyers. Nationwide, these buyers are expected to account for almost 1 in 10 home sales.
There are a couple of reasons that boomerang buyers are expected to make up such a significant portion of purchases. Once a borrower has owned a property, it is often difficult to deal with the instability that is characteristic of renting; both in payments and location. And the prevalence of foreclosure means that refusing mortgages to these people wipes out a considerable percentage of potential buyers. Lenders, also looking to recover, are becoming less willing to alienate this portion of the population. After having the ability to rack up a decent down payment while living in a foreclosing property and a few years to nurse their credit back to health, boomerang buyers are actually pretty attractive buyers.
According to one recent report, California’s Riverside-San Bernardino and Los Angeles County metro areas are expected to experience the highest rate of boomerang buyers. The Phoenix metro area is third on the list. This could be attributed to California and Arizona’s high rates of foreclosure as well as the presence of anti-deficiency laws in both states. These laws protect most homeowners who experienced foreclosure from liability for any remaining debt. Often, this protection extends to both first and second mortgages. The lack of liability paves the way for future homeownership.
http://www.afterforeclosure.com/2013/07/boomerang-buyers-expected-to-account-for-19-of-2013-phoenix-sales/
People who do not pay their debts are expected to borrow more.
Blue Skye
If you come to the west end of Ontario I have a vacant dock spot.
Patrick,
Very gracious of you sir. We are stuck in Oswego at present, the first mate requiring some emergency surgery. Not sure if we will cross later or just settle in for a gentle convalescence.
Skye
Sending good vibes to you both, Blue.
The stock market always goes up…when Big Ben speaks.
Of Bernanke testimonies, his semi-annuals are best for S&P 500
July 16, 2013, 6:34 PM
Markets will be eyeing Federal Reserve Chairman Ben Bernanke as he gives his 16th semi-annual testimony before both houses of Congress on Wednesday and Thursday. And it’s those semi-annual testimonies — what used to be known as Humphrey-Hawkins testimonies — that tend to give stocks the best boost, compared with the other times Bernanke speaks before Congress.
MarketWatch, using data from FactSet, looked at how the S&P 500 Index performed every time Bernanke provided testimony to Congress since 2005 and found that Bernanke’s two-day semi-annual events tend to lead markets higher compared with his other other testimonies.
…
For how long now has the U.S. stock market been utterly dependent on the Federal Reserve for keeping prices aloft?
Stocks: Waiting for Ben Bernanke
By CNNMoney Staff @CNNMoneyInvest July 17, 2013: 5:06 AM ET
NEW YORK (CNNMoney)
Stock markets were set for a cautious start Wednesday as investors wait for further comments from the U.S. Federal Reserve chairman, Ben Bernanke.
U.S. stock futures were little changed from Tuesday’s closing levels.
Bernanke is back in the spotlight Wednesday as he prepares to deliver his semi-annual testimony on monetary policy before the House Financial Services Committee at 10:00 a.m. ET.
Many are expecting Bernanke to repeat recent remarks, gently explaining that the central bank might begin pulling back on its massive bond-buying program later this year if the U.S. economy continues to improve.
“We’re not expecting any surprises in the testimony text,” said London-based Mike van Dulken, head of research at Accendo Markets. “If there is any excitement, like last time it’ll be in the [question and answer session].”
…
Hedge trimming:
ft dot com
July 16, 2013 5:45 pm
Hedge funds lead Treasuries sell-off
By Vivianne Rodrigues in New York
Global hedge funds have been at the forefront of the sell-off in US Treasuries, quick to dispose of US debt in May ahead of a rise in yields even as foreign central banks remained solid buyers.
Private foreign accounts based in the Caribbean, Belgium and Luxembourg – a proxy for hedge funds – sold a combined $51.5bn of US Treasuries in May, official US data show.
“We believe strong selling from Caribbean accounts represented fast money shedding of Treasuries, a trend we can expect to continue as the Treasury market sell-off accelerated in June,” said Gennadiy Goldberg, US strategist at TD Securities.
Central banks added $40.3bn, with demand from China and France particularly strong, according to the figures released by the US Treasury on Tuesday.
Still, both private and official account holders sold $10.3bn of agency debt, such as those sold by Fannie Mae and Freddie Mac, for the first time since April 2012.
“Unfortunately the TIC [Treasury International Capital] report is backward looking, but it goes to show the multitude of themes global investors, private and official, were dealing with at the start of May,” said Vassili Serebriakov, foreign exchange strategist at BNP Paribas.
After selling Treasuries in April, central banks bought back government securities in May as fears over a botched bailout for Cyprus eased and confidence in the US economy improved. A strong US employment report at the start of May showed a pick-up in hiring in the previous month, which sent the jobless rate to a four-year low.
But the move into US government bonds did not pay off. By the end of May, 10-year yields had jumped nearly 50 basis points and Treasuries had lost almost 2 per cent, as the Federal Reserve first suggested it would taper its aggressive stimulus policy.
Sales of Treasuries by private holders in May, however, marked just the beginning of a broader retreat from the US fixed-income market that accelerated in June, when Ben Bernanke, Fed chairman, confirmed the central bank’s intention to slow down its bond-buying programme.
The next TIC report in August may provide further evidence of private investors’ exit and show whether central banks have pared their purchases, analysts said.
…
Perhaps this article will offer comfort to those who decided to sit out the latest rally on headline U.S. stock market indexes to daily new record levels.
July 17, 2013, 12:01 a.m. EDT
Critical Warning No. 17: Dow 5,000, crash of 65%
Commentary: Sucker’s bull market of 1928 now repeating
By Paul B. Farrell, MarketWatch
SAN LUIS OBISPO, Calif. (MarketWatch) — Critical warning #17? Lost count? Here’s the latest: “The stock market is about to have a devastating decline; we will see Dow 5,000 before we see Dow 20,000.”
Beware: The sucker’s bull market of 1928 is repeating.
That’s Terry Burnham on PBS, former Goldman Sachs trader, biotech entrepreneur, money manager, author of “Mean Markets and Lizard Brains: How to Profit from the New Science of Irrationality.” A former Harvard professor of behavioral economics, a guy on par with Nobel economist Daniel Kahneman, “Black Swan’s” Nassim Nicholas Taleb, and Dan Ariely, author of “Predictably Irrational: The Hidden Forces That Shape Our Decisions.”
Dow 5,000? Yes, investors, the big one’s coming, dead ahead. We’ve been reporting these warnings, maybe 20 this year alone. But unfortunately, thanks to what Burnham calls the investor’s “lizard brain,” you can’t, you won’t hear the crash coming, till it’s too late.
‘Gloomiest of all gloomsters:’ We’re repeating 1928 sucker’s rally
As if to punctuate his new warning, Burnham’s PBS editor added this postscript: “Over the weekend at ZeroHedge.com, the gloomiest of all gloomsters, Tyler Durden,” compared the current stock market to the sucker’s rally of 1928 that set up and led the lambs to the 1929 slaughter. So history buffs, be warned that Fed Chairman Ben Bernanke’s risky cheap-money bubble-blowing “depression-fighting remedies” are repeating the 1928 bull-market sucker’s rally whose “side effects could include … another depression.”
Warning bells are everywhere: Dow 5,000 … another depression … massive denial on Wall Street and Main Street … a new meltdown bigger than the 2000 dot-com crash … longer than the 30-month recession of 2000-2003 where Wall Street lost $8 trillion of America’s retirement money … worse than the fact Wall Street narrowly breaks even on an inflation-adjusted basis … and bigger than the 2008 bank-credit meltdown with the de facto bankruptcy of all Wall Street’s banks … with trillions of new debt dumped on taxpayers by the U.S. Treasury … and Bernanke’s wanton “grand experiment” showering endless cheap money into speculation … and blowing the biggest bubble in history.
Denial? Yes, massive denial. Why? Lizard brains, 95 million Main Street investors. And Wall Street crawling with a million lizard brains. That’s the primitive, survival-first, irrational part of our old brain that began developing a few hundred million years ago.
You have one of these bio-algorithm drones wired in your brain. It takes over, reacts on autopilot to old fears trapped in outdated behavioral patterns that override your rational brain.
Wall Street’s in denial. Main Street in denial. Nobody hears, till too late.
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Prepare for the next crash right now
July 15, 2013, 4:00 PM
By Cody Willard
…let’s look at what’s dominating today’s market headlines:
- U.S. stocks hold line after record climb
- Stocks edge higher, extending a hot start to July
- 6 Stock That Stand Out in Today’s Sizzling Stock Market
- Citi, Boeing, Leap on the rise
And best of all, our quote of the day:
The ‘Bernanke Put’ is Back in Play – ”The phones have been crazy,” says William Lefkowitz, options strategist at asset management and brokerage firm National Securities. “People are excited after the Bernanke comments.”
The headlines are full of euphoria, excitement and talk of bullish stock moves. Hmm.
Here are some headlines from this time last year:
- The 2013 Fiscal Cliff Could Crush Stocks
- The Next Stock Market Crash Will Be Bigger Than “Black Monday
- The Stock Market Is Crashing!
Back when stocks were 20%-30% lower than where they are now, the headlines were full of fear, panic and talk of market crashes.
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