The Housing Bubble

“Mercifully there is no HOA.”

+1 Or Mello-Roos taxes.

The permit fees for building have exploded over the course of the past 15 years. It makes an even better case for renting, and is also why land should be cheap.

“Kern County: (Comparable Placer County)

Maybe you should backcheck the requirements before yammering.

http://www.co.kern.ca.us/RMA/pdfs/0708_ESSFeeAdjustment.pdf

http://picpaste.com/e4d57f61efb86e4af5f15094f910dd35.png

Have one of you pulled a permit before? Ever?

You don’t know what you’re talking about.

Oh my goodness, RJ. Thanks for the reminder! I forgot all about the masonry fireplace fees, the recorder’s fees, the nonstandard plans fees, the dust remediation and flood revision fees, the culvert installation, the elevation fee, the satellite dish fee….

And actually I DO know what I’m talking about, because I GC’d the house and wrote all the checks. But then that doesn’t quite jibe with your narrative now, does it?

Sorry about that, hon.

Those are individual inspection fees… Which are included in the permit.

Nice try.

And PS….. You haven’t “GC’ed” anything. The last email to me you admitted that. Would you like to review it?

You mean a far cry from your $90,000 lie Jingle Balls.

your barking up the wrong tree dude. I present facts.

Another far cry lie JingleBalls.

azdude02 is NOT Jingle Bail.

A distinction without a difference.

Actually, no you haven’t. What’s wrong with shop built panels?

Even This Old House built a high-end pre-fab house. They explained the advantages of constructing house components in a controlled environment. No rain damage, no temperature extremes, waste easily recycled, fewer on-site delays, easy accessibility. They even built the entire mechanical room (e-, H2O, CH4) in the shop and just craned it into place. No crawling around the dirt.

“Actually”, yes we have.

And just as we thought, “This Old House” is the extent of your construction and engineering expertise you like to throw around here.

You got got screwed because you don’t know what you’re doing.

Get over it and get on with your life.

Yes, TOH is where I learn my construction. If you have better knowledge, why not share with us? Tell me again, what is wrong with shop pre-fab? I’m sure there are some new lurkers who missed my last schooling and could benefit. And really, why would you politely refuse an opportunity to school me? It’s not as if etiquette ever stopped you before.

You tell us Junky. You’re the one disparaging shop built panels.

Our friend w/the Masters Degree in Construction who’s worked in various areas of the field would agree w/you, Oxide. We’ve had that conversation w/him many, many times.

In a past life, he once did home inspections so he’s had lots of hands on experience w/how different materials age.

Houses can be made a lot of ways. Debating the fine points while missing the big picture is silly. The foolishness of paying bubble prices for a house, and double that because you couldn’t afford to actually pay for it for some decades is more the point.

Oxy, I think what RAL is saying (and it has some validity) is that the future of home construction for rank and file people will largely be things like pre-fab components and EFCO exteriors. This is already being done in China — the house is “built” in pieces in a factory and assembled on site. They can even do this for large MFH complexes. I think this might even be cheaper than ballon framing bc these prefab things already have subfloors, openings for drains, and wiring.

Liberace!

You’re as uninformed as The Junky!

This charade is comedic. Keep going.

I did not buy my house at bubble prices. Not adjusting for inflation, I bought my house at a mid-2003 price, which was on the cusp of the bubble. Adjusting for inflation, my house price was the 2001 value, fully pre-bubble. Now if you think that prices have been in a “bubble” since 1990 or whatever, go right ahead and think that. Chances are the prices will still be bubbly when I pay the house off, or even when I die. And I’m relatively young.

And the point is, I CAN afford to pay for the house for some decades. Just like I was able to afford to rent for some decades.

LOLZ

You need to reconcile the first 3 sentences. By 2003, prices had doubled then some.

We all make mistakes. Just admit it and carry on.

I know that 2003 prices here out west were already insanely bubbly, and that it DID begin in the 90’s. And in this current bubble, prices are BACK to 2003 from their brief visit to the 90’s.

So you’re thinking the housing bubble lasted two whole years?

Joey, I thought I implied that I was in favor of prefab.

Jingle posted a description of a POS house. I found the listing for the POS on Zillow and agreed it was a POS. It would be better to raze it for land and build a new pre-fab. Since HA makes pre-fabs for $60/sq ft (if we believe him), I put that in too.

HA then schooled me on shop-built panels, i.e. prefab. So I guess he thinks something is wrong with prefab, although he won’t tell me what. So I’m not sure what you’re getting at.

Blue, I had to look up “cusp” to make sure my connotation was correct. Dictionary.com says that a cusp is a “point” but based on the other defnitions, it’s not a point in the sense of “peak.” It’s either the starting point of an arc, or where two arcs intersect, i.e. the start of a second arc. So “on the cusp of” generally refers to the point just before a line increases. The cusp of the bubble is just before the bubble took off.

Yes, I took your meaning properly then, and the bubble reached its zenith in 2006, so that is two years. Maybe you get some extra for DC if it lags the reality the rest of the country has to deal with.

My point is that you have only lived in the greatest expansion of credit in history. It started before you were a hatchling. Correcting to 2003 prices from a 2006 peak is just a scratch. A real correction is outside your ken, but it is out there.

“Since HA makes pre-fabs”

We do?

Lay off the Donkey Sauce.

Sometimes it is hard for chronic posers to keep their stories straight.

Jingle Male: I see a 1,056 SF home on a half-acre at 24th SW which sold for $263,000 in 2006. Guess what the current foreclosed values is: $48,275!! I am going to go see this one. There is a nice do-boy pool with green water in back.

Canada has yet to experience this kind of loss. Our debt to income keeps going up, price to income keeps going up, price to rent keeps going up. 70% of the population owns a house, a condo or something.

what’s a do-boy pool?

Simple. Rent for half the cost. Buy after the inevitable collapse and save yourself from a lifetime off debt slavery.

I think tx is the hot spot now.

I dunno, sounds like Jingle is almost being sarcastic. Jingle speculates on undervalued properties for long-term rental in areas with stable jobs.

This POS is overpriced, in an area with no jobs and therefore not even good for a rental. And this thing isn’t flippable even in the current environment of a popping bubblet.

“I love how the guy in this story is only getting the house because there is zero down payment. Yeah! lets give a young guy with zero ability to save the burden and responsibility of a loan that’s probably 5x his household income! Nothing could go wrong there!”

Hey, that sucker has to fund my retirement too!

It is not impossible, but it seems that is not the game we are playing at all. I think the game is more like Borrow until you make them stop. In the meantime the bill is yours.

Got 7.62x 39?

I do

WOLVERINES!

‘the dire economic effects of a …’

What is it today? Aren’t we in an never ending series of world’s-about-to-end moments anymore? Wake me up when the panda cam is back online.

http://finance.yahoo.com/news/danger-grows-shutdown-heads-second-083158258.html

‘Danger grows as shutdown heads into second week’

Lions and tigers!

‘With no end in sight, the near week-old partial U.S. government shutdown is putting growth in the world’s largest economy under further threat with each passing day, economists say.’

And bears!

Bill made a good point the other day. He mentioned that we were all raring to go bomb Syria just a few weeks ago. That would have cost a few bucks. Yet now, hardly any time later, and we can’t afford a panda cam?

At first I thought the panda cam thing was funny. Then I pondered what it would actually cost to run it. You already have the panda and the zoo. The cam is paid for as is the months internet. That was when I realized this is political theater and decided to stop watching.

Apparently the pandas and the folks who tend their camera are not nonessential federal employees.

Live Cam
Giant Pandas: Our World-Famous Celebrities

The San Diego Zoo has had a love affair with giant pandas ever since two of the black-and-white bears came to visit in 1987. After years of red tape and tons of application paperwork, the Zoo and China agreed on a 12-year research loan of two giant pandas, Bai Yun and Shi Shi. A brand-new exhibit area was built for our panda guests, which has since been expanded and renovated and is now called the Giant Panda Research Station. We currently have four giant pandas—Bai Yun, Gao Gao, Yun Zi, and Xiao Liwu, born on July 29, 2012.

Our pandas enjoy deluxe accommodations with larger exhibit areas and extra vegetation and climbing structures. You’ll enjoy the newer exhibit area too, with its winding, elevated viewing paths that give great panda-watching opportunities of the two main enclosures.
…

Got 7.62x 39?

WOLVERINES!

LOLZ. I sold my Romanian AK-47 and the 7.62×39 ammo I had stockpiled and bought an Arsenal AK-74 in 5.45×39. The Arsenal is just as accurate as my AR-15 and its piston operation is as reliable and durable as any other AK.

Best firearm made today for the money… only problem is the big box stores like Dick’s Sporting and Walmart and the local gun shops don’t stock 5.45×39. I have to drive up to New Hampshire to find it. The up-side to buying in NH, it’s $220/1080 rounds, which is cheaper than I was paying for steel-cased 7.62×39, and no sales tax.

AR-15? Pfft. I am stuck with my lowly Winchester .270 hunting rifle and scope, an old Remington 12 gauge, and my Colt 10 mm semi-auto.

AR-15? Pfft. I am stuck with my lowly Winchester .270 hunting rifle and scope, an old Remington 12 gauge, and my Colt 10 mm semi-auto.

10mm? I hope you reload. Other than the AK-74, I’ve standardized my firearms on calibers I can readily find (and afford). .22LR, 5.56/.223, 7.62×54/.308, 12 guage for rifles. 9mm and .45ACP for handguns.

“10mm? I hope you reload.”

Ammo price isn’t a consideration when it comes to my personal protection.

Ammo price isn’t a consideration when it comes to my personal protection.

I understand the sentiment. I just don’t see the advantage of 10mm over .45ACP. Yes 10mm has more energy than a .45, but at the cost of greater recoil, higher cost, and more wear on the barrel.

FBI studies and statistics show that hit location more than any other factor is the determinant in neutralizing a threat. So accuracy and practice with your carry piece, not caliber, is probably the most important factor in surviving a gun fight, all other things being equal. My .02, which is probably all this post is worth.

It was HBB poster spook who first posted the link to “When The Music Stops” and led me to enjoy Bracken’s other writings.

The modern American lemming thinks that food grows on grocery store shelves and that electricity just flows out of the wall like water.

Throw enough wrenches in the “just in time” delivery system that is the logistical backbone of modern capitalism, and the system collapses.

see also:

http://www.counterpunch.org/2013/10/07/is-homeland-security-preparing-for-the-next-wall-street-collapse/

But actually the Dems had compromised.

Yes they did.

Defending tea party delusions, Republicans shut down government

http://www.latimes.com/opinion/topoftheticket/la-na-tt-republicans-shut-down-20130930,0,2380001.story

Because the No. 1 priority of House Republicans is to cater to the fantasies of their tea party constituents, the federal government has been shut down. The loony legions that drive Republican primary elections now are driving the United States toward calamity.

Weirdly, the continuing funding resolution that the Republicans have refused to pass is a seriously conservative budget plan far closer to what House Budget Committee Chairman Paul D. Ryan asked for than what President Obama would have liked. But, instead of claiming a victory for fiscal conservatism, the Republicans’ right-wing absolutists have refused to pass the continuing resolution unless it includes provisions to cripple or kill the Affordable Care Act, a.k.a. Obamacare.

The Republicans aren’t threatening default,

Check out the Repub hypocrisy on the shutdown. Ya can’t make this stuff yo, (Funny cartoon too)

Tea party Republicans blame Obama for the shutdown they planned

http://www.latimes.com/opinion/topoftheticket/la-na-tt-republicans-blame-obama-20131006,0,2739790.story

The government shutdown has revealed the impressive skill of tea party Republicans to say untrue things with sincerity so convincing that they almost sound as if they believe what they are saying. Michele Bachmann, with her toothy grin and startling wide-eyed stare, is especially adept at this.

…..The shutdown was the president’s fault, she said; he was to blame for inflicting so much unnecessary inconvenience and pain.

This is the same woman who has been absolutely giddy in other interviews talking about how “very excited” she and her colleagues are, as if the shutdown is the best thing since Jesus turned water into wine. “It’s exactly what we wanted, and we got it,” Bachmann said to the Washington Post.

…..a well-financed cohort of conservative activists have been planning for months to use a government shutdown as a cudgel to cripple the Affordable Care Act, also known as Obamacare. Among those behind the effort are, predictably, the Koch brothers, the right-wing billionaire industrialists who, the newspaper reports, gave out $200 million last year to anti-Obamacare groups.

Also pushing the Obamacare battle is Michael A. Needham, who runs the political arm of the conservative Heritage Foundation. Unlike Bachmann and her buddies, Needham did not play coy when asked about what is going on, telling the New York Times, “We felt very strongly from the start that this was a fight that we were going to pick.”

And it’s the fight they got. Republicans should stop feigning innocence and be brave enough to own it.

November 28, 2012

‘We most often hear about the alarming $15.96 trillion national debt (more than 100% of GDP), and the 2012 budget deficit of $1.1 trillion (6.97% of GDP). As dangerous as those numbers are, they do not begin to tell the story of the federal government’s true liabilities.’

‘The actual liabilities of the federal government—including Social Security, Medicare, and federal employees’ future retirement benefits—already exceed $86.8 trillion, or 550% of GDP. For the year ending Dec. 31, 2011, the annual accrued expense of Medicare and Social Security was $7 trillion. Nothing like that figure is used in calculating the deficit. In reality, the reported budget deficit is less than one-fifth of the more accurate figure.’

“Obama won’t negotiate. So who is at fault?”

Suppose a thug walked up to an innocent pedestrian and put a gun to his head, saying ‘Your money or your wallet.’ If the victim stood there petrified and didn’t say a word, would that be considered a ‘Refusal to Negotiate’ on planet Republica?

‘The actual liabilities of the federal government—including Social Security, Medicare, and federal employees’ future retirement benefits—already exceed $86.8 trillion, or 550% of GDP.’

It’s pretty funny how the GOP Grand Kabuki Dance over Obamacare somehow manages to completely ignore the ginormous elephant hiding under the rug.

Suppose a thug walked up to an innocent pedestrian and put a gun to his head, saying ‘Your money or your wallet.’ If the victim stood there petrified and didn’t say a word, would that be considered a ‘Refusal to Negotiate’ on planet Republica?

That metaphor fails on many levels:
Why? Because I could use the same argument you are for government forcing me to pay higher and higher taxes and fees or face the threat of force. I could use the same argument for the government forcing me to buy health insurance or pay a penalty. Don’t pay the penalty then the government guns come out. See how that works?

Obama is a politician in charge of one aspect of our governing system. The House of Representatives is the body of the common man. At what point did the president become a dictator to say he refuses to negotiate with a body that was elected by the people? A body dominated by Republicans?

The big contributors don’t want a default.

The big contributors behind the current healthcare industry want to know they’ve gotten the most they can for their money. So their politicians are going to have to put on a real sound-and-fury show for them, to show that they’ve done everything they can to preserve the current system.

But the biggest contributor, the FIRE sector, while it’s already gotten politicians to firehose a tremendous amount of money at it… and it has used up many favors… which will weaken its hand… but still, they’re a huge paymaster. And they’re aligned with the Federal Reserve, a de facto post-Constitutional arm of government. I can’t imagine the politicians would have any incentive to allow a default. There are 435 house members and the big contributors have a dossier on each one.

“That metaphor fails on many levels:”

So from now on, whenever Congressfolk from Planet Republica don’t like any law, they can be expected to shut down the government until it is defunded, and accuse the other side of the aisle for ‘refusing to negotiate’ in case the extortion attempt doesn’t go over well?

Let’s reverse that statement and see how it works:

So from now on, anytime Democrats want to ram more socialist wealth-redistribution disguised down American’s throats, right along party lines, they don’t need to negotiate. And they certainly don’t need to negotiate with some elected representatives in the House who would rather shut the Federal Government down than let that monstrosity of healthcare reform go live. See how that works?

This is why we have a polarization of the moderate attitude to the extremes of ideology and politics.

The Repubs lost the election, and the people voted for Obamacare. Instead of accepting their losses, the Repubs are kitchen-sinking it in a desperate attempt to ignore reality, and cater to their special interests who do NOT want Obamacare. What was the Repubs answer to the health care crisis again? Oh, that’s right, the status quo. They have nothing.

The Repubs lost the election, and the people voted for Obamacare.

And what does this have to do with anything? Again, the polarization of the moderate attitude. I don’t care if the Democrats won the Presidential election and control the Senate, they lost the House. Democrats don’t represent me, Republicans do, and especially the Tea Party Republicans, so I’m all for them forcing the Senate and Executive Branch to the negotiating table…

Just because there are more poor, government-dependent minorities in urban areas that vote Democrat doesn’t mean they control our entire legislative process. Understand?

Democracy is two wolves and a sheep debating what’s for dinner… well the Tea Party is telling those Democrat wolves to bugger off.

Whether you or I like it or not, Obamacare is what Obama ran on, and won. That’s what the people voted for. Again, like it or not. If the Repubs were serious, they would have had a viable alternative. They have nothing. So, they basically decided to hold the country hostage and threaten to sink it.

And then the people who voted for that bill along part lines got thrown out… If all the country was so behind the bill as you say, they would have voted to keep their democrat supporters of the bill in office and we wouldn’t have this spun out lie fest because the dems would still be in charge… Except, that isn’t what happened, the repubs were elected to go undo the ACA, which is what they are doing… according to the will of the people…

So spin it a different way, because what you are saying is a *lie* not just an angry way of looking at things. The democratic process is in effect and working.. not terrorism, not hostage taking… political leverage of elected representatives. Yes we know you don’t like it, but stop lying. It just makes your position look weak.

For all those saying “Obama has a mandate”. No he doesn’t. Here is the popular vote of the last election:

Barack H. Obama Democratic 65,917,257 51.01%
Willard Mitt Romney Republican 60,932,235 47.16%

As I posted previously, a couple more percentage points supported Obama over Romney. Mandate? No, just more socialists, liberals, progressives, and those dependent on the state handouts.

Given we live in a Constitutional Republic, not a “majority-rule” Democracy, the majority doesn’t get to dictate policy to everyone else. Given Republicans control one half of the legislative branch of our government, I’d say Democrats better learn to negotiate and stop with the “mandates” BS…

Sure, it’s “working”- if you call a handful of politicians standing in the way of the majority “working.” That’s all this is- a handful of teabaggers stymying the whole process. Funny how you can call a handful of people working in the interests of a precious few the majority. Talk about lies…

Just because there are more poor, government-dependent minorities in urban areas that vote Democrat doesn’t mean they control our entire legislative process. Understand?

Why all this focus on poor minorities?

Why all this focus on poor minorities?

Because Obamacare was written for them. Obamacare uses government subsidies, aka tax dollars from upper-income earners, and higher premiums on middle and upper middle income households to provide “affordable” coverage for those who didn’t have it before.

Who doesn’t have health insurance today? Primarily those who can’t afford it because they don’t earn enough in part-time or full-time employment at low wages… that’s where “poor minorities” live.

Just because there are more poor, government-dependent minorities in urban areas that vote Democrat doesn’t mean they control our entire legislative process. Understand?

Why not?

Or are you saying that the votes of poor minorities shouldn’t count as much as the votes of white landowners? How much should a poor minority vote be worth? 3/5?

You really need to read more about these things. There are plenty of poor people who are white. Also, the poorest of the poor were already getting Medicaid. There are also many non-poor people who can’t get health insurance due to preexisting conditions.

Also, those of us who happen to get health insurance through our employers get a very nice tax break. A significant chunk of our total compensation is not subjected to FICA or income taxes.

Also, those of us who happen to get health insurance through our employers get a very nice tax break. A significant chunk of our total compensation is not subjected to FICA or income taxes.

The high deductible plans that use a HSA to cover all the normal stuff are even a little better because even your copays and deductibles are covered by pre-tax money. I’ve been on one of those the last couple of years, but we just switched back to a more standard plan on October 1st.

Also, those of us who happen to get health insurance through our employers get a very nice tax break. A significant chunk of our total compensation is not subjected to FICA or income taxes.

Spoken like a sheep… it’s the government’s money, not yours, right? You didn’t earn that.

There are plenty of poor people who are white. Also, the poorest of the poor were already getting Medicaid. There are also many non-poor people who can’t get health insurance due to preexisting conditions.

How much of the Black and Hispanic vote did Obama take vs. Romney? How much of the Black and Hispanic voting demographic is considered poor? As to the pre-existing conditions, the private insurance market refused to cover them for a reason… they weren’t insurable given the amount of health care services they require. BTW, that isn’t insurance. It’s medical care coverage. They are two very different things.

That’s a good point, Carl. My employer started one of those HSA plans this year. To encourage employees to participate, they contribute $500 to every account at the beginning of the year. It was a great way to start the year this year - five hundred bucks of tax-free income.

Why not?

Or are you saying that the votes of poor minorities shouldn’t count as much as the votes of white landowners? How much should a poor minority vote be worth? 3/5?

LOL.

There will always be a “pyramid” shape to economic classes in a free, capitalist society. That pyramid will have the poor at it’s widest base, a narrower middle made up of the professional classes, and the wealthy at the narrowest point, the top. This has as much to do with the scarcity of resources (or lack thereof) as it does access and distribution to those resources.

Our founding fathers knew a bit about history. What they knew about pure “Democracy” is that it is mob rule. If the mob had the majority and the political power, the mob could just vote itself all the wealth from the wealthy. That doesn’t seem fair does it? Nor does that seem sustainable…

So our founding fathers came up with checks and balances in our government. They established a Constitution, laying out the rights of the citizens. They established three separate branches of government, to balance each other out. They established the electoral system, again because the ignorant majority shouldn’t have control simply because there are more of them. Within the legislative branch, the Senate was where each state, and thus the people, had an equal vote. Only in the House of Representatives did the population of the state determine how many delegates would represent their state. All in all, not a perfect system, but one that has worked for 230+ years.

Does that civics lesson clear a few things up, Oxide? We do not live in a Democracy. Democracy is mob rule. We live in a Constitutional Republic, and a Capitalist one at that… so while poor minorities have a vote, they don’t control the entirety of our government or the legislative process just because there are more of them than of the middle or wealthy classes.

More to the point, the poor don’t have a right to my labor, my earnings, just because some people think they can vote to steal it from me and mine and they have a political “majority”.

“‘The actual liabilities of the federal government—including Social Security, Medicare, and federal employees’ future retirement benefits—already exceed $86.8 trillion, or 550% of GDP.’”

ISTM that we have 5.5 years of GDP to pay for 50 years of liabilities or about 11% per year.

Also, those of us who happen to get health insurance through our employers get a very nice tax break. A significant chunk of our total compensation is not subjected to FICA or income taxes.

Spoken like a sheep… it’s the government’s money, not yours, right? You didn’t earn that.

Dude, I wrote nothing of the sort. The point is that that that tax break has been around for a long time, helping people pay for their health insurance. The revenue forgone by such a break has to be made up either by taxing other people or by increasing the deficit, which your kids will have to pay back. You might call it redistribution.

There are plenty of poor people who are white. Also, the poorest of the poor were already getting Medicaid. There are also many non-poor people who can’t get health insurance due to preexisting conditions.

How much of the Black and Hispanic vote did Obama take vs. Romney? How much of the Black and Hispanic voting demographic is considered poor? As to the pre-existing conditions, the private insurance market refused to cover them for a reason… they weren’t insurable given the amount of health care services they require. BTW, that isn’t insurance. It’s medical care coverage. They are two very different things.

I just explained to you that many, perhaps most, of the people that will benefit from Obamacare will not be poor. So you still haven’t explained your focus on poor minorities.

Here’s some statistics for you. In the last election Obama got 55% of the women’s vote and 73% of the Asian-American vote. So is your brain full of furious anger directed at those two groups?

http://www.ropercenter.uconn.edu/elections/how_groups_voted/voted_12.html

“Why all this focus on poor minorities?”

Did you miss the memo that heaping buckets of scorn on the downtrodden is part of the GOP platform?

WAKE UP AND START PAYING ATTENTION!

More to the point, the poor don’t have a right to my labor, my earnings, just because some people think they can vote to steal it from me

Actually, Northeasterner, they DO have that right to “steal.” The conflict here is that what you think of as “stealing,” is what the Constitution calls a “tax.” The people have the right to vote for the government, the government has the right to tax.

Your explanation of the system only strengthens the defense of Obamacare. The Obamacare law made it though the legislative branch AND the judicial branch, through the majority, through the check and balances, and passed muster with the Constitution through the Supreme Court. I admit I don’t know the legal basis for the selective execution of the law by the Executive Branch, but as far as I can tell, there is nothing Constitutionally wrong with delaying the employer mandate, or we would have heard about it.

Think of them as Amidinijab

It’s only “welfare cheese” when someone else is the beneficiary.

True. I still don’t quite have a handle on the differences between Japan and the US regarding deflation. The Japanese have had 20+ years of deflation, except for imports. I chalk this up to currency devaluation and the Japanese penchant for saving vs. consuming.

The question is how is the US different, other than currently having the global reserve currency? Still, I don’t think rates in the US are going anywhere for a generation. There is too much debt…

“…how is the US different,…”

The current Fed Chair and his likely successor have identified deflation as something akin to Armageddon, and have tailored their quantitative easing policy to prevent its occurrence.

Don’t forget what happened to Japanese housing prices over the twenty years from 1990-2010. (Hint: It seems that real estate doesn’t always go up.)

And what conclusion should we draw from this? Is it merely that the Japanese central bank failed to properly inject their QE purchases into the housing sector via MBS purchases?

And what conclusion should we draw from this? Is it merely that the Japanese central bank failed to properly inject their QE purchases into the housing sector via MBS purchases?

Seems like a fair assessment. The FED directly supported the housing market via the purchasing of bonds and did so sooner in the deflationary spiral than Japanese interventions.

As Housing Analyst says daily, demand has fallen quite a bit even in this Fed-supported housing market, so the intervention must continue. It wouldn’t surprise me if a generation passes before housing can operate without massive government intervention.

This system cannot sustain itself. No corrupt system can.

One should ask whether the Fed has the willingness and means to provide indefinite MBS purchase support to the housing market through quantitative easing. They have already expressed to taper QE3 when the economy has shown sufficient improvement, though not necessarily their MBS purchases, and with no guarantee they will not reverse the taper in case they decide the economy is too weak to bear a reduction in accommodation.

Regardless of the duration of the Fed’s willingness to support the housing market, one should also question their ability, in the face of political pressures to avoid subsidizing one sector of the economy at cost to all others. And the selloff in the long-term bond market this spring further questions their ability to suppress long-term rates forever, regardless of intent.

Real Estate
Is The Housing Recovery Just an Illusion Created by the Federal Reserve?
By Christopher Matthews @crobmatthews
Dec. 07, 2012
MARTIN ADOLFSSON / Gallery Stock
Follow @TIMEBusiness

It’s now conventional wisdom that the housing market — once the anchor that sank the American economy — is the ballast that’s keeping it afloat, however tenuously. The Case-Schiller index of home prices, released last week, showed a sixth straight month of year-over-year increases. Rising home prices buttress consumer demand as home prices are the single biggest source of the average consumer’s wealth. In addition, a recent report on housing starts showed that more new buildings are being constructed than at any point since July of 2008, and a revitalized construction industry could do much to bring down unemployment and spur economic activity.

Jed Kolko, the Chief Economist for the real estate website Trulia, compiles a “housing barometer” that measures how close the real estate market is back to normal based on housing starts, existing-home sales, and delinquency and foreclosure statistics. His most recent reading put the housing market at 47% back to normal. Writes Kolko:

In the past three months, Trulia’s Housing Barometer has risen from 34 percent to 47 percent, which is the largest quarterly increase since we started tracking the recovery 18 months ago. Not only is the housing market closer to normal than at any other point since the crisis, the recovery is also accelerating.

In other words, there’s plenty of data to choose from for a housing market bull to make his case. But even if these data clearly show an incipient recovery, what exactly is the reason for it? Tim Iacano of Iacano Research believes that most — if not all — of the recent rise in home prices is a direct result of efforts by the Federal Reserve to stimulate the economy.

The Federal Reserve has kept short term interest rates at near-zero since 2008. In order to stimulate the economy further, the central bank has engaged in quantitative easing (QE) or the purchase of U.S. treasury bonds and mortgage debt in order to drive down long-term interest rates as well. The most recent round of QE was specifically aimed at mortgage-backed securites (MBS), and was effective at lowering mortgage rates to all-time lows.

One of the main ways this sort of action helps stimulate the economy is by increasing home values, for the reason that if you lower the interest rate you need to pay in order to finance the purchase of a particular asset, you raise the price at which a home buyer can afford to purchase it. As Iacano points out, lower home mortgage interest rates can mean dramatically higher home prices. Iacano notes that with today’s record-low rates of 3.3%, an $1,100 per month mortgage payment can finance a house worth $280,000. He continues:

Even if mortgage rates moved back up to their 20-year average rate of 6.5 percent (what many thought were simply unbelievable rates when they first dropped that low last decade), that same $1,100 mortgage payment would finance a home purchase of just $193,000, not the current $279,000. The difference between these two prices is nearly 50 percent!

…

Really? F you. Fool me the first 1000 times shame on you. Fool me the 1001th time.. shame on me. Is the ACA REALLY the most important thing? If so, end federal housing, end farm aid, end foreign aid, end education loans and guarantees, end the other 1000 things that the feds subsidize. it’s really that important? Agree to a balanced budget amendment to the constitution in exchange to make it happen. Otherwise bulls**t, it’s just one more handout on top of the other 1000 that you are asking me to pay.

So let’s just overthrow it all. Burn baby burn!

You say this in jest, but there are those in our society who see this as the only way to undo the decades of corruption and greed that has befallen our system.

As for me? I’ll just direct you to the following which outlines my view perfectly.

Is the ACA REALLY the most important thing? If so, end federal housing, end farm aid, end foreign aid, end education loans and guarantees, end the other 1000 things that the feds subsidize.

What is the logic behind this? What does the ACA have to d owith those other programs?

It’s called prioritization. Riddle me this.. if the federal government operated on a balanced budget, could it be “held hostage” (read: legislatively challenged on its overspending) by those threatening to not raise the debt limit? The repubs would cave on “obamacare” if the dems agreed to a balanced budget amendment.

The ACA, like it or not, takes money from some people and gives it to others because they “need it more”. Not as in paying for a common good like a highway, or national park, but a direct benefit to an individual, namely, healthcare. It puts the US government on the hook for the funding for this. Now I’ve seen how a lot of people in this country take care of themselves. Putting everyone on the hook for that is bad.

You didn’t answer my question.

Also, I’m sure that may taxpayers have absolutely no interest in visiting national parks and would object to having to pay taxes for the benefit of other people.

“Really? F you.”

Such an emotional little fool..

2%.

There is no way to completely eliminate fraud anywhere. Whether it be government or private sector, it will always exist. That said, I don’t like the government’s track record insofar as weeding out fraud and corruption. They seem to actually propagate it.

wow Steve J…the EIC should have been shut down a long time ago.

Bootstrapping rugged individualist capitalists they are!

Every time a police state has been created, it didn’t end without something bad happening. That’s the sort of stuff that worries me. I read yesterday that 4 US soldiers got killed in Afghanistan. 6,000 Iraqi’s have died in violence this in the last month. Over the weekend, the US had military raids in Somalia and Libya. And somebody assassinated another scientist (or someone like that) in Iran.

This AFRICOM thing is real. It doesn’t matter who is in power, the Empire is running things. Problem is, we don’t vote on who runs the Empire.

This AFRICOM thing is real. It doesn’t matter who is in power, the Empire is running things. Problem is, we don’t vote on who runs the Empire.

In some countries, there’s an overt “Supreme Council” which vets politicians and allows the approved ones to stand for election. Iran has such an overt system. The military in various countries, such as Egypt, play such a role.

Our system is designed to limit those who can stand for election, by 1) the need for money and 2) control of the public marketplace (print, radio, tv media).

Here’s some observations by Lawrence Lessig, at a TED talk.

^^ Good TED Talk

(Sucks that TED has watered down its brand so much with all these regional TEDs that have terrible speakers. TED turned into a business and will whore out its name for some fee payments these days. The original TED in SoCal still seems very, very good, but of course its very expensive to attend, I think 10k or more for 2-3 days.)

Ben, are you familiar with any reports that the Kenyan mall attack could have simply been a looting operation, or insurance fraud?

How do we really know the shishkabob is responsible?

Can I trust twitter?

Sure, they identified 3 or 4 dead men as terrorists, but since most of the dead were missing their wallets, how can you be sure of who anyone was?

In addition, whats to stop a “terrorist” from dropping their weapon, smearing some blood on themselves, and pretending to be a victim?

The news broadcasts about this event reminded me of an Abbot and Costello routine.

@Ben Jones, an article to make your Monday

America’s police are looking more and more like the military:

http://www.theguardian.com/commentisfree/2013/oct/07/militarization-local-police-america

I thought it hilarious that the Seal Team that hit Somalia had to swim back empty handed.

What conceivable strategic threat does Somalia pose to the US?

The madness continues….

What conceivable strategic threat does Somalia pose to the US?

Hey, they just got Tom Hanks, didn’t they? So…it’s on!

Derpas gonna derp.

Brawndo, it’s what plants crave…

+1 Good point.

We’re armed to the teeth and as a whole, not polite at all.

Generally the impolite are not in the presence of weapons. It’s pretty rare to see two people open carrying who are not polite to each other.

So the saying should be an “open carry” society is a polite society?

That’s what fans of open carry would say, I think.

So do a majority of American voters.

Aww…. poor thing.

“…the handwriting is on the wall, ceiling and floor.”

I can’t wait for the handwriting to show up on the rooftops, writ large enough to see it from Google maps!

No need to go inside. It can be seen on the plywood front “door.”