Bits Bucket for July 18, 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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Rents in Denver going up, up, up. The sky’s the limit for rents.
Vacancies down, down, down (in Capitol Hill there are NO vacancies).
Better buy now or be priced out forever!
Excellent plan! How many are you going to buy? Snap ‘em up!
Capitol Hill, Lower Downtown, Highlands can’t contain all the Pretty Young Things who keep coming here with their out-of-state license plates and their snowboards and their bongs.
They’re spilling over and crossing Alameda and Mississippi and driving rents up and gentrifying with their yoga studios and doggie daycares and fixed-gear bicycles.
The future’s so bright, I gotta wear shades!
They’re called hipsters
This.
Rents in hipsterish areas trend upwards even if rents in other areas go down. To the extent other neighborhoods fall, it just makes more people want to live in the areas perceived to be nicer/trendier.
I actually get more responses from better qualified prospective tenants when I list coming vacancies at slightly higher rents.
Rents in hipsterish areas trend upwards…
Yup. Hipster Portland is seeing very low vacancy rates near the food carts and bike lanes.
They’re called hipsters
Hipstar
The future’s so bright, I gotta wear shades!
LOL….
The snapping phase has passed. We are now in snatching phase.
To be followed by the ’smacking’ phase.
If you want some smack, the place to score is downtown by the Cherry Creek bike path, in the shadow of all the new $300,000 condos.
Wait. When did we leave the ’scooping’ phase?
Not that kind of smack, the kind of smack the Invisible Hand delivers to those that ignore market fundamentals.
If this doesn’t work, the Invisible Hand balls into the Invisible Fist, and delivers a free market beatdown.
“To be followed by the ’smacking’ phase.”
Next after that: ’smackdown’ phase…
I got the red promethazine, thick orange and yellow tuss,
Hydrocodone,
on the hands-free phonethink I’ll go buy me a home.hell yeah! talking to realtors is always better after sippin on some sizzurp
Watcha got against Purple Drank?
Rents are rising in my city as well. ALL over town.
Jesse Jackson in the Chicago Sun-Times:
“We need a national investigation of the racial context that led to Trayvon Martin’s slaying. Congress must act. And it’s time to call on the United Nations Human Rights Commission for an in-depth investigation of whether the U.S. is upholding its obligations under international human rights laws and treaties.”
I am for it. I propose let’s get UN examine US in these 4 areas;
1. Racial justice/injustice (including prison systems)
2. Financial fraud (including fed)
3. Government corrpution/tyranny
4. War crimes
I don’t think we gonna like what they will find.
Milk it for all it’s worth.
We’d know nothing about this Zimmerman case if Zimmerman were also black.
It’s a circus…nothing more. Most people on this board are willingly manipulated by it, what with all the never-ending talk about it.
“the never-ending talk…”
Only if you are taking the buzz by IV. Out here on the lake the subject never came up.
Exactly. I have watched precisely zero programs or news stories about it. It’s a shame a young man died, but people die every day.
As usual, The Onion gets it right when no one else does.
http://www.theonion.com/articles/nation-throws-hands-up-tells-black-teenagers-to-do,33125/
The Onion gets less and less like satire each year.
JJ should be in jail.
In jail for what? What laws did his shakedowns break?
http://www.jessejackson.org/
JJJ is reporting to prison soon IIRC.
Kudos to Frank Zappa. From the 1988 album ” Broadway The Hard Way”
Rhymin’ Man,
Tall and tan,
Rhyme or reason,
Play your hand -
Rhyme on this - rhyme on that
Oh, you naughty Democrat!
They say when Doctor King got shot,
Jesse hatched an awful plot,
Dipped his hands in the Doctor’s blood,
‘N rubbed his shirt like playin’ with mud
Looked around for all the press,
Said: “Check me out, my name is Jess!
I’ll be known from towns ‘n farms -
Doctor King died in my arms!”
Rhymin’ Man,
Tall and tan,
Rhyme or reason,
Play your hand -
Rhyme on this - rhyme on that
Oh, you naughty Democrat!
A few years later, legend says,
Rhymin’ man made a run for Prez
Farrakhan made him a clown,
Over there near Hymie-Town
Said he was a diplomat -
Hobbin’ an-a-knobbin’ with Arafat
Castro was simpatico,
Though the U.S. voters, they said: “No!”
Rhymin’ Man,
Tall and tan,
Rhyme or reason,
Play your hand -
Rhyme on this - rhyme on that
Oh, you naughty Democrat!
Okay, here we go again!
Rhymin’ Man says he’s your friend
Any fool can make a rhyme -
Cowboys do it all the time
(We could do, they sure do)
People say: “Now he’s mature!”
Cowboys rhyme that with horse manure
Horse manure!
(Horse manure)
That’s for sure!
You been cheatin’ -
We kept score!
Are you “this”?
Or are you “that”?
Oh, you naughty
Demo . . . (crat!)
Democrat!
Amnesty International has been failing the US in all categories for decades.
Our hypocrisy is second to none. So is our prison population.
How to Spot an Economic Recovery Addict
Since the beginning of the Great Recession, dating back to the “green shoots” days of early 2009 and recovery summer of 2010, there has been a crowd of analysts, journalists and pundits searching for signs of an economic recovery.
http://smaulgld.com/how-to-spot-an-economic-recovery-addict/
I’ll start the list: Christopher Thornberg
Sorry, but the list-topper is Mark Zandi…
A sure-fire sign of the addict:
They do not see the benefits of changing their self-destructive behavior. Instead, they insist that the world must bend to their own deluded and addictive ways.
I remember a comment that was copied from another board a few years back. In effect, the commentator had argued that housing “can’t” tank because if it did, he would be bankrupt. That is addictive thinking. The world must conform to the desire, since the desire cannot be controlled.
They do not see the benefits of changing their self-destructive behavior. Instead, they insist that the world must bend to their own deluded and addictive ways.
Why should they when they are TBTF?
I heard a great comment the other day. To paraphrase, it remarked that when an employee fails at their job they are fired, but when a CXO fails, it’s considered “a learning experience”.
“The world must conform to the desire, since the desire cannot be controlled.”
And hence the real estate and stock markets must always go up.
Mortgage Rate “Surge”…A Comparable Event to Analyze
What to expect from New and Existing Sales on “the Surge” in rates…I think a stimulus-induced pent-up and pulled-forward demand “hangover” similar (or greater) to mid-2010 on the sunset of the Homebuyer Tax Credit, which kicked off the “double-dip”
http://mhanson.com/archives/1370
The Banking System
They loan you air
You pay back money
The game is rigged
And that ain’t funny
n/c
Yes, Virginia, Banks Really Do Create Money Out of Thin Air
by Jeremy R. Hammond
August 4, 2012
Where did the money come from? It came—and this is the most important single thing to know about modern banking—it came out of thin air. Commercial banks—that is, fractional reserve banks—create money out of thin air. Essentially they do it in the same way as counterfeiters. Counterfeiters, too, create money out of thin air by printing something masquerading as money or as a warehouse receipt for money. In this way, they fraudulently extract resources from the public, from the people who have genuinely earned their money. In the same way, fractional reserve banks counterfeit warehouse receipts for money, which then circulate as equivalent to money among the public. There is one exception to the equivalence: The law fails to treat the receipts as counterfeit.
That is to say, fractional reserve banking is just legalized counterfeiting. Rothbard continued:
http://www.foreignpolicyjournal.com/2012/08/04/yes-virginia-banks-really-do-create-money-out-of-thin-air/ - 133k - Cached - Similar pages
Aug 4, 2012 …
is this how goldman sachs’ profits doubled?
Yep.
I remember when I took my first into to economics class. I was all psyched up to confront my professor with the “secret” knowledge I had uncovered about how fractional reserve banking and central banking
counterfeitcreate “money” out of thin air.I was shocked not only to learn that this is common knowledge in macro economics, but in fact we spent 2-3 lectures covering exactly how to calculate the effects on price, supply, and demand.
And it was on the midterm.
Economists account for it and move on with their day. Too bad the vast majority of people don’t get that it’s a back door, non-representational tax on the value of their earned dollars. If they really understood that, they would be demanding a tighter control and greater oversight on the creation of new money.
s a back door, non-representational tax on the value of their earned dollars.
Those earned dollars were originally borrowed into existence too.
Those earned dollars were originally borrowed into existence too.
that right. what’s bad about that?
what’s bad about that?
you tell me
so you don’t think that dollars borrowed into existence is a bad thing.. then why make a statement about it?
‘what’s bad about that?’
‘you tell me’
Monty Python - Argument Clinic
http://www.youtube.com/watch?v=hnTmBjk-M0c
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®
houses in lajolla @ 700/ foot are just waiting for you to show up.
How will your shanties @ 50 compare?
No Diggler, they are waiting for you.
Yesterday evening’s discussion of the Caucusus Mountains led to an impromptu poetry slam. I re-post the winner here:
———-
Comment by ahansen
2013-07-17 18:03:12
We must buy this house in Tehran!
Said the Mu’salem wife to her man.
When he asked, “What’s your hurry?’
She said “Not to worry?
I had it researched by Su’h zhanne
“Far out, daddy-o” (snapping my beatnik fingers and wearing my beret and obligatory Che T-shirt) “like, way cool, man.”
Boooring…..
Where are some racy poem?
“There once was a realtor from Nantucket…”
Write one yourself!
Love it!
Thanks for posting this in today’s thread, Oxide.
The request for a limerick about Tehran was pure tongue in cheek on my part. Had you not posted today I would have missed it.
Buying house? Get ready for bidding war
http://abclocal.go.com/kabc/story?section=news/consumer&id=9176553
(So Ca ABC station)
NAR & a Real Estate Attorney interviewed.
LOLZ
NAR?
Liar.
how about the guy interviewed. he said that even though he got into a bidding war, he felt the property was “undervalued” anyway, so he didn’t overpay. I bet I know what you think of that!
I caught that comment too. He deserved the price tag to his dream home. We were a cash buyer in a bidding war. Our brilliant agent/broker/partner in the firm, took a different path to securing our low but cash offer. Our dude was sensational. Closed $37K under other offers. Mind you a bidding war, yet we landed on our feet!
I had a similar experience, though in reverse as a seller.
First accepted offer was the high offer. Couldn’t get ‘er done.
During the second round I focused on the down payment at a lower offer, albeit still a good offer. Got ‘er done.
“He deserved the price tag to his dream home. We were a cash buyer in a bidding war. Our brilliant agent/broker/partner in the firm, took a different path to securing our low but cash offer. Our dude was sensational. Closed $37K under other offers. Mind you a bidding war, yet we landed on our feet!”
You’re a sucker and a fool.
HA
Same cr*p different day. You’re one nasty soul-less twit. You have way too much free time.
Same truth, different day.
Carry on you foolish sucker.
Low inventory? Bidding wars? Increasing mortgage rates in conjunction with unsustainable price increases? Only an idiot would buy in that kind of environment. Anyone with even a vestigial brain stem would be smart enough to stay out of that type of market. And those that aren’t will be the FB grist as this head-fake rally continues to tank and steamrolls downhill.
You might be onto something. local media here (central FL) quiet about housing market, while my inbox floods with new to market and price reduction alerts.
Only an idiot would buy in that kind of environment ??
Although I agree with the convergence of the conditions you suggest there are a lot of very smart people around here that are fighting each other trying to buy…It is irrational, but it is also reality….
You have a very weak mind and poor judgment skills.
“…there are a lot of very smart people around here that are fighting each other trying to buy…”
That’s not smart. That’s stupid.
Hey! I know the tune to this song …what was the title again?
Oh yah! The sheep being led to the slaughter
http://www.brownstoner.com/blog/2007/02/party-like-its/
My nephew just sold in Pomona, and he had three offers in two weeks. All the offers were from Asians and just look at the bubble going on in China. China’s efforts to squealch this inflationary spiral are going to hurt my stock investments. Bloody interconnectedness.
“All the offers were from Asians…”
+1 And there’s more where they came from.
You also have to remember that this is a news show in L.A. Our bubbles grow as big as Hollywood Blvd silicon breasts. Hey, throw in a butt implant for good measure. We are the bubble. Now Detroit. Are the $1.00 houses going to go to $.50 after the bankruptcy. Imagine putting in 25 years as a cop on those mean streets and getting it chopped now. Ouch.
wall street journal - u.s. seen losing to china as world leader:
‘according to a survey of around 38,000 people in 39 countries released on thursday by the washington-based pew research center, majorities or pluralities in 23 of the nations surveyed said china either has replaced or eventually will oust the u.s. as the world’s top superpower. the chinese don’t question their nation’s eventual dominance, but americans are split on the question, the poll found.’
http://m.us.wsj.com/articles/a/SB10001424127887324263404578611623402415576?mg=reno64-wsj
See my comment below. Kinda hard to be super when you literally donate everything you have to everyone else. We have been giving them our jobs for 30 years. China doesn’t even create enough jobs for its own people.
“China doesn’t even create enough jobs for its own people.”
+1 I’m sure they could incarcerate our long-term prisoners far cheaper than we have been able to especially in California.
“My little China girl
You shouldn’t mess with me
I’ll ruin everything you are
I’ll give you television
I’ll give you eyes of blue
I’ll give you a man who wants to rule the world”
-David Bowie
Full lyrics
All they are lacking right now is 12 more carrier groups.
The reports of our death are greatly exaggerated.
los angeles times - home price rebound has look of a boom:
‘the median home price in southern california surged a stunning 28 percent in june compared with a year earlier — outpacing any month during last decade’s housing bubble. the gain puts the median at 385,000, up from 300,000 last june.’
http://www.latimes.com/business/la-fi-home-prices-20130718,0,129823.story
they need to recruit more buyers into the game with the thought of some free equity cause they buy a house.
Greed is working.
los angeles times - lapd: roving hollywood robbers may also be zimmerman protest vandals:
‘a band of robbers that tore through hollywood boulevard on tuesday night appear to be some of the same youths who were attacking people and vandalizing stores in the crenshaw district earlier this week where demonstrators were protesting the george zimmerman murder trial verdict, police said.
‘i think this specific group came up to riot and cause problems in hollywood,’ lapd sgt. john barkley said. ‘they were not engaging in any kind of protest.’
of the dozen people arrested in the indiscriminate crime spree, most of the suspects came from south l.a. or compton and used the subway to get there, he said.
security camera footage obtained by l.a. weekly shows a wave of youths running down the hollywood walk of fame with tourists trying to avoid the stampede.’
http://www.latimes.com/local/lanow/la-me-ln-hollywood-robbers-20130717,0,7520634.story?track=rss
“… most of the suspects came from south l.a. or compton …”
Now they are beggining to smarten up, as in go to where the money is.
There isn’t all that much money in Compton or South L.A. but there is elsewhere (think Beverly Hills).
Next up, if they were smart, is to stop looking, acting, and dressing as they are crooks. Stop advertising to the world what they are up to.
The Hollywood crime scene thugs were caught on video cameras all over the place. Those not caught yet, will have justice served. Lower the age of adult accountability to 14 years old, and lock them all away.
The seeds of bad character are already sowed. By 10 you should know better.
Just wait. Their fathers will give ‘em a good spanking.
Fathers?
Fathers? Black ones? Not many around, as far as I can tell. Babby daddies.
may also be zimmerman protest vandals:
That’s all the rioting? I was ready to be invaded by Cincinnati hoodlum armies. (I was wondering how they were going to make it down I-75 through 80 miles of Tea Party country. The kind of people who’d shoot Zimmerman for looking too dark.)
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.
Apparently not “always”:
http://www.latimes.com/business/la-fi-home-prices-20130718,0,129823.story
That is awesome news, but it seems like I’ve heard that exact same somewhere before? Oh yeah- it was right here on this forum in 2007. ‘California Housing Prices Going Into The Stratosphere, Forever’. It was sandwiched right in between, ‘Its a New Paradigm’ and ‘People Who Don’t Buy Now Will Live In Tent Cities And In Hondas’.
if you aren’t in the game you have no shot at free equity. The casino like atmosphere has infiltrated into the housing market thanks to regulators and wall street.
The thought of free equity does strange things to people.
“The thought of free equity does strange things to people.”
+1 Same goes for, All You Can Eat!
it is your patriotic duty to have more debt:
‘data this week reminded us of an ugly risk to the recovery. namely, the american consumer.
american families have seen their net worth return to pre-recession levels, up to $70.3 trillion in the first quarter. however, that was almost wholly thanks to increases in the stock market and real estate values — not actually having more money in the bank.
the bottom line is that household borrowing is a bullish economic sign. debt signals people are buying cars and houses and home goods — and more importantly, that they are confident enough to do so on credit. however, in may we saw debt hit lows not seen since 2006.’
http://www.marketwatch.com/story/confused-consumers-threaten-stocks-and-recovery-2013-07-17?dist=beforebell
The people shuffling homes and stocks are the ones cashing in. the poor guy actually working for a living is going backwards.
The pillar of the economy are assets bubbles.
Even mcdonalds thinks you can make a living on their pittance of a paycheck.
Exactly.
Net worth outside of primary residence would be an interesting number.
I’m sure that would be negative.
Or maybe they just can’t actually afford the purchase.
A lot of people will hang themselves with debt any chance they can get. I know someone who went BK due to excessive credit card debt ($125k or so, before the laws were changed), then turned right around and jacked up about $80k on high rate cards. It’s like a drug addiction, and the banks are happy pushers.
Sell your bonds and buy stocks now or get priced in forever.
Stocks & Bonds
A Lost Decade for Bonds?
By Roben Farzad
June 25, 2013
The three-decade bull market in bonds may morph into a lost decade.
In the 2000s we had a lost decade for stocks, which started the period with nosebleed-valuations, thanks to dot-com mania and Irrational Exuberance. Investors who bought and held experienced crashes in 2001-2002 and in the wake of the panic of 2008. Bond investors, by comparison, saw largely consistent gains in their holdings, especially with the Federal Reserve pursuing an emergency low-rate policy for the better part of five years since Wall Street melted down.
But bond mutual funds and exchange-traded funds have experienced a combined outflow of more than $47 billion in June, the worst month on record, according to TrimTabs. Treasuries fell 2.8 percent this year through June 21, according to the Bloomberg U.S. Treasury Bond Index. By comparison, the MSCI All-Country World Index of shares returned 5 percent during the period, including reinvested dividends. Globally, bonds of all types have lost 1.5 percent in 2013, as tracked by Bank of America Merrill Lynch’s Global Broad Market Index; the reading has not had a down year since 1999.
All of which could add appeal to the equity side of the portfolio ledger. JPMorgan Chase (JPM), Barclays (BCS), Bank of America (BAC), Morgan Stanley (MS), and Goldman Sachs (GS) are recommending stocks over most bonds.
“The lost decade for bonds has begun,” Howard Ward, chief investment officer at Gamco Investors, told Bloomberg’s Susanne Walker. “Stocks are likely going to be the asset class of choice over the course of the next 10 years. Now that the tide has turned and the economy is doing better, investors in bonds are going to have a hard time making any money.”
…
Go with shorter durations and bonds should out perform cash.
On thing that gets overlooked here, IMO, is the role that bonds play in a portfolio, and that is the return of capital rather than the return on capital.
Over the past 30 years long term bonds have enjoyed stellar capital appreciation returns. As interest rates approach their theoretical downside limit of zero percent there is no more capital appreciation.
There is still a place for bonds in a portfolio to preserve capital in the event of a sharp reduction in the value of equities. Just go short on the durations and adjust your expectations.
“There is still a place for bonds in a portfolio to preserve capital in the event of a sharp reduction in the value of equities. Just go short on the durations and adjust your expectations.”
Or if you have a good crystal ball and can predict market tops, buy long-term bonds the day before a crash. Better yet, purchase bond market call options (assuming their existence). Highly-rated long-term bonds will go up in value by more in a flight-to-quality move than short-term bonds, due to that return of capital factor you mentioned at greater duration.
My crystal ball is in the shop for repairs.
It never worked right on a consistent basis.
Pbear…Is there any whispers going around in San Diego about military cut-backs ??
So… will the shadow inventory stay dark forever?
The market can remain manipulated for longer than you can remain young enough to care.
that goes back to:
The market can stay irrational much longer than you can remain solvent.
the truth?
“Your personal balance sheet strengthens the longer you avoid the housing market.”
u watching more suze orman dvds today? now wonder your still broke.
… and can keep your job.
“Get what you can get for your house today because it’s going to be much less tomorrow for many years to come.”
Correct.
you have lost out on thousands of dollars of free equity due to that mind set.
And now your losses grow.
what kind of wine would you recommend to compliment my t bone steaks tonight?
Still living like a pauper? T bone? LOLZ
I found a nice cabernet might do the trick. How is your walmart trip going today?
Pauper….LOLZ
The market can stay manipulated for longer than you can remain young enough to care.
That’s exactly where I am at.
Michael
I feel for you.
It took us 4 years
of bidding war back-offs
to land this fixer in mid 2012.
We sold a decade ago,
and got caught
in this insanity.
I know what you’re
going through.
We had given up hope and then
this Dementia Patient deal came up.
The lighter, happier side of Alzheimers….
But you were patient and quite rewarded for being so. unfortunately many today want instant gratification. and if the market turns south, they’ll get a bailout courtesy of those who were responsible.
and if the market turns south, they’ll get a bailout courtesy of those who were responsible.
american exceptionalism
No bail out needed here, although I would love to sell the in-ground pool on ebay. lol
Oh, and a raccoon lives on our property (in a tree) and is becoming quite the menace. Those creatures are naughty, and I had no idea how big they are. I never had exposure to raccoons before.
ahansen
lol
Though adorable, raccoons are definitely a menace. They get territorial and aggressive, kill house pets, tear up gardens and furniture, break into houses, carry nasty parasites, etc.
Go ahead and call animal control to come and relocate it, or take steps to discourage it from your property forthwith– or you’ll be
sooo-rrry
ahansen
Thank you.
I’ll call in the AM.
Years ago, I was picking blackberries on my property, and as I was filling my bucket I head something in the bush right in front of my hand. By golly if it wasn’t a raccoon, pigging out on berries herself. She was not a bit scared of me, and actually had the look of “you best back off my bush, or the claws are coming out.” I quickly took note and moved on down the line a ways, to give her some space.
July 17, 2013, 8:31 a.m. EDT
Sell signal from key market indicator
Commentary: Famous ‘High Low Logic Index’ is no longer bullish
By Mark Hulbert, MarketWatch
CHAPEL HILL, N.C. (MarketWatch) — Spoiler alert: A market timing indicator with a stellar long-term record is now in “sell” mode.
The last time this indicator generated a sell signal was in late 2007, just before the Great Recession.
The indicator is called the “High Low Logic Index,” and it was created by Norm Fosback in 1979, then the president of the Institute for Econometric Research, and currently editor of Fosback’s Fund Forecaster. The indicator represents the lesser of two numbers: New 52-week highs and new 52-week lows (both expressed as a percentage of total issues traded). High readings are bearish, while low levels are bullish.
Fosback’s explains the theory behind the indicator: High readings suggest that “the market is undergoing a period of extreme divergence… Such divergence is not usually conducive to future rising stock prices, [since] a healthy market requires some semblance of internal uniformity.” Fosback furthermore found that “it doesn’t matter what direction that uniformity takes. Many new highs and very few lows is obviously bullish, but so is a great many new lows accompanied by few or no new highs.”
Fosback recommended using a 10-week exponential moving average of the weekly values. When that average reached 5%, he said it indicated “extreme market divergence” and therefore bearish. And that’s just what the indicator did in June, rising to 5.1%. It currently stands at 4.6%
Lest you think that, because the indicator has dropped back below 5%, that the danger has passed, let me hasten to add two additional considerations. First, according to Fosback, a new buy signal doesn’t get generated until the indicator drops all the way to below 1%. So June’s sell signal still stands.
…
the stock market bubble will end in tears for the momentum chasers.
‘the stock market bubble will end in tears for the momentum chasers.’
Don’t be a hater.
I’m a hater now. I hate the stock market for going up.
I’m actually rooting it higher, along with crude oil. I like a real good spike before a massive meltdown. Once the crumbling begins, I will become a CNBC junkie. I love the tears, and watching the people squirm as they lose everything.
“The housing bubble will end in tears for for those holding rapidly depreciating houses.”
get out while the greed is still in the air and you will be scooping up houses cheap in the next bust.
Now you’re catching on.
Yes both of these asset bubbles will end in tears eventually. there is money to be made playing the game though. I dont trust wall street!!!
…. and far more money is lost.
“There once was a realtor from Peru……..”
The realtor moved to Peru
having run out of FB’s to screw
He’d lost so much money
It’s not even funny
‘Twas time to infest some place new.
BRAVO!
Impressive.
another good one!
+1 Awesome!!
Real Estate Agents use bogus copyright claims to try and shut down independent real estate listing/agent-rating website:
Link
Good find.
Housing growth at standstill in Ohio
Ohio ranked 44th in the nation in housing growth, with nearly three-quarters of its counties, including Summit and Stark, losing homes between July 2011 and July 2012, according to a census analysis.
The state’s housing stock — houses, apartments and mobile homes — grew only 0.01 percent, or by a meager 645 homes, over that time period, the U.S. Census Bureau reported.
Only West Virginia, Massachusetts, Pennsylvania, Connecticut, Illinois, Rhode Island and Michigan fared worse.
Summit and Stark Counties are toast. So is Cuyahoga (Cleveland). This piece on Stark County seat Canton’s housing market and economy, from 7 years ago, titled “The City The Boom Passed By” is a nice summary of the region’s structural economic decline:
http://www.nytimes.com/2006/06/25/realestate/25nati.html?pagewanted=all&_r=0
As a former Clevelander I mostly agree. Like Detroit they should focus on (and accept) the positive side of being a smaller city. Tear down vacant housing, promote green space, etc.
Pittsburgh seems to have seen it coming and reformed itself ahead of the curve. If I was to move back east, I’d probably do “Oil City” somewhere near Pittsburgh or, if Cleveland, it would be Lakewood, Rocky River, Avon areas…
where did you live in the mistake by the lake? my last place was in lakewood gold coast. before that i have lived in cleveland heights and shaker heights.
Born and raised in east side suburbia somewhere east of Cleveland Heights, west of Ashtabula.
After college and before I left I was living at the intersection of Lakewood/Rocky River/Fairview Pk.
Cleveland Heights is another that I *might* consider given the old mansions for not a lot of dough. I’ve heard Shaker has gone downhill fast.
Born and raised in east side suburbia somewhere east of Cleveland Heights, west of Ashtabula.
Cool. My wife is from Conneaut.
Nice. I wish I’d explored that area more as a younger chap.
Speaking of that general area, probably not a popular choice but I found something intriguing about Erie, PA and that was only on a recent trip where I specifically decided to turn North on a whim, as I’d never been there. Seemed Tacoma-like, but on fresh water.
do “Oil City” somewhere near Pittsburgh
Depending on your idea of “near,” you could do “Oil City” in the actual Oil City.
After I posted that, I did go to maps to gauge the distance. I’d want to be 20-40 miles away. The OC is about 90 miles away.
Pittsburgh had a lot of things going for it when the steel industry collapsed. Like a very good higher ed and health care infrastructure. Can’t say that about Detroit.
IIRC, Pittsburgh struggled for years.
But unlike Detroit, it seems they have survived, but I really haven’t heard anything in years.
They may have had plans in place, but ISTR things being a little sketchy when I visited during the early-90s recession.
Keynes, Krugman and Bernanke seem to think there is no side effect to increased homeownership. Both Keynes and Krugman seem to think burying bottles full of currency and having the citizenry dig them up has the same effect as buying houses.
However - buying a house has a side effect that finding a buried bottle of currency does not - a house triggers a decades-long deleveraging event / payback hangover. Likely resulting in a trickle-up / Reverse Robin Hood effect.
I saw a bit of Bernanke’s testimony to the house yesterday and he says two interesting things:
1) Low interest rates make houses more affordable.
2) Housing is central to the economic recovery.
Does he actually not realize low interest rates drive up house prices, ultimately having no impact on the affordability of a house? Or is it just a de rigueur affirmation of a DC creed?
And with housing… it’s amazing they think it’s the same as burying bottles of currency in that buying a house has no side effects either.
“1) Low interest rates make houses more affordable.”
What effect do low interest rates have on the home price to income ratio?
I wonder if anyone ever asks economists, “Does this pass the smell test?” Meaning, does this make sense in reality, outside of the equations.
Simply stated, “the equations” for asset prices say that, other things equal, higher long-term interest rates translate into lower asset prices.
Can someone please explain why the stock market is up again?
Nature….they always go up…
wall street trying to ramp up the market to suck more sheep in?
Up and to the right. Are you with us? Or against us?
We are told the market is a forecasting indicator of business and economic conditions in the future. Remember the market crash right after Obama was re-elected? See where we are now? Perfect 20/20 hindsight! Buy the dips.
Market Selloff After Obama’s Re-election No Accident, Recession Coming
Charles Biderman - 11/14/2012
Ever since Obama won eight days ago, stock prices are down about 4% as this is being recorded. So stocks peaked September 14—two months before the election. To me, that is a major reason why Obama won the election. Romney lost not because the real economy is doing anything good, but because lots of people who voted for Obama incorrectly assumed that the high stock prices were a strong indicator that the economy was on the road to recovery.
They also ignored, or in many cases, didn’t understand, that higher stock prices were actually the result of Fed manipulation. They also believed the highly suspect data from the BLS and other government agencies that the economy was improving.
But now the election is over and stocks are dropping as reality is setting in.
Everything I read and hear says to me and many other investors that the Obama administration is totally committed to raising income tax rates and maintaining virtually all current government spending.
http://www.forbes.com/sites/investor/2012/11/14/market-selloff-after-obamas-re-election-no-accident-recession-coming/
*Charles Biderman is president and CEO of TrimTabs Investment Research.
Despite the fact the market continues to make new all time highs 8 months later this guy is still calling for a crash.
“I would expect U.S. stock prices to trade down about one third to 10 times earnings, or back to around 10,000 on the DJIA and1100 on the S&P 500.” - Charles Biderman 7/11/2013
http://seekingalpha.com/article/1543652-stocks-near-all-time-highs-yet-u-s-economy-nowhere-near-sustainable-growth
QE3 extension rally: The market supposedly misinterpreted the Fed’s discussion this spring about a near-term end to QE3, which would have taken away a huge prop from stocks, bonds, housing and other interest-sensitive assets. Now that clarification has been offered to explain how the Fed is not on a timetable and will keep QE3 going as long as necessary to ensure recovery, the market is pricing in a longer time horizon until punchbowl removal Armageddon.
Also, can someone please explain why the China PR machine is being cranked back up to a full squeal? NPR is fawning over the growth China has “made” during the last 30 years. No one on NPR dares to ask what changed in China to cause this growth. Nothing changed in China. The only change occured when the US stopped charging tariffs against imported manufactured goods from every slave-providing nation on the planet.
So the marketing guy is talking to a coworker, and I hear him explaining the problem with manufacturing in China (we sell capital equipment for medical-device manufacturers). The Chinese government may have approved a particular medical device for sale, but the manufacturing facility has to be approved by the government before it can operate.
He didn’t seem to understand that all corporations in China are state-owned though. The truth is that the government has to start operations on its new manufacturing plant, after the government approves the sale of the medical device. That’s why Chinese manufacturing plants always sit idle for 6-12 months before they start making anything, but after the facility has been built and equipped.
He was also saying that he “didn’t realize” how much growth potential was going to be in China, as compared to Europe or the United States. He was worried that innovation would not be highly valued anymore, since Chinese state-owned manufacturing companies do not realize much value in automated manufacturing over slave-made manufacturing. OK, he didn’t use the word slave, but still.
Why do the American people allow this to continue? We are giving them our jobs, devaluing our own economy, and contributing to the new dark age.
The typical US American has bought into the “free trade/free market” propaganda, because it is easier to understand than the thousands of ways markets/taxes/incentives can be manipulated.
There is no “Universal Truth”. The truth is manipulated by people with agendas and/or a profit motive. It is easy for people to ignore unpleasant facts/truths, because “facts” can be generated to support any ideology/pathology.
The American people have no say whatsoever in this. Democracy has been dead here for a long time. We now have a plutocracy and a circus.
You have problem with Corporate Communist Capitalism©®™, comrade?
There’s a sucker
bornwriting every minute….LOLhttp://finance.yahoo.com/blogs/the-exchange/why-m-draining-savings-stimulate-economy-132919961.html
From the article:
“As anybody who has ever taken out a mortgage knows, the whole process feels like a huge vacuum latches onto your bank account and starts sucking.”
That sounds about right.
Off-Topic Poetry Slam?
“Wheels”
I am a cog, broken and bare.
Attached to the dilapidated wheel,
I fall.
I lie alone, unwheeled.
My substrate rolls forward, stalls.
The machine. Alone, uncogged.
apparently alot of people are pissed off about the rolling stone cover…when i ask…”well…have you actually read the article”…blank stare.
the idea of a mass murderer on the cover of an “entertainment” magazine (that usually features some popular person on he cover) is so repugnant, why even pick it up? It’s not like it’s Time or Newsweek. but then much of print media is getting pretty desperate these days.
I can remember reading about women fawning over Charles Manson after he was arrested and charged. Same story. Different verse.
Or Son of Sam. Or Ted Bundy.
Women say they want to be with guys that are “self-confident”.
And who has more self-confidence that mass murderers/criminals who try/think they can get away with it?
Sorta like the “Crazy Chick = Hot Sex” formula for guys.
There will always be crazy people who become obsessed with anyone famous.
Women say they want to be with guys that are “self-confident”.
Self-confident and self worth are nice atrributes to have but today’s women confuse self-confidence with being loud mouth, exibiting rude behavior and showing sociopath tendencies.
Women want to be with the “rogue” sort of like Dirk Diggler.
All you need is a good banana.
They’re called “death row groupies.”
Lyle and Eric Menendez have groupies. Joran van der Sloot, guilty of murdering two women, actually impregnated a woman while incarcerated.
It’s nothing new. There simply is a type of person attracted to violent criminals, especially murderers.
Years ago, I recall watching a PBS Frontline episode on Helen Prejean and her favorite murderer, Robert Lee Willie, guilty of a particularly gruesome rape and murder of a couple of teenagers. Those two - Willie and Prejean - became the stars of the movie, “Dead Man Walking.” Listening to the language used by the “spiritual advisors” about the death row murderers made it sound like they were in love with them.
Then there was the Benetton ad campaign from I guess the late 90s which featured death row murderers portrayed in sympathetic lights. Not a peep of course about the victims.
This is just an associated depravity seen to accompany murder. Like I say, nothing new.
yes, there are plenty of weird people who are attracted to evil, but I really didn’t consider them part of Rolling Stone’s target market.
I don’t believe the intent of Rolling Stone was to glorify Tsarvaev. The article pointed out that he wasn’t this sulking loner type that people were kind of waiting to snap. The exact opposite. He was likable and seemed to have everything going for him. I think that’s why Rolling Stone chose that photo. I believe they wanted him to look the way others saw him before Marathon day. They just had no idea people were going to still be suffering beyond the point of being able to handle their point.
One more thing I realized looking at this whole RS debacle. On 9/11 the press wouldn’t show jumpers, or gore. We knew people were killed in that rubble but we really saw no photographic proof of it. The Boston Marathon was very very different. Blood, dismemberment, bones sticking out of stump imagery everywhere. I think this is why Tsarvaev’s visage appears even more hated when bin Laden was on mag covers. But that’s the press’s creation more than Ibelieve it is a mirror of his evil.
Tsarnaev, that is.
Typo seemed to autocorrect.
Come on, come out of the closet. You think he’s a hunk.
I feel alienated by economic discussions among my peers. They are so obsessed with buying houses and stocks. I feel like discussing the other financial options that are available, which would likely outperform stocks and houses at this time.
Markets can be shorted. Money can be kept aside in wait for crashes, and invested at lower prices. You have corporate debt, government debt, precious metals, currency trades, and collectibles. Plenty of options besides just “buy the 401K and buy a house”.
However, I learned years ago never to engage in money-talk. These are people who learned their economic mantra from their parents. It is not socially permissible to question the time-honored economic values of yore. It is tantamount to punching a teddy bear. I feel like a martian.
That’s okay…..you’ve come to the right place.
Nobody wants to recognize or acknowledge that “things have changed” when it comes to home owning.
Most people have bet all of their chips on “housing/stocks always goes up/housing and stocks are an investment”, and don’t want to even think about the downside risk if they are wrong.
Wishing things were they way they wanted them to be, instead of dealing with the reality of the way things are.
So where are you going to live while you divest yourself of your house into a more profitable investment?
Unless you mean second homes, which IMO is a stupid investment.
My second homes are paying my rent, Oxide. This means I can choose where I live after my job goes poof.
“However, I learned years ago never to engage in money-talk.”
There is great fun to be had when announcing you are going to short the stock market as their 401k crashes into oblivion, and buy their house for pennies on the dollar when they lose it to the bank.
Sister is selling her “investment” house in the DFW Metroplex Area.
Has two offers, one at “asking” price, another for $10K over “asking” price, but she pays the closing costs.
Which tells me that they don’t have enough cash to pay the approx $8K in closing costs.
Yeah, the country learned the lesson about “no skin in the game” buyers in 2007-2008. Not.
I’d take the asking price buyer and be done with it. The other crew sounds like trouble.
Yeah, I would too, but she’s smarter than me (just ask her).
She has a terminal case of “Fortune 500 Company VP Administrative Assistant, who thinks the brains and authority of her boss rubs off on her”-itis.
This is the same one who swore on a stack of Bibles that her nothing special about it, 50 miles from downtown LA, 3/2/2 house was going to be worth a million bucks this year.
You gotta belieeeeveee….
Cleaning out blight begins in southern Summit County Ohio communities
SPRINGFIELD TWP.: People living in the Sawyerwood neighborhood of Springfield, some whose family ties to the historic area go back generations, watched as demolition unfolded Wednesday on five homes township officials deemed nuisance properties.
Some said they hoped that tearing down the homes, clustered on tiny parcels of land, would stop the illegal activities they say vagrants, teens and methamphetamine makers perpetrate each night in the abandoned structures.
“It’s a long time coming,” said Jerry Miller, 37, a lifelong Sawyerwood resident who lives near three of the Mohawk Trail properties demolished Wednesday. He watched a crew from Butcher & Son Excavating knock down a home next door to a property his deceased uncle formerly owned. His uncle’s home was next on the demolition schedule.
“I’m amazed they had anything to throw away,” Miller said as the crew cleaned up after the first house was pulled down.
Thieves already had cleared out all plumbing fixtures, siding and anything else of value. Nothing was safe from the nightly foragers and scrappers, he said.
Sawyerwood, a neighborhood of trails within walking distance of Springfield Lake, was developed as a resort area during the rapid growth of the rubber industry in Akron in the early 1900s. Many of the summer cottages built by Akron’s well-to-do became year-round residences for later generations.
Today, many of the homes are in disrepair and on the demolition list. Banks own many of the properties, said township Zoning Administrator Patricia Ryan. She cited one case in which a bank came in and proposed working with the zoning department to bring the property up to code.
“We had one that was going to cost an estimated $51,000 to repair. After it was finished, it would have only been valued at $48,000,” Ryan said.
The bank abandoned its plans for the home, she said.
Some of the foreclosed bank-owned properties are still up for sale. Some are listed on an auction website by the Federal National Mortgage Association (Fannie Mae), she said.
“There are demo orders on some of these homes, and Fannie Mae has them on auction. People are buying them site unseen without doing due diligence,” Ryan said.
Communities in southern Summit County, hard hit with a rash of vacant, blighted homes, are getting rid of them in part with Moving Ohio Forward grant money. In most cases, the communities provide partial matching funds to be eligible for the grants.
Seed money for the program came from a $25 billion state-federal settlement agreement with the nation’s five largest mortgage providers over foreclosure abuses, fraud and unacceptable mortgage practices nationwide.
Ohio’s estimated share of the settlement is $330 million to be distributed across its 88 counties. Summit County is responsible for divvying up $3.8 million from the Moving Ohio Forward demolition program to help its communities deal with abandoned, vacated and blighted properties.
Springfield, which demolished two homes deemed uninhabitable last month, has identified as many as 30 properties it hopes to dismantle — and needs to tear down more, Ryan said.
The township has more than $380,000 to spend.
By some estimates, there are about 220 homes in the township that are empty or need repairs. Not all of those properties are candidates for demolition, Springfield Trustee Dean Young said.
“You have three categories for these homes. First, they must be a nuisance, blighted or uninhabitable. Then you have the ones that are tax delinquent. The third category is those that are vacant or abandoned. When those three categories intersect, you have a match for tearing them down,” Young said.
Summit County has identified more than 4,600 vacant and abandoned properties in its borders, with Springfield third, behind Akron and Barberton with about 3,000 and 600 blighted homes, respectively.
Local authorities said one of the biggest obstacles in using the funding is obtaining approval from owners to demolish the buildings. In many cases, out-of-state banks own the parcels and do not respond to repeated requests to clean up the property, New Franklin Zoning Inspector Barry Ganoe said. In those cases, the community must declare the properties nuisances before they can level them.
“Banks don’t want to tear a house down because they have equity in it. They want to milk out every dime they can,” Ganoe said.
Toronto has another $1 million neighbourhood!!
http://www.thestar.com/business/real_estate/2013/07/18/homes_in_gta_see_big_price_gain.html
The entire neighborhood is worth a million bucks? So there are 10 houses, each worth $100,000? Makes sense.
Read the comments section on that article. Half the people think that the prices will remain high because of all the new immigrants who come to Toronto. Of course, when the economy tanks the new immigrants will be the first to jump ship.
That’s funny. When the US housing bubble first started to pop, we didn’t worry because we knew the Canadians would save us. Every Canadian wants to buy a house in the US, don’t ya know? Chinese too.
Detroit files for bankruptcy…more forthcoming I’m sure.
Who could have guessed?!
May it be the first domino in a line of much-needed civic restructuring.
Yeah, it would be a helluva good business, except for the damn customers…….
http://tinyurl.com/l4fbfew
Remember, to most companies, a customer is just an inconvenient cost between them and the wallet.
Justice Alito used to be thought to be of relatively modest means.
NOT ANYMORE, SUCKERS. HE’S BALLING NOW.
Short version: he’s worth at least $6MM+.
——————————-
http://www.theatlanticwire.com/politics/2013/07/justice-samuel-alito-might-have-quintupled-his-net-worth-2012/67342/
Yes, that’s quintupled with a “q.” According to the Center for Public Integrity, an investigative journalism nonprofit, Justice Samuel Alito’s net worth jumped from between $380,000 and $1.1 million in 2011 to between $2.3 million and $6.2 million in 2012. The gulf in the estimates is due to the fact that federal officeholders such as justices and members of Congress must report only the range of their assets and liabilities, not the exact figures. Regardless of the exact amount, we know one thing: Justice Alito made a lot of money last year.
According to Public Integrity, the bump comes from “previously unreported PNC Bank accounts valued between $250,001 and $515,000, along with two Edward Jones investment accounts.” Alito’s investment portfolio includes holdings in Oracle Corp., a software firm; OEG Energy Corp.; Boeing; and Caterpillar. He also has some money in Chevron, which might be why he recused himself from a case last year that involved the company. Alito made $27,000 from teaching at Duke University and Penn State. (There are, however, limits to how much money a Supreme Court Justice can make on the side.)
He must have talked to Hillary for investment advice.
is anyone interested in a DC/Baltimore HBB meet up?
Friday, Saturday or Sunday?
Coffee, beer or pizza… makes no difference to me.
(disclosure: I have a house I’m trying to rent)
Well at least China still has a housing bubble.
Location Location Location
Detroit files for bankruptcy and we get no posts from Smithers or 2Ban? I’m disappointed.
(Ever notice they both come and go at the same time?….)
Now that this is behind US, let’s get on with the recovery!
Detroit files for bankruptcy
Compiled by Devon Merling, Deseret News
Published: Thursday, July 18 2013 3:59 p.m. MDT
Updated: 6 hours ago
In this July 17, 2013, aerial photo is the city of Detroit. On Thursday, July 18, 2013, Detroit became the largest city in U.S. history to file for bankruptcy when State-appointed emergency manager Kevyn Orr asked a federal judge for municipal bankruptcy protection.
Paul Sancya, Associated Press
…
Is this akin to another Lehman, or is it safe to say Detroit’s municipal default is contained?
Silver lining: FIRE SALE ON DETROIT HOUSING FOR CANADIAN INVESTORS JUST ACROSS THE BORDER!!!!
“(Ever notice they both come and go at the same time?….)”
Ever notice they both make way to many lame posts?
Five years after the global financial system nearly collapsed into rubble, are there any too-big-to-fail entities left standing?
Not Detroit. In retrospect, they experienced a century-long automobile bubble and bust:
“Detroit expanded at a stunning rate in the first half of the 20th century with the arrival of the automobile industry, and then shrank away in recent decades at a similarly remarkable pace. A city of 1.8 million in 1950, it is now home to 700,000 people, as well as to tens of thousands of abandoned buildings, vacant lots and unlit streets.”
Luckily America is on the path to economic recovery, or else this news would be worrisome.
Billions in Debt, Detroit Tumbles Into Insolvency
Fabrizio Costantini for The New York Times
The abandoned Brewster Wheeler housing projects, right, and the General Motors headquarters in downtown Detroit.
By MONICA DAVEY and MARY WILLIAMS WALSH
Published: July 18, 2013
DETROIT — Detroit, the cradle of America’s automobile industry and once the nation’s fourth-most-populous city, filed for bankruptcy on Thursday, the largest American city ever to take such a course.
The decision, confirmed by officials after it trickled out in late afternoon news reports, also amounts to the largest municipal bankruptcy filing in American history in terms of debt.
“This is a difficult step, but the only viable option to address a problem that has been six decades in the making,” said Gov. Rick Snyder, who authorized the move after a recommendation from the emergency financial manager he had appointed to resolve Detroit’s dire financial situation.
Not everyone agrees how much Detroit owes, but Kevyn D. Orr, the emergency manager, has said the debt is likely to be $18 billion and perhaps as much as $20 billion.
For Detroit, the filing came as a painful reminder of a city’s rise and fall.
“It’s sad, but you could see the writing on the wall,” said Terence Tyson, a city worker who learned of the bankruptcy as he left his job at Detroit’s municipal building on Thursday evening. Like many there, he seemed to react with muted resignation and uncertainty about what lies ahead, but not surprise. “This has been coming for ages.”
Detroit expanded at a stunning rate in the first half of the 20th century with the arrival of the automobile industry, and then shrank away in recent decades at a similarly remarkable pace. A city of 1.8 million in 1950, it is now home to 700,000 people, as well as to tens of thousands of abandoned buildings, vacant lots and unlit streets.
From here, there is no road map for Detroit’s recovery, not least of all because municipal bankruptcies are rare. State officials said ordinary city business would carry on as before, even as city leaders take their case to a judge, first to prove that the city is so financially troubled as to be eligible for bankruptcy, and later to argue that Detroit’s creditors and representatives of city workers and municipal retirees ought to settle for less than they once expected.
Some bankruptcy experts and city leaders bemoaned the likely fallout from the filing, including the stigma. They anticipate further benefit cuts for city workers and retirees, more reductions in services for residents, and a detrimental effect on borrowing.
“For a struggling family I can see bankruptcy, but for a big city like this, can it really work?” said Diane Robinson, an office assistant who has worked for the city for 20 years. “What will happen to city retirees on fixed incomes?”
…
“Not everyone agrees how much Detroit owes, but Kevyn D. Orr, the emergency manager, has said the debt is likely to be $18 billion and perhaps as much as $20 billion.”
‘Tis a mere flesh wound. By comparison, figures out on the internet suggest the 2008 Lehman Brothers bankruptcy triggered on the order of $200+ billion in losses.
Now that too-big-to-fail Megabanks have been nursed back to financial health and gargantuan size on the back of taxpayer-financed bailouts and Fed-funded stimulus measures, it’s time to resume the discussion on ending too-big-to-fail.
Steve Schaefer, Forbes Staff
7/17/2013 @ 9:09AM |4,951 views
Treasury Secretary Talks Too Big To Fail, Fannie And Freddie
(Photo by: Heidi Gutman/CNBC)
U.S. Treasury Secretary Jacob Lew said the Dodd-Frank financial reform legislation is well on its way to ending the problem of “too big to fail” financial institutions, as long as the elements of the program are successfully implemented.
Speaking at Wednesday’s CNBC/Institutional Investor Delivering Alpha conference, Lew told an audience of investors, executives and press that the Dodd-Frank laws “ended the notion that any bank is too big to fail.”
Now, Lew said, “if a firm fails, taxpayers will not have to bear the cost,” and he touted achievements like dedicating certain non-bank firms, GE Capital and American International Group (AIG +0.34%), as systemically important institutions
There is more work to do, the secretary acknowledged, highlighting the Volcker rule as part of a to-do list before the year is out. “Let there be no doubt, finishing the job of financial reform is critically important to me and this administration,” he said.
Lew deflected a question over Senator Elizabeth Warren‘s (D-Mass.) recent push for a new Glass-Steagall act that would force the breakup of America’s biggest banks to split traditional roles from riskier activities. “If we can’t say we’ve ended too big to fail by end of this year we’re going to have to look at other options,” he said.
The secretary was also sure to note the progress that has been made in the economy, housing market and the financial system. On the latter point, banks are in the midst of second-quarter earnings season and the likes of JPMorgan Chase (JPM +1.99%), Goldman Sachs Group (GS +1.59%), Citigroup (C +1.74%) and Bank of America (BAC +3.14%_ have all reported numbers sharply above year-ago levels.
Fannie Mae and Freddie Mac also turned up during Lew’s appearance at New York’s Pierre Hotel Wednesday. Lew said the conversations around reforming or eliminating the government-sponsored mortgage firms are important, but that the most important outcome is “never again end[ing] up with a failure where taxpayers are left holding the bag with an unbounded amount of risk.”
…
Ted Kaufman, Contributor
7/18/2013 @ 9:00AM
The ‘Too Big To Fail’ Problem
An Unhappy Birthday For Dodd-Frank As Momentum Builds For The Next Meltdown
There were lots of heated debates before passage of Dodd-Frank, but no disagreement from anyone in the administration or Congress about one thing. The bill had to end the possibility that American taxpayers would ever again have to bail out a big bank because its failure would have a severe impact on the entire economy.
Some of us argued at the time that Dodd-Frank’s solution to the TBTF problem would never work in the real world. Others thought it would. But three years later, there is a growing consensus across ideological lines that TBTF is still very much with us.
Sandy Weill, the creator of the Citibank behemoth, now argues that banks are too big. Two other former Citibank chairmen, John Reed and Richard Parsons, agree that TBTF is a problem. So do columnists from George Will and Peggy Noonan to Gretchen Morgenson and Joe Klein. Fed Chair Ben Bernacke (SIC) recently said, “TBTF is not solved and gone.” Fed Governors Tarullo, Fisher, Stein, Plosser, and Bullard have similarly said there are still banks that are too big. Cam Fine, CEO of the Independent Community Bankers of America, a trade association with 7,000 members, says, “Too-big-to-fail firms should be downsized and split up.”
Jeb Hensarling, the Republican Chair of the House Financial Services Committee, has pledged to “end the phenomenon of ‘too big to fail’ and reinstate market discipline.”
If the consensus building for solving TBTF is growing, so is the flood of money the megabanks are spending to lobby against any reform. Ironically, they can well afford to spend whatever it takes because they are bigger and currently more profitable than ever. The numbers do not lie. Our biggest banks are bigger now than they were in 2008, when the Troubled Asset Relief Program dedicated billions of taxpayer dollars to make sure they didn’t fail. In part, that has happened because the government forced the merging of Merrill Lynch, Washington Mutual, Bear Stearns, Countrywide, and Wachovia into the largest banks, making them even larger.
A recent analysis by Thomas Hoenig, vice chairman of the Federal Deposit Insurance Corporation, used international accounting standards (rather than the accounting methods used by the banks themselves) for derivatives and consolidated mortgage securitizations. The results are eye opening. JPMorgan Chase (JPM +1.99%), Citibank and Bank of America (BAC +3.14%) have become the three largest banks in the world. Together with Wells Fargo (WFC +2.07%), which has become the world’s sixth largest, assets of the four largest U.S. banks amount to an astonishing 97 percent of our 2012 gross domestic product.
Is that too big? For many of us, it is. But if you argue size is not the problem, the question you must then ask is, what would happen if any or all of them were in extreme financial trouble?
…
Just keep using the banks, stupid Americans. Look in the mirror.
Who moved my green shoots?
July 17, 2013, 10:04 a.m. EDT
Home-construction starts lowest in almost a year
By Ruth Mantell, MarketWatch
Construction started on U.S. homes fell in June to the lowest rate in almost a year, while home-construction permits posted a sharp contraction, according to government data released Wednesday.
WASHINGTON (MarketWatch) — Construction started on U.S. homes fell in June to the lowest rate in almost a year, with a big slide in apartment building, according to government data released Wednesday.
Housing starts fell 9.9% in June to a seasonally adjusted annual rate of 836,000, the lowest level since August 2012. Starts for buildings with at least five units, a volatile category, fell 26.7%. Meanwhile, starts for single-family homes declined 0.8%.
Economists polled by MarketWatch had forecast total housing starts in June to hit an annual rate of 950,000, compared with an originally estimated May starts rate of 914,000.
…
And now that the various crisis of August are done, time to begin the apartment search again.
I find it interesting that almost every apartment complex between 5 and 50 miles miles of downtown are all priced within 5% of each other.
Everyone is raising rental rates….the only incentives seem to be of the “Get the 13th month free” variety.
Is their pricing based on “competition” between apartments, or is the competition (overpriced) residential properties that are for sale?
Damn whiny Filipinos……..they should have just gotten in their cars and driven to Manila, instead of trying to ride the storm out……
For what it’s worth, I think mittens should go to Tacaloban, and give his “47%ers/parasites/creating culture of dependency/takers from the productive/pull-yourself-up-by-your-bootstraps-your-own-damn-self” speech.
US Americans = 10 million dollars (initially) plus 8-10 ships to supply water, and a base of operations for rescue helicopters, pretty much with no-strings attached.
Chicoms = $100K (and their citizens are bitching about that)…….because the Phillippie government hasn’t rolled over and kissed China’s ass, Re :Spratleys/South China Sea oil exploration.