Bits Bucket for October 4, 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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“A house makes you poor. Very poor.”
It certainly does at current massively inflated asking prices of resale housing considering prices are 250% higher than long term trend. If you buy a house in this environment, you’ll be deep in debt for the rest of your life.
Don’t do it.
“Housing makes insiders rich…. and buyers poor. Very poor.”
No question. Paying in excess of $35/sq ft for a resale house is counted as loss. Your losses are magnified tremendously if you finance it for 15 or 30 years.
“Housing’s ‘Shadow Inventory’ Still Haunts Banks”
http://news.yahoo.com/housings-shadow-inventory-still-haunts-banks-152949909.html
With 25 million excess, empty and defaulted houses on the horizon, the risk of losses buying a house at current grossly inflated asking prices of resale housing is massive.
BEWARE
“Housing is a depreciating asset, ALWAYS.”
Exactly. No different than a car, refrigerator or lawn mower.
No different than a car, refrigerator
Total B.S. as usual. HA.
Cars and refrigerators do not come with the land under them.
Like a house in Carmel Ca. is the same concept as a house in Detroit? Life refrigerators? LOL
Are you kidding me? Yea. Houses might be over priced, whatever. But you insult the intelligence of yourself and everyone else to make such stupid statements all the time. Just constant one-line, borderline psychotic broken record B.S.
Yea, call me a liar, pimp or whatever. It makes me laugh. (All the way to BancoBrasil)
Depreciate ALWAYS
And yeah…. Don’t forget to get to the bank. They want their cash back.
If we must be as communist as you, you better share your house with us.
Don’t disrespect me, or my lower jaw might jut out.
leverage yourself until you have money coming out the wazoo.
LNKD trading at 932 P/E, time to go all in
all the shorts have got crushed thx to bernake. you bring up a good point about the phony stock market. when printing money no longer props up these overpriced stocks there will be no liquidity once they start the freefall. caveat emptor. At least I can live in a house.
Got PCLN?
DOW is up ~70 points at the moment. But if this shutdown wraps into the debt ceiling fight, watch out below.
“I don’t get no respect.”
Budgets
GOP Rep: I Have No Idea What the GOP Wants
But he sure as hell won’t be dissed!
By David Stout Oct. 02, 201356 Comments
As the second day of the federal shutdown comes to an end, hardline elements within the Republican Party have made it clear that they will not budge until their demands are met. But what exactly are their demands? Republican House member Marlin Stutzman, for one, has no idea.
“We’re not going to be disrespected,” said Congressman Stutzman during an interview with the Washington Examiner on Tuesday. “We have to get something out of this. And I don’t know what that even is.”
…
“We have to get something out of this. And I don’t know what that even is.”
GOP at its finest.
“We have to pass the bill so you can find out what is in it”
DEM at its finest.
a house will get you that new car you so much deserve. pull that equity and go down and see the chevy man.
Adapt to the new economy or be left behind.
“People have learned that a highly leveraged, illiquid, high-transaction cost “asset” requiring regular annual maintenance of thousands of dollars is not worth the risk”
take your 3000 / month paycheck and leverage 500,000.00 in assets and hope u get some free equity.
This message sponsored by the National Association of Realtors
leverage is your friend. your 3.5 % down payment could get you a big payday.
Your 3.5% down payment will lead to incalculable losses
it could lead to 5 years of free rent.
Or it could lead to 5 years of free maintenence on the house that I own.
When the time is ripe for me to toss the occupants out into the street then that is what I will do.
Or it could lead to 5 years of free maintenence on the house that I own.
That sounds overly optimistic to me. I doubt they’ll take care of it beyond mowing the lawn. And if there is a major expense, say like replacing a roof, they won’t do it.
So… Going deeply into debt- to essentially rent an overpriced, depreciating asset from a bank- will enable me to go even MORE deeply into debt to rent ADDITIONAL depreciating assets from said bank, eventually putting me in a position where I cannot even afford to pay the interest on these debts… I foresee a bright future for you son. Have you ever considered a career in Government or Politics?
Suzanne researched it
http://m.youtube.com/watch?v=hPIxrzmatq0&desktop_uri=%2Fwatch%3Fv%3DhPIxrzmatq0
^^^ never gets old.
If I made a time capsule for my grand- or great-grandkids, I would include a disc with this on it, labeled “housing in the 00’s”.
“… eventually putting me in a position where I cannnot even afford to pay the interest on these debts…”
That’s when I take back the house.
It’s my game; Thank you very much for playing.
May I help the next person in line?
u are ruthless mr banker. how do u sleep at night?
I sleep very soundly (and thank you for asking) because I realize that I have a secure income due to thousands of schmucks that willingly send to me, on a regular basis, huge chunks of their paychecks.
And I’m hoping that these smucks will breed lots of kids.
Doin’ God’s work.
“The Lord helps those who help themselves”, and I’m helping myself to all that I can get.
why do u charge 20% interest on money you borrow for next to nothing?
He and Realtors sucker them into paying grossly inflated prices for what is always a depreciating asset at 4% rates……. Not 20%.
a house will get you that new car you so much deserve. pull that equity and go down and see the chevy man.
Years ago when I was a journeyman window washer a friend and I sub contracted a job for a friend who was in a time pinch; it was in Pacific Heights in San Francisco, CA. A short ride up in the elevator from the basement parking garage opened into a richly appointed entertainment room with a fully stock bar, and the elevator doors closed revealing a red leather paneling. Real paintings, mirrors and polished brass everywhere.
My friend said, “Can you imagine bringing a cutie pie here? This f*cking place would undress her without saying a word!”
“…red leather paneling… mirrors and polished brass everywhere….”
Um, no.
“Um, no.”
No chit.
The dining room had a custom window like an office building probably 18 to 20-ft wide; must have cost $100k just to install that huge plate window, which faced north looking out on the Golden Gate bridge, Alcatraz, Sausalito, Tiburon, etc., something that only very deep pockets could afford.
Years ago when I was a journeyman window washer
Hey rms, just curious: at what age did you switch career paths and go into engineering (assuming I’m remember your profession correctly)? And what was it that brought you to the realization that that was what you should do?
It’s always interesting to me when people make major life course corrections…
“Hey rms, just curious: at what age did you switch career paths and go into engineering (assuming I’m remember your profession correctly)? And what was it that brought you to the realization that that was what you should do?”
I was thirty-two, the year was 1989, and I was being squeezed by excessive business expenses particularly liability insurance. I decided that in one year, 1990, I was going to return to college and pursue a civil engineering degree, and complete this goal by the time I was forty. While I achieved my goal the dot-com and housing bubble(s) meant leaving California for eastern Washington to insure financial stability and family responsibilities.
Thanks, rms! Nice job—for setting a clear goal, and then making it happen. Love it.
News on FHA;
http://www2.realtoractioncenter.com/site/R?i=SpImTHxIee0ne71pFG9uGQ
Op-Ed from commie Michael Bloomberg and Hank “This sucker’s going down” Paulson who want to take away your F-350 and destroy American exceptionalism:
http://www.washingtonpost.com/opinions/a-climate-change-risk-assessment/2013/10/03/d4f70e3c-2bb5-11e3-8ade-a1f23cda135e_story.html
“Hank Paulson –snip– is chairman of the Paulson Institute, which promotes sustainable economic growth.”
Do these guys ever review the economic damage left in their wake?
“Hank Paulson –snip– is chairman of the Paulson Institute, which promotes sustainable economic growth.”
LOL!!! That is _RICH_!!
My all-time favorite quote from that assclown:
“This is far and away the strongest global economy I’ve seen in my business lifetime” — Henry Paulson, July 2007
My all-time favorite quote from that assclown:
+1. That one will go down in infamy.
Prime_Is_Contained
Thanks for your feedback about the “faux” garage windows. I’m with you on anything fake, but it looks good from the sidewalk and street. Not a bad diy project for $15 and an hour of time.
How does this writing jointly thing work? Do they meet in a bar and make notes in napkins and hand it off to their assistants to type it up?
This guy should be in prison. Instead, he’s being quoted by the MSM as an expert.
Chart at the web site.
———————-
The Housing Party Is Over: Flat Incomes, Declining Labor Participation, Exploding Entitlements
Confounded Interest | 10/04/2013 | Anthony B. Sanders
Chris Whalen is saying the same thing I have been saying for years. The housing party is over.
“The party is over” for refinancing activity while a weak job market and flat consumer incomes are preventing a pickup in purchase activity, Whalen says. “Structural reasons, apart from rates [mean] you’re going to see a real tail-off in demand” for mortgages.
And we have replaced a vibrant full-time employment market with a slow growing, part-time employment market.
But let me add more vinegar to the stew. The US has runaway entitlement spending (Medicare, Medicaid, and Social Security) which cannot possibly be paid for.
With massively bloated Federal government (let’s call it “nonessential government”) and declining real incomes, labor force participation and the willingness of the Administration and Congress to pretend nothing is wrong, we will never fix this until it blows up.
Throw in the ultra-expensive Obamacare and Houston, we have a problem.
True, demographics (growth in population) will drive some new construction. But where will the money come from?
Quick throw another tax break on the grill for the elite or the whole economy will crash.
Oh wait the problem is there isn’t enough demand because the bulk of Americans are poorer. How could we fix this??
Lower the price.
Lowering the price will just attract Blackstone and other investors, again, who will promptly bid prices up out of J6P’s range, again. Blackstone doesn’t have to pay interest; J6p does.
Blackstone’s housing dept. has borrowed hundreds of millions to buy houses. I’m pretty sure they have to pay interest.
Donkeys always seem to have excuses for the their voluntary slavery.
You’re a smart lady, oxide, but they cannot carry the entire market. It’s too big. That’s the flaw in your argument. They can cause short term distortions, but in the long run they are not immune to the laws of supply and demand.
but they cannot carry the entire market.
They don’t have to carry the entire market—pricing is set at the margin.
And affordability is made at the margin.. And only with the help of phoney and fraudulent financing.
Ben, does it matter where they borrowed the money? They pay back that loan later, but they buy the house for cash NOW, and it’s the NOW that sets the price.
If there is no appreciation in prices, they will rent the house out and use the rent money to pay the minimum payment on the loan.
“They don’t have to carry the entire market—pricing is set at the margin.”
Yes, they do, because they will be the only ones buying in oxide’s scenario.
there is no appreciation in prices, they will rent the house out and use the rent money to pay the minimum payment on the loan.
Have you calculated the cap rates at current asking prices?
?
Oh wait the problem is there isn’t enough demand because the bulk of Americans are poorer. How could we fix this??
If you talk real solutions you might be censored.
Remember, the NSA and the like are out there. Everywhere.
Pittsburgh Post-Gazette - Corbett compares gay marriage to incest:
HARRISBURG — Gov. Tom Corbett is again wading into the gay marriage debate in Pennsylvania, comparing it to incest.
Mr. Corbett made the remark on a Friday morning news broadcast by WHP-TV in Harrisburg, when asked about a statement his lawyers made in a court filing in August.
From a state with a town named ‘Intercourse’.
Which is within a 1 hour drive of “Blue Ball” PA
And I am not making that up.
I grew up near Blue Bell, PA. Never knew there was a Blue Ball.
Haha, busted.
“Blue Ball is an unincorporated community and a census-designated place in East Earl Township, Lancaster County, Pennsylvania near 40°N 76°W. Blue Ball lies approximately 2 miles east-northeast of the town of New Holland, Pennsylvania at the intersection of US 322 and PA Route 23. As of the 2010 census the population was 1,031 residents.”
http://en.wikipedia.org/wiki/Blue_Ball,_Pennsylvania
In other note, the wives are known to kick their husbands in the lower region in Blue Ball, PA.
“As of the 2010 census the population was 1,031 residents.”
Lemme guess, same population in 2000 and 1990 too?
This isn’t even outrageous, it’s just sad.
I’m concerned that this could inadvertently increase support for gay marriage, as these comments could “rally the base” of rural Pennsylvania voters who have favorable views of incest
Quick, load the car up, head to Oil City for refuge!
Sorry, the gays are already there, fixing up the dilapidated houses to their unique style. Certainly THE BEST in garden decor.
In another generation, the only married people will be gays and lesbians.
Liberace!
If I’m Liberace, you must be a wannabe Scott Thorson.
That’s sad, bro.
Lighten up the staccato on that harpsichord Liberace.
Legato Liberace legato!
http://www.youtube.com/watch?v=fqhUyK52c9Y
Let’s play sing along with Liberace.
Take it from the chorus Lib!
Your head is empty, the lights are out! And all the bull$hit you’ve got to give has all spurted out!
Your head is empty, the lights out! And all the bull$hit you’ve got to give has all spurted out!
Your head is empty, the lights are out! And all the bull$hit you’ve got to give has all spurted out!
Take it away Lib!
Lighten up the staccato on that harpsichord Liberace.
Tough request…harpsichord is nothing but staccato :-).
rockin’ Carl…. I think you’re right.
Outrageous? Have you got something against incest? You bigot!
I guess I’m silly, but isn’t incest “the union between a man and a woman?” I thought that’s what they wanted to defend?
[yes that was snark]
I guess I’m silly, but isn’t incest “the union between a man and a woman?”
Also known as royalty when the world was flat.
Via zerohedge and file it under you cant make this stuff up.
TWTRQ is up more than 1000%.
TWTRQ is up more than 1000%.
Awesome.
the hype has no boundaries.
what idiots are buying FB?
TWTRQ is not Twitter.
“Trading is halted because FINRA has determined that an extraordinary event has occurred or is ongoing that has had a material effect on the market for the OTC Equity Security or the security underlying an OTC ADR or has caused or has the potential to cause major disruption to the marketplace or significant uncertainty in the settlement and clearance process.”
Whenever I fly, I always manage to sit by interesting neighbors. And inevitably, once the conversation gets rolling, they divulge their tales of housing market woe.
Like this morning, for instance: My conversation companion on the first leg of a cross-country flight told me about her two homes she used to own, one in Colorado and the other in San Diego. She finally decided to go for a short sale on the Colorado home, after keeping up payments for month after month, despite being hopelessly underwater. She told me that the bank had given her the impression there was no way, no how they would be willing to put together a short sale, but once she stopped making payments, it was over amazingly fast. The investor who bought the place got it for a fire sale price, and just bought it as an investment, not as a place to live in. She seemed extremely angry about how little the investor had to play to buy the place, though she also said she was trying to let go of her angry thoughts and move on.
A word to the wise: Dump your underwater money pit today, or keep making high payments forever on an investment where you will never get your money back.
She told me that the bank had given her the impression there was no way, no how they would be willing to put together a short sale,
And why should they approve a short-sale, when they know they have a sucker on the hook who will continue to pay, month after month?
As soon as you stop paying, their incentives are reversed.
“As soon as you stop paying, their incentives are reversed.”
That’s pretty much what I told her.
I’m always amazed by people who will share their tales of real estate woe with any stranger who is willing to listen. I hear alot of these stories — ALOT! — whenever and wherever I travel.
Exactly….that’s why I am for Sharia law in banking.
Why do they confess this stuff? I would be embarrassed. Yet it happens to me, too.
She seemed extremely angry about how little the investor had to play to buy the place,
Angry at who??? At the investor? The bank?
This is a classic case of victimhood as a result of “I can’t be wrong” syndrome. Fully uninformed, armed with realtor talking points and cultural stupidity, she voluntarily paid a massively inflated amount for a depreciating asset. Smart money moved in and displaced dumb.borrowed.money. The smart money just might be a dumb as the dumb.borrowed.money in this case considering the timeline and the fact the correction is ahead of us.
The “I can’t be wrong” syndrome is as insidious as the “I’m not poor” syndrome.
Angry at who??? At the investor? The bank?
Angry that someone else got a better deal than she did.
In other words, she is angry at herself, but not sufficiently self-aware to realize it yet.
“Angry that someone else got a better deal than she did.”
They may have paid less but likely overpaid still. Remember… even at the supposed “bottom”, prices were inflated 150-200%.
Did you ask the important questions, like: “Why did you buy the Colorado house when you couldn’t afford it? Why would you buy something that did not provide positive cash flow?” I hate these kind of people. I ran into a lady 6 months ago who was lamenting about the short sales she went through on a number of houses. She said she never would have done it if she knew prices were going to rebound, and now she’s mad. I wanted to punch her in the mouth.
So we basically killed an innocent unarmed woman yesterday because she had an accident near king’s palace?
Basically? Yeah.
“We’re an empire now.” And this is what empires do.
Peace.
After ramming another vehicle, being shot at by police, and drove at speeds in excess of 80-mph toward the capitol on a surface street with pedestrians and cross traffic with a child in the vehicle. Bad hair day?
Could have been a “phase of the moon” issue for all we know.
When in rome, you have to behave like romanis. How dare she act like a human being while driving in the city full of overloards?
Remember….. . the roman senatorial monarchy had loads of slaves.
The Romans had to at least keep manufacturing coins to keep the fiscal games going.
They had less and less precious metal in them they still had to make them.
Now government just creates fiat money out of electrons. As many as they want with the tap of a computer mouse.
Does this make us more civilized?
Does this make us more civilized?
More like “more foolish.”
More corrupt. And that’s something considering how brutally corrupt the romans became.
The capitol police just were “standing their ground”
Is that racist since the person shot and killed was black?
Or since they were defending a black president it is ok.
Until someone calls the president a white-black?
It just gets so confusing….
The Capitol building houses Congress, not the President, black or no. And hindsight is 20/20, isn’t it. The driver could have been armed. The vehicle could have been tricked out as a truck bomb. They can’t afford to play games downtown.
It just gets so confusing….
The problem is those crakpot right-wing web sites that you read. If you stop reading them, your confusion may abate a bit.
Yes, the rogue cops cut down an UNARMED single mother with a BABY in the car. And the media was running the story like there was a terrorist attack going on, with headlines across the tv stating “BREAKING NEWS: Shots Fired at Capitol Building, Two Officers Injured.” Instead of a terror cell, of course, it was a single mother who took a wrong turn into the White House, and the cops put a barricade in the way of her vehicle, pulled their weapons on her, and she freaked out and tried to run away. So, they chased her, endangering the lives of countless others, then cut her down in a hail of gunfire which could just as easily have killed her 1 year old baby.
You will not find much information at all on this incident because now they are busy covering their tracks in an “oh, sh!t” moment.
Johnnie Cochran…I thought u b dead?
LOL, rms
The news coverage of it seems to have dried up quickly. If it had been a white male with a gun from a red state we would be hearing about it 24 hours a day.
JCP is having another fine today. I wonder how long mark cuban will hold his 1 million shares @ 13?
Depends on if he can stay out of jail or not.
Interesting focus group quotes from Republicans. The comments by those identifying themselves as Evangelical or Tea Party are really humorous. After reading the report, even though I know there are many intelligent people who were with the tea party thing when it started, it’s clearly devolved into a white trash situation now. And evangelicals + tea party make up the bulk of the people picking GOP general election candidates.
Only 1/4 of Republicans identify themselves as moderate these days (see p. 2) so evangelical + tea party have all the power. What used to be moderate Republicans are now independents or Democrats.
“We know that Evangelicals are the largest bloc in the base, with the Tea Party very strong as
well. For them, President Obama is a “liar” and “manipulator” who has fooled the country. It
is hard to miss the deep disdain—they say the president is a socialist, the “worst president in
history,” and “anti-American.”
For all that, this is a deeply divided base. Moderates are a quarter of those who identify Republican,
and they are very conscious of their discomfort with other parts of the party base.
Their distance begins with social issues, like gay marriage and homosexuality, but it is also
evident on immigration and climate change. Fiscal conservatives feel isolated in the party.”
The entire focus group report is here:
http://www.democracycorps.com/attachments/article/954/dcor%20rpp%20fg%20memo%20100313%20final.pdf
Very nice. I don’t have time to read all 30 pages of that now but will this weekend.
One quote that stood out: “For Evangelicals, homosexuality is the defining issue and threat.”
A recent Bloomberg piece noted that about 70% of young people support gay marriage. How exactly will the GOP attract more young voters?
A related note, this morning’s C-SPAN Washington Journal was aired live from the offices of National Review magazine (should be available in their video archive), very informative program.
If homosexuality was the defining threat, then why didn’t the Tea party shut the government down over DADT or DOMA? Why Obamacare?
Because congress has much different priorities than their base? Even though they pretend to be the same?
One quote that stood out: “For Evangelicals, homosexuality is the defining issue and threat.”
A recent Bloomberg piece noted that about 70% of young people support gay marriage. How exactly will the GOP attract more young voters?
The evangelicals can always evangelize, i.e. convert others to their way of thinking.
Only 1/4 of Republicans identify themselves as
moderateSANE these days(Come on, lighten up….. that’s funny)
The entire focus group report is here:
I like it if for no other reason that it shows the nuance, even if you disagree with every faction. It gets annoying here sometimes when the people on the left think the Tea Party and the Fundies are the same people. Read the Tea Party comments…that’s what I’m more familiar with from people who identify as that group…not what I’ve heard here.
That’s interesting because that was one thing that I didn’t like about the report. I think that there must be a large overlap, in other words, a large number of people who would describe themselves as both Tea Party people and evangelical or fundamentalist.
Or that’s just what the media has led everyone to “know”.
KeyRAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAASH!!!!!!
What the @$#% was that?!!!!
…. that was the sound of housing prices collapsing in your neighborhood.
Where’s Tears Of Joy today? Bemoaning next to her pool of hopelessness?
Well-well look. I already told you: I deal with the god damn customers so the engineers don’t have to. I have people skills; I am good at dealing with people. Can’t you understand that? What the hell is wrong with you people?
I am successful at not being charged interest on my credit cards. Ten years ago I had $11,000 i owed on my credit cards. For the last couple of years i have been paying them off at the end of every month and have a great habit of frugality. I am prioritizing the next six months building up more cash. Very boring. Have enough stocks and stock mutual funds. Looking into doing this every Fall and winter the next few years to prepare for next car purchase. Probably a Camry. Cash of course. My current Toyota now is ten years old. 73,000 miles and great shape still. It might surprise me and go beyond the fifteen years I expect it to last. I already have plenty of cash to be without a job for three years, but that is devoted to being jobless. So I need to build up $30,000 more, at least.
Debt is dumb. Cash is king. Live like no other so you can live like no other! Like Ramsey says.
building up more cash. [...] the next few years to prepare for next car purchase. My current Toyota now is ten years old. 73,000 miles and great shape still.
That thing is barely even broken in! Why the heck would you be thinking about funding a new one right now??
That’s it - I’m not really. But statistically the longer you own a car, the more likely something could happen - even beyond your control. Last year some young gal sideswiped my car with her Mini Cooper (and her insurance paid for the total repair - looked as good as new after the repair).
Cannot save enough cash and gold bullion.
why save cash? Invest in houses and stocks.
It seemed mighty quiet around here yesterday; any ideas why?
It seemed mighty quiet around here yesterday; any ideas why?
Perhaps government funded blog posters are on furlough?
LOL… Nice one.
Interesting that the local post office was open for business on Saturday. What happened on that?
The U.S. Post Office daily operations are not funded by appropriated (congress) dollars. Ours (fly-over) is open to initiate Saturday deliveries and accept letters and packages (prepaid), which will arrive the same day at the major distribution center for sorting and routing. No counter service on Saturday.