Bits Bucket for August 12, 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.
About Me
Name:Ben Jones
Location:Northern Arizona, United States
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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®
a house will get you out of that awful 9-5 job and finally get a few bucks in your pocket.
Good morning $hitHouse Poet…… What are your losses to date?
how can I have losses when i’m having wine and lobster 3 times a week kiddo?
How is your bankruptcy? Those suze tapes really paid off. Keep sleppn for the man!!!!!!!!!!!!!!!!!
Enjoy your losses $hitHouse Poet.
can you tell us how much your in the hole? I want to write a poem just for you.
what does your crystal ball say today about home prices after u have been wrong for @ least two years?
It’’s your job $hitHouse Poet. How deep underwater are you on your rapidly depreciating shack?
got lots of equity to spend kiddo. Do u think I should buy a new chevy camaro and do some smokerolls down in s cal?
u still slapping together shanties and trying to unload them on naive buyers?
Don’t despair $hitHouse Poet……. there are millions of others just like you that paid a grossly inflated price for what is always a depreciating asset.
u have been wrong for @ least two years?
Two years?
As of June 25 2013, according to SP Dow Jones/Core Logic and Case Shiller, USA median home prices have been on an upward trend for almost 4 years.
Now one can call the messenger childish names, but that does not negate the message of the facts.
Markets More: Chart Of The Day
CHART OF THE DAY: Home Prices Soar, And Have Their Best Month In The History Of The Case-Shiller Index
http://www.businessinsider.com/chart-of-the-day-may-case-shiller-2013-6
Excluding 25 million defaults the median went up? Really?
“Comment by azdude
2013-08-12 05:22:31
how can I have losses when i’m having wine and lobster 3 times a week kiddo?”
OK, I see you now. I get it.
Jason Greenslate – California Jeff Spicoli eating Sushi & Lobster off EBT cards
http://www.fireandreamitchell.com/2013/08/09/jason-greenslate-jeff-spicoli-eating-sushi-lobster-ebt-cards/
azdude: got lots of equity to spend kiddo. Do u think I should buy a new chevy camaro and do some smokerolls down in s cal?
“Liberating your home’s equity” is a shortened way of saying, “Taking out a loan and putting your house up as collateral.”
You are on the hook to pay all that liberated equity back, with interest.
Unless of course you default in a state which where you can’t be pursued for the debt.
You are on the hook to pay all that liberated equity back, with interest.
That’s the beauty, it pays for itself…
http://www.urbandictionary.com/define.php?term=30k%20millionaire
all fur coat and no knickers
http://oxforddictionaries.com/definition/english/be%2Ball%2Bfur%2Bcoat%2Band%2Bno%2Bknickers___1
I believe that the Texan translation of that phrase is “Big hat, no cattle.”
“Why buy a house today at these massively inflated bubble prices? Rent for half the monthly cost and by later after prices crater for 65 percent less.”
Exactly. The losses are large considering the magnitude of the price declines we’re looking at.
tire kicker
empty pockets.
I imagine you all read the link today about the Frank Lloyd Wright homes that won’t sell. Classic stuff.
Nothing is selling at these absurdly inflated prices. Thats why demand for housing is at 1997 levels and cratering.
I wouldn’t go so far as to say “nothing is selling.” My coworker sold her crapshack in Arvada in two days for 370K. She had 4 offers and buyers even wrote “love letters”. I was surprised, I really thought it wouldn’t sell.
Once this bubble pops, then the losses will show up. But right now, if you’re selling in the right market, it’s happy times.
Housing demand is at 1997 levels and falling.
In Orlando, houses are cratering. Literally. I wonder what THAT does to the value of the Garage-Mahals nearby?
http://www.zerohedge.com/news/2013-08-12/monday-humor-gappiest-place-earth
CRATERRRRRRRRRRRRRR!!!
It’s like the government and central bank are encouraging growth of a tumor. “The patient is gaining weight nicely. But it’s all in the tumor.”
Houses in the $225 - $275,000 range in my neighborhood sell within days. That’ll get you a 35-50 yo house with 3BR, 1.5-2BA, ~1500 sq. ft., on 1/4 - 1/3 acre.
How far away are the “family supporting” jobs?
Frank Lloyd Wright Houses…
Insanely priced.
Insanely high maintenance costs. FLW was a great architect but a terrible engineer/builder.
In the article, one potential seller said the buyer just had to be “into” Frank Lloyd Wright and just “had” to have a desire to live in this type of “art”. I thought it was funny and right up there with ‘feed the squirrels’.
One house was For Sale for 1.1 million Dollars that needed 1 million Dollars of repair work.The house was originally purchased for $26,000 in 1954.
That’s crazy.
Is that how long The Housing Bubble has been going on, since the 1950’s?
In one of the comments, a guy said he talked to a Frank Lloyd Wright homeower who said it seemed Frank had no clue about comfort or maintenance of a house. I wonder how many architects and builders today used Frank as that same kind of inspiration?
A flat roof in snow country - no, there’s no problem with that. Ha.
Another thing I found amusing was the term, “the historical gestapo”. They’re the historical preservation groups the homeowers have to get permission from to do any work to their house. Kinda like a H.O.A. on steroids?
The article was written by Dean Reynolds and Phil Hirschkorn.
“Is that how long The Housing Bubble has been going on, since the 1950’s?”
I’d say the late sixties. High housing prices and taxes, and the rise of the two income family coincide with the expansion of social programs; the money has to come from somewhere.
The money was borrowed.
The money was borrowed.
And much already paid back.
Nearly one-third of U.S. homeowners have no mortgage January 10, 2013…Los Angeles Times
Those who own homes outright include retirees and a surprisingly high percentage of young adults…..
What mortgage meltdown?
While millions of Americans have suffered the angst of lost homes, equity and pride, nearly a third of the nation’s homeowners have no mortgage at all….
You have really uncovered some breaking news. Nearly a third of the two thirds who “own” houses have no mortgage. The other two thirds are….
Brazil is in a spectacular housing/credit bubble and will crash hard.
The other two thirds are….
Somewhat paid off too.
Brazil is in a spectacular housing/credit bubble and will crash hard.
LOL, and your momma wears combat boots……
The flat-roof houses in my part of snow country were designed by architects, most of them as said architect’s own residence. I just don’t get it.
Rooves aren’t “designed” by architects.
Oh really? And when did the plural of ‘roof’ become ‘rooves’, LOL.
By who then? The Roove Design Commitee?
Yeah “Oh really”.
So the architect designs everything but the roof and leaves it up to the builder to design that part?
That has to be one of your dumbest comments yet, HA.
Hold on, everyone, easy on HA. Geez, I can’t believe I’m defending him.
http://www.merriam-webster.com/dictionary/rooves
and
http://wiki.answers.com/Q/What_is_the_plural_form_of_roof_-_roofs_or_rooves
Crikey, I think HA is Australian!
Architects (me) design rooves? And trusses? And open web steel joists? And perform calcs for q-deck roof?
I bet we design beams and and specify column sizes too? And how about reinforcing? We perform all the calculations on temperature reinforcing?
You don’t know what you’re talking about as usual
‘Insanely priced.’
“This is not a country club! This is my house!”
Don’t give Bezos any idea.
Has anyone read “The Slaughter of Cities?”
The premise of the book is WASPs and Jews used black migrants to break up and disperse “ethnic” Catholics in the North,and by doing so, destroyed their political power.
The result today is Detroit, Newark, Baltimore…
Black people need to wake up and study how we have been used by white people in the past, and how we continue to be used by white people today; as TOOLS to further political agendas NOT OUR OWN.
Why?
Because we always end up getting none of the credit, and all of the blame.
(((shakin my head)))
It’s the PLAN old black people always talked about. Do you honestly believe that white elites want the black people in those expensive locations in the center of the city? Too much money to made by rebuilding renovating and selling it to yuppies. And of course few section 8 housing to “diversify.”
Black people have played and played hard by the ones they trusted the most. It’s a fact.
For that plan to work, they’d have needed to be able to count on the people moving in junking up the inner city terribly. People don’t just leave because of race. Inner city areas almost everywhere are a disgrace. And they are all tremendously valuable real estate where there should be no poor people living. It is a tremendous missal location of resources, particularly where the poor aren’t the working poor with jobs, but just the ones one the dole.
Compton, because of its proximity to downtown LA, is ridiculously valuable for anyone that could buy it up, fix it up and institute the rule of law.
Strawberry picker
People don’t just leave because of race.
——————————————————————–
True; they leave because they can’t defend themselves. And they can’t defend themselves because they have been DISARMED.
Whats they best way to disarm a person?
Remove their identity.
How can you bond with another person if you don’t know who you are?
“lets you and him and him and him and him all fight”
Whats they best way to disarm a person?
Remove their identity.
How can you bond with another person if you don’t know who you are?
Native Americans have been dealing with that issue even before the War of 1812.
No kidding, I was watching the Nova documentary on Kennewick Man last evening and the NAs couldn’t confiscate those bones fast enuf! What do you mean, we weren’t here first, Paleface?
You won’t see any documentaries on NOVA again about Kennewick Man, or the others, anytime soon, lol.
Black people need to wake up and study….
That would help right there.
yep
my war on ebonics starts to make sense…oh well..im a racist
The rich have been using race to bait us all for along time.
(and other knee jerk button pushing fake issues)
Wait, I meant “rob”.
Racism is a convenient form of classim, IMO.
Surprise! DoJ’s mortgage-fraud prosecutions claim turns out to be … fraudulent
Hot Air | August 12, 2013 | Ed Morrissey
Bloomberg News caught the Department of Justice in a particularly noteworthy Friday-night news dump over the weekend. The Obama administration, stung by accusations from the Left that it hadn’t gone after fraudulent mortgages and the lenders that helped fuel the bubble, claimed that a year-long initiative run by the Mortgage Fraud Working Group in the DoJ had charged 530 people who had victimized 73,000 people. When Bloomberg’s reporters began digging into the claim, the DoJ stonewalled — and then finally admitted it cooked the books themselves:
The Justice Department made a long-overdue disclosure late Friday: Last year when U.S. Attorney General Eric Holder boasted about the successes that a high-profile task force racked up pursuing mortgage fraud, the numbers he trumpeted were grossly overstated.
We’re not talking small differences here. Originally the Justice Department said 530 people were charged criminally as part of a year-long initiative by the multi-agency Mortgage Fraud Working Group. It now says the actual figure was 107 — or 80 percent less. Holder originally said the defendants had victimized more than 73,000 American homeowners. That number was revised to 17,185, while estimates of homeowner losses associated with the frauds dropped to $95 million from $1 billion.
Hey, they only inflated those claims by 80% and 9o% — or looking at it from the other direction, 500% and 900%. Shouldn’t they get a chance to round up to the nearest 1000%? If you’re wondering what prompted this sudden outbreak of honesty, Bloomberg explains that two of its reporters had figured out the fraud…
The government isn’t ready to start peeling the housing onion.
The more money the FIRE sector gives to politicians, the more favor they get. It’s like an engine spinning faster and faster.
http://www.opensecrets.org/orgs/list.php
Yeah - except 14/20 ALL TIME political donors are unions.
And most of them are public unions.
And we wonder who controls the political process. (hint - those with the MONEY).
And we wonder why obama breaks the laws/contracts to reward unions.
And we wonder why cities are bankrupt.
You found a way to blame this on unions? Brilliant.
Actually from this analysis on Open Secrets, labor is listed as 12th out of 13th in Lobbying:
http://www.opensecrets.org/lobby/top.php?showYear=a&indexType=c
In this analysis, labor is listed as 20th out of 50 in Congressional contributions:
http://www.opensecrets.org/industries/mems.php
And it hovers around 15-20th typically, around the listed cycles.
99.9% of problems in 2banana’s America are due to unions.
What is a called when 50 blacks beat a white into a coma, take his pants off of him, leave him in the street to die and cause permanent brain injury?
Crickets. Nothing. Nada. Maybe a tragic event…
“We Are Trayvon Martin”
————————-
St. Paul: Bystander brutally beaten after wandering into apparent gang fight
Twin Cities.com ^ | August 10, 2013 | Andy Greder and Tad Vezner
Four young males have been arrested after the senseless, brutal beating of a man on a late-night walk Sunday on St. Paul’s East Side, police said Friday.
The victim, Ray Widstrand, 26, of St. Paul, reportedly was in critical condition at Regions Hospital with potentially fatal brain swelling.
According to the complaint, Widstrand was attacked when he tried to walk through a group of 30 to 50 juveniles and young adults fighting near Payne and Minnehaha avenues in the Payne-Phalen neighborhood about 11:30 p.m. Sunday.
“An innocent man was walking down the street and brutally attacked by a group of youth,” said Sgt. Paul Paulos, a police spokesman. “He was out for a walk and decided to go through this group and was assaulted and knocked unconscious.”
The second witness said the first person to hit Widstrand did it with a can in a sock.
The witness said a second man then hit and stomped on Widstrand. A third man removed his pants.
The witness said the man was hit and beaten for no reason.
When Widstrand went down, a “whole bunch of little East Side Boys” began to kick him, the complaint said.
When his pants were removed, they went through his pockets.
“If I had a son, he’d look like Trayvon” - President Barack Obama
Is St.Paul known for its hoodlums? I know years ago I was minding my own business walking down a suburban Tacoma sidewalk and came across wannabe street hoodlums. Made a decision after that that Tacoma was not a place I cared much for. Sounds like St. Paul is that way too. The list grows.
So I guess from here on out, any time a group of black thugs wants to jump a white guy, they can tell the media they “did it for Trayvon.”
Thanks Jesse. Thanks Al. Thank you Obama and Eric Holder.
Sorry, but if Obama had a son, it would look more like this guy:
https://www.youtube.com/watch?v=uQaJ8n3R3lY
Will they be serving some Purple Drank (Promethazine with codeine, Arizona Iced Tea brand watermelon fruit punch, and Skittles) to the stoodents at the Trayvon dialogues?
http://mobile.wnd.com/2013/08/schools-push-trayvon-dialogues-to-vent-anger/?cat_orig=us
“He was out for a walk and decided to go through this group and was assaulted and knocked unconscious.”
Bad decision.
Those “Sons of Obama” were just exhibiting the same kind of visionary leadership that our Nobel Peace Prize President does when he launches drone attacks on unarmed civilians.
Forward
Yes, it was a bad decision, but he probably bought all the brotherhood of man bilge they disgorge in the education system. I mean, when you tell people that hot stoves don’t burn, people will put their hands on ‘em.
What is a called when 50 blacks beat a white into a coma…?
he tried to walk through a group of 30 to 50 juveniles and young adults fighting
I think it’s called “Dumb”.
and if he had went around them…he would be a white profiling racist.
According to the complaint, Widstrand was attacked when he tried to walk through a group of 30 to 50 juveniles and young adults fighting near Payne and Minnehaha avenues
Stack’em like cordwood…
Even a Glock 19 compact 9mm has doublestack 15-round mags. Only need a couple of mags to deal with scum like that.
Waiting for the statists and gun-grabbers to heap blame on the white guy for trying to walk through the fight and ignore the “troubled youths just trying to turn their life around”.
Here’s a little House of Pain for ya:
“Fourteen pulls on my trigger, that’s the whole clip
And if there’s anyone still standin’ thinkin’ that they’re runnin’ shit
They can come and get some of this”
Stack’em like cordwood…Only need a couple of mags…
Are you 5′ 2″?
Like the GMG1 in charge of the armory aboard ship used to say, “If the situation demands 15 rounds, you need to be running in the other direction.”
“If the situation demands 15 rounds, you need to be running in the other direction.”
Unless they won’t let you off the school bus.
School Bus Beating Caught on Camera! | 13 Year Old … - YouTube
http://www.youtube.com/watch?v=DZ9nTLJfsfg - 157k - Cached - Similar pages
6 days ago … 8/5/13
Sorry, but walking into a plain-as-effing-day dangerous situation IS just effing stupid. Any drill sergeant can tell that.
The crowd was already fighting? You can’t fix that kind of stupid.
I know, that kid should never have gone to school.
The trial of Fabrice Tourre
Collective guilt
The verdict against a former trader exposes Goldman Sachs
Aug 10th 2013 | NEW YORK |From the print edition
WERE Fabrice Tourre merely an ordinary defendant in a case brought by the Securities and Exchange Commission (SEC), it would be time to forget his name. But on August 1st a jury in a Manhattan federal court found him liable on six counts of securities fraud—including one of “aiding and abetting” his former employer, Goldman Sachs. This means that a jury has found that the world’s most successful investment bank has done something wrong—and that the case may be far from over.
…
Yet allowing the aiding-and-abetting claim to stand may have legal ramifications. Goldman already faces a class-action suit by some of its shareholders, filed in the Southern District of New York, seeking billions in damages related to Abacus and three other transactions. The suit alleges that Goldman failed to disclose that it was acting against its own clients’ interests when creating these financial products.
“The Tourre verdict, in particular the finding that Tourre aided and abetted Goldman, sends a message to hold those responsible for creating these financial products that were destined to fail,” said Spencer Burkholz of Robbins Geller Rudman and Dowd, the counsel for the plaintiffs. Discovery is in process, a trial could come next summer. Much to his regret, Mr Tourre’s fame will continue.
No jail time though?
If he was truly a “rogue trader” carrying out illegal actions without the knowledge or approval of his superiors, then perhaps a punishment for the Fabulous Fab alone would be appropriate.
But what if his acts were an example of Cockroach Theory — i.e., his trading activities were typical for Goldman Sachs, but he happened to be the one trader whose emails somehow leaked out to the media?
It seems like the beginning of the end of Enron was similar. Remember the email leaks that gave the masses an inside look at Enron?
But what if his acts were an example of Cockroach Theory
“Who knows what evil lurks in the hearts of men?”
BWAHAHAHAHAHAHAHAHAHAHA!
Apparently, not all homes around San Diego County have recently seen significant price ‘improvements.’
GOLF COURSE LEFT HIGH AND DRY
Rams Hill in Borrego Springs withering as pact with water district prohibits new wells
By J. Harry Jones
12:01 a.m.Aug. 12, 2013 Updated
8:02 p.m.Aug. 11, 2013
BORREGO SPRINGS
The Tom Fazio-designed golf course at Rams Hill in Borrego Springs has gone bone dry and brown.
Dead trees, their roots weakened by lack of water, have blown over in the winds. Their broken limbs litter dirt fairways, empty ponds and once lush greens. Weather-beaten flags marking the holes flap solemnly in the August heat.
What has happened to the golf course, just a few years after it was redesigned for a reported $27 million, is not just a story of one more dream dashed by the Great Recession.
It’s a tale of water and desperate homeowners whose properties have devalued in price by as much as 70 percent in the past five years.
Some believe the future of Rams Hill could determine the fate of Borrego Springs, the small desert town in northeast San Diego County completely surrounded by Anza-Borrego Desert State Park.
The once-stunning golf course is part of a 3,000-acre master-planned community made up of six small subdivisions, a luxury oasis in a desert hamlet dreaming of becoming a smaller alternative to Palm Springs. About 350 homes have already been built in Rams Hill — ranging from spacious estates to small retirement and vacation homes — with room for hundreds more.
Up until four years ago, the course got its water from an on-site well drilled in 1985 by the development’s original owner. But in 2009 — in what amounted to a fire sale by a subsequent owner, who lost millions in the real-estate bust — the well was sold for $1.1 million to the Borrego Water District.
The deal — which wasn’t disclosed to homeowners — included a condition that new wells could never be drilled on the property.
Residents were outraged when they learned what happened. Without affordable water, there’s no way to sustain the championship golf course winding though their housing development — a key feature of the resort lifestyle they bought into.
“We don’t know if (the sale of the well) was legal, but certainly morally it was wrong,” said Russ McMillan, who has lived part time at Rams Hills since 2007. “It ripped the heart out of the community.”
…
I know of a development in Atlanta where the developer created a man-made lake and sold “lakehouse” houses for a premium. A very nice development.
Guess what was Phase II?
Yep. Fill in the lake and build house on the new land.
The last I heard - it was still tied up in court.
Morale of the story.
Know WHO owns WHAT before you buy.
Yeah, but they knew who owned the water well when the moved in. They even knew about the later sale, just not the conditions of the sale.
Without affordable water, there’s no way to sustain the championship golf course winding though their housing development — a key feature of the resort lifestyle they bought into
The scarcity of water is a BIG deal out in most of the west. I think this might be hard for east coasters to fully grasp. I am reminded of one of our regular, east coast posters who said there was plenty of water in the west, citing that we have “rivers” out here too. That made me chuckle. When my brother came to visit, I showed him the “Big Thompson River”. His reaction was “that’s not a river, that’s a creek”. We just don’t have big rivers in the SW. Even the Colorado is puny, and less full than normal these days.
Mark Twain said it best:
It’s no joke, water rights are a BIG deal out here.
Metro Denver gets a lot of it’s water from aquifers, which are expected to be depleted in about 20 years or so.
Lawns are stoopid. I haven’t mowed a lawn since 2006. Those dumb Denver suburbanites can tell their kidz to go play in a pile of cactus, not on a lawn.
which are expected to be depleted in about 20 years or so.
Weren’t they supposed to be depleted 20 yrs ago as well?
My brothers house in Denver has yard full of lava rock.
Weren’t they supposed to be depleted 20 yrs ago as well?
The levels in the aquifers are dropping. We can stick our heads in the sand and pretend there is no problem on the way.
From http://pubs.usgs.gov/ha/ha730/ch_c/C-text6.html
“Thus, in the metropolitan area, withdrawal greatly exceeded the recharge, and water-level declines have exceeded 500 feet in some wells.”
And that was as of 1980. Metro Denver is bigger now, and thirstier too.
Solution = nuclear water distillation/desalinization OR use the extra heat from global warming to distill/desalinate water…
I think this might be hard for east coasters to fully grasp.
Uh no. For years, I’ve told everyone that I will not voluntarily live west of the Squiggle. Not enough to drink and too much sh!t to fall off of.
I won’t voluntarily live east of it. Too much humidity in the summer…the sweating is just gross, you can’t see far enough and there’s nothing out there to see anyway. The Appalachians might be an exception but they’re a poor substitute for the Rockies.
Can’t see far? Why, I can see the Sears–I mean, the Willis Tower from 20 miles away while driving home on the expressway!
The west is the best!
The west is the best!
Those who won’t settle for anything less than the best must pay any price and bear any burden to get it. Oh, and never complain about the bubble pricing & related social evils.
Is anyone noticing plummeting stock prices in real estate-related corporations (homebuilders, listing services, etc)?
I’m wondering if we are seeing the harbingers of echo bubble collapse?
Have you noticed plummeting resale housing transactions?
We certainly have.
Good luck to anyone trying to make money by shorting the stock market. It’s rigged to ‘get shorty.’
Aug. 12, 2013, 9:39 a.m. EDT
ZipRealty shares trip short-sale circuit breaker
ZipRealty Inc.
NASDAQ: ZIPR
Market open $3.65
Change -0.50 -12.13%
Volume 16,164
Aug 12, 2013, 9:36 a.m.
Quotes are delayed by 20 min
Previous close $4.15
Day low $3.63
Day high $3.87
Open: 3.87
52 week low $1.60
52 week high $4.37
What the Sudden 25% Collapse in Homebuilder Stock Prices Tells Us
Profit Confidential Mon, Aug 12 2013, 12:17 GMT
by Michael Lombardi | Profit Confidential
Homebuilder stocks are heading into dangerous territory and investors need to take note—even if they don’t own these stocks—because the move to the downside for this barometer of activity in the U.S. housing market is significant.
The most important factor that sets the fate of the homebuilder stocks is the housing market. If the housing market has growth potential ahead, then you can bet on homebuilder stocks to provide a stunning performance to the upside. If it’s the opposite scenario, with the housing market looking shaky, then homebuilder stocks usually tank. In other words, homebuilder stocks are very fickle, but they are also a great indicator of future activity in the housing market.
Right now, the U.S. housing market is being threatened by the mixed messages the Federal Reserve is sending to the marketplace.
Our central bank has “helped” lower the interest rates by buying bonds and keeping interest on overnight lending artificially low. As a result of this, the conventional mortgage rates in the U.S. declined to record lows—this created an opportunity for those who were sitting on the sidelines to get involved in the housing market. This is what has happened over the past four years.
Now, the Federal Reserve is sending mixed signals of its next action: will it pull back on quantitative easing, or will it continue to create new money and keep interest rates artificially low? There’s a significant amount of speculation around the Fed’s future actions, and this has created a major problem for the housing market, causing mortgage rates to skyrocket in a very short period of time.
Take a look at the 30-year fixed-term mortgage rates tracked by Freddie Mac. In July, they stood at 4.37%. But this past January, the same rates were 3.41%—an increase of almost a third in just seven months. (Source: Freddie Mac web site, last accessed August 8, 2013.)
No doubt, these rates are low compared to their historical average, and those who were around in the 1980s could vouch for this.
As mortgage rates climb now, the cost of owning a home rises, which obviously puts the brakes on participation from would-be homebuyers.
This is bad news for the homebuilder stocks. If those who drive the housing market are stepping back, it’s very likely the overall market conditions will deteriorate, impacting business activity for homebuilding companies.
…
Sounds like the echo bubble pop is approaching
Rising interest rates will pummel businesses that depend on financing. Time to look at companies with cash reserves in the bank.
I noticed the percentage of RE-related ads in the Money Saver is down by 2/3.
Two-thirds of economists see September taper
August 12, 2013, 9:51 AM
About two-thirds of Wall Street economists see the Federal Reserve beginning to reduce, or taper, its $85 billion-per-month bond purchase program in September, according to a poll released this weekend.
According to Blue Chip Economic Indicators, another 9% see a taper in October and 26% say the taper won’t happen until December.
The same survey shows 81% expect the Fed’s bond purchases to end by the middle of summer 2014.
…
Even if they annouce taper, they will still find a way to print more money. Is it possible? Tell me I am wrong here.
In September I swear I’ll quit using Viagra. (In September I’ll begin using Cialis).
Hey, at least boner pills do serve a useful purpose and have real value, unlike a lot or what the Fed does.
There are quite a few people who have had boners after seeing their “investment” portfolios lately.
I’ll quit using Viagra
For about 2 years now, Brazil has legal generic Viagra available over the counter.
In the USA, “Viagra’s patent, originally scheduled to expire in late March of 2012, has been extended to April of 2020.”
Why do you think that is?
Over the counter … and it’s cheap? No wonder those middle aged Brazilian dudes and their ladies are always smiling!
Maybe test the waters by tapering to $80 billion per month, for the next couple of years.
Rumor has it that mom and pop are getting set up as the bagholders in another stock market crash.
Aug. 12, 2013, 7:33 a.m. EDT
Will Mom and Pop investors blow it again?
Commentary: The average investor is terrible at timing the market
By Brett Arends
The myth that this is an “unloved” bull market is just that — a myth.
Data shows that the ordinary retail public — Mom and Pop — are back on Wall Street, and how! According to the Investment Company Institute, the Great American Public has poured $92 billion into the stock market via stock mutual funds since the start of the year.
To put that in context, in the first seven months of last year — when the market was much lower — they withdrew $180 billion.
The last time the investing public jumped into the Wall Street pool with both feet like this was in 2007. And they are investing even more this time around. In the first seven months of 2007 they invested $85 billion into stock funds.
By definition, every stock is owned by somebody, so if Mom and Pop are buying, others must be selling (and vice versa).
And thereby hangs a tale.
According to Dalbar, a Boston-based consultancy that tracks these things, Mom and Pop are just terrible market timers. Year after year, they have a self-defeating tendency to buy when the market has already risen, and sell after it has fallen. They aren’t always wrong, of course, but over time their record is a poor one.
For example, over the 20 years through the end of 2012, Standard & Poor’s 500-stock index produced an annual return of 8.21%. So if you’d invested $100,000 20 years ago and then gone away to a desert island, when you returned you’d find you’d get back your original $100,000 investment, plus a profit of $384,000.
However, over the same period, the average mutual-fund investor — Mom and Pop — didn’t do nearly so well, precisely because they kept buying after stocks had risen and then selling again after they had fallen. Their average return over that period, says Dalbar, was only 4.25% a year. At the end of the period, they would have gotten back their original $100,000 investment plus a profit of just $130,000.
In other words, they missed out on two-thirds of the profits.
…
Can you see the people you work with and see in the stores you shop and pass on the street the types that buy stocks because they are in a bullish mood? I don’t. Most of them probably know that WS is a scam.
Most of them probably know that WS is a scam.
I think of Wall Street as Organized Crime.
mom and pop are where wall street makes its profits. Stealing from the dumb money under the premise of investing in pieces of paper.
>I think of Wall Street as Organized Crime.
Because it is.
It is probably older people with retirement savings (such as they are). Bond funds have been scaring them off since the beginning of the year.
That’s because the average investor doesn’t have access to inside information. And also because they don’t even know what the stock market is for.
Wow. This is about as good a bubble story as you can get. Skyscraper in Spain, mostly finished and may never be finished. Apparently no passenger elevators, built strictly for unoccupied price appreciation as far as I can tell.
http://www.idesigntimes.com/articles/7105/20130809/spanish-skyscraper-without-elevator-intempo-47-story-benidorm-spain-high-rise-lift.htm#.Uge_rtS-43Y.facebook
Actually - it is a “feature” of the new building.
Get in shape while you walk-up to your 47th floor condo…
Good find. It’s obviously a specialty condo building, designed for residents who have fitness in mind.
Maybe we should ban elevators in the USA
Maybe we should ban elevators in the USA
That, or tax them heavily, or charge really stiff tolls to use one.
Don’t give that idiot Bloomberg another bad idea…
Welcome to the recoveryless recovery:
http://www.washingtonpost.com/world/spanish-struggle-amid-unemployment-crisis/2013/08/11/4e17466e-da63-11e2-b418-9dfa095e125d_story.html
Oops, just saw Resistor already posted this last Friday. Neglected to click on his post, though it was new info.
Just bulldoze a big pile of dirt around it and call it a “Groundscraper”
Eddie Cochran was singing about this scenario back in the ’50’s, a great scene from “The Girl Can’t Help It”, Twenty Story Rock
http://www.youtube.com/watch?v=VbkHhp-v1OI
sorry, I meant “20 Flight Rock”
It has elevators, they just neglected to provide enough space for the equipment.
Borrowing $200,000 to attend the University of Flyover’s Lucky Duck School of Law isn’t such a good idea after all? That’s unpossible. Oh wait…
Wall Street Journal - Law-School Professors Face Less Job Security
http://online.wsj.com/article/SB10001424127887323446404579006793207527958.html
Maybe they can get jobs as Starbucks baristas working with their former
studentssuckers.The student loan bubble is popping. And yes, there will be bailouts.
I still refuse to bail out any student unless they give back their degree…canceled….you can only put you attended school…and you dont have a valid BA, MS, JD or Phd degree anymore
Its totally unfair to all of us who paid in full for our piece of paper.
Its totally unfair to all of us who paid in full for our piece of paper.
Maybe that depends on when we paid for that piece of paper and its relative value.
The price of my education was cheap and the value high.
The price it would be today is sky-high and the value low.
Just like that seaside shanty in the slums.
Just like that seaside shanty in the slums.
Actually, I live in one of the “nicest” parts of Rio - pretty far (by Rio standards) from a slum.
But I wish I would have bought 4 of those “shanties in the slums” 5 years ago. (Because they’re being “snapped-up” now.) lol
The Rio favela (slum) transformed into prime real estate
http://www.theguardian.com/world/2013/jan/23/rio-favela-real-estate
Wealthy buyers are snapping up plots of land in Vidigal after authorities pushed out drug gangs
From high on the steep slopes of Vidigal, the panorama across Atlantic beaches and distant islands is among the most spectacular in Rio de Janeiro, Brazil. But tourists are unlikely to find it listed in most guidebooks.
Until recently, this hillside shanty town was dominated by drug gangs and widely considered off-limits among both the local and foreign middle class.
But the favela is undergoing a transformation. The police have taken control of the streets and with the gangs no longer deciding who enters their territory, rental prices have surged more than threefold in three years. Wealthy buyers are snapping up the prime plots, real estate firms are opening offices and more outsiders are moving in.
You paid a grossly inflated price for a shack in a 3rd world slum.
How far underwater are you?
Maybe so….but let the employer discriminate between those that have a real piece of paper and those that dont….
Its bad enough you have to sit next to some deadbeat living rent free for years….
Or maybe put a lien on their parents house. If we are not going to allow student loans to be wiped out by bankruptcy,( which will finally burst the bubble) then what else is the alternative, leave the country..
I’ve about used mine up.
“The price it would be today is sky-high and the value low.”
A piece of paper might not mean a garaunteed job like it used to, but not having one makes getting a good paying job extremely challenging. Given how high the prices are going, post secondary education will only be for the rich soon enough.
Thats exactly my point you make a choice….if you are working at starbucks and have $100,000 debt, you can still work at starbucks with NO debt over your head……
That would be a nice pay raise….
————
but not having one makes getting a good paying job extremely challenging.
Law professors are unique in that they are not allowed to have ever worked as a lawyer.
Modern law is seriously deranged.
“And yes, there will be bailouts.”
Maybe if we take out massive student loans to pay for our kids’ college education, they will fall under the future student loan debt jubilee.
“Maybe if we take out massive student loans to pay for our kids’ college education, they will fall under the future student loan debt jubilee.”
I wouldn’t bet my kid’s future credit worthiness on a jubilee.
ISP’s shut down rather than comply with the desires of “the most transparent administration in history” to spy on its citizens:
http://www.theguardian.com/technology/2013/aug/09/lavabit-email-edward-snowden-shuts-down
I’m surprised these email providers don’t move offshore. Or would the NSA block them from being accessed from the USA?
As Dotcom found out, living in another country does not keep the FBI out of your house.
OpenPGP, friends.
I can’t get anyone I know to use Open PGP. I even wrote a user guide on how to install/use a very convenient and commonly available system, but no one will do it. I think they think I’m crazy for even knowing about it to begin with.
Hope and Change
“Bo, the president’s Portuguese Water Dog, arrived separately on one of two MV-22 Ospreys, a hybrid aircraft which takes off like a helicopter but flies like a plane.”
http://www.telegraph.co.uk/news/worldnews/barackobama/10236302/First-dog-Bo-is-airlifted-to-Obama-holiday-home.html
Man, I don’t think I will ever match Bo’s carbon footprint in my lifetime.
But it’s all good bro. He traded a bunch of Milk Bone biscuits to Al Gore for some carbon credit offsets so he can fly guilt-free.
Don’t know what you guys are bitching about……this kind of stuff is normal ops for the 1%ers.
Stories from people I trust, or from first hand knowledge:
- A female VP in SFO, sent the airplane back to Seattle, because she forgot her favorite shoes.
-A Chicago-Florida trip, to bring down the dog of the CEO’s wife.
- Too many 1am flights with hookers to Vegas than can be easily counted. Including in-flight “entertainment”. (one aircraft had a bunch of “beanbag chairs” in the hangar…..the plan? Pull out the regular seats, throw in the beanbags, arrange as required. And the beanbags were easy to hose off after the trip).
- Pretty much every major sporting event you can name. Sponsor the event, and it comes with all kinds of free perks….all of it paid for out of the advertising budget.
I thought you went to Vegas to find prostitutes?
“And the beanbags were easy to hose off after the trip”
+1 LOL…it’s a dirty job, but someone has to do it!
>…this kind of stuff is normal ops for the 1%ers.
Yep. Oh, and it’s a tax write off as well.
Oh, and it’s a tax write off as well.
Yup. The owner of a distributor I work with owns a second home that he offers for his employees to use all the time. I’m convinced he offers because then he can say it’s a business facility and write it off as a business expense. Few take him up on it and he enjoys it 95% of the time.
Yes xer, you are right and I bet all of them believe that we all should reduce carbon footprints but not them. That was my point.
Bo Knows carbon footprints.
They should have had Clark Griswold drive Bo to Martha’s Vineyard.
……or Mitt Romney.
Mitt’s dog made it.
Bloomberg News
Bond Hubris Overwhelms Fed in Riskiest Credit-Market Sectors
By Daniel Kruger and Mary Childs
August 12, 2013
Bond investors trying to divine when the Federal Reserve will reduce its unprecedented monetary stimulus are increasingly looking to the riskiest parts of the debt market, which are booming like before the financial crisis.
The amount of loans made this year that lack standard protections for lenders exceed the all-time high set in 2007, and only one other time have investors pumped more money into funds that buy lower-rated loans than they did last week. Bonds rated in the lowest category of junk accounted for the greatest percentage of speculative-grade offerings last month since 2011.
While Fed policy makers say employment and inflation will be the primary determinants of when and by how much they reduce the $85 billion a month being pushed into the economy every month through bond purchases, signs of excessive risk-taking are likely to also play a part. Chairman Ben S. Bernanke and Fed Governor Jeremy Stein have cited the potential for continued so-called quantitative easing, or QE, to disrupt financial markets.
When to reduce “seems to be a risk-management issue as opposed to a pure economic issue because the Fed hasn’t really met its mandates with respect to employment gains or with inflation,” Christopher Sullivan, who oversees $2.2 billion as chief investment officer at United Nations Federal Credit Union in New York, said in an Aug. 7 telephone interview.
Bernanke’s Experience
Bernanke is aware of the risks to the economy, after leading the Fed through the worst financial crisis since the Great Depression, when financial firms posted credit losses of more than $2 trillion as the subprime-mortgage market collapsed, the Standard & Poor’s 500 Index of stocks fell by more than 50 percent and home foreclosures rose to a record.
“Having experienced the damage that asset-price bubbles can cause, we must be especially vigilant in ensuring that the recent experiences are not repeated,” Bernanke warned in a 2010 speech. “We must remain open to using monetary policy as a supplementary tool for addressing those risks.”
Fed policy makers next meet to decide monetary policy on Sept. 18. That’s when they will likely trim their monthly bond purchases to $65 billion, according to half the 54 economists surveyed by Bloomberg from July 18 to 22.
Concern that the Fed may reduce its stimulus sent bond markets plunging, pushing borrowing costs higher.
Rising Yields
Yields on 10-year Treasury notes, a benchmark for everything from corporate bonds to mortgages, rose to 2.74 percent July 5, the highest since August 2011, from 1.93 percent May 21. That was the day before Bernanke said policy makers “could take a step down in our pace of purchases.”
…
James Kunstler today on the impending installation of Larry Summers in the place of Ben Bernanke:
Mr. Summers will be entering the scene the way Vincent Price used to enter a Hammer Studio horror film — reliably delivering some deadly unpleasantness. I don’t think a more perfect figure might be found for piloting the garbage barge of American finance over a Niagara Falls of consequence.
Priceless.
Kunstler was convinced Y2K would collapse the economy a few years ago.
What’s he on about now?
Bernanke Just Felt a Chill Down His Spine
August 12, 2013
The “QE generates economic growth” story is officially dead. This will have severe repercussions throughout the financial system.
Indeed, it is not coincidence that the Fed began talk of tapering QE shortly after Japan announces its own massive program. And it is not coincidence that the Fed began to speed up the “taper QE” timetable as the epic failure of Japan’s QE efforts become obvious to everyone.
The Fed now clearly realizes that QE no longer impacts the economy in any meaningful way. It also realizes that it has created yet another massive stock market bubble, arguably one that is even worse than that of 2007/2008.
http://gainspainscapital.com/2013/08/12/bernanke-just-felt-a-chill-down-his-spine/
We’re Heading For A Crisis Worse Than 2007?
Washington is engaged in a massive “campaign” to make Americans believe the economy is in recovery. But in reality the United States is at the brink of a devastating economic crash that will cause catastrophic market losses and impoverish millions.
That’s according to Peter Schiff, the best-selling author and CEO of Euro Pacific Capital, who delivered his frightening warning to investors in a recent interview on CCTV.
“The problem with politicians is they don’t want to level with the voters and tell them how bad the economy really is and what the cure for the disease is,” Schiff said.
http://moneymorning.com/ob-article/schiff-washington.php?code=117833
We’re Heading For A Crisis Worse Than 2007?
——————-
Russian Leader Warns, “Get All Money Out Of Western Banks Now!”
A Ministry of Foreign Affairs (MFA) “urgent bulletin” being sent to Embassies around the world today is advising both Russian citizens and companies to begin divesting their assets from Western banking and financial institutions “immediately” as Kremlin fears grow that both the European Union and United States are preparing for the largest theft of private wealth in modern history.
http://www.eutimes.net/2013/03/russian-leader-warns-get-all-money-out-of-western-banks-now/
“European Union and United States are preparing for the largest theft of private wealth in modern history.”
Who can it be now?
Ya man, the wheels are ready to come flyin’ off and they’re stompin’ on the accelerator. They had better start training in the major cities with Blackhawks and military/police drills so they will be ready when the sh#t hits the fan.
What’s that? They already started training in the major cities with Blackhawks and military/police drills so they will be ready when the sh#t hits the fan.
“The “disease” Schiff refers to is a toxic combination of our massive $16.4 trillion debt and the Fed’s continued devaluing of the dollar through its controversial 7-year long “easing” program.”
The inevitable was just postponed.
King Canute and Marie Antoinette didn’t get it either.
http://www.washingtonpost.com/business/capitalbusiness/hilton-hotel-chain-plans-public-stock-offering/2013/08/07/634b5ce4-ffa9-11e2-9711-3708310f6f4d_story.html
more signs that blackstone smells inflation…get out now to avoid the rise in rates…which will negatively impact earnings.
wouldn’t have anything to do with a new fed chair?
Hold onto your cash because high and guaranteed yields are coming your way.
bs on that one
do u want to bankrupt everyone?
Hold onto your cash because high and guaranteed yields are coming your way..
Sinkholes at Disney World.
http://www.usatoday.com/story/news/nation/2013/08/12/sinkhole-causes-resort-villa-to-partially-collapse/2641949/
Damn! I was hoping that “It’s a Small World” had met its demise.
Now that’s REALLY throwing money down a hole.
Foreclosures double in Maryland from 1 year ago.
Thousands of Marylanders are losing homes in second wave of foreclosures
By Annys Shin
Washington Post
August, 2013
In the first three months of the year, there were 9,339 foreclosure filings in Maryland, more than twice the total of a year earlier but still far below the peak of 16,788 during the last three months of 2009, state data shows. That year, there were about 50,000 foreclosure filings.
Housing experts had been bracing for a second wave of foreclosures since 2010, when lenders were forced to halt all foreclosures while they addressed massive documentation problems. Many kept the brakes on until last year, when they reached a nationwide settlement with state attorneys general over their practices.
All the while, the backlog of troubled loans grew, mainly in states such as Maryland, where courts approve foreclosures and the process takes much longer. Lawmakers in Annapolis also passed a series of reforms to help homeowners try to save their homes, which made the foreclosure timeline even longer. Once among the shortest in the nation, Maryland’s is now among the longest: an average of 575 days as of June, according to foreclosure-tracking firm RealtyTrac.
For the past year, the growing “shadow inventory” of homes in or on the edge of foreclosure has loomed over Maryland’s housing market. Homeowners and policymakers, especially in hard-hit areas such as Prince George’s, feared that once it was unleashed, it would depress home prices and prolong a housing slump.
http://www.washingtonpost.com/local/thousands-of-marylanders-are-losing-homes-in-second-wave-of-foreclosures/2013/08/10/859bbfde-fde5-11e2-96a8-d3b921c0924a_story.html
I have noticed prices starting to go back down in some cities. For instance, I checked out a city in Missouri, and it has been declining since January, after increasing for like a year or something like that.
Yellummers comes in…curbs QE…which should increase rates…which should create a drag on corporate earnings….which should tank the stock market?
But shouldn’t a tanking stock market mean a boost to bonds? Safe haven effect…steadying interest rates?
A huge correction is already underway: The Dow Jones Industrial Average dropped by 5.83 points today. Run for the hills!
Aug. 12, 2013, 1:03 p.m. EDT
Has the market correction finally begun?
By Avi Gilburt
With the market topping this week just 3 points below my ideal target of 1708 on the E-mini S&P futures that I noted the last two weeks, not hitting the target has actually left me with some questions about whether we have now begun the larger correction we have been expecting.
…
as long as people are talking about it the odds are certainly less it will happen.
If there were a God, the stock market would have crashed two months ago.
Credible Fear
A new breed of house buyer is emerging. They are Millenials employing the exact same logic that boomers and gen-x’ers used in the last bubble. The only difference is that they have even less money, yet they’re even more convinced that prices will go up. Rising interest rates = prices up. Rising inventory = prices up. Stagnant wages = prices up.
It seems the boomers and gen-xers are all thinking this is a rebubble, but the millenials are like babes in the woods. Some of them are not aware that we recently experienced deflation in the United States.
This country has always taken criminal advantage of the young.
“Experience keeps a dear school, but fools will learn in no other.” - B. Franklin
LOOSERS
Quote of the day from Salon:
http://www.salon.com/2013/08/12/8_signs_the_rich_have_way_too_much_money_partner/
That’s pretty much the problem in a nutshell: Billionaires increasingly control our world. But they don’t live here. They dwell in a Hobbit-like fantasy, far from our worries and fears, where our nation is becoming “a collaborative art project,” a media-made myth, a post-middle-class theme park – call it “AmericaLand” – complete with a make-believe middle class and an animatronic democracy.
But the rest of us are suffering the effects of growing wealth inequality: joblessness, soaring poverty rates, lack of access to education or municipal services. The ultra-wealthy may have passed through “a beautiful gate in clearing,” but the rest of us stand on the “threshold” of an increasingly grim world.
Commie talk
For $300 you too can learn how to say…. “credible fear”
Border Agents Overwhelmed by Mexicans Using ‘Fear’ Scam to Gain Entry
Monday, 12 Aug 2013 10:25 AM
By Audrey Hudson
A flood of new immigrants crossing the Mexican border are using what some officials believe is a coordinated scam which has forced the closure of at least one overwhelmed federal processing center.
The local ABC News affiliate in San Diego reports that nearly 200 immigrants inundated the Otay crossing on Monday, and that all are using the phrase “credible fear” of drug cartels in Mexico as their reason for fleeing Mexico.
“They are being told if they come across, when they come up to the border and they say certain words, they will be allowed into the country,” said a border agent who wanted to remain anonymous.
“We are being overwhelmed,” the agent said.
Unnamed sources told the News Team 10 reporters that for $300, immigrants can buy a video in Mexico that instructs them on how to beat the system by learning key phrases to gain immediate entry into the U.S.
“There has to be a policy change, something implemented, an emergency implication that will stop this, or otherwise we will have thousands coming in, into the United States,” the agent said.
Pete Nunez, a former U.S. attorney who specializes in immigration issues, told the ABC station said the sudden surge appears to be well orchestrated and “makes our system even more ridiculous than it has been in the past.”
The claim also guarantees special treatment for the immigrants.
Families cannot be split up in detention, and with groups of relatives numbering as high as 30 making the claim, the only option for federal officials is to release the immigrants into the U.S. on a bond system until a scheduled court hearing to prove their claim is legitimate.
But sources told the San Diego TV station that under this system, the immigrants never return and instead disappear into the U.S.
“It’s a huge loophole. If the government doesn’t figure out some way to combat it, they are going to be deluged,” said Nunez.
Christoper Bentley, of the Citizenship and Immigration Services, described to News Team 10 the lengthy process of gaining asylum by pleading “credible fear.”
“Any individual who asserts a fear of persecution or torture … is referred to an USCIS asylum officer for an interview to determine if the individual has a credible fear of persecution or torture. Credible fear determinations are dictated by long standing statute, not an issuance of discretion,” Bentley said.
© 2013 Newsmax. All rights reserved.
http://www.newsmax.com/US/mexico-border-credible-fear/2013/08/11/id/519807 - 70k -
Fundamental analysis of GDXJ (Junior gold miner ETF) looks “purty good.” Looks like it’s breaking out of the upper channel, if not already broken out.