Bubbles Aren’t Punctured By External Factors
It’s Friday desk clearing time for this blogger. “The U.S. Treasury Department needs to do more to learn why more than a quarter of the borrowers in a federal mortgage workout program have re-defaulted, costing taxpayers at least $815 million, according to an audit. The report underscores a disagreement between the auditor and Treasury over the performance of HAMP, which has used TARP funds to pay lenders incentives to modify loans for nearly 1.2 million delinquent borrowers since February of 2009. More than 300,000 of those homeowners had re-defaulted by the end of April this year. SIGTARP also said it found an ‘alarming’ number of HAMP re-defaults in an April audit.”
“The audit found that struggling borrowers who entered the program in 2009 and 2010, who make up more than half of all HAMP participants, had re-default rates of 46 percent and 38 percent, respectively. ‘It is important to keep in mind that HAMP targets borrowers in demonstratively difficult financial situations,’ Treasury Assistant Secretary Timothy Massad wrote. ‘While the program is designed to reduce the default probability of these loans as much as possible, these loans present a higher-than-usual risk of default to begin with.’”
“A group of around 50 people gathered outside the San Francisco home of Wells Fargo CEO John Stumpf Saturday calling for changes in the way the bank handles foreclosures. Wells Fargo spokesman Ruben Pulido said that, on average, customers who had completed a foreclosure over the past six months were 25 months past due on their payments. Manuela Alvarez said she is to stay in her home following foreclosure proceedings, and would be back in court on Monday to fight an eviction order. ‘I’ve been holding out for almost four years, but its getting harder and harder,’ Alvarez said.”
“A woman who’s losing her home to foreclosure, picketed outside the office of her Boca Raton lawyer on Monday. Gail Zamore held signs at the office of C. William Berger. Zamore says she paid Berger thousands, but only found out about the foreclosure auction sale of her Tequesta home two days after it happened. ‘I did not get the help of $25,000 that I gave this lawyer,’ said Zamore. ‘I received nothing– except my home is gone.’”
“Berger called us later, and defended his work on Zamore’s case. He said he’s kept her in her home for more than 3 years.”
“Retired postal clerk Jaymie Kelly of Minneapolis, Minnesota, is holding onto her home by a thread, despite having paid five times its value in ballooning monthly payments. ‘We bought this house for $74,900 in 1983, and I’ve paid $425,000 for it so far,’ Kelly said. ‘I wouldn’t have gone into foreclosure if these house payments weren’t so high. I’m in one of the poorest neighborhoods in Minneapolis. It started with a predatory lender after my husband died. I had insurance money and thought I was paying off my house, but instead I was signing off on a loan at 5.5 percent interest. It went up 13.5 percent, and it had a prepayment penalty. I had to buy my way out of the deal. I was so ignorant. This was someone who I met in church who basically took advantage of the situation. I was trying to get out of that and refinanced several times.’”
“Since the bankruptcy was announced on July 18, talk of snapping up Detroit housing for a pittance has picked up on Sina Weibo, reports Sina Finance. Caroline Chen, a real estate broker in Troy, Michigan, says she’s received ‘tons of calls’ from people in mainland China. ‘I have people calling and saying, ‘I’m serious—I wanna buy 100, 200 properties,’ she tells Quartz, noting that one of her colleagues recently sold 30 properties to a Chinese buyer. ‘They say ‘We don’t need to see them. Just pick the good ones.’”
“Chen says that Chinese investors sometimes pick up and fly to Detroit without notice and call her to say, ‘Hey, I’m at the airport.’ Because Chen is unwilling to risk her safety for a $3 commission on a home sale, she recommends that they hire a taxi to drive them through downtown Detroit. So far, most haven’t called her back. ‘Once they see the scary area, they give up,’ she says.”
“The housing market in Halifax and Dartmouth has taken a dip over last year, and realtors say many houses are staying on the market longer before selling. Some homeowners told CBC News they have been waiting as long as 14 months, without so much as an offer. Realtors can’t say exactly why buyers aren’t biting, but some like Margot Aldrich say, sellers need to be realistic about their expectations. ‘In the last two years, you could get really cheeky with your asking price. You can’t do that anymore, you have to list very realistically,’ she said.”
“An easing in mining activity, political uncertainty and the state of the local housing sector may have all combined to kill off a well-known Canberra business. Unless a ‘white knight’ investor emerges, Fisher Discount Workshop Machinery in Fyshwick will close at the end of the month. ‘Everywhere you go - interstate as well - builders are not building houses,’ said Rob Chambers, who bought the business in April. ‘Builders I know in Canberra have got houses they built 12 months ago that still haven’t sold. They’re hardly in a position to go out building more. We need to sell nails by the pallet load in Canberra, now you’d never sell a pallet of nails.’”
“PT Sinar Mas Land corporate strategic director Ishak Chandra said prices of residential units at their projects had risen by between 40 and 70 percent since the start of the year. Sinar Mas Land subsidiary oversees the Bumi Serpong Damai City township in Serpong, Banten, which borders Jakarta. ‘At the start of last year, the price was roughly Rp 4 million (US$397) per square meter, but prices are around Rp 8 million per square meter this year,’ Ishak said in a recent interview.”
“He said that the rising prices did not amount to a bubble forming because property investors here were not desperate to score sales. ‘A bubble partly happens when investors are forced to sell or rent their units at low prices. As a result, they default on their mortgage payments, triggering an increase in non-performing loans at banks,’ he said.”
“More than 400 people who had booked or bought flats in Teen Kanya - a much hyped Bengal Shelter housing project in New Town - are in shock after SBI announced that it was taking possession to recover dues in excess of Rs 176 crore. Rajesh Ghosh has already paid Rs 45 lakh for his flat. ‘Only the last tranche is left. We were supposed to get the flat in mid-2010 but three years on, there has been little progress. If work starts now, it will still take 16-18 months to complete. But Bengal Shelter officials cannot say if they can find the money to complete the project,’ said Ghosh.”
“The Town Hall is calling for new powers to stop overseas investors buying up flats in Islington and leaving them empty – driving up property prices and depriving residents of accommodation. Housing chief Councillor James Murray made the call after research revealed that two-thirds of the 127 flats in the curved Bezier luxury development in City Road, built in 2010, are empty. Many have been bought by investors in Hong Kong, Singapore and Malaysia, he added.”
“Labour councillor Claudia Webbe added that the Bezier, in her Bunhill ward, was not a one-off. ‘There are a lot of developments in Central Street which they call the Clerkenwell Quarter,’ she said. ‘This includes the Orchards development, which they sold in one evening and the cheapest one-bedroom flat started at £550,000. We are insisting that all new developments have 50 per cent affordable flats. But there is a row over the definition of affordable. One so-called affordable flat in my ward was valued at £700,000.’”
“Professor Robert Shiller made his prognosis for Norway after taking stock of a 35-percent price rise across the country’s residential housing market in the last five years. ‘This really does look like a bubble,’ he told business newspaper Dagens Næringsliv. The professor, who is in Oslo, said it was difficult to be sure whether a collapse was imminent. ‘But it does look like it’s pretty close to the end,’ he said.”
“The professor added that bubbles weren’t usually punctured by external factors. It wasn’t the financial crisis that caused the US housing market to crash, he said. In fact, it was the other way around. ‘It was the drop in real estate prices from 2006 that eventually triggered the financial crisis,’ said Shiller.”
“If Norway wants to dampen its bubble tendencies, he said, the country should seek political solutions that might include freeing up new areas for property construction. ‘For centuries, towns have been spreading out ever further. I can’t imagine that would be a problem in Norway. If there’s one thing you have enough of, it’s land,’ said Shiller.”
1. Did you ever take out home equity money?
2. How much?
3. Where did this money go?
4. If what you say is true - then why have not spoken to the police and filed fraud charges?
—————–
“Retired postal clerk Jaymie Kelly of Minneapolis, Minnesota, is holding onto her home by a thread, despite having paid five times its value in ballooning monthly payments. ‘We bought this house for $74,900 in 1983, and I’ve paid $425,000 for it so far,’ Kelly said. ‘I wouldn’t have gone into foreclosure if these house payments weren’t so high. I’m in one of the poorest neighborhoods in Minneapolis. It started with a predatory lender after my husband died. I had insurance money and thought I was paying off my house, but instead I was signing off on a loan at 5.5 percent interest. It went up 13.5 percent, and it had a prepayment penalty. I had to buy my way out of the deal. I was so ignorant. This was someone who I met in church who basically took advantage of the situation. I was trying to get out of that and refinanced several times.’”
“I was so ignorant.”
There it is, her entire situation is based on these four words.
After a century of so the birthrate os suckers remains at one a minute.
The Information Age. Information has never been easier to get than it is today, but nevertheless there she is saying “I was so ignorant.”
The reality for some folks is they live in The Misinformation Age.
“thought I was paying off my house, but instead I was signing off on a loan at 5.5 percent interest.”
Did that happen on Wacky Wednesday?
Later that afternoon:
She thought she was driving to work, but instead she was riding a unicycle home.
She thought she was putting on pants, but instead she put on a hat made out of a skunk.
She thought she was strolling casually, but instead she was crabwalking.
In 1987, I knew I was getting a loan at 10%+ and I was smiling! -
1. To a government bureaucrat - a government program with a 46% default rate is a success and deserves even more money.
2. To a democrat - a government program with a 46% default rate is a success and deserves even more money.
3. Isn’t this really a program to suck every last dollar out of FB and get it to the bank.
4. Would not have these homeowners defaulted long ago without this program? Who really benefited?
5. So this is really a bank bailout
6. Shouldn’t homeowners with “higher-than-usual risk” pay MORE to borrow money?
7. Why is the US Government involved with guaranteeing over 90% of all mortgages?
8. Has not all this done is make housing more and more expensive?
9. Which hurts everyone - but mostly the poor the lower/middle class?
10. Why doesn’t the government want young adults to afford a house?
—————————–
“The U.S. Treasury Department needs to do more to learn why more than a quarter of the borrowers in a federal mortgage workout program have re-defaulted, costing taxpayers at least $815 million, according to an audit. The report underscores a disagreement between the auditor and Treasury over the performance of HAMP, which has used TARP funds to pay lenders incentives to modify loans for nearly 1.2 million delinquent borrowers since February of 2009. More than 300,000 of those homeowners had re-defaulted by the end of April this year. SIGTARP also said it found an ‘alarming’ number of HAMP re-defaults in an April audit.”
“The audit found that struggling borrowers who entered the program in 2009 and 2010, who make up more than half of all HAMP participants, had re-default rates of 46 percent and 38 percent, respectively. ‘It is important to keep in mind that HAMP targets borrowers in demonstratively difficult financial situations,’ Treasury Assistant Secretary Timothy Massad wrote. ‘While the program is designed to reduce the default probability of these loans as much as possible, these loans present a higher-than-usual risk of default to begin with.’”
When you lay off the political partisanship, you make decent points. I agree with ## 3-10.
“The U.S. Treasury Department needs to do more to learn why more than a quarter of the borrowers in a federal workout program have re-defaulted …”
A mystery that will forever remain unsolved.
But wait, maybe not. Maybe emersed in the story lies a clue …
“It is important to keep in mind that HAMP targets borrowers in demonstratively difficult financial situations …”
Oh, maybe this is the reason: Seek out people in “demonstratively difficult financial situations” and then loan them lots of money. Something payday loan stores are known to do.
There are a couple of comments to the San Francisco Appeal article above:
‘You’ve been holding out for 4 years?!?! And how much have you paid towards your loan in those 4 years? The average customer getting foreclosed on is 25 months behind. If you were renting, your landlord would start the process 5 days after the payment was due! Why should you get to stay in your home if you aren’t paying for it?’
‘”principal reduction?” Why? The bank is just the lender. The borrower requested & accepted the loan based on the home’s value at the time; they invested in a home. Why should the lender, & not the borrower, be at risk for market value fluctuations? How about if I borrow $ to buy stock, and the stock’s price falls …. should the lender protect me against loss? No.’
‘So borrowers want Wells Fargo to grant principal reductions in their home loans because value fell? How about if I borrow $ to buy stock, and the stock’s price falls …. should the lender protect me against loss? No. What if home values went up? Should WFC similarly get a principal increase? That is predatory borrowing!’
When you exchange dollars for ____, the quantity of the dollars exchanged is static for eternity, the item you exchanged the dollars for is not.
People are stupid.
The quantity of the dollars may be static, but their value is not. That’s the Fed’s expressed policy, too; a “desired” inflation rate of 2%, which over time goes parabolic.
The free sh*t army disagrees
And the free sh*t army votes
The little person’s version of privatizing profits and institutionalizing losses. None of those people would have volunteered home equity gains if things were going swimmingly.
“Seek out people in “demonstratively difficult financial situations” and then loan them lots of money.”
Hmmm, not a bad strategy for the banks. The borrowers who still have hope will continue to pay longer but the “owners” of the worst properties on the books are likely to walk. Therefore, pump taxpayer money into the worst ones to keep them from defaulting while you manipulate supply and demand.
“Because Chen is unwilling to risk her safety for a $3 commission on a home sale, she recommends that they hire a taxi to drive them through downtown Detroit.”
So if it was safe, she would dedicate herself tirelessly to helping them? I think not.
“Because Chen is unwilling to spend $10 in gas for a $3 commission on a home sale, she recommends that they hire a taxi to drive them through downtown Detroit.”
There, that’s better.
Ol’ Crusty Perkins…… how are things at the sales shack?? Slow I wager.
We’ve had a lot of rain lately, and a bridge washed out down the road, thought you might want the tip for new business. From what I hear, all the replacement estimates so far have been more than $50/sq ft, so you might get the job.
Bonus: While you’re down here, you can look for your future retirement neighborhood and sweet southern belle Realtor wife.
Thats what you get for living in hillbilly country. Good luck Krusty The Realtard.
You kids play nice or we are NOT going to Dairy Queen! Don’t make me pull this car over…
‘The U.S. Treasury Department needs to do more to learn why more than a quarter of the borrowers in a federal mortgage workout program have re-defaulted, costing taxpayers at least $815 million, according to an audit.’
OK, so a guy who was on the inside wrote a book. You would think the media might interview this man.
‘The important moment in the book for me comes conveniently after Barofsky recounts this FDL News item, one of my HAMP horror stories. Barofsky shows how HAMP’s faulty design led to all sorts of problems like this, with trapped borrowers, extended trial payments, no-doc modifications, and eventually unnecessary foreclosures. Barofsky mused that Treasury didn’t care about the suffering of borrowers under HAMP, and the issue came up in a meeting with the Treasury Secretary, which was also attended by Elizabeth Warren, then the head of the Congressional Oversight Panel, another TARP watchdog.’
‘Warren asked Geithner repeatedly about HAMP. After several evasions, Geithner said about the banks, “We estimate that they can handle ten million foreclosures, over time… this program will help foam the runway for them.”
‘As Barofsky says, HAMP was not separate from the bailouts, it was part of them. It squeezed a few extra payments out of borrowers and then allowed banks to do with them whatever they wanted. It stretched out the foreclosure crisis, by design. In fact, by the end of this, HAMP may not help even the borrowers secure in permanent modifications. Not only are the modifications of inferior quality, and not only have they led to high re-default rates already, but most of the permanent modifications are not permanent at all. Barofsky notes in the book that they have five-year time limits, with interest rates rising and payments returning to their original size at that time. So in 2014 and 2015, we’re going to see hundreds of thousands of recasts, like on an adjustable-rate mortgage. Maybe the borrowers will have righted their financial ships by then, or saved up enough to move on. But the more logical scenario is for more defaults at that time. But by then, the banks will have built their fortress balance sheets (with lots of government help) and won’t mind another half a million foreclosures.’
http://news.firedoglake.com/2012/07/20/barofsky-book-geithner-confirmed-in-2009-that-hamp-was-designed-for-banks-to-spread-out-foreclosures/
And why hasn’t Elizabeth Warren said anything?
Chief Lieawatha no rockee boat. Makum great speeches for picture box that steal soul.
BAHHHHHHHHH
fake indian
why no close pawn shops - kimosabie ?
Ben: Look at the bright side — Another half a million foreclosures will help the hedge funds to increase their goal of world dominance in the SFH market — “the new asset class.” If they’re not interested in buying the “assets” themselves, they can use their new business model to loan money to other hedge funds that are looking to get into this market.
Nothing is going to change until the American people get very very angry. And they are not going to get angry until they turn off the TV, stop talking about Kim Kardashian’s baby bump, and take a look at their own lives. It won’t happen any time soon…
Interest rates seem to be continuing to rise. That is restricting the stock market. Homebuilder stocks are hurting this week. Bernanke is going to really hurt the market if he allows rates to rise. I guess now that he’s leaving, he’s going to do the right thing by some analysis of allowing housing to return to a homegrown market. Bernanke has become as confusing to decipher as Greenspan lately.
It’s interesting to call the low of the housing market. Did it occur in 2011 or can the low still be in the future. Nobody could have predicted the ride we have been on for the past 9 years, and nobody could have predicted the Fed’s creative response to combat it.
“That is restricting the stock market.”
How so? Interest rates started moving up significantly starting on May 2nd, yet the Dow sets a new record several times a week.
Dow ekes out another record high
By Ben Rooney
@CNNMoneyInvest July 23, 2013: 5:13 PM ET
NEW YORK (CNNMoney)
The Dow was able to notch another record high Tuesday, but the broader market was mixed as investors weighed the latest corporate results against a weak regional manufacturing report.
…
Oops…spoke too soon.
July 26, 2013, 10:21 a.m. EDT
U.S. stocks trim drop on rise in confidence
By Kate Gibson, MarketWatch
NEW YORK (MarketWatch) — U.S. stocks eased Friday losses, with the S&P 500 index still readying for its first weekly loss in five, after a reading on the consumer rose in July.
The Thomson Reuters/University of Michigan’s index of U.S. consumer sentiment rose to 85.1 this month from 84.1 in June, according to reports.
…
Restricting the stock market? You mean how it keeps falling up?
“The U.S. Treasury Department needs to do more to learn why more than a quarter of the borrowers in a federal mortgage workout program have re-defaulted, costing taxpayers at least $815 million, according to an audit.”
Really?
Could it have been a mere 800 or so Palo Alto starter homes on which the re-defaults occurred?
What Happens if the Real Estate Market Crashes?
Ryan and Louis discuss Fed Chairman’s Congressional testimony. Ryan noted that rates have gone lower due to recent dovish comment by Ben Bernanke. Ryan notes this morning’s jobless claims came in slightly higher than anticipated.
http://smaulgld.com/obamas-better-bargain-podcast-7-24-13/
Since the Fed has successfully steered massive capital flows (including $40 bn/mo in MBS purchases) into real estate since 2012, these remarks seem extremely pertinent.
Goldman’s Blankfein: The worse (SEC) absolutely will happen
July 26, 2013, 10:24 AM
What makes things interesting, potentially, is that given enough time, absolutely everything happens. Even, and maybe especially, the bad stuff. That’s the definition of infinity, according to Lloyd Blankfein, who said he learned to expect the worse (SEC) when guiding Goldman Sachs through the 2007/2008 financial crisis.
“Not only should you think things could happen, you have to think everything will happen. Risk management (is) training yourself so well to anticipate the possibility of things that when things happen and the gun sounds, you get off the block so quickly that other people think it’s a false start,” he said.
In a wide ranging interview in Australia this morning, Blankfein went on to explain that one of the driving forces during the financial crisis was that people did not think their most feared scenario could happen and didn’t take any steps to guard against it. This made these scenarios more likely to happen.
“Everyone thought it was so improbable that so many people would default on real estate, it actually created a greater probability that it would [happen] because more capital flowed into that sector,” he explained.
…
Blankfein is making a feudal attempt to give a fair warning of the impending crash…Got it!
“Since the bankruptcy was announced on July 18, talk of snapping up Detroit housing for a pittance has picked up on Sina Weibo, reports Sina Finance. Caroline Chen, a real estate broker in Troy, Michigan, says she’s received ‘tons of calls’ from people in mainland China. ‘I have people calling and saying, ‘I’m serious—I wanna buy 100, 200 properties,’ she tells Quartz, noting that one of her colleagues recently sold 30 properties to a Chinese buyer. ‘They say ‘We don’t need to see them. Just pick the good ones.’”
There is so much free cash floating around in China that mainland investors are eagerly picking over the carcass of bankrupt Detroit’s real estate market.
How could anything possibly go wrong with these investments?
Do the chinese know about property taxes?
Maintenance and upkeep?
Liability and lawsuits?
‘There is so much free cash floating around in China’
Yes, they even build entire empty cities to invest in:
‘Stalled Project Shows Why China’s Economy Is Wobbling’
‘The $91 Billion Caofeidian Industrial Zone Is Mired in Debt and Unfulfilled Promise’
http://online.wsj.com/article/SB10001424127887323971204578625412243604252.html
That these people are buying up real estate all over the world makes it tempting to conclude the global economy is nothing but a joke. But at least their “leaders” don’t get caught emailing pictures of their wee-wee’s to each other.
One could conclude that the US bubble cannot correct until the Chinese bubble explodes.
But at least their “leaders” don’t get caught emailing pictures of their wee-wee’s to each other.
Except when they do.
http://www.washingtonpost.com/world/ji-yingnan-and-other-jilted-mistresses-expose-chinese-officials-corruption/2013/07/25/8d8d35f6-eb02-11e2-aa9f-c03a72e2d342_story.html?hpid=z1
As President Xi Jinping pledges to clean up government corruption in China, an unlikely group of self-styled whistleblowers has emerged: jilted mistresses.
The latest is a 26-year-old named Ji Yingnan, who says she discovered at the end of last year that her fiance, a powerful Communist Party official in Beijing, had been married with a teenage son the entire time they were together.
‘She has made dozens of CDs containing photos and videos of her relationship, handing them out at the front gates of Zhongnanhai, central headquarters of the Chinese Communist Party.’
‘The photos, now plastered all over the Internet in China, look like ordinary mementos from a happy relationship. But they also capture the extravagant lifestyle of the ruling elite in a country with rampant income inequality.’
He’ll probably be executed. In the US he’d be the Mayor of San Francisco.
I’m not saying the Chinese have higher morals. I do think it’s funny that these guys build empty cities in the middle of nowhere, yet they are kicking our butts in business. How the heck does that happen?
I’m not saying the Chinese have higher morals. I do think it’s funny that these guys build empty cities in the middle of nowhere, yet they are kicking our butts in business. How the heck does that happen?
Maybe it’s just a temporary anomaly. Or maybe it just shows how truly inefficient our system has become.
Slave labor helps. So does heedless environmental degradation. China will be disintegrating in due time.
Shiller says: ““If Norway wants to dampen its bubble tendencies, he said, the country should seek political solutions that might include freeing up new areas for property construction.”
Building more (adding supply) dampens bubbles. Sometimes econ 101 is all you need.
Does Norway have 25 MILLION excess empty houses like the US?
‘If there’s one thing you have enough of, it’s land’
That’s true everywhere, even Japan. It doesn’t stop bubbles from forming. China has a lot of land and they’ve got the biggest bubble in history.
See, Shiller is an ivory tower guy the media loves to go to because he won’t say anything that threatens the big powers. His role is the go-to expert that will never touch on the central banks or regulatory failure in creating real estate bubbles. And even better for wall street (and the DC dogs they own), he was eager to jump in and support any and every bail-out.
So there he is, in Norway speaking to an insurance group (for a tidy sum, I’m sure) and the media runs up asking, ‘is it a bubble’ (as if everybody doesn’t know). And he gives his usual, ‘well gee-wiz, it sure looks kinda bubbly! You should build some houses.’
Because if he said, ‘yes and you all are about to get an ass-pounding, so sharpen your pitchforks and heat up the tar’, he would never get asked about the subject again.
Available land for building has nothing to do with bubbles. One only need look at NV and AZ to realize that. They had some of the most extreme price appreciation, with thousands upon thousands of acres of empty land available for building.
Why was NV and AZ different than TX?
I included this article mainly because of this:
‘It wasn’t the financial crisis that caused the US housing market to crash, he said. In fact, it was the other way around. ‘It was the drop in real estate prices from 2006 that eventually triggered the financial crisis,’ said Shiller’
So one could assume that if Norway has a housing bubble, there will be a financial shock ahead, and building more houses won’t do anything to stop that or make it less painful.
‘Why was NV and AZ different than TX’
There’s a huge bubble in Texas and there has been since at least the late 90’s. It’s not in every little town and varies in degree, just like Arizona. Texas is enjoying a resource boom right now, but that didn’t keep the bubble from popping in the 80’s.
Available land for building has nothing to do with bubbles. One only need look at NV and AZ to realize that.
And in the most extreme case, California with tens of millions of undeveloped acres.
consumer sentiment as high as 7/7
re was down in my hood by 15% by then
happy about what?
“Why buy a house at the current inflated asking prices? Rent for half the monthly cost, then buy later for 70% less.”
Jim Rogers to Moneynews: Bernanke to Leave Fed to Avoid ‘Hangover’ From His Policies
The Federal Reserve is pumping up the economy and financial markets with its massive easing tactics, and central bank Chairman Ben Bernanke might not seek another term because he doesn’t want to deal with the “hangover” aftermath of his policies, says legendary investor Jim Rogers, chairman of Rogers Holdings.
Read Latest Breaking News from Newsmax.com http://www.moneynews.com/Headline/jim-rogers-ben-bernanke-federal-reserve-easing/2013/05/19/id/505205#ixzz2aAhuNblk
taking a break from lurking to post this article. look at all the houses for rent! thanks.
Those are stunning maps of Phoenix. Worse yet, housing demand in Phoenix has collapse a whopping 20% in a year and 11% in a single month.
Collapsing demand is what happens when prices are massively inflated.
It looks like these PE guys have gone all in on the economic/housing recovery being real. Maybe they are still counting on the old Greenspan put to save their investments?
If you understand that the definition of housing recovery means falling housing prices to dramatically lower and more affordable levels, they must be nuts.
Yup, agreed. Maybe they are smarter than me, but I have a tough time seeing how they will make a return on all these houses w/o an increase in prices.
Och Ziff (sp?) got out, so did Carrington. I see different approaches. This weekend I’m starting a trash out on a hedge fund house. They bought the paper and likely had no idea of the condition. It’s a manufactured house, tore up pretty bad and the door was left open for a while because the floor buckled. If you get the right price you can make money on almost anything. But we read about Blackstone’s “model” of paying over asking, etc, so I don’t think they are watching their pennies. Then some are buying new houses.
Ocwen buys entire companies (subprime lenders), takes the paper and forecloses or what ever needs to be done. They are still around, so who knows if it is working. But generally I agree, most of these guys are speculating on increased prices.
“most of these guys are speculating on increased prices.”
I agree with that. One person we know buying homes to rent used to be able to get 10 at an auction at pretty decent pricing (15-20% discount to a non-auction situation, as late as early 2012).
Now, the auctions are overrun with people bidding up prices on behalf of institutions, and he’s getting 0. Now he’s making 200 offers on short sales to get 1 at a price that he likes.
If you are a disciplined buyer, you aren’t buying much now. The game is largely over unless you want to bet on rising prices.
Listing #13006803
$439,900 (LP)
$447,000 (SP)
Price/SqFt: 266.71
SP % LP: 101.61 14669 Loyola St, Moorpark, CA 93021 Sold
Beds: 4* Baths: 3 (2 0 1 0) (FTHQ) Sq Ft: 1676* Lot Sz: 6534sqft*
Area: NMP Yr: 1987
Don’t forget to post the other 10 on the same street that aren’t selling for prices half of 2005 asking.