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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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Is the information that Shanghai home prices are at one hundred times income levels factual?
How does this compare to Tokyo home prices in the late-1980s, just before the Japanese real estate market went into a twenty-year tailspin?
How many weasel words are necessary to say that China’s growth is slowing?
Oct. 18, 2013, 8:31 a.m. EDT
China’s economic recovery is over: Nomura
By Polya Lesova
NEW YORK (MarketWatch) — China’s economic recovery has ended and its gross-domestic-product growth will slow to 7.5% year-on-year in the fourth quarter and 6.9% in 2014, according to economists at Nomura. Data on Friday showed that China’s GDP rose 7.8% in the third quarter, meeting market expectations. But leading indicators suggest that China’s recovery ended in September, the Nomura economists wrote in a note on Friday. They see downside risks to their fourth-quarter GDP forecast. “We have argued that China’s recovery is fundamentally unhealthy, as it has been mainly driven by heavy industry and stands in contrast to the principles recently expounded by both President Xi Jinping and Premier Li Keqiang - that a lower rate of GDP growth can be tolerated to ensure a better quality of growth in the future,” the economists wrote.
Are bloggers and Rush Limbaugh part of the same cabal?
Your First Amendment rights are in jeopardy. Enjoy them while they last.
Bloggers, pundits show little repentance after Obama setdown
October 17, 2013, 12:49 PM
A stern-faced President Obama had some choice words for bloggers and radio pundits as he spoke Thursday morning about the deal to reopen the government and lift the debt ceiling. And the bloggers and their supporters shot right back.
Obama said Washington needs to stop listening to bloggers, “talking heads on radio” — an unmistakable reference to hosts like Rush Limbaugh — plus “the professional activists who profit from conflict” and instead focus on growing the economy and creating good jobs. See a recap of Obama’s remarks.
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Let’ see, how long has he been in office and just how many jobs have been created and how much has the economy grown? Let us keep loading them up on the government plantation.
You should only get your news from what Dianne Feinstein considers “real journalists”
What’s eating Mr Market these days? It seems quite odd to see both the Down Jones Industrials and gold selling off in sync at the opening bell.
Topic for discussion:
If you are a worker, when was the last time you asked for a raise?
Did you get one?
If not, what was the excuse they gave for not giving you a raise?
If you are an employer, when was the last time you gave your workers a raise?
If you did give your employees a raise, why?
If your employees asked for a raise and you refused, why?
If you are self-employed are you raising prices or cutting costs to stay in business?
If not, what was the excuse they gave for not giving you a raise?
The company only made a $10B profit. Money’s too tight to mention.
There is another thing that is that is going on now. In my company, new persons with little related experience are hired with higher pay than what the engineers with 5 to 10 years experience are drawing. Apparently one of the newbies let the cat out of the bag so the oldies are fuming but can’t quit.
Thanks for the insight. Good to know.
Interesting. Happened to me back in 98, if by “newbies” you mean new grads. Hadn’t seen it since if the “oldies” are changing jobs as needed to force the salary up. Does that mean the starting salaries given to the newbies are really good? Or that the oldies took a cut that they haven’t gotten back? Or just that the oldies have sat in one job for a long time and are being paid much less than if they had changed jobs at least once since then?
The thing that makes it easy for employers is the number of links in the golden handcuffs. Mortgage debt being the big one. Marriage, kids, car loans. Debt slaves are easy to abuse. It has been so in my observation since the ’70s.
The consequences of Debt Slavery are timeless.
“The consequences of Debt Slavery are timeless.”
+1 The debtor loses control of their life.
What is the answer and who has it? Are there any adults any longer in this country? You can say what you want about the Tea Party but at least they are trying to make a difference. For those of you who think the ACA will not add to the debt in this country you are just wrong. Plain wrong. The ACA will increase costs for businesses, taxpayers (there are still a few of us left) and the government. (what the gubmint doesn’t collect in taxes, they have to borrow for)
I know there are those out there that say it is a noble effort to provide healthcare for those who don’t have it now. (are there really people out there who are denied medical care in emergency rooms? thousands? millions?)
If you don’t think costs will go up, you are wrong. Add to the demand of healthcare (putting x millions of people into health plans) without increasing the supply (are there going to be any more doctors??) and costs will go up. Maybe you think the law of supply and demand doesn’t apply here? Who will pay for those costs?
1. Employers. Any of you hear of something called the PCORI fee? Transition reinsurance fee? (that’s been in the news lately!) HIT tax? These are all new taxes the ACA puts on employers. Who do you think pays for that? Employers? Well yes, they typically subsidize between 70 and 80% of the total cost of an employees healthcare.
2. Employees- See the note above. If the employers are subsidizing 70 to 80%, that leaves 20 to 30% for the employees to pony up for. Or if you have a company who is going to pass all those new taxes on straight to the employee, then the hardworking folks will be paying for all of it. (I work in Finance and support the benefit plans my company provides so I have real life experience with this stuff) My weekly contribution for healthcare is going up 20% next year…..wish i lived in Hawaii…..they don’t contribute a cent!
3. Gubmint (i.e. taxpayers) So if you think all of those new taxes are going to pay for the subsidies that the government is going to give out to make healthcare affordable, I’ve got a bridge to sell you. So that means…the taxpayers will be ponying up again because you see……the gubmint spends more money than it takes in.
Do we have a revenue problem? A spending problem? Both?
Let’s hear your solutions. Yes, I’ve seen them before on the HBB. Let’s cut off all foreign aid. (works for me) Let’s bring our troops home and not be the world’s policeman. (check) Ok…..what happens when we bring the troops home? Who is going to employ them? There are no effin jobs! So those folks will need to be taken care of via welfare, food stamps etc. Do we cut entitlements? Means testing for social security? Raise taxes? Ok….to what rates? 80%? 90%? Give me a number for once. And then let me know if you think there will be any adverse affect on hard working slobs like Ben (sorry) who finally say, F-it. I am not busting my balls for 15 hours a day for the government to take 80% of it away. Do we put a 15% tax on wealth? Start confiscating 401k plans and cash in the bank? That seems like a real smart way to treat folks who worked hard and didn’t blow it on boobs are over priced shit shacks. (oh wait….the FED is doing that already)
Are maybe none of this. Maybe we just inflate our way out of this. Is that going to work? I know there are many folks on the board who say the thing needs to be blown up……the sooner the better. But what does that really mean? Will we have bank runs? Will people have food to eat? Panic in the streets? Who has their guns, ammo, rice and water ready? I tell you there was panic in the streets when that god damn panda cam was taken away for two weeks……you think our wonderful citizens could survive without food for a couple of days?
You think our President, Congress or the Fed has the answer? These a-holes think that keeping housing prices propped up is the answer? Can they really be that effin stupid? Really? Is there any leader out there who has the balls or the brains to get on the national television shows and say this is the stupidest f’n idea we have had in ages?
I know there are some smart people on this blog (with Rio obviously thinking he is the smartest…..sorry for the cheap shot but I read the blog all the time and you just think you know it all) so let’s hear your solutions………cause I am not sure there is one!
Sorry for the long winded gas bag post Ben.
I appreciate your thoughts. However, I personally believe that the time for any solution to fix our present problems is now gone. We don’t get out of this.
Nobody in Washington, including the tea party guys, are ever going to stop the continued entrenchment of government or stop the spending because too many Americans are now on the Government dole and our “leaders” aren’t going to risk early retirement by rocking the boat.
I am involved in the local political (Town & County) landscape here in SoUtah and I sometimes amuse myself by discussing entitlements with the local “conservatives” that I meet. I always like to get around to Social Security and ask the question on whether or not it should be considered an entitlement.
“After all, I say, many individuals do receive more than they actually pay into it, right? And considering that the group of workers paying back you SS is getting smaller over time shouldn’t cuts be made in what you are now receiving, you know for the good of the Nation”?
The response is always the same. Anger, followed by something along the lines “I paid into it my whole working life and I deserve to get what’s mine”.
The smart posters were on here before the bust. I thought that I was one of them. A total collapse in housing followed by the big stock market drop along with record numbers of Bank failures, yep, saw it all. I believed that the personal wealth destruction that would happen, because of the bust, would wake people up and expose the corrupt politicians and the POS Bankers for the monsters that they truly are and possibly from that enlightenment we could reform the political process for the good.
It turns out that I wasn’t that smart. For the last six years I have stood around with a dumb look on my face while the very Bankers that are personally responsible for that bubble that failed, got richer. The Politicians that put laws into place that allowed the bubble to reach such epic proportions are still around and even more lawless (IRS violations and the NSA) than before.
And across this Country many people, including some on this site, are still trying to debate one side of the aisle against the other, like it matters, while the oligarchs steal what little wealth we have left.
However, perhaps I am wrong in my pessimism. Google just blew through $1,000.00 a share today, so that is proof that things must be getting better, right?
Ok…..what happens when we bring the troops home? Who is going to employ them? There are no effin jobs!
I think Darrell’s analysis of that problem is correct. The jobs would be there if we controlled what came into the country the same way everybody else does. Even though the rich wouldn’t continue to get richer as quickly…
Invoking “the rich” is a bit of a strawman in this saga. If there were economic opportunity without the price fixing, “the rich getting richer” wouldn’t be a part of the discussion.
If you are responding to me you missed my point.
I said nothing about “the rich” in general. I stated “the very Bankers that are personally responsible for that bubble that failed, got richer”.
Is that an incorrect statement?
I was responding to Carl.
I just bring it up because I think those with the money control our policy, so they don’t like the solution even though it might be best for the country. If we had to make our own stuff there would be plenty of jobs, even though it might mean less profit at the very top.
There is no solution, but there is one guaranteed outcome:
Permanent Democrat Supermajority
Another HBB poster countered that it would inevitably split into factions, which I correctly replied will be the Free Sh*t Army versus the More Free Sh*t Army.
The 0.1% will still own and control everything. 85% of this country will be poor or working poor, kept alive with just enough free sh*t in a manner structured to continue the enrichment of the 0.1% at the expense of the 14.9% that is the hollowed out carcass of what was once the American middle class.
There is a solution. Call a general strike and let it last for at least 17 days beginning on Thanksgiving Black Friday. It’s the silver bullet of death to the vampire squid.
Strike!
Strike!
Strike!
The other solution is outright armed revolt. Two different times in our history where this was the solution eventually taken, so precedent exists.
Our history shows a 50/50 chance of success, not great odds if one were risking life and limb, but there it is. Of course, on a long enough time-line, the survival rate for everyone drops to zero, so maybe it’s not such terrible odds after all.
“Our history shows a 50/50 chance of success”
So would that be the American Revolution and the Civil War? The American Revolution was against a foreign power so it might not count. There were some other attempts like the Whiskey Rebellion and the Indian Wars but the Government won those conflicts.
Historically labor strikes have advanced the ball farther down the field.
Then the question I would ask would be:
If the nexus of our problem is the collusion between a bunch of morally corrupt capitalist and their political minions then a economic body blow of a general strike should work. The object is to seize control of our economic and political freedom.
But if as you suggest we take up arms then I must ask where are the generals and strategic planers that could coordinate such a national campaign? If I took a cross section of the able bodied population who could be marshaled into operational units I’m afraid the numbers would be pitifully small. And if we should prevail in an armed revolt who would be the new political leaders? Wouldn’t they be the same people who killed other Americans to advance their particular vision of what America should be? Pretty risky, we might end up with a Hitler or Stalin.
If we go with the strike option then I think we could muster a army of 10’s of millions. Citizens of all ages and political persuasions could be deployed to shut down critical economic activities. Obama is a coward and a appeaser at heart so I doubt he would deploy deadly force against us.
In summary, your plan might have a 5% chance of success. I think my plan (if we could just get 20% of the people to join us) could put the odds at a better than 90% chance of success.
The majority of us are afraid of freedom. Afraid to even limit what they but to what they can pay for. An army of Debt Zombies? Unlikely.
so let’s hear your solutions………cause I am not sure there is one! ??
To many people riding in the wagon…Not enough people pulling it…
Or…not Are..before i get slammed by the g-police.
This headline currently on the MarketWatch front page:
“Foreclosures dog even wealthiest home buyers”
With the blurb below:
“Jumbo borrowers who went into foreclosure a few years ago are learning the hard way: You can’t go home again.”
This is such pathetic, sloppy journalism. If they were “wealthy” they wouldn’t need a mortgage. If they were “wealthy” they wouldn’t have fallen into foreclosure.
This is such typical sh*tty MSM journalism, the purpose of which is to pimp the lying liar NAR lie that you can borrow your way into “wealth”, PUKE!
Note that the couple in the article (very wisely) jingle-mailed on their underwater crack shack and are now all boohoo they can’t become debt donkeys again.
“Wealthy” people don’t need mortgages, they may get mortgages for tax purposes (welfare for the 1%), but the point of calling out this sh*t journalism is to differentiate between high-income (and apparently no savings) and the truly “wealthy”, for whom this would not be a concern.
“Note that the couple in the article (very wisely) jingle-mailed on their underwater crack shack and are now all boohoo they can’t become debt donkeys again.”
You’d have to be a braindead, empty skulled moron to continue paying for what you know is a depreciating shack that’s only worth a fraction of what you paid.
Is vampire squid good eatin’?
Look out for the sharks!
Follow Up | SATURDAY, OCTOBER 19, 2013
Could Goldman Sachs Be Activists’ Bait?
Goldman’s weak results, even as rival Morgan Stanley prospers, could prompt a call for change, including a cut in its lavish compensation.
Shares of Morgan Stanley reached a new 52-week high Friday as investors cheered the firm’s earnings report and ongoing transformation, while Goldman Sachs Group fell on the week after a disappointing profit report highlighted its low returns and excessive employee compensation.
Morgan Stanley (ticker: MS) finished the week at $29.69, and up 6%, and Goldman (GS) fell 1% to $158.69. The moves underscored the growing investor preference for Morgan Stanley, whose shares are up 55% this year, versus 24% for Goldman.
Goldman’s weakness could spur an activist investor to push to break up the company. One argument could be for a spinoff of the investment-management unit, which could be worth $20 billion or more based on nearly $1 trillion in assets. A more controversial idea would be a spinoff of one of Goldman’s crown jewels, its financial-advisory business, which might be worth $10 billion or more if separated from the firm. Pure-play asset-management and financial-advisory companies get valued at a big premium to Goldman, which trades for about 10 times forward earnings and 103% of book value.
Both Goldman and Morgan Stanley have low returns on equity of around 8%, but Morgan appears to be on a path to higher returns while Goldman’s outlook is cloudier.
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How is California housing looking nowadays? Still always going up?
Billions of dollars of federal largess are flowing into the pockets of CA homeowners.
Does anyone have the statistics on how much was handed out to downtrodden renters by the Hardest Hit Renters’ Fund?
Last investor to buy an overpriced SoCal home gets burned!
Southern California housing market slows after torrid rebound
By Andrew Khouri
October 16, 2013, 4:54 p.m.
The median home price stays flat for the third straight month, easing fears of another housing bubble and signaling a return to a more normal market, experts say.
A “For sale” sign is displayed in front of a house in KB Home’s Whisler Ridge housing community in Lake Forest. (Patrick T. Fallon, Bloomberg / September 23, 2013)
- Government shutdown puts a wrench in housing market
- L.A. County is among least affordable housing markets
- Realtors group expects more homes to go on market, moderating prices
Southern California home buyers have apparently had their fill of bidding wars, home shortages and double-digit price hikes.
For the third straight month, the median home price across the Southland stayed essentially flat, at $382,000. The September data confirmed expert predictions that waning demand would throw a wet blanket over the white-hot market. The stall is owed to multiple factors: buyer fatigue over skyrocketing prices, higher mortgage rates, an expanding supply of homes and a pullback by investors who had swarmed the market.
The cooling has quelled fears of another housing bubble and signals a welcome return to normality, experts say. The California Assn. of Realtors predicts that year-over-year price increases will return to 6% next year, more in line with historical norms.
“The market was starting to get too hot for a lot of people to touch,” said Stuart Gabriel, director of UCLA’s Ziman Center for Real Estate. “Now we are moving toward a more sustainable growth path.”
The rapid run-up in prices peaked in June — with a whopping 28% year-over-year increase in the median price. Sellers dominated the market, often getting multiple bids for more than the asking price amid heavy demand and scarce supply. But sellers listing their homes now are finding a different, more empowered, class of buyers.
“They don’t feel the need to pull the trigger if it’s not a perfect house,” said Broker Derek Oie, owner of Century 21 the Oie Group in the Inland Empire.
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Sell now or get priced in forever!
California Home Prices Cool In September
October 17, 2013 5:09 PM
SAN DIEGO (AP) — California housing prices cooled in September as inventories grew and investor interest waned, a research firm reported Thursday, offering fresh evidence that the market is taking a breather after a torrid spring and summer.
The median sales price for new and existing houses and condominiums was $355,000 last month, up 23.7 percent from $287,000 during the same period last year, research firm DataQuick said.
It was the 10th straight month of annual gains above 20 percent, but the median fell by $6,000 from August.
The 36,027 homes sold in the state — up 5.9 percent from a year earlier — was the highest September sales tally since 2009.
Fewer homeowners find themselves owing more than their properties are worth as prices have soared, prompting many to put their homes up for sale.
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The saddest cut of all for the foreign all-cash real estate investors in California residential housing will be the point when they realize there are NO end-user buyers who can “afford” to pay anywhere near the amount they overpaid when they got in at the tail end of the echo bubble investing craze.