November 26, 2013

Bits Bucket for November 26, 2013

Post off-topic ideas, links, and Craigslist finds here.

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Comment by AbsoluteBeginner
2013-11-26 03:37:50

Used to be a traditional Thanksgiving TV watching thing when I was a kid. Need to see if my local library has it:

Comment by Housing Analyst
2013-11-26 08:41:06

California Has The Highest Business Failure Rate In The Nation

Comment by Tarara Boomdea
2013-11-26 21:48:34

Me, too. And at Christmas, “A Christmas Carol” but only the one with Alastair Sim. As a little kid, his scream when he sees his future grave scared the hell out of me.

Comment by Housing Analyst
2013-11-26 05:08:06

realtors are liars

Comment by Housing Analyst
2013-11-26 05:09:38

California Bond Rating Worst In Nation

The state is so corrupt and unsafe, you’d have to be an idiot to go there.

Comment by goon squad
2013-11-26 07:58:26

Here the rich California twits get their panties in a bunch and have NIMBY tantrums about feeding homeless in their neighborhood. Article notes that Los Angeles County has about 53,800 homeless:

Comment by Bill, just South of Irvine, CA
2013-11-26 08:13:27

They are progressives (AKA riotards)

Comment by Housing Analyst
Comment by Albuquerquedan
2013-11-26 07:51:27

California corrupt and unethical lawyers what are you talking about:

Comment by rms
2013-11-26 08:15:41

Don’t be dis’n my main main, Johnnie Cochran. He hates ‘da po-lice! He’s mah junkyard dawg!

Comment by azdude02
2013-11-26 06:04:35

your house is the best meal ticket you will ever have. Don’t get too emotionally attached to it though. If you get to greedy you could end up up without a seat when the music stops.

Don’t worry though. our ship will come in some day at that 9-5 you hate going to every day.

Comment by Combotechie
2013-11-26 06:15:03

Not only is buying a house the best meal ticket you will ever have it is also an excellent way to finance all of your vacations, your children’s college costs, all of your brand new cars you will get to buy every year, and your retirement plans.

If you want to extend your spending beyond this then you will have to do something extra to add to your house several thousands of dollars of value by maybe planting flowers in front or maybe even planting a tree.

Comment by Combotechie
2013-11-26 06:28:34

Last Saturday I was able to add three or four thousand dollars of value to my property just by sticking some plastic flamingos in the front lawn.

Comment by rms
2013-11-26 08:19:13

That’s fracking incredible! I want a house too, a really big house. :)

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Comment by Whac-A-Bubble™
2013-11-26 06:30:24

“…do something extra to add to your house several thousands of dollars of value…”

If you are a savvy real estate investor, then after you blow several thousand on improving the yard, you can charge it back to your tenants as a rent increase.

Comment by oxide
2013-11-26 08:05:17

Savvy real estate investors don’t need a reason to raise the rent. They just do it and dare you to move.

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Comment by Housing Analyst
2013-11-26 08:25:16

It’s magical too huh Donkey?

Comment by Blue Skye
2013-11-26 13:44:49

You showed them, didn’t you Oxy!

Comment by Michael Viking
2013-11-26 06:35:01

If you want to extend your spending beyond this then you will have to do something extra to add to your house several thousands of dollars of value by maybe planting flowers in front or maybe even planting a tree.

Another thing you could do is use your house to finance a second house, thereby beginning the bootstrap method of embarrassing riches. This right here is the secret; the sky is your limit.

Comment by goon squad
2013-11-26 06:26:10

House prices only ever go up, you can’t loose with housing.

I want to be Tom Vu when I grow up.

Comment by NH Hick
Comment by NH Hick
2013-11-26 09:03:04

Maybe this one will work better,

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Comment by jose canusi
2013-11-26 06:48:31

Wow, the “knockout game” is a myth! Because “real” journalists have decided it doesn’t exist. Although I’m sure it was very real to the folks who got their heads cracked open.

It’s an interesting exercise to enter “knockout game myth” into google’s search engine and notice which so-called media outlets and “journalists” are trying to bury this thing.

Comment by rms
2013-11-26 08:28:09

Simply doesn’t exist. Now go shopping.

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Comment by Tarara Boomdea
2013-11-26 14:04:41

A couple of days ago I asked on the City-Data forum in Las Vegas if anyone had heard of this type of attack happening here.

Hilarity ensued - I was accused of being a “weak minded Fox News viewer”. The thread lasted five pages before it was shut down due to complaints.

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Comment by Dale
2013-11-26 19:53:27

Is that where Rio(tard) is posting now?

Comment by azdude02
2013-11-26 06:52:49
Comment by oxide
2013-11-26 06:07:47

Today’s zillow fun… inventory. Compare houses for sale with the houses sold in the past 24 months.

85206 Mesa AZ = 203 for sale now / 1783 sold in the past 24 months = 11.4%
78701 downtown Austin TX = 9.1%
34233 Sarasota FL = 10.6%
34236 Sarasota FL (Bird Key/St. Armand resort(?) area) = 21.9%
95212 northeastern Stockton CA = 5.8%
97702 eastern Bend OR = 18.5%
89169 northern Las Vegas NV = 8.8%
my zip code MD= 5.5%

I dunno… is this a good indicator of how bubbly an area is/was?

Comment by Housing Analyst
2013-11-26 08:22:22


You start with a link. Like this.

Then you state the truth about it like this.

Mesa AZ Housing Demand Collapses 31% Year Over Year

Comment by oxide
2013-11-26 10:04:14

What a great link! Lots of Truth in that link. Let’s lookie looo…

I start by posting a link — I’ll use the overall Mesa, as you did:

Then I state the Truth about it like this:

Mesa AZ Median Sale Price skyrockets 13.6% Year Over Year

Oh looky looo, zillow tracks several variables!

Mesa AZ Sale Price Per Square Foot Skyrockets 15.6% Year Over Year
Mesa AZ Rent List Price Skyrockets 23.6% Year Over Year
Mesa AZ List Price Skyrockets 21.8% Year Over Year
Mesa AZ % of Houses Sold for a Loss Craaaters 21.1%
Mesa AZ % of Houses Sold for a Gain Skyrockets 21.1%
Mesa AZ Listings with Price Cut Skyrockets 17.2% Year Over Year

The 17% houses that needed to cut the price makes sense. List price increases 22%, actual sale price increases only 14%. That doesn’t sound like a bubble OR a collapse, just normal bargaining. I see that in my nabe too.

Comment by Ben Jones
2013-11-26 10:09:38

Zillow doesn’t count REO. This site does:

Don’t miss the price reduced line at the bottom.

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Comment by oxide
2013-11-26 10:33:34

Man, you guys gotta stop posting links.

Ben, your link still shows a 20% YOY list price increase. And the percentage of “distressed” homes decreased from 9% to 2%. I don’t know how they calculate that metric, but it looks like their clearing inventory.

I was using zillow links because that’s what HA did.

And I just explained a price reduction. Squirrel feeding notwithstanding, it looks like people are willing to wait for the price to drop to where they think they get a good value.

As for REO, I can see why they aren’t counted. If I were Blackstone and I had cash, I would ask for a $50K price drop on a house that need $50K of work, and spend the $50K on the work. That effectively brings the sale price up to a zillow-sanctioned house. Or higher, if I wanted to flip-for-profit.

Comment by Rental Watch
2013-11-26 10:35:41

I think he was specifically targeting zip code 85206. Movoto has a total of 168 listed for that zip code. Zillow has 227.

If you widen to all of Mesa, Movoto has a total of 1,762, Zillow has 2,342.

Comment by Ben Jones
2013-11-26 10:45:32

It shows a $20 per sq/ft drop in listing price since July.

You probably missed this from the other day:

“Certain areas have already become a buyers’ market, and the entire market will be there by early next year,” said Mike Orr, a housing analyst at Arizona State University in Tempe.’

Comment by Whac-A-Bubble™
2013-11-26 12:02:06

“Man, you guys gotta stop posting links.”

How else do you expect us to stop the ‘real estate always goes up’ crowd dead in their tracks?

Comment by Strawberrypicker
2013-11-26 18:50:28

Anyone who buys in Mesa or anywhere near Phoenix at current asking prices is a moron. This is my area. Those year over year figures are nothing but arear view mirror of how the market used to look when the investors and flippers were driving up prices. The investors have fled and flippers are holding the bag leaving real demand cratered. The inventory has also increased as many are putting homes back on the market hoping for wish prices.

You need to understand the dynamics of this market and what has gone on the past few years here to get it about here.

You also need to understand the tremendous amount of building going on in this area. The builders came in and started trying to capitalize before it all went belly up. They mostly didn’t make it and with all that is coming on line from the builders (who are also pricing at wish prices for now) in the next 6 months it is going to further crater.

Quoting numbers that still reflect the months before July of this year is a fools game. Better ask Polly for some help.

Comment by Housing Analyst
2013-11-26 10:12:36


The price direction is immaterial considering demand collapse.

How many times do I need to school you on the proverbial 10 year old Honda Civic with a $40k price tag?

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Comment by Rental Watch
2013-11-26 10:17:21

To translate, every 4.166% = 1 month of inventory (as traditionally measured). A number of about 25% is “balanced”. Below that is a “seller’s market”, above that is a “buyer’s market”.

Again, generalizations, but what is typically noted.

Comment by Strawberrypicker
2013-11-26 19:18:15

Why the past 24 months?

Comment by Whac-A-Bubble™
2013-11-26 06:27:53

Will Norway’s housing bubble collapse stay in Norway, or is contagion a likely prospect? I’m reminded of how the collapse of the Thai baht back in the late 1990s spilled over to global currency markets; since All Real Estate is Local, perhaps the situations are unrelated.

Comment by Whac-A-Bubble™
2013-11-26 06:35:40

Norway is an oil-dependent export economy, and oil prices are notably weak as of late. Apologies to Ben if this brings to mind bad memories of the Texas housing bust after oil prices collapsed in the early 1980s.

Comment by azdude02
2013-11-26 06:51:06

norway scr@wed norway!

Comment by Albuquerquedan
2013-11-26 07:34:16

The average oil price for WTI in Nov. 2012 was 79.67 while the price today is around $91 a barrel, I am sure Norway is being devastated by the “drop”. Didn’t you say you taught math?

Comment by Albuquerquedan
2013-11-26 07:38:33

Sorry that number was a low when the news on Iran first came out actually it is around $94 today.

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Comment by Albuquerquedan
2013-11-26 07:48:04

It is interesting that no one discusses Norway’s ace in the hole its wealth fund. The government has been smart enough to sock money away during good times what a concept of course nothing grows to the sky so parabolic housing increases will not continue but it is much harder to determine what is being driven by the strong fundamentals and what is being driven by speculation. You would need to look if they have a policy of given loans to people with bad credit just for politically correct reasons.

Comment by oxide
2013-11-26 08:11:30

The government has been smart enough to sock money away during good times what a concept

That concept has a name. It is named “Keynesian economics.” To HBB, the concept is known as “excess taxation,” “theft,” “statist,” “socialist,” and “communist,” among others.

Comment by In Colorado
2013-11-26 08:23:04

It is interesting that no one discusses Norway’s ace in the hole its wealth fund.

You mean a bunch of pinko socialists saved for a rainy day?

Comment by Neuromance
2013-11-26 09:19:13

oxide:That concept has a name. It is named “Keynesian economics.”

Keynes was a brilliant guy. But he’s not the infallible messiah many of his most vocal proponents in the MSM make him out to be. He was wrong about some things too:

1) He equated house building with burying bottles of currency (4th paragraph from bottom). However, houses have an associated multi-decade deleveraging event associated with them. That initial burst of economic activity is paid for by the homeowner who goes deeply into debt to do it. He draws down his spending over the next decades to pay for it. Burying bottles of currency has no such blowback.

2) Keynes did suggest governments should pay off debt in good times. Of the 68 years since World War II, the US reduced its debt by single digits immediately after World War II, when it reached 120% of GDP. And never again after that. The economy grew so the debt became a smaller, manageable portion of GDP. Are there any countries that actually reduce their debt in real terms, or do they all hope for economic growth to reduce it as a percentage of GDP? Is this concept of paying down sovereign debt as unrealistic as creating a true communist society in the real world? Does it just go against social (citizenry plus politicians) nature?

The society will reduce its debt when it becomes the less painful option. When does it become the less painful option? Only in catastrophe.

Even Einstein was wrong on very rare occasion (end of first paragraph). Keynes had some brilliant insights but he didn’t present revealed wisdom either. His first name was ‘John’ not ‘Moses’.

The debt-doesn’t-matter crowd, Keynesians all, are prescribing yet more debt to deal with a debt-induced crisis.

It’s like a hungry vampire with poor self control trying to figure out a way to keep his victim from dying altogether.

Debt is deflationary. It forces the debtor to draw down spending. The answer isn’t to print money to have it hoovered back up by Wall Street. We shouldn’t have a “company store” society.

Comment by Albuquerquedan
2013-11-26 09:58:28

Show me a liberal state with a well funded rainy day fund they are all conservative states

Comment by In Colorado
2013-11-26 10:41:32

Show me a liberal state with a well funded rainy day fund they are all conservative states

This chart shows that isn’t true. Some “conservative” states save very little, while some “liberal” states (New Mexico stands out) save more.

What the map does show it that its mostly oil producing states which have surpluses and save.

Comment by my failure to respect is unacceptable
2013-11-26 11:09:47

His first name was ‘John’ not ‘Moses’.

Even if his name was God or Jesus, Keynes would have been wrong.

Comment by oxide
2013-11-26 11:23:15

He draws down his spending over the next decades to pay for it.

Because before he bought the house, he was renting for free, right? :roll: Look, someone paying a mortgage for 30 years and someone renting for 30 years will spend the SAME amount of money. Actually, the renter will spend more, because rent goes up. And I drew down my spending as a renter, not as a buyer, in order to save the down payment.

Is this concept of paying down sovereign debt as unrealistic as creating a true communist society in the real world?

I dunno, why don’t you ask the Bush Administration and Congress circa 2001 and 2003 who herded tax cuts through Congress instead of paying down sovereign debt?

Comment by Albuquerquedan
2013-11-26 11:23:29

Looking at the map and do not see any liberal states with rainy day fund nm is a swing state and ca is a major oil producer

Comment by Housing Analyst
2013-11-26 11:41:24

“Because before he bought the house, he was renting for free, right? :roll: Look, someone paying a mortgage for 30 years and someone renting for 30 years will spend the SAME amount of money.

So a renters cost are going to be the same as a buyers cost even when a buyer overpaid by 200%+?

Good God woman you can’t even be honest with yourself.

Comment by X-GSfixr
2013-11-26 13:49:18

Show me a state with a well funded rainy day fund, and I’ll show you a state where Republicans are calling it evidence of government “stealing from the producers”

Comment by Neuromance
2013-11-26 16:41:11

Neuromance: He draws down his spending over the next decades to pay for it.

oxide:Because before he bought the house, he was renting for free, right? :roll: Look, someone paying a mortgage for 30 years and someone renting for 30 years will spend the SAME amount of money.

This is exceptionally unlikely. Owning means coming up with 10-20% downpayment, plus a montly PITI payment that is almost certainly significantly higher than the rental payment. Plus the often ignored “Maintenance”, which can easily run into the 10s of thousands of dollars over the duration the house is owned.

oxide: Actually, the renter will spend more, because rent goes up.

THIS is an interesting item. All projections I ever see are of linear increases, and in about 10 or 20 years, these projections have people are paying ludicrous amounts of rent per month. In reality, rent does go up. But it’s not linear or continuous. I believe we saw a lot of rental stock in the 2000s converted to for-sale units resulting in significant increases in the 2000s. That trend is changing.

Here is a very good picture of state-by-state rental increases over the decades, up till 2000:

As you can see, the typical (inflation adjusted) median rents do not increase in a consistent linear fashion. In fact, in Maryland, from 1990 to 2000, they dropped from $700.00 to $689.00, in inflation adusted terms (they went up in non-inflation-adjusted dollars).

oxide: And I drew down my spending as a renter, not as a buyer, in order to save the down payment.

This is another strike against housing as a stimulative policy. In order to purchase the house, you had to draw down your spending before the purchase, in order to raise the downpayment, and then you contend with the almost certainly significantly higher PITI+M versus rent over a good chunk of the life of the loan.

Multiple studies since 1996 have shown that higher unemployment is strongly correlated with increasing homeownership rates.

Now, don’t get me wrong - I think buying a house can be good for the individual. IF the house is in good shape for starters and doesn’t require a lot of maintenance; if the house price is truly affordable by the purchaser; and it’s nice to have a locked in payment eaten away by inflation, especially after the relentless rent increases of the 2000s. But government, central bank and investors are heavily involved in supporting (manipulating) market prices right now. Is that going to change? Probably, but who knows when. And few - if any - serious researchers suggests housing is a good longer term investment. But it’s nice to be able to eventually stop paying a monthly fee for shelter.

But this focus on encouraging housing as a social policy is utterly self defeating. This focus on pushing debt on the populace is utterly self defeating as well. This focus on capturing more and more consumer surplus is self defeating as well.

Our age has its robber barons, but unlike a century ago, these barons are extractive elites, not productive ones.

Comment by Neuromance
2013-11-26 17:12:41

Neuromance: Now, don’t get me wrong - I think buying a house can be good for the individual. IF the house…

Forgot a very important one - IF the house can retain its value. Something missed by those who “bought now and were priced in forever.”

Comment by Whac-A-Bubble™
2013-11-26 09:26:24

Don’t tell me you are long both gold AND black gold! Let me guess: It’s Peak Oil that guarantees oil prices will keep going up from here to the Moon?

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Comment by Whac-A-Bubble™
2013-11-26 06:38:36

Breaking News Building Permits in U.S. Rose 6.2% in October to Five-Year High

Norwegian Housing Bubble Seen by Shiller Deflating: Mortgages
By Saleha Mohsin - Nov 12, 2013 9:32 AM PT

Trine Dahl, a broker at Norway’s second-largest realtor DNB Eiendom, says the number of potential buyers at her viewings has fallen by 50 percent in the past year and she now has to make as many as 15 calls to sell an Oslo apartment. A year ago, Dahl says, selling was as easy as sitting at a cash register.

The change came in the summer and since August and September, it has been really different,” Dahl said in an interview at DNB Eiendom’s office on Oslo’s upscale west side. “It’s very hard to say which property is a difficult house to sell and which is easy. In a normal market, that’s easy to do.”

Norway’s housing market, which Nobel Laureate Robert J. Shiller described in 2012 as being in a bubble, is now deflating faster than even the central bank had predicted after regulators introduced a slate of measures to cool demand. After home prices doubled over the past decade, fueled by low interest rates and surging oil wealth, they’ve slid for two consecutive months raising concern that real estate could be in for a hard landing amid record household debt.

Comment by Whac-A-Bubble™
2013-11-26 06:43:54

The world’s five largest housing bubbles: A brief, whirlwind tour
By Matt Phillips
October 24, 2013

Goldman Sachs analysts spotlighted some of the world’s fast accelerating housing markets this week, in a bid to try to sniff out potential for problems in the making. (After all, it was the high-flying US housing market that served as the epicenter for the financial crisis that set off the Great Recession.)
​Here’s a quick rundown on what’s been happening in some of the hottest housing markets in the world.

With prices up roughly 30% since the worst of the Global Recession, Norway has pulled far ahead of even its strong Nordic neighbors in terms of housing prices. The rise is due, in part, to surging incomes and population thanks to immigration. Supply is tight because of land use restrictions and relatively stringent minimum size and quality standards. But the ongoing surge in prices is making some a bit jittery. Household debt in Norway is high, and much consumer wealth is locked into illiquid real estate. So, a downturn in the housing market could result in some sharp cutbacks in consumption. And while the oil-rich nation has weathered the recent global economic slowdown almost effortlessly, it had its own nasty financial crisis in 1987 tied to over-exuberance from a recently deregulated banking system.

Comment by Resistor
2013-11-26 11:24:18

“over-exuberance from a recently deregulated banking system.”


Comment by Whac-A-Bubble™
2013-11-26 06:47:09

ft dot com
September 6, 2013 7:56 am
IMF warns Norway over housing bubble
By Richard Milne in Oslo
A pedestrian is seen silhouetted against residential housing blocks in Oslo, Norway©Bloomberg

Norway hasone of the biggest housing bubbles in the world with prices overvalued by up to 40 per cent, according to the International Monetary Fund, putting pressure on the favourite to win the country’s upcoming election.

In its latest assessment of the oil-rich Nordic country, the IMF increased its estimate of how much Norwegian house prices are overvalued from 15-20 per cent in its previous report in 2011.

“A large house price correction could significantly impact the economy, dampening consumption and residential investment. The negative impact could be significant given the high level of household debt and the fact that a certain segment of households is heavily indebted with debt to income ratio higher than five,” the IMF said.

It comes ahead of Monday’s parliamentary elections in Norway where the centre-right favourites have promised to ease credit conditions for people seeking mortgages.

Erna Solberg, the leader of the Norwegian Conservatives and favourite to become the next prime minister at Monday’s elections, said earlier this year that Norway was not in a housing bubble.

She wants to reverse planned rules that make it more expensive for Norwegian banks to hand out mortgages. “The banks say that when they evaluate whether or not to give a loan, they will see it in a long-term perspective. The new rules make it harder for the banks to have that flexibility. We need to change that back to what it was,” she told Bloomberg last month.

Norway has proposed tripling the risk weighting on mortgages for banks to 35 per cent, which would be the highest in the Nordic region. Banks such as DNB have warned that this would lead to higher loan costs. The Financial Services Authority has also lowered the non-binding limit on the loan-to-value ratio of mortgages to 85 per cent, making it difficult for some young people to get on the property ladder.

Norwegian house prices have risen by 71 per cent since 2005, according to Statistics Norway, as the country’s increasing oil wealth has boosted economic growth and wages. The IMF said inflation-adjusted house prices rose by 6 per cent a year from 2010-12 while household disposable income advanced by 3.8 per cent from 2008-12, ahead of an average of 0.8 per cent in other western economies.

Comment by Whac-A-Bubble™
2013-11-26 06:53:31

Carefully note the date on this article.

Norway’s Housing Bubble Makes Ours Look Almost Cute by Comparison

Matthew O’Brien Jun 26 2012, 6:24 PM ET

Everything is a bubble nowadays. Even how many words a picture is worth. Take a look at this chart from the San Francisco Fed comparing housing prices in the U.S. and Norway over the past century.

This picture is worth approximately eleventy billion words.

(Note: Housing prices are inflation-adjusted and indexed to 100 from their 1985 levels).

Norway has actually has had two housing bubbles the past two decades. The first looks relatively puny, but that’s only because the second has been so mammoth. Norway’s late-1980s bubble saw prices double in the span of a few years — roughly the same size as our own burst bubble. But that looks downright Lilliputian compared to what’s happened in Norway the past 15 years: Housing has quadrupled. And that’s after inflation.

Is this time different? Haha, of course not. It never is.

Two stories explain Norway’s runaway housing prices. The first is the country’s safe haven status. Foreign capital pours into Norway during uncertain economic times — which pretty much describes the entire past five years — because it controls its own currency and its oil-based economic fundamentals are strong. That sounds great, but it’s not so great if it makes their currency so expensive that exports become uncompetitive. And that creates a catch-22 for Norway’s central bank. If they raise interest rates, even more foreign money will pour in — higher interest rates would be quite enticing in a world with precious little yield — and cripple their non-oil export economy. So Norway has kept interest rates low — and that’s helped push housing prices into the stratosphere.

Norway’s other problem is that it’s like California. There’s only so many places you can build houses in Norway. Constrained supply is the other half of the recent rapid run-up in prices — which deflates a bit of the concern over bubbly prices. But only a bit.

None of this means that Norwegian housing will come crashing down anytime soon. Prices can keep defying gravity as long as foreign investors want to park their money in Norway. Still, the 70 percent of Norwegians who expect housing prices to keep gaining might be in for a nasty surprise sooner rather than later.

What goes up usually comes down.

Comment by phony scandals
2013-11-26 06:52:53

“I Fear For What’s Coming” – 68 Percent Of Americans Believe The Country Is On The Wrong Track

Michael Snyder
Economic Collapse
November 26, 2013

Are you deeply concerned about the future of America? Is something in your gut telling you that our system is fundamentally broken and that the mainstream media is not telling you the truth about what is happening? If so, you are definitely not alone. Right now, there are millions upon millions of Americans that are absolutely horrified as they watch this nation deteriorate. In fact, according to an analysis of recent polling data conducted by Real Clear Politics, approximately 68 percent of all Americans believe that the country is on the wrong track and only 23.5 percent of all Americans believe that the country is on the right track.

And of course our problems did not appear just recently. In fact, many of them are the result of decades of very foolish decisions and they are not going to be fixed easily. Unfortunately, there is very little consensus among Americans about how to fix any of our problems. There is more anger, frustration, hatred and division in the United States today than there has been in decades, and there is very little hope that the great storms that are looming on the horizon will be averted. Those that are wise are preparing for what is coming. Those that are not are going to be absolutely blindsided by what is rapidly approaching.

Once upon a time, America was the wealthiest nation on the entire globe by a huge margin and it had the largest and most thriving middle class the world had ever seen. But now America is drowning in the biggest ocean of red ink in the history of the planet and the middle class is being systematically destroyed.

If you read my articles on a regular basis, you already know all of this. But now there are certain factors that are going to cause the problems of the middle class to greatly accelerate.

For instance, just consider what Obamacare is going to do to millions of American families.

The Foundry recently posted a story that detailed the extreme hardship that Obamacare is going to impose on one middle class family in Sonora, California. This particular family is very healthy and does not have a history of health problems. Up until now, they have had a health insurance policy with Anthem Blue Cross Insurance that they have been very happy with.

Back in 2011, this family was paying $389 a month for health insurance.

In 2012, due to changes in California law that figure went up to $499 a month.

Now, this family has just received a letter informing them that their current plan is being canceled and that if they want a new plan it is going to cost them $1,252 a month.

Needless to say, that news did not go over very well with that family.

Just think about it.

Can you come up with an extra $753 a month for health insurance?

Most American families certainly cannot.

Well, Kate Joy and her husband sat down and started trying to figure out how they could squeeze the new health insurance policy into their budget. It turned out that they would have to cut out a lot of things. The following is a list of the proposed cuts that they have come up with so far…

Stop paying the extra payment on my mortgage: $100/month
Stop eating out: $150/month
Don’t go to the movies: $36/month
Switch to getting a haircut every other month: $15/month
Stop getting manicures: $40/month
Stop monthly charitable donations to Wounded Warrior and Habitat for Humanity: $70/month
Stop saving for an annual anniversary getaway: $60/month
No Christmas gifts to extended family: $40/month
Quit buying beef at the grocery store: $100/month
Teeth cleaning only once per year: $30/month
Cancel all magazine/newspaper subscriptions: at least $30/month
Cut DISH service to cheaper plan: $50/month
Cancel land line phone service: $70/month
If they make all of those cuts, it will save the family $791 a month.

Understandably, that family is having a very hard time feeling optimistic about the future right now. In fact, at the end of the article Kate Joy is quoted as saying the following…

“I fear for what’s coming.”

And of course her family is not the only one that is being absolutely hammered by Obamacare.

In a previous article, I discussed the results of one study which showed that health insurance premiums for men are going to go up by an average of 99 percent under Obamacare and health insurance premiums for women are going to go up by an average of 62 percentunder Obamacare.

And a different study found that health insurance premiums for healthy 30-year-old men are going to go up by an average of 260 percent under Obamacare.

All of this is going to suck a tremendous amount of “discretionary income” out of the economy.

In addition, millions upon millions of Americans are going to make the choice to go without health insurance altogether. And considering the level of care that we get in many of these hospitals that is understandable. For example, the body of 57-year-old Lynne Spalding was recently discovered in a stairwell at San Francisco General Hospital 17 days after she had disappeared from her hospital room.

Those that provide our “health care” don’t care about us as much as they did in the old days. Instead, the health care industry just wants to get as much money out of us as rapidly as they can and then move on to the next victim.

And of course health care is not the only thing that middle class families have to be concerned about these days. Our national employment crisis is getting even worse, incomes are shrinking, and Obama is pushing Congress to approve a secret treaty that will ship millions more of our jobs out of the country.

Comment by goon squad
2013-11-26 07:20:58

See also Washington Post piece (written by real journalists) pending to post that shows record number of Americans fear loosing their jobs.

Comment by scdave
2013-11-26 07:52:47

Linkee ??

Comment by scdave
2013-11-26 08:01:50

Got it below…Thanks…

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Comment by Happy2bHeard
2013-11-26 09:32:39

I had a policy like that for a while. About $350 for a family of 4. It was all I could afford. It had no out of pocket maximum and a $2500 deductible. It got us the negotiated rate for hospitals and providers and the plan paid about half of the negotiated rate. We ended up paying about a quarter of the retail bill for several expensive events.

I now pay about 3 times that for two of us (and my rate has dropped for 2014). My husband had an expensive event last year for which my employer policy saved us about $32K. That is about 3.5 years of the $753 this family is attempting to carve out of their budget. And after reaching our out of pocket maximum, I got about $9K of actual health care that I would have postponed - including physical therapy that was not covered under the catastrophic policy.

If we had no insurance, my husband would not have had the surgery he needed. It was necessary, but not an emergency. So no hospital would have approved it.

The Joy family has been gambling that they would not need a robust insurance policy. I suspect their deductible was in the $5 to $10K range. They may have been able to get away with that for a few more years. But eventually it would catch up with them. Then they would have either defaulted on the bill or would have paid all of their discretionary cash to the hospital.

The Joy family will pay more for health insurance. There are others who will pay less. On balance, if Obamacare bends the health care cost curve downward, then America wins. We’ll have healthy hospitals and a healthier population and pay less for it.

If more voters pay less under Obamacare than pay more, then it may be a winning issue for the Democrats. And some who pay more may find that the elimination of pre-existing condition exclusions, the ability to cover young adult children, and other Obamacare provisions more than offsets the difference in cash outlay.

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Comment by Northeastener
2013-11-26 10:05:19

If more voters pay less under Obamacare than pay more, then it may be a winning issue for the Democrats. And some who pay more may find that the elimination of pre-existing condition exclusions, the ability to cover young adult children, and other Obamacare provisions more than offsets the difference in cash outlay.

I bet you believe in the tooth fairy and candy-crapping unicorns too. There is no free lunch. Millions will now pay more so millions can be covered who previously weren’t. Those millions who are paying more, in most cases, can’t afford it or won’t want to make the adjustments to their budgets and thus will pay the penalty. Obamacare is a failure unless you were previously uninsurable because of a pre-existing condition or too poor to afford insurance and weren’t covered by Medicare.

Socialism, like Communism fails because government bureaucrats aren’t smarter than markets and eventually they run out of other people’s money to squander.

Comment by In Colorado
2013-11-26 10:34:58

The Joy family has been gambling that they would not need a robust insurance policy.

RIght now it’s open enrollment at the wife’s job. Her employer lists the total cost for insurance. The “nicer” plan costs $1400 a month. The “cheaper” plan is $1200 a month. The numbers are basically the same as last years.

These are plans with lower deductibles, maximum out of pocket caps, prescription plans and copays when to visit the doctor.

I know people who have these cheapo $350 plans. They never see the doctor, because, in their own words, they can’t afford it.

Comment by In Colorado
2013-11-26 10:45:56

Socialism, like Communism fails because government bureaucrats aren’t smarter than markets and eventually they run out of other people’s money to squander.

Meanwhile, our market based healthcare system is the most expensive and least efficient one in the world.

We spend a higher percentage of GDP, by far, on healthcare than any other industrialized nation in the world. And yet we get mediocre results.

Yay markets!

Comment by Happy2bHeard
2013-11-26 11:42:15

Indeed there is no free lunch. Americans have been paying increasing costs for health insurance and getting less coverage for it for the last few decades. The costs of actual health care have been increasing faster than the general rate of inflation. Medicare has been impacted and has become strained because of these increases.

The “free market” approach that you (Northeasterner)support would provide no health care for large numbers of people. This would include many working people, some of them middle class. I have known people who gambled and lost. They developed chronic conditions like asthma that were not covered by insurance. They could not afford insurance because they had to pay for treatment out of pocket for the first year and could not afford both. (I can just hear your “too bad, so sad” response.)

You would eliminate Medicaid and Medicare and expect everyone to pay all costs out of pocket. This would not result in a free market paradise of low costs and universal availability. It would explode the health care bubble in the most vicious way possible. Some doctors and nurses would find something else to do or go to another country where they would be welcomed with open arms. Some hospitals would close. Costs would stabilize at a somewhat but not substantially lower level. Supply would decrease to meet demand. The wealthy would still be able to get care. The rest of us not.

Comment by Biggvs Richardvs
2013-11-26 13:14:57

Ya, and lets get all those nasty government bureaucrats out of finance too and eliminate Glass-Steagall so the free market can just regulate itself in financial matters. Remind me again how well that worked out?

Oh that’s right, you(capital worshipers) collectively have your head up Ayn Rand’s ass and are incapable of seeing that completely unfettered markets/capitalism always ULTIMATELY result in predatory outcomes and exploitation.

It’s about balance you dumbschitts. Rightsizing regulation to guard against excess - in EITHER direction.

Jeesus, wake up already. Free markets can’t exist in stasis. They will always in the end result in monopoly or oligopoly. Or would you prefer that we let Ma Bell get back together and charge you $2.00-$3.00 a minute(inflation adjusted) for long distance service? Those darn evil government bureaucrats - how dare they interfere in the free market, create competition, and lower our long distance bills?

Anyone who still disagrees is probably related to this guy:

Comment by X-GSfixr
2013-11-26 13:46:41

Just for grins, I went to Wikipedia to see how the stalwart, free-enterprise, business friendly people of Singapore (that many here have held up a a shining free-enterprise beacon) have elected to run their health care system…..

Well, guess what?

From the Wikipedia page above:

“Singapore has a non-modified universal healthcare system, where the government ensures affordability of healthcare wthin the public health system, largely through a system of compulsory savings, subsidies and price controls.”

Sounds pretty “Socialist” to me. Say it ain’t so, Joe……

Comment by Northeastener
2013-11-26 14:07:49

This has now become the “Out Me” post. Want to know who your socialist brothers and sisters are HBB? Just look above. Railing against free markets. Begging for governments to regulate, confiscate, and redistribute their labor for the good of society.

Tell me my fellow socialists, how is the government using price controls, mandatory coverage, and tax penalties for non-compliance of private participants in healthcare any different than that Communist hack Maduro jailing capitalists and distributing electronics to the poor?

Want to know who embraces socialism like that? Losers who can’t compete, are afraid of taking risks, and who feel entitled to that which isn’t theirs.

Comment by Ben Jones
2013-11-26 14:41:48

‘that many here have held up a a’

Uh-oh, straw-man alert!

I can’t think of a single non-socialist country. Now about those free wheeling Singaporeans:

‘Prior to 2003, homosexuals were barred from being employed in “sensitive positions” within the government. Furthermore Lesbian, gay, bisexual and Transgender (LGBT) persons in Singapore may face legal challenges not experienced by non-LGBT residents. For instance, self-declared or discovered servicemen are referred for psychiatric assessment which involves their parents being called in for an interview. They are medically downgraded irregardless of physical fitness and marginalised with regards to vocation, posting and security status’

‘Any public gatherings of more than 2people after 10pm is considered illegal.’

There’s more:

Comment by Northeastener
2013-11-26 15:20:28

Free markets can’t exist in stasis.

I love this canard the socialists love to throw out as justification for more government regulation and control. If a free market came up and smacked you in the head, would you recognize it?

Want to know what free market I enjoy using? Craigslist. That’s about as close to a real free market you can get today. Want to know the beauty of it? You can buy and sell with little to no government interference, taxes, or regulation. Yeah, Cragislist has rules… and you’re not supposed to break the law, but do you think that stops people?

Regulate that, bitchez. Haters gonna hate, statists gonna state…

Comment by Housing Analyst
2013-11-26 16:36:38

Strange world….

You’d think peons without two dimes to rub together would demand the price fixing end.

Instead, they ask for even higher prices through socialism.

Comment by Strawberrypicker
2013-11-26 07:30:57

Like I said long before even the website debacle brought it into focus, if this hits Ma and Pa 6pack in their wallets noticeably it will be a disaster for the Ds.

Imagine coming in for a free lunch and being charged on the way out. Unbelievable.

Comment by oxide
2013-11-26 08:23:44

Back in 2011, this family was paying $389 a month for health insurance…went up to $499 a month.

Now, this family has just received a letter informing them that their current plan is being canceled and that if they want a new plan it is going to cost them $1,252 a month.


If the Verizon raised the cell phone fees for this family, they would check out AT&T. If the landlord raised the rent, they would look for another apartment. If the credit card raised the interest rate, they would transfer the balance to a new card. If a bank offered a re-fi at a lower interest rate, they would take it. If Safeway raised the price of tuna fish, they would shop at Wal-Mart. The family certainly wouldn’t sit down and chop their budget just to accomodate some s.o.b.’s retail jack-up. Shopping around is the American way.

But if their death panel tries to force them into paying twice as much for something, do they shop around? Heck no, they complain to the news.

And if they are truly as healthy as they brag, they why buy health insurance at all? They can simply choose to allow the IRS to deduct a (completely Constitutional) emergency room tax.

Comment by phony scandals
2013-11-26 09:10:07

“Shopping around is the American way.”

It used to be. Now you have to shop at Obama-Mart, it’s the only health-care chain in the country.

Clean up in Death panel isle.

Comment by ibbots
2013-11-26 11:32:56

Not accurate. People still buy insurance from ins companies, not from Obama-mart as you suggest. There is no such thing.

The absence of pre-existing condition exclusions allows the business I am in to shop for plans after being stuck with the same provider for many years.

We will save money in 2014 on health insurance largely because of the absence of pre-existing condition exclusions.

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Comment by phony scandals
2013-11-26 12:46:12

“We will save money in 2014 on health insurance largely because of the absence of pre-existing condition exclusions.”

Good for you. Just remember, somebody else is paying for your savings.

“Not accurate.”

Here are the 37 instances we could find in which President Barack Obama or a top administration official said something close to, “If you like your plan, you can keep your plan,” referring to health insurance changes under the Affordable Care Act.

Obama’s comments before the law passed

• White House Web page: “Linda Douglass of the White House Office of Health Reform debunks the myth that reform will force you out of your current insurance plan or force you to change doctors. To the contrary, reform will expand your choices, not eliminate them. ” (Spanish-language version.)

• White House Web page: “If you like your doctor, you can keep your doctor. If you like your health care plan, you can keep your health care plan.”

• President’s weekly address, June 6, 2009: “If you like the plan you have, you can keep it. If you like the doctor you have, you can keep your doctor, too. The only change you’ll see are falling costs as our reforms take hold.”

• Town hall in Green Bay, Wis., June 11, 2009: “No matter how we reform health care, I intend to keep this promise: If you like your doctor, you’ll be able to keep your doctor; if you like your health care plan, you’ll be able to keep your health care plan.”

• Remarks at the American Medical Association, June 15, 2009: “I know that there are millions of Americans who are content with their health care coverage — they like their plan and, most importantly, they value their relationship with their doctor. They trust you. And that means that no matter how we reform health care, we will keep this promise to the American people: If you like your doctor, you will be able to keep your doctor, period. If you like your health care plan, you’ll be able to keep your health care plan, period. No one will take it away, no matter what.”

• Presidential press conference, June 23, 2009. “If you like your plan and you like your doctor, you won’t have to do a thing. You keep your plan. You keep your doctor.”

• Rose Garden remarks, July 15, 2009. “If you like your doctor or health care provider, you can keep them. If you like your health care plan, you can keep that too.”

• Remarks at a rally for New Jersey Gov. Jon Corzine, July 16, 2009: “if you’ve got health insurance, you like your doctor, you like your plan — you can keep your doctor, you can keep your plan. Nobody is talking about taking that away from you.”

• Presidential weekly address, July 18, 2009: “Michelle and I don’t want anyone telling us who our family’s doctor should be – and no one should decide that for you either. Under our proposals, if you like your doctor, you keep your doctor. If you like your current insurance, you keep that insurance. Period, end of story.”

• Rose Garden remarks, July 21, 2009: “If you like your current plan, you will be able to keep it. Let me repeat that: If you like your plan, you’ll be able to keep it.”

• Remarks in Shaker Heights, Ohio, July 23, 2009: “Reform will keep the government out of your health care decisions, giving you the option to keep your coverage if you’re happy with it.”

• Town hall in Raleigh, N.C., July 29, 2009: “I have been as clear as I can be. Under the reform I’ve proposed, if you like your doctor, you keep your doctor. If you like your health care plan, you keep your health care plan. These folks need to stop scaring everybody. Nobody is talking about you forcing … to change your plans.”

• Presidential weekly address, Aug. 8, 2009: “Under the reforms we seek, if you like your doctor, you can keep your doctor. If you like your health care plan, you can keep your health care plan.”

• Town hall in Portsmouth, N.H., Aug. 11, 2009: “Under the reform we’re proposing, if you like your doctor, you can keep your doctor. If you like your health care plan, you can keep your health care plan.”

• Town hall in Belgrade, Mont., Aug. 14, 2009: “If you like your health care plan, you can keep your health care plan. This is not some government takeover. If you like your doctor, you can keep seeing your doctor. This is important.”

• Presidential weekly address, Aug. 15, 2009: “No matter what you’ve heard, if you like your doctor or health care plan, you can keep it.”

• Town hall in Grand Junction, Colo., Aug. 15, 2009: “I just want to be completely clear about this. I keep on saying this but somehow folks aren’t listening — if you like your health care plan, you keep your health care plan. Nobody is going to force you to leave your health care plan. If you like your doctor, you keep seeing your doctor.”

• Remarks to Organizing for America, Aug. 20, 2009: “No matter what you’ve heard, if you like your doctor, you can keep your doctor under the reform proposals that we’ve put forward. If you like your private health insurance plan, you can keep it.”

• Presidential weekly address, Aug. 22, 2009: “Under the reform we seek, if you like your doctor, you can keep your doctor. If you like your private health insurance plan, you can keep your plan. Period.”

• Remarks on health care reform, March 3, 2010: “If you like your plan, you can keep your plan. If you like your doctor, you can keep your doctor. Because I can tell you that as the father of two young girls, I wouldn’t want any plan that interferes with the relationship between a family and their doctor.”

• Presidential weekly address, March 6, 2010: “What won’t change when this bill is signed is this: If you like the insurance plan you have now, you can keep it. If you like your doctor, you can keep your doctor. Because nothing should get in the way of the relationship between a family and their doctor.”

• Remarks in Glenside, Pa., March 8, 2010: “If you like your plan, you can keep your plan. If you like your doctor, you can keep your doctor.”

• Remarks in St. Charles, Mo., March 10, 2010: ” If you like your plan, you can keep your plan. If you like your doctor, you can keep your doctor.”

• Remarks in St. Louis, Mo., March 10, 2010: “If you like your plan, you can keep your plan. If you like your doctor, you can keep your doctor. I’m the father of two young girls –- I don’t want anybody interfering between my family and their doctor.”

• Remarks in Strongsville, Ohio, March 15, 2010: “If you like your plan, you can keep your plan. If you like your doctor, you can keep your doctor. I don’t want to interfere with people’s relationships between them and their doctors.”

• Remarks in Fairfax, Va., March 19, 2010: “If you like your doctor, you’re going to be able to keep your doctor. If you like your plan, keep your plan. I don’t believe we should give government or the insurance companies more control over health care in America. I think it’s time to give you, the American people, more control over your health.”

Obama’s comments between the law’s signing and the release of the HHS regulations

• White House web page: “For those Americans who already have health insurance, the only changes you will see under the law are new benefits, better protections from insurance company abuses, and more value for every dollar you spend on health care. If you like your plan you can keep it and you don’t have to change a thing due to the health care law.”

• Remarks in Iowa City, Iowa, March 25, 2010: “You like your plan? You’ll be keeping your plan. No one is taking that away from you.”

• Remarks in Portland, Maine, April 1, 2010: The critics will “see that if Americans like their doctor, they will keep their doctor. And if you like your insurance plan, you will keep it. No one will be able to take that away from you. It hasn’t happened yet. It won’t happen in the future.”

• White House blog post by Stephanie Cutter, May 18, 2010: “A key point to remember is that while the Act makes many changes to the individual market, it specifically allows those who want to keep their current insurance to do so. Most of the Act’s protections apply only to new policies, allowing people to stick with their current plan if they prefer.”

After the release of the HHS regulations

• Kathleen Sebelius blog post, June 14, 2010: “The bottom line is that under the Affordable Care Act, if you like your doctor and plan, you can keep them.”

• White House blog post by Stephanie Cutter. “Another important step we’ve taken is to fulfill President Obama’s promise that ‘if you like your health plan, you can keep it.’ Last week, Secretary Sebelius and Secretary of Labor Hilda Solis announced a new rule that protects the ability of individuals and businesses to keep their current plan. It outlines conditions under which current plans can be ‘grandfathered’ into the system, minimizing market disruption and putting us all on the path toward the competitive, patient-centered market of the future.”

• Remarks on the Affordable Care Act Supreme Court ruling, June 28, 2012: “If you’re one of the more than 250 million Americans who already have health insurance, you will keep your health insurance — this law will only make it more secure and more affordable.”

• Campaign event in Pittsburgh, July 6, 2012: “If you have health insurance, the only thing that changes for you is you’re more secure because insurance companies can’t drop you when you get sick.”

• Campaign event in Virginia Beach, Va., July 13, 2012: “If you already have health care, the only thing this bill does is make sure that it’s even more secure and insurance companies can’t jerk you around.”

• First presidential debate in Denver, Oct. 3, 2012: “If you’ve got health insurance, it doesn’t mean a government takeover. You keep your own insurance. You keep your own doctor. But it does say insurance companies can’t jerk you around.”

• Remarks in Largo, Md., Sept. 26, 2013: “Now, let’s start with the fact that even before the Affordable Care Act fully takes effect, about 85 percent of Americans already have health insurance — either through their job, or through Medicare, or through the individual market. So if you’re one of these folks, it’s reasonable that you might worry whether health care reform is going to create changes that are a problem for you — especially when you’re bombarded with all sorts of fear-mongering. So the first thing you need to know is this: If you already have health care, you don’t have to do anything.”

Comment by phony scandals
2013-11-26 13:13:44

Almost 80 million with employer health care plans could have coverage canceled, experts predict

Published November 26, 2013 •

Almost 80 million people with employer health plans could find their coverage canceled because they are not compliant with ObamaCare, several experts predicted.

Their losses would be in addition to the millions who found their individual coverage cancelled for the same reason.

Stan Veuger of the American Enterprise Institute said that in addition to the individual cancellations, “at least half the people on employer plans would by 2014 start losing plans as well.” There are approximately 157 million employer health care policy holders.

Avik Roy of the Manhattan Institute added, “the administration estimated that approximately 78 million Americans with employer sponsored insurance would lose their existing coverage due to the Affordable Care Act.”

Last week, an analysis by the American Enterprise Institute, a conservative think tank, showed the administration anticipates half to two-thirds of small businesses would have policies canceled or be compelled to send workers onto the ObamaCare exchanges. They predicted up to 100 million small and large business policies could be canceled next year.

According to projections the administration itself issued back in July 2010, it was clear officials knew the impact of ObamaCare three years ago.

In fact, according to the Federal Register, its mid-range estimate was that by the end of 2014, 76 percent of small group plans would be cancelled, along with 55 percent of large employer plans.

The reason behind the losses is that current plans don’t meet the requirements of ObamaCare, which dictate that each plan must cover a list of essential benefits, whether people want them or not.

“Things like maternity care or acupuncture or extensive drug coverage,” said Veuger. “And so now the law is going to force them to buy policies that they could have gotten in the past if they wanted to but they chose not to.”

Some plans already have been canceled and employers are getting sticker shock at the new, higher prices under ObamaCare.

One of them is David Allen, president of a company bearing his name in Boulder, Colorado. He told a Congressional hearing recently that his carrier discontinued his company policy because it wasn’t compliant with ObamaCare.

“It does not meet the minimum standards as stipulated under the law. Due to this one change,” he said, “our premiums are now scheduled to increase by 52.3 percent in January 2014.”

Roy said that is not unusual. “The old plans that are being cancelled are meaningfully cheaper than the new plans that are ObamaCare compliant.”

A new wave of cancellations and sticker shock will emerge just before next year’s elections.

“They’re going to start doing that in the summer or early fall but certainly before the midterm elections,” said Veuger. -

Comment by Northeastener
2013-11-26 15:24:57

We will save money in 2014 on health insurance largely because of the absence of pre-existing condition exclusions.

Government, picking winners and losers since 1933…

FWIW, I’m glad you’re a winner in all this. From what I can tell, there are a whole lot of losers who helped make you (and other unfortunates) a winner in this little socialist experiment called the ACA.

Comment by Housing Analyst
2013-11-26 09:11:27

” If the landlord raised the rent, they would look for another apartment.”

Now wait a second Donkey….. Today you said houses are Magic Money Trees.

How can this be?

Comment by Carl Morris
2013-11-26 09:21:46

Shopping around is the American way.

Tougher to do when dealing with a cartel (which I realize the phone companies are close to being as well).

Comment by Northeastener
2013-11-26 15:27:38

Tougher to do when dealing with a cartel

Who made them a cartel? Who regulates the insurance industry. Who has made it such that a doctor can’t just accept cash (at a reasonable price) for services rendered? Who decided we needed a middleman in healthcare?

There is an answer I’m looking for here and it starts with a “G” and ends with a “t” and sounds like “overnmen”

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Comment by oxide
2013-11-26 11:39:41

Sorry, Ben, got a little carried about with the language.

Carl and phonyscandals, I don’t disagree. Hopefully ObamaMart will provide more options and competition than the pre-Obamacare setup.

Comment by samk
2013-11-26 11:33:36

While I can certainly empathize with this family’s plight, statements about how they might have to *gasp* get a lower service tier from Dish make me chuckle. I see that there is no mention of cell phone sacrifice.

Comment by Puggs
2013-11-26 15:43:28

It took me about 5 minutes to find something almost as cheap as my former plan. Smart money finds efficiencies dumb money takes out a loan or expects someone to do it for them.

Comment by Puggs
2013-11-26 15:47:12

I fear what’s coming if most American’s like this family pay $70/mo for a land line!!!

Kate and hubby could have paid off theit house by now if they’d cut half the fat in that budget.

Comment by Whac-A-Bubble™
2013-11-26 06:57:29

I’d say the fact that the Fed takes Bitcoin seriously is a bad sign for the New Era internet funny money.

Bitcoin Is the Segway of Currency
Silicon Valley thinks it’s the future, but Bitcoin is more ridiculous than motorized scooters for adults.
Matthew O’Brien
Nov 21 2013, 1:02 PM ET
Can we get these half off if we pay with bitcoins? (Reuters)

We were promised jetpacks. We got Segways instead.

Well, we didn’t get Segways. Nobody did. At least nobody other than mall cops, tour groups, and techies. Okay, and ironic polo players. But in any case, it’s fair to say that Segway hasn’t exactly been “to the car what the car was to the horse and buggy,” like its founder Dean Kamen said it would. It hasn’t even been to the moped what the moped was to the horse and buggy. Or what the bicycle was. It’s just been a (sometimes morbid) punchline. And one that’s almost too impossible to believe. Did you know that Kamen thought he’d need an around-the-clock factory churning out 10,000 Segways a week to meet initial demand? It’s true. It’s also true that he only needed to make 10 a week to do so.

This wasn’t just self-delusion. It was mass delusion. Back in 2001, Steve Jobs thought Segway could be as big as personal computers. The venture capitalist behind Amazon thought it could be bigger than the internet. The entire internet. The only reasonable explanation for all this hype was that neither of them had actually seen someone ride a Segway. Because, as Y Combinator’s Paul Graham puts it, you can’t ride a Segway without looking like a “smug dork.” And people generally try to avoid looking like that. They won’t use something so inherently ridiculous, no matter how technically impressive it might be.

Like Bitcoin.

Comment by oxide
2013-11-26 11:46:47

I knew Segway was gonna be a flop the moment they showed what it was, even if it did look cool. You can’t go fast, you can’t go far, you can’t carry anything, you’re out in the weather, and I’ve never seen one go uphill. In terms of what you can effectively accomplish with a Segway, it IS a bicycle. In fact it’s worse because you can’t sit down and there’s no good way to put a basket on it. (I strapped a milk crate on a back shelf for 15 years.)

Comment by Whac-A-Bubble™
2013-11-26 12:04:30

I knew that Bitcoin was gonna be a flop the moment I learned there are other nascent online currencies and no barriers to entry.

Comment by Northeastener
2013-11-26 15:30:22

I knew that Bitcoin was gonna be a flop the moment I learned there are other nascent online currencies and no barriers to entry.

Why did Betamax fail and VHS thrive, at least until DVD and DVR?

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Comment by Whac-A-Bubble™
2013-11-26 07:03:22

Shoeshine-boy moment, geriatric style: My 80-something year old dad recently told me (without prompting) that he took his age 70 1/2 401(K) distribution early this year to sell some stock, as he is worried the market is overvalued.

Comment by Whac-A-Bubble™
2013-11-26 07:05:42

Nov. 26, 2013, 8:30 a.m. EST
Is the stock-market bubble about to pop?
Commentary: Retail investors are getting nervous
By Irwin Kellner, MarketWatch

In the past few days, a number of people have asked me the same question: How much higher can this market go, especially when the economy is punk, to put it mildly?

To put it another way, they are asking whether it time to sell.

You can’t blame people for being cautious. From its low point in March 2009, the Dow Jones Industrial Average DJIA +0.05% has more than doubled — it has jumped more than 22% this year alone. By contrast, the economy has barely grown by 10% during this entire time.

To think about selling is an interesting sign. Usually, in a bull market such as this one is presumed to be, people ask me for tips on what to buy. Now, people want to know when they should sell.

Of course, I don’t give tips on the market, nor do I trade in stocks. The only stocks I own are from past employment and/or board memberships.

I do find this change in people’s attitudes very interesting, and it’s more than simply taking profits off the table.

When I tell people that stocks are trading on corporate profits, their response is how much longer can business make money if consumers’ buying power is so poor and unemployment is so high. Besides, there is little inflation out there to goose business sales and earnings numbers.

When I mention how easy the Federal Reserve’s monetary policy has been, their reaction is that the Fed is reportedly ready to take the punch bowl away by reducing the amount of money it is injecting into the bond markets.

And when they are not complaining about the dichotomy between profits and the rest of the economy, or less ease emanating from the Fed, investors are griping about what goes (and doesn’t go) on in Washington. I am referring to partisan politics, Obamacare and the government’s attitudes towards the big banks.

Investors’ fear du jour is that, when the next crisis arrives, the big banks won’t be interested or able to help the government bail out the smaller weaklings, certainly not after the way several big banks have been treated by the powers that be.

None of these issues is conducive to getting a good night’s sleep. So don’t be surprised if it’s the small investor who bails out first, leaving the big institutional investors holding the bag, instead of the other way around.

Comment by Albuquerquedan
2013-11-26 07:09:08

“Shoeshine-boy moment, geriatric style: My 80-something year old dad recently told me (without prompting) that he took his age 70 1/2 401(K) distribution early this year to sell some stock, as he is worried the market is overvalued”

Actually, if it was a shoeshine-boy moment he would be telling you that he moved all the money into FB.

Comment by Whac-A-Bubble™
2013-11-26 07:13:33

You have a point. But I suppose Dad is a bit more on the precautious side than many of his peers, ever since early 2008 when I successfully convinced him to dump all of his stock market holdings.

Comment by Strawberrypicker
2013-11-26 07:16:24

Or is this what he means? That the shoeshine boy gets it wrong just like his dad, so invest in Facebook to the moon?

Comment by Rental Watch
2013-11-26 10:40:05

Nah, that’s just wisdom. The shoeshine boy moment is when he tells you that the stock market is going to the moon and he’s staying all-in.

Fear of loss helps take air out of bubbles.

Comment by Whac-A-Bubble™
2013-11-26 07:10:14

Why Mel Watt Heading Fannie Mae And Freddie Mac Will Push HARP 3.0 To The Forefront
26 Nov 2013
Author Dan Green

Waiting for HARP 3 to pass Congress? Your wait may be just about over.

Within days or weeks, congressional representative Mel Watt is expected to be confirmed as the new head of the Federal Housing Finance Agency (FHFA). The controls Fannie Mae and Freddie Mac and administers the Home Affordable Refinance Program (HARP).

HARP was expanded once under current FHFA director, Ed DeMarco but little progress has been made with the program since. With Watt at the helm, the FHFA is expected to overhaul HARP a second time to provide additional aid to troubled U.S. homeowners.

What Is HARP?

HARP is an acronym. It stands for Home Affordable Refinance Program.

HARP is an economic stimulus program. It was first launched in March 2009 using monies from the Housing and Recovery Act. The premise of the program was to help U.S. homeowners whose homes had lost equity to get access to the day’s falling mortgage rates.

Mortgage rates had dropped 1.50 percentage points in the seven months preceding HARP’s launch. U.S. homeowners were eager to refinance. However, few could.

Prior to HARP, homeowners whose homes had lost equity were ineligible to refinance without paying private mortgage insurance (PMI) for which costs were exploding; or, without reducing their existing loan balance to 80% loan-to-value at closing, which was often costly given sharply falling home values in many U.S. states.

HARP instructed lenders to ignore mortgage insurance requirements and to waive loan-to-value restrictions. HARP only required that homeowners have a mortgage backed by Fannie Mae or Freddie Mac, and a reasonable strong payment history.

The typical HARP household was expected to save $3,000 annually via refinance — a projection soon revealed to be overly conservative. As mortgage rates dipped into the 4s and household savings multiplied, it became clear that HARP was a hit.

However, the program was less-than-perfect, in some respects.

As one example, HARP guidelines included a 125% loan-to-value limit which meant that loans over 125% LTV could not be HARP-eligible.

The guideline had little effect on homeowners in cities such Boston, Massachusetts; Denver, Colorado; or Cincinnati, Ohio where home values fell only modestly last decade. For homeowners in hard-hit cities, though, including Phoenix, Arizona; San Francisco, California; and Las Vegas, Nevada, HARP remained out of reach.

As another example, the language of the Home Affordable Refinance Program was written such that refinancing lenders were responsible for any underwriting errors made by the loan’s former mortgage lender. If Wells Fargo refinanced a Countrywide mortgage via HARP, then, Wells Fargo would be responsible for Countrywide’s due diligence on the loan.

This liability clause created risk for HARP lenders so many simply elected to refinance their own loans only. This was known as “same-servicer” refinancing. You could only refinance a Wells Fargo loan with Wells Fargo; a Bank of America loan with Bank of America; a Chase loan with Chase; and so on.

HARP was expected to reach 7 million households but, after nearly years, it had failed to reach even one million. That’s when the FHFA revamped and released the HARP mortgage program, which came to be known as HARP 2.0.

Comment by Whac-A-Bubble™
2013-11-26 09:29:20

I’m guessing steam is blowing out of Republican politicians’ ears over the prospect of a Watt appointment that they have no way to block?

Comment by Ben Jones
2013-11-26 09:35:26

’steam is blowing out of Republican politicians’ ears’

Ah yes, let’s focus on the red/blue farce instead of real issues.

We’re all going to regret this concentration of political power and elimination of checks and balances.

Comment by phony scandals
2013-11-26 10:16:24

“Ah yes, let’s focus on the red/blue farce instead of real issues.”

Tuesday, June 4, 2013 8:10

The illusion of ideological differences between the two political parties that is conveyed to the unsuspecting American public is best summarized by the advice of former CFR and cabinet member Henry Cabot Lodge to his colleagues “Is there anything we can APPEAR to do?” This charade is given credibility and legitimacy by the controlling CFR influence of top management within corporate media. In reality, a uni-party collusion between the CFR represented politicians and their corporate counterparts continues to solidify and presses its totalitarian agenda.

To insure their power, the Establishment covers their bases. For decades, presidential candidates from both parties have been CFR members. When Bush, Cheney, McCain, Bradley, Gore, and Lieberman, all CFR members. touted the corporate globalization agenda such as NAFTA, FTAA, WTO, World Bank, ad nauseum, one could question where their loyalties might be.

Even in the event that a presiding president’s administration gets caught in some unsavory practice, the chosen legislators that head the investigative committees are often members of the CFR; thus, the truth is never revealed and the issue is quietly swept away. During Clinton’s Whitewater investigation, Jim Leach, House Republican from Iowa (CFR) directed the investigation. During George W. Bush’s tenure, Lieberman (CFR) Dodd (CFR) and Levin (CFR) headed committees that investigated the Bush Administration while Paul Volker, former Federal Reserve and Trilateral Commission chairman, was named chairman of an oversight committee for the International Accounting Standards Board to review recent lapses in accounting ethics.

The governmental solution presented for disciplinary or reform action is often presented by one of their own foxes watching their henhouse, assuring no constructive changes are even implemented. Through the influence of revolving door politics, corporate executives are assigned to direct public regulatory agencies that dismantle the very laws that were designed to protect the public from the abuses of corporations.

For a quick examination into the media’s influence on public opinion, consider the virtual monopolistic view of the CFR promotes through mainstream media. Think you’re getting the true scoop on the Sunday talk shows? They might as well call this political commentary the CFR Misinformation News Hour. You have CFR guests from both Republican and Democratic parties interviewed by CFR journalists (George Stephanopoulos, Diane Sawyer, George Will) with CFR commercial sponsorship (Archer Daniel Midlands, Merrill Lynch, IBM, etc.). Switch to PBS, you say? Jim Lehrer (CFR) will also make sure the incriminating questions are never asked. - 44k - Cached - Similar pages
Jun 4, 2013

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Comment by Whac-A-Bubble™
2013-11-26 22:26:19

He’s black, which trumps all other considerations.

Nov 26, 2013
New U.S. mortgage overseer a bad choice on all counts

Congressman Mel Watt is too partisan, inexperienced, and conflicted as a recipient of campaign cash

Comment by rms
2013-11-27 00:10:23

“Congressman Mel Watt is too partisan, inexperienced, and conflicted as a recipient of campaign cash”

+1 The blue eyes’ black stooge.

Comment by Strawberrypicker
Comment by Albuquerquedan
2013-11-26 07:22:39

There use to be a term yellow dog Democrats and it meant they would vote for a candidate if he was yellow dog as long as he had the Democratic label. There are a number of people that will support Obama no matter what he does. He could start a nuclear war and wipe out half the population and some of the survivors would support him because they would say “well we survived under Obama”.

Comment by Michael Viking
2013-11-26 07:38:04

“well we survived under Obama”

or “It would have been worse under XYZ”

Comment by scdave
2013-11-26 08:00:31

There are a number of people that will support Obama no matter what he does ??

Getting a little of your own medicine Dan ?? Remember 2000-2008 ??

Comment by Albuquerquedan
2013-11-26 08:09:19

Sorry, but find where I supported Bush during that time. Some of us have had the sense not to support either one of them and have had to suffer through both administrations.

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Comment by Housing Analyst
2013-11-26 08:57:01

ABQdan….. Thank you for exposing another LIEberal.

Comment by scdave
2013-11-26 09:01:26

Hmmm…Whereas I cannot demonstrate that you did support Bush my suspicions are that you did…If I am in error, apologies in advance…

Comment by Albuquerquedan
2013-11-26 09:48:44

Protest vote for third party both times warned the blog about his plans for nau.

Comment by rms
2013-11-26 13:10:22

“Maybe this one will work better”


Git a couple of ‘em. Yee-haw!

Comment by Strawberrypicker
2013-11-26 07:25:18

My first link posted! Somehow it’s all linkified. What did I do wrong?

Comment by Albuquerquedan
2013-11-26 07:18:01

To expand on the shoeshine-boy point, the belief is that you should do just the opposite of the shoeshine-boy does. Thus, if you mean that your father missed the rally by selling early, it is a shoeshine-boy moment. I don’t think that is what you were meaning to say but the post is vague enough to mean anything.

Comment by Whac-A-Bubble™
2013-11-26 09:34:19

Let me try to spell it out a bit for those who are confused.

My dad is not what you would call a sophisticated investor. He is barely interested enough in investing to pay any attention to the financial news whatsoever. If Dad thinks there is a good chance the stock market is overvalued, it’s probably a sign the stock market is overvalued. If new record high stock market prices are set every other day month after month on weak underlying fundamentals, the stock market is a duck that is quacking so loudly that even 80-somethings who are slightly hard of hearing can recognize the sound of a duck for what it is.

Does that clear it up?

Comment by Rental Watch
2013-11-26 10:55:42

I get that.

I guess I’m more worried about there being no rational minds in the room…there have been constant calls of “bubble” which have made people generally more cautious (which as I note above tends to pull air out of inflating bubbles).

I remember going to the gym during the dotcom bubble, and a former college classmate of mine, with a straight face, was telling me that earnings didn’t matter. (warning #1) The next time, I went with my partner to a meeting to listen to a start-up company pitch. The guy pitching the company said that earnings don’t matter, just eyeballs. (warning #2) My partner and I left that meeting, looked at each other in the car, and had a brief conversation about how surreal the pitch was…a sign of the end coming soon.

I remember when I had the similar feeling that I had on housing. I knew the market was in a bubble, but my “holy sh*t it’s all going to end soon” moment was when my partner told me that the most popular loan was an Option ARM in the mid-Peninsula… clearly using the loan as an affordability tool.

Today, all I hear about is how the stock market is overvalued based on PE’s, people warning about new bubbles, caution about what happens when the Fed tapers, etc. In other words, where is the “irrational exuberance”?

Candidly, I expect the stock market to NOT crash from current levels just yet. I think that the job market will look better over the next 12 months than the prior 12 months (in terms of net new jobs and maybe even wages), and that improved job market could be the thing to send the stock market into overdrive.

So you don’t think I’m completely nuts, I’ve been thinking a lot recently about when I go back to cash (as I did in 2007). My current thinking is that 2014 could be the next 2007.

Comment by Whac-A-Bubble™
2013-11-26 12:23:41

In other words, where is the “irrational exuberance”?

The advice for the masses currently dispensed by financial ‘experts’ is fairly dripping with irrational exuberance. It’s predicated on the firm conviction that the Fed will never, ever take away the punchbowl. All the ‘experts’ quoted in the MSM openly acknowledge that it’s the Fed’s easy money that keeps the stock market aloft, but they follow that with assurances that the Wall Street liquidity punchbowl spiking operation is here to stay.

Stocks & Bonds
Kiplinger’s 2014 Stock Market Outlook: More Gains
Five years into a powerful bull market, there seems to be little on the horizon to cheer up the bears.
By Anne Kates Smith, From Kiplinger’s Personal Finance, January 2014

The march to record highs came despite hurdles that might have tripped up lesser bulls. First came a scare courtesy of hints that the Federal Reserve was about to remove the easy-money punchbowl that has kept this party going. That was followed by a government shutdown and then the threat of a U.S. debt default. What’s more, the stock market’s gains materialized despite a lackluster year for corporate profits, often considered the market’s main engine.

So the phenomenal rally raises the question: Where is the market getting its strength? And more important, can this aging bull continue to run? Our answer: Don’t give up on the bull yet—it may be younger than it looks. “We don’t see a bear market coming,” says Henry Smith, chief investment officer of Haverford Trust. “We believe that March 2009 represented a generational low, and that this is the middle of a sustained bull market.

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Comment by Rental Watch
2013-11-26 12:47:21

I guess I’m talking to the wrong guys in the street…the guys I’m talking to seem to be very nervous still…

Comment by Whac-A-Bubble™
2013-11-26 15:00:48

There is no inconsistency between guys in the street candidly expressing their nervousness off the record and MSM financial writers encouraging greater fools to rush in and snap up stocks just before the next crash. In order for financially savvy folks to successfully race through the exits of the burning theater, they need a bevy of clueless bagholders to buy assets at a hefty premium to fundamental value.

Comment by Rental Watch
2013-11-27 00:11:45

Yes, but during the other bubbles (dotcom and 2005-2007 housing), those guys in the street expressing nervousness didn’t exist (or at least not with nearly the same frequency as today).

Comment by goon squad
2013-11-26 07:18:23

Hope and Change

“More than six in 10 workers in a recent Washington Post-Miller Center poll worry that they will lose their jobs to the economy, surpassing concerns in more than a dozen surveys dating to the 1970s. Nearly one in three, 32 percent, say they worry “a lot” about losing their jobs, also a record high”

Comment by Albuquerquedan
2013-11-26 07:24:25

Don’t worry HELOC loans will be up to $91 billion this year and $97 billion next year according to Bloomberg. We are going to borrow our way to prosperity.

Comment by goon squad
2013-11-26 07:34:34

Consider also the multiplier effect. Pull $10K of equity on the HELOC to buy some new drapes, doorknobs, faucets, etc and the value of your home goes up $20K. You can’t loose in today’s housing market!

Comment by azdude02
2013-11-26 07:39:14

isnt equity awesome? Its a game changer. what are home prices doing in albuquerque? Are the investors swarming all over again?

Comment by Albuquerquedan
2013-11-26 07:57:54

There was a brief flurry of construction and buying in the early Summer and then when the interest rates rose, it shutdown. Because there is not a shortage of land or even developed lots no real price spike. They will have to use up the developed lots here prior to any real increase in prices and that will be a few years at least.

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Comment by azdude02
2013-11-26 08:31:30

supposedly there’s a shortage of land to build on in CA. Also they want a lot of money for permits. NIMBY crowd doesn’t want development.

Comment by Housing Analyst
2013-11-26 08:37:37

Why would you need to build when there are 4.4 MILLION excess empty houses in the state of California?

Comment by Rental Watch
2013-11-26 11:11:59

azdude02, the clarification is that there is no shortage of land in CA.

However, there are laws in place that make getting that land approved for building more homes either a) difficult/time consuming or b) expensive.

1. California Environmental Quality Act (CEQA) makes the entitlement process very difficult and is the main thing environmental groups use to sue to stop new development;
2. Prop 13 has pulled a lot of $ out of community coffers, which pushes permit costs higher;
3. Williamson Act slows the development of agricultural land (farmers get tax breaks for entering into a Williamson Act contract–that contract renews for 10 years EVERY YEAR, so there is a 10-year lead time before you can develop that land…once you notice your desire to cancel the contract, you need to wait a decade or buy land to replace what you are taking out of the ag pool).

NIMBYism doesn’t help, nor does the Coastal Commission, or the Sierra Club. The net result is despite lots of land, there isn’t enough that gets approved for the development. Approval certainly can’t occur fast enough to meet demand when needed…so you get boom/bust cycles in CA housing.

Comment by Housing Analyst
2013-11-26 12:04:10

Just as there is no shortage of land in CA, there is no shortage of housing in CA.

Comment by Albuquerquedan
2013-11-26 08:06:20
Comment by azdude02
2013-11-26 08:33:50

yeah buddy! Time to pull some of those bernake bucks and buy a new chevy and take a much needed vacation.

I hope yellen delivers on the dovish hype.

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Comment by Housing Analyst
2013-11-26 08:35:30

“Home equity lines due for reset may be looming financial disaster”,0,6997479.story#axzz2kNgJik5m

And don’t forget, the subprime outfall is just developing legs.

Comment by oxide
2013-11-26 08:27:53

If they fear their jobs, then they aren’t working hard enough and it’s time they polished those bootstraps at the University of Phoenix.

Comment by Bill, just South of Irvine, CA
2013-11-26 07:44:47
Comment by Albuquerquedan
Comment by Albuquerquedan
2013-11-26 08:03:24

I think it is time for the Federal Government to pay Ben $100 million dollars to set up a website. Maybe it could be healthcare for FBs facing foreclosure.

Comment by Bill, just South of Irvine, CA
2013-11-26 08:05:26

The other 30 million progressives stayed home and ate crow.

Comment by Mr. Banker
2013-11-26 07:55:12

Doing God’s work takes money, so fork it over.

Comment by oxide
2013-11-26 16:29:44

Dude, the Reformation was 400 years ago.
I’ll be my own priest and do God’s work my own way.

Comment by Bill, just South of Irvine, CA
Comment by azdude02
2013-11-26 08:35:21

how much twtr did you buy @ 50?

Comment by Bill, just south of Irvine
2013-11-26 09:45:39

Zero. And own zero of FB.

Comment by my failure to respect is unacceptable
2013-11-26 10:52:49

I just found myspace. FB and TWTR I think I am 10 years behind.

Comment by Housing Analyst
2013-11-26 08:39:25

Just how impoverished is California?

60% Of All California Students Qualify For Free or Reduced Lunch

Comment by goon squad
2013-11-26 08:50:26

article from 2 years ago compares california with the fall of rome:

Comment by Housing Analyst
2013-11-26 08:44:30

Escape From California: “The Great California Exodus”

Overall, the state of California has experienced a net loss of about four million residents to other states over the past 20 years.

And you wonder why there are 4.4 MILLION excess, empty and defaulted houses in California?

Comment by Housing Analyst
2013-11-26 08:46:23

“California worst state for business, CEOs say”

“For the seventh year in a row, a survey of chief executives has ranked the Golden State as the nation’s worst in which to do business.”

Comment by goon squad
2013-11-26 09:01:31

What’s with all the California hate?

Watch the talented and beautiful Courtney Love sing “Malibu”

Comment by Resistor
2013-11-26 19:19:21

This is what real Californians do with their freetime:

Comment by phony scandals
2013-11-26 08:53:37

Climate Change Agenda (21): From the UN to Long Island

March 27, 2013
By Sara Noble

On Long Island, ICLEI is Vision Long Island.

Hubs are being built with small stack ‘em and pack ‘em apartment buildings all across Long Island. The residents are being told the hubs will be self-sustaining with trolleys and stores. No one will ever have to leave their complex. For some inexplicable reason, people are eating it up.

One of the many Vision Long Island resources is The Long Island Progressive Coalition, which has taken on the sustainable development issue. This socialist organization has published a manifesto linked below which calls for population control and the building of hubs. [YIMBY is a front group for the Long Island Progressive Coalition.]

The group hopes to convert the children to their way of green thinking through the educational system. In addition, they hope to adjust taxes so there are green progressive taxes used solely for progressive projects.

They are planning to halt building on the East End and preserve the land. Their goal is to get people out of their cars and onto buses and into hi-rises or two or three story walkable, self-sustaining communities. You will never have to leave the community. The land won’t be owned by you. It will be owned by the government.

The shaded black portions of the map, not visible above, are reserved for congested human settlements of 10,000 people.

Check out their manifesto on the link below and go to page 5 to see their views on population control which happens to match the goals of the wildlands project which matches the original UN Agenda 21. - 40k -

Comment by phony scandals
2013-11-26 09:27:25

New developments on Long Island target smart growth

Originally published: October 16, 2013 2:17 PM
By LISA CHAMOFF Special to Newsday

For years, developers have been using the term “smart growth” to describe the ideal communities for everyone from young professionals to downsizing baby boomers.

Many of Long Island’s newest developments, expected to start leasing or breaking ground within the next year, follow through on that vision to create walkable neighborhoods that are close to transportation and feature a mix of residential and retail.


This new high-end development a couple of blocks from the Patchogue Long Island Rail Road station has 291 units and 30,000 square feet of retail space spread out among five buildings. Amenities include a pool, fitness center, outdoor fireplaces, barbecue area and Wi-Fi throughout.

Construction is nearing completion, and leasing is expected to start in the late fall or early winter, with move-in six months later. Rents will range from $1,350 for studios to $2,900 and up for three bedrooms.


One of AvalonBay’s newest luxury developments, under construction in Huntington Station, features a clubhouse that’s on an “island,” surrounded by man-made ponds.

“It’s going to be pretty dramatic and kind of cool,” says Christopher Capece, senior development director of AvalonBay Communities Inc.

Other amenities in the 379-unit complex, a mix of rentals and for-sale units, include a fitness center, swimming pool and easy access to the Huntington Long Island Rail Road station. The clubhouse and first residential buildings are expected to be done by the beginning of next year.


A three-story condominium complex in Garden City is looking to capture the spirit of Manhattan living. The complex will be a short walk to restaurants on Seventh Street. The developer, The Engel Burman Group, expects to break ground later this year


A $2.5 billion redevelopment plan aims to revitalize what was once considered Nassau County’s downtown. The master developer, Plainview-based Renaissance Downtowns, expects to break ground at the beginning of next year on 336 apartments, the first of nearly 3,500 units over 100 acres.

Everything will be within a half-mile of the train station and transit center, including ground-floor retail, with the zoning changed to allow “light industrial” uses, such as a bakery or furniture maker that has a retail component, says Sean McLean, vice president of planning and development for Renaissance Downtowns.


Proximity to transit is a big selling point for this luxury development, expected to open in 2015 near the Farmingdale train station.

“Our residents will be able to wait for the train in the lobby of their own building,” says developer Anthony Bartone of Bartone Properties.

One building, across the street from the train station, will have 39 apartments and 6,200 square feet of retail space, while the larger structure next to the station will have 115 apartments and 13,200 square feet of retail space.

Rents will range from $2,000 to more than $3,000 a month, with 10 percent of the units reserved for affordable or workforce housing. Along with a theater room, fitness room and courtyards with barbecues, the development will have an amenity more likely to be found in a hotel — a business lounge with free coffee, Wi-Fi and the ability to conduct conference calls. - 62k -

Comment by phony scandals
2013-11-26 09:42:21

“A wide range of stakeholders participated in development of the Long Island sustainability plan, including 300 community, business, labor and local government leaders who participated in working groups and another 500 residents.”

I bet those 300 leaders are gonna have a Meey Christmas.

Andrew M. Cuomo -

GovernorGovernor Cuomo Launches Grant Program for Projects to Support Cleaner, Greener Communities Sustainability Plans in Long Island

$30 Million in First Round to Implement Projects for Smart Growth, Improved Energy Efficiency, Green Jobs and Greenhouse Gas Reduction

Albany, NY (June 27, 2013)

Governor Andrew M. Cuomo today announced $30 million in the first round of funding for the implementation of regional sustainability plans, including the plan recently endorsed by the Long Island Regional Economic Development Council. The plans were developed under the governor’s $100 million Cleaner, Greener Communities program, a major statewide initiative to invest in smart growth planning and sustainability.

“This first round of funding will put each region’s sustainability plans to action,” Governor Cuomo said. “Through the Cleaner, Greener Communities program, regions across the state have developed plans from the bottom up, building on their assets and identifying needs, to create green jobs for New Yorkers while investing in projects that improve energy efficiency and reduce pollution. These plans will help accelerate our clean energy economy and improve the quality of life for all New Yorkers.”

The Long Island Cleaner, Greener Communities Sustainability Plan outlines the region’s vision, goals and objectives for a sustainable future, identifies a number of regional assets and makes recommendations for building on those assets. A consortium of dozens of municipal leaders and organizations completed the plan.

Funding for the Cleaner, Greener Communities program is through the Regional Greenhouse Gas Initiative. For more information on the program, including instructions on submitting grant applications through the Consolidated Funding Application, please visit - 27k -

Comment by Prime_Is_Contained
2013-11-26 10:43:21

Governor Andrew M. Cuomo today announced $30 million in the first round of funding for the implementation of regional sustainability plans,

Green apparently now means nothing more than handouts to connected developers.

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Comment by phony scandals
2013-11-26 11:12:23

“Green apparently now means nothing more than handouts to connected developers.”

It’s called The Public-Private Partnership.

The Public-Private Partnership (P3), Regionalism, and Agenda 21

On September 5, 2013

Anyone who has seen a magician ply his trade understands the use of misdirection to confuse and baffle the audience. The flourish of the cape and wand captivate the watchers’ eyes so they will not see the false bottoms, mirrors, and devices hidden behind the curtain.

This lesson has been well-learned by the world’s arrogant elitists whose goal is one world governance, one world currency, and the elimination of all private property (except theirs) under the umbrella of the UN’s Agenda 21. They know that few Americans would willingly give up their vehicles, pets, their 3 bedroom/2 ½ bath home on 2 acres, and their suburban lifestyle to live in a cramped 2 bedroom/1 bath apartment in an inner city high rise.

Participating in a UN advocated planning process would very likely bring out many who would actively work to defeat any elected official undertaking Local Agenda 21. So we will call our process something else, such as Comprehensive Planning, growth management, or smart growth.

~J. Gary Lawrence, City of Seattle Planner and Advisor to
the President’s Council on Sustainable Development 1998

Preemptively and deliberately, they did indeed grab all the “good” words: Sustainability, consensus building, common future, biodiversity, smart growth, social equity, food justice, social justice, mixed use development, transit corridors, bike lanes, urban sprawl, riparian buffer zones, farmland preservation, and pedestrian oriented development, to name a few.

Those who dare to oppose any of these socialist initiatives are forced into the untenable position of favoring ideas and programs that sound truly evil regardless of their actual intent. If you are against “social justice”, for instance, you must be for “social injustice”. If not “smart growth”, are you for the opposite?

The Public-Private Partnership (P3) is yet another ruse of big government to steal your wealth and private property and, in the process, “fundamentally change America” and plunder the productive members of society. A P3 is the essence of fascism and crony capitalism, elected government officials and their bureaucracy favoring corporations who support the political agenda of the ruling class, so both can profit at the expense of our individual freedom.

Vallee Bubak, my guest on Freedom Forum Radio in a three-part interview that begins this weekend (Saturday/Sunday, September 7 and 8), is on a crusade to educate the public about Public-Private Partnerships (P3s). Her current focus is the P3 involved in widening Interstate 77 north of Charlotte, NC. The following is a synopsis of her arguments against this project.

I-77 only needs 13 miles widened with a general purpose lane in each direction, a project that would cost $80 – $130 million and would not require any bridges to be rebuilt. Instead, under a P3 proposal, the public is being pushed into a 27.5 mile project that includes the unnecessary rebuilding of nine bridges, a flyover to connect two highways, managed toll lanes, and the relocation of homes and businesses at the estimated cost of $550 million. Even though the public is almost unanimously opposed to it, the organizations and corporations that stand to profit from the restricted toll lanes actively fund the campaigns of the elected officials who vote in favor of the expanded project. These private companies work in partnership with the government, funding media campaigns to manipulate and dupe an unsuspecting public.

The toll lanes use dynamic managed pricing in which cars using the lanes are monitored by video cameras or by on-board sensors. Monthly bills are generated based on miles driven, and rates vary during peak and off-peak hours.

Even though taxpayer money helped pay for the project, traffic is increased on the general purpose lanes, because drivers do not want to pay the tolls. Since the contract between the corporation and the state was written for a
50 – 70 year term, newly elected officials cannot eliminate the tolls even if elected to do so.

In the big picture, these projects are designed to alter the American way of life. Taxpayers who have paid to construct more highway lanes now find themselves sitting in worse congestion than before. Their choice is to sit in traffic or pay the tolls. Either way, the price of their commute has increased.

Eventually, especially if all the good corporate jobs are located in the city, they are forced to use public transportation or relocate into the city, both of which are among the stated goals of Agenda 21 (walkable inner-city communities, public transportation only, light rail, no private automobiles, an end to urban sprawl, controlled distribution of food and water, etc.). Using video or on-board transponders to track cars also allows the government to know exactly where you are any time you drive on a monitored road.

The end result is the complete loss of true individual freedom and total control over every aspect of the life of each citizen – the ultimate goal of all totalitarian governments so well depicted by George Orwell in his epic novel, 1984. - 63k - Cached - Similar pages
Sep 5, 2013 …

Comment by Housing Analyst
2013-11-26 08:59:22

Photos taken of Walmart Customers in California

Comment by azdude02
2013-11-26 09:16:14

weren’t half shirts popular in like the 80’s?

Comment by phony scandals
2013-11-26 12:08:26

They are exceptional.

But now I need some visual brain rinse.

The Squad | Miami Dolphins Cheerleaders - 44k -

Comment by rms
2013-11-27 00:14:49

“They are exceptional.”

+1 Certainly none of them will ever die drowning. :)

Comment by Whac-A-Bubble™
2013-11-26 20:01:49

Please convince me this photograph is a fake!


Comment by Housing Analyst
2013-11-26 09:29:49

Why should it be any mystery that the Dynamic Duo of Lola and Liberace are LIEberals?

Comment by goon squad
2013-11-26 09:48:02

What are you implying about Downlow Joe?

Comment by Whac-A-Bubble™
2013-11-26 09:40:13

I’m very confident that consumers without money will spend no money.

Nov. 26, 2013, 10:43 a.m. EST
Consumer confidence falls in November
Third straight decline does not bode well for retailers as holiday season nears
By Jeffry Bartash, MarketWatch

WASHINGTON (MarketWatch) — The government shutdown, it turns out, is not the only thing that’s undermined the confidence of consumers as retailers enter the most critical part of their year.

The consumer-confidence index fell for the third straight month, dipping to 70.4 in November from 71.2, the nonprofit Conference Board said Tuesday. It’s also the lowest level since April.

Comment by oxide
2013-11-26 12:42:29

consumers without money will spend no money

Isn’t that why they invented credit cards and HELOC’s?

Comment by Whac-A-Bubble™
2013-11-26 15:02:17

Don’t forget about SNAP cards…

Comment by rms
2013-11-26 13:24:03

“I’m very confident that consumers without money will spend no money.”

Receptionist: “Rainbow PUSH Coalition. How may I direct your call?”

Caller: “I have an injustice to report.”

Comment by Prime_Is_Contained
2013-11-26 09:58:16

Comment by Ben Jones
2013-11-25 10:32:13

[...] And serious write downs would basically lower house prices.

Ben, would you care to elaborate on how you see this occurring?

I agree that write-downs would dramatically increase the number of people who could afford to sell (because they would no longer be underwater), and thus may increase the liquidity of the system and the number of transactions occurring.

And some of those people who sell would accept less for their house because they owe less.

But I’m not sure that it would lower house prices that much…

Comment by Ben Jones
2013-11-26 10:06:47

It would lower the basis for the houses. IMO millions of houses would hit the market with a lower basis. That’s one reason the PTB wouldn’t do it. Another is that the GSE’s borrowed the money, and pledged the houses as collateral. Somebody has to pay. Sure you can stick it to the bond holders. But what happens next week when they need to sell some bonds?

Anyway, these people are in the bankers pockets. Whatever they do will benefit wall street.

Comment by Rental Watch
2013-11-26 11:16:56

The few write-down plans that I’ve seen require the beneficiary of the write down stay current on their lower loan balance loans for 3 years in order to get the benefit…and the lender gets a share of the upside.

Comment by Whac-A-Bubble™
2013-11-26 12:36:36

A three-year delay in cratering prices will still leave behind a crater.

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Comment by Rental Watch
2013-11-26 12:40:08

Aren’t the write downs only to the current market value? In other words, even if the write down had no strings attached (no 3-year payment requirement) and people could sell right away, wouldn’t it only free them up to sell at the new written-down loan amount?

Comment by Whac-A-Bubble™
2013-11-26 16:56:12

“…wouldn’t it only free them up to sell at the new written-down loan amount?”

Wouldn’t a bunch of homes newly listed for sale at the written-down loan amount push prices lower?

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Comment by Rental Watch
2013-11-27 00:13:23

Not if the written down loan amount were at the then market value.

Again, a write down to anything less, and the bank would essentially be giving away money (since they could foreclose and get that money themselves).

Comment by Rental Watch
2013-11-27 00:28:23

To give an example:

House purchased for $300k in 2005 with a $270k loan.
Market crashes to $150k in 2010, still have a $270 loan.
Market recovers to $200k by 2013 (33% move, still way underwater).

Borrower now defaults.

Bank has two choices:

1. Foreclose, and resell for $200k; or
2. Modify the loan (ie. make a deal).

If they modify by writing down the mortgage to anything less than $200k, then they are giving away money, since they could get $200k by foreclosing and reselling (*).

If they write the loan down to $200k, now the homeowner can sell, but needs to sell for at least $200k (market value)(*) to pay back the loan without coming out of pocket.

(*) I’m ignoring sales costs, which in reality, wouldn’t be ignored.

If what you are saying is that with enough of these, you swamp the market with listings, and drive prices lower simply due to increased supply, you are right. That could happen.

But then you need to do the math…how many homes being dumped on the market immediately would it take to move the market? Take foreclosure radar’s delinquency numbers for CA:

44k in “preforeclosure”. If all of these were instantaneously to be listed for sale at the most recent comps, it would add approximately 1 month of supply to the market. Including foreclosures, Zillow notes approximately 106k homes for sale in CA currently.

480k homes were sold in the past 12 months in CA, 150 homes (current listings PLUS the hypothetical addition of 44k modified loans) represents 3.75 months of inventory.

Because the 44k additional homes to be listed are highly unlikely to be dropping their prices, I don’t see how even this improbable situation (44k modifications happening quickly is highly unlikely…and all 44k modifications resulting in listings is even more unlikely, since many who have not already walked away are staying put because they want to live in the house) would amount to much of a change in the market.

Comment by Whac-A-Bubble™
2013-11-26 15:17:22

“But what happens next week when they need to sell some bonds?”

Fed’s housing preoccupation dangerous: Ex-Fed gov

Published: Tuesday, 26 Nov 2013 | 10:29 AM ET
By: Matthew J. Belvedere | Producer, CNBC’s “Squawk Box”
Tuesday, 26 Nov 2013 | 8:35 AM ET

How important are housing signals for determining the total economic environment, with former Federal Reserve Gov. Kevin Warsh, Hoover Institution. Warsh discusses Bank of Japan’s policies.

The Federal Reserve should not be focusing as much on housing as a measure of the health of the overall economy, former Fed Gov. Kevin Warsh told CNBC on Tuesday.

“Housing and housing assets are going to give you one signal,” Warsh said in a “Squawk Box” interview. “[But] there is a broader cross section of data from the consumer, from the business, from trade and from exports. So this preoccupation with housing strikes me as really quite dangerous.”

One of the goals of the Fed’s $85 billion in monthly purchases of bonds and mortgage-backed securities, known as quantitative easing, has been to support the budding recovery in the housing market—the crash of which led to the 2008 financial crisis.

Investors have been hanging on every word out of the Fed for clues on when policymakers might start to scale back QE. Wall Street had widely expected tapering to begin in September, but it didn’t materialize. With no changes in October, attention has turned to next month’s meeting of the central bank.

“My sense is now as we get to the end of this year, early next year, QE has gotten a little tired in that room,” the former Fed governor said. In a world according to Warsh, he said he’d make it clear that QE is “on a path to extinction.” He explained that he’d lay out a committed course for winding down asset purchases from $85 billion a month to $65 billion to $45 billion and so on, barring “some extraordinary developments in markets.”

(Read more: US home prices up the highest since 2006: Survey)

Comment by Whac-A-Bubble™
2013-11-26 10:13:42

“I agree that write-downs would dramatically increase the number of people who could afford to sell (because they would no longer be underwater), and thus may increase the liquidity of the system and the number of transactions occurring.”

Close but no cigar.

If there is latent inventory due to people who previously could not afford to sell due to their underwaterness, we could see a spontaneous surge in supply (not to be confused with an increase in liquidity) as owners try to cash out their $100,000+ in helicopter drop home equity provided in the form of tax-free mortgage writedowns. If you took (and passed) an undergraduate microeconomics class, then you know that an exogenous increase in supply results in a decrease in prices unless demand is perfectly elastic (and it isn’t).

Comment by Housing Analyst
2013-11-26 10:25:10

Just how many millions of people have stated over and over, “I gotta get rid of this house!” ? I’ve heard it a handful of times from acquaintances just in the last 6 months…..

… and they’re still holding onto the melting ice cube.

Comment by Prime_Is_Contained
2013-11-26 10:57:51

(not to be confused with an increase in liquidity)

Increased transactions is what I mean by increased liquidity. An illiquid market has no transactions or very few transactions occurring.

Do you really believe that in a market with low total transactions (1997 levels, currently), that reducing the number of underwater sellers will not increase the rate of transactions?

an exogenous increase in supply results in a decrease in prices unless demand is perfectly elastic (and it isn’t).

I’m not convinced that this improved liquidity will actually result in an increase in total supply—as many of those no-longer-underwater sellers who would sell would also be buyers elsewhere. In such cases, you get two additional transactions and no additional net supply.

But I do think it would increase total transactions.

Comment by Housing Analyst
2013-11-26 11:01:00

Whether it adds to the supply or not isn’t the point. Besides, with tens of millions of excess empty houses, it’s a immaterial entirely.

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Comment by Whac-A-Bubble™
2013-11-26 12:26:44

“—as many of those no-longer-underwater sellers who would sell would also be buyers elsewhere.”

In 55-and-older and assisted living communities, perhaps. The aging crest of the Baby Boomer demographic wave pretty much guarantees that McMansion tract home bedroom communities are toast once liquidity returns.

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Comment by Whac-A-Bubble™
2013-11-26 12:30:12

In case you somehow missed Ben’s explanation (which is fully consistent with mine):

Comment by Ben Jones
2013-11-26 10:06:47

It would lower the basis for the houses. IMO millions of houses would hit the market with a lower basis.

I’m not sure the PTB would mind this, though. They have been talking about plans to provide ‘affordable housing’ for as long as I have paid attention, and millions of houses hitting the market would definitely lead to improvements in affordability.

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Comment by Ben Jones
2013-11-26 13:12:54

If you think about it, it wouldn’t take millions. Because houses are appraised at the last sales, it wouldn’t take many transactions to bring prices down.

‘I’m not sure the PTB would mind this’

It could be the end of the GSE’s. If large enough, it could begin the unraveling of decades of price distortion. There may be another million or 3 of recent buyers who find themselves underwater because of it. Bernanke wouldn’t like it, as deflation would run wild.

I know a guy who defaulted twice. He’s now in a HARP loan. They forgave the year of missed payments. And he’s still way underwater.

Comment by Whac-A-Bubble™
2013-11-26 15:22:10

‘It could be the end of the GSE’s.’

I’m not sure the PTB would mind this.

Comment by Whac-A-Bubble™
2013-11-26 15:23:19

“I know a guy who defaulted twice. He’s now in a HARP loan. They forgave the year of missed payments. And he’s still way underwater.”

At least his home isn’t on the market, screwing up the comps.

Comment by Whac-A-Bubble™
2013-11-26 16:52:28

“…deflation would run wild.”

My understanding is that the Fed distinguishes between asset market wealth effects (such as rising or falling home values) and inflation or deflation. This distinction suggests there is no need for them to be concerned over falling home prices, as that would not constitute deflation, at least by their definition.

Comment by Whac-A-Bubble™
2013-11-26 12:35:11

“Do you really believe that in a market with low total transactions (1997 levels, currently), that reducing the number of underwater sellers will not increase the rate of transactions?”

I get it.

But I think you are missing the reason for the increased rate of transactions, which is not that those on the demand side will suddenly find themselves with extra purchasing power, whether due to a first-time buyer tax credit, even looser federal government lending standards, or lower interest rates than have already been reached in a downward march to generational lows.

Rather the increase in transactions would be on the supply side, due to sellers who could suddenly ‘afford’ to sell at a lower price than they would have needed to sell for previously in order to pay off their mortgages. A large spontaneous increase in the number of homes for sale offered at lower prices than before sounds to me like a good recipe for improved affordability.

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Comment by Rental Watch
2013-11-26 12:43:01

What you are suggesting is that a bank or servicer would write the loan amount to a level BELOW the market value of the home (ie. give them equity, rather than foreclose and re-sell the REO to get that equity themselves).

Under what rationale would a bank or servicer give borrowers equity in their homes? That makes no sense.

Comment by Whac-A-Bubble™
2013-11-26 15:20:40

“What you are suggesting is that a bank or servicer would write the loan amount to a level BELOW the market value of the home…”

Wrong again.

What I am suggesting is that the market values of homes will drop in response to a supply glut due to many owners who are suddenly willing and able to underbid the recent comps, yet still extract home equity gains.

Wait for it.

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Comment by Rental Watch
2013-11-27 00:35:56

“many owners who are suddenly willing and able to underbid the recent comps, yet still extract home equity gains.”

If their home loan was written down to the market value, there is no equity by selling below recent comps (since market value=recent comps).

In other words, the owners are not able to sell below recent comps, because that presupposes that banks write down loans to BELOW those recent comps, which they wouldn’t do, since their alternative would be to foreclose, and sell AT those recent comps, and take that spread for themselves.


Loan=$270k, market value of home=$200k.

Do you honestly believe that a bank (or servicer) is going to write down the loan to below $200k, when their alternative is to foreclose, take back the home as REO, and sell for $200k?

Comment by Housing Analyst
2013-11-27 06:15:09

That’s the point. Neither the bank nor the “owners” can sell at “recent comps” and they both know it.

Comment by Whac-A-Bubble™
2013-11-26 17:49:22

One reason to expect writedowns to have no effect on home prices: The conforming loan limits are going to stay right where they are currently in 2014, suggesting the federally-guaranteed mortgage bid will be sufficiently high to support current price levels.

Comment by Whac-A-Bubble™
2013-11-26 17:51:20

UPDATE 3-Fannie, Freddie home loan limits to hold steady in 2014
Tue Nov 26, 2013 2:18pm EST
* $417,000 will remain the limit in most areas for now
* Regulator mulled lowering cap to curb gov’t housing role
* Nominee for housing post seen less eager to pull back
By Margaret Chadbourn

WASHINGTON, Nov 26 (Reuters) - The maximum size of U.S. home loans that taxpayer-owned Fannie Mae and Freddie Mac can buy will hold steady next year, their regulator said on Tuesday, deferring a decision on when to pull back government support for the housing market.

The mortgage financiers will continue to purchase loans up to a maximum of $417,000 in most areas, the Federal Housing Finance Agency said. In more expensive markets, such as Los Angeles and New York, the cap will remain at $625,500.

The limits were raised in 2008 to help keep the mortgage market liquid during the financial crisis, and the agency had begun to consider lowering them as the housing market recovered to allow private capital to support more home loans.

Last month, it said any changes would be phased in and announced six months before they were implemented to avoid economic disruptions.

In announcing its decision on Tuesday, the FHFA said the housing market was not showing enough strength to warrant lowering the limits now. It is expected to wait until sometime next year before deciding on any future reduction.

Some housing industry leaders and lawmakers have expressed concern that reducing the limits could shut out buyers and impede the housing recovery. Investors might not be willing to take the risk of buying mortgage-backed securities without a government guarantee, they cautioned.

Analysts, however, say a decrease would affect only a sliver of the market, about 2 to 3 percent.

“The housing market isn’t going to flourish because of this announcement, but in some markets this eliminates a threat for 2014,” said Jaret Seiberg, a senior policy analyst at Guggenheim Securities. “This is broadly positive for housing, but it’s not the secret cure that’s going to give us a healthy market.”

Comment by Whac-A-Bubble™
2013-11-26 18:01:47

“Recently the Internal Revenue Service clarified that borrowers in non-recourse states, where lender cannot pursue borrowers personally in case of default, can avoid the tax hit.”

I assume this applies to many underwater California homeowners, who are on the brink of receiving six figures in tax-free principal forgiveness income? This certainly will make underwater debt donkeys look like the smartest guys in the room!

Watt’s Up For FHFA Post
By Steve Viuker on November 26, 2013

President Obama received an early Thanksgiving gift as his party did a turkey trot around filibusters; thus paving the way for Mel Watt (D., N.C.) to likely be confirmed as the new director of the Federal Housing Finance Agency, which regulates bailed-out mortgage giants Fannie Mae and Freddie Mac.

Democrats voted to overturn an existing rule that required a minimum of 60 votes to break a filibuster blocking a floor vote for a presidential nomination. Under the new rules, a simple majority of 51 is sufficient. Senate Majority Leader Harry Reid (D., Nev.) said that he decided to invoke the “nuclear option” after Republicans blocked several Presidential nominees.

In October, Republicans blocked the nomination of Watt to head the FHFA. The Congressional Black Caucus said it was the first rejection of a long-serving sitting member of good standing since 1843, when the Senate rejected Massachusetts Rep. Caleb Cushing as treasury secretary.

Acting FHFA director Edward DeMarco has clashed with the Obama Administration on a number of issues, most notably on his reluctance to allow the agencies to forgive principal. Watt is seen as being more sympathetic to the Administration’s views and may be more open to principal reductions. Loan forgiveness is considered a source of income under tax rules, but the Mortgage Forgiveness Debt Relief Act allows taxpayers to exclude income from discharge of debt on their principal residence. With the act expiring this year, borrowers who court principal forgiveness would have to take a big tax hit. Recently the Internal Revenue Service clarified that borrowers in non-recourse states, where lender cannot pursue borrowers personally in case of default, can avoid the tax hit.

DeMarco has been trying to reduce the footprint of the government-sponsored enterprises (GSEs), which now purchase over 80% of newly originated mortgage loans.

Republicans accuse Watt of supporting lower requirements for obtaining a mortgage, which contributed to the need for the government to take over the quasi-government entities. “America needs someone with technical expertise and experience to run Fannie and Freddie’s conservator and ensure that we don’t repeat the same mistakes that led to the last financial crisis,” Senate Minority Leader Mitch McConnell, R-Ky., said in a statement. “This is the second FHFA nominee that President Obama has sent who did not meet those standards.”

Comment by phony scandals
2013-11-26 10:26:44

”In times of universal deceit, telling the truth is truly a revolutionary act.”

George Orwell

Comment by Bluestar
2013-11-26 15:03:46

“That men do not learn very much from the lessons of history is the most important of all the lessons that history has to teach.”

Aldous Huxley

Comment by phony scandals
2013-11-26 10:46:13

Redskins play the Navajo Code Talkers card.

10 Hrs ago / National

Washington Redskins Honor Navajo Code Talkers

Brian Feldman

Tonight at the Washington Redskins home game against the San Francisco 49ers, the team honored a group of Navajo Code Talkers—Native American veterans who developed an unbreakable code for relaying messages during WWII—who came out wearing team jackets.

The tribute comes in the midst of a month of tributes to veterans throughout the NFL, but also in the midst of controversy over the team’s racist name. While the motives behind the brief show of gratitude are unlikely to be explained publicly, the ties between the team name and the specific group of veterans are hard to ignore. - -

Comment by ibbots
2013-11-26 10:53:18
Comment by Housing Analyst
2013-11-26 12:50:54

Dallas prices fell 8%+ in a single month.

Remember….. There is a 3 month delay in CS.

Comment by goon squad
Comment by rosie from the north
2013-11-26 15:07:22

My brother smashed his hand in a log splitter. Ambulance, hospital, doctors, nurses, X-rays, follow up home care, surgery by plastic surgeon, follow home car again, 4 months physiotherapy, hand starting to work. Cost 0, unless you include taxes paid over the years. Bite the bullet, go socialist.

Comment by Ben Jones
2013-11-26 15:42:22

I know a guy who had a motorcycle accident in Costa Rica. Broke his leg, they put pins in it. A month or two later (he was still in the hospital), they realized it was all screwed up. They re-broke the bones and put in new pins. Four months after that he got out. Leg was all messed up, the rest of his body was in bad shape from being on his back for 6 months. Walks with a limp to this day. Cost 0. I guess he has to bite the bullet too.

Comment by tom cruz bustamante
2013-11-26 19:25:36

But Canada is different…it’s got white people.

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Comment by Northeastener
2013-11-26 15:51:14

Note that Nader doesn’t say what causes delays in health care, only that delays aren’t due to not having insurance. Socialists the world over have something in common: an ignorance of supply demand and price interaction.

Lets ask ourselves a few simple questions: Are government bureaucrats smarter than markets? Can government bureaucrats set correct pricing on products while balancing consumer and producer market participation?

Here’s something else: in Canada’s system, I would be paying 7-8% of my income in taxes for marginal healthcare with long wait times for services. Today, my out-of-pocket healthcare costs are closer to 3% (not including the employer match) and I have almost no wait times for services. I also have the benefit of knowing the doctors and specialists available to me are the best in the world. Why? Because the financial rewards of a capitalist (pseudo) free-market create the incentives for the best and brightest to be doctors… something government mandates and pricing controls doesn’t provide.

Comment by aNYCdj
2013-11-26 13:04:50

I may bitch gripe act stupid racist and clueless…..but this made me cry…..

Comment by Whac-A-Bubble™
2013-11-26 15:28:59

Robert Shiller on housing: Don’t trust momentum
Published: Tuesday, 26 Nov 2013 | 10:50 AM ET
By: Diana Olick | CNBC Real Estate Reporter
Shiller: No homebuyer excitement
Tuesday, 26 Nov 2013 | 9:15 AM ET

Robert Shiller, Case-Shiller Index co-founder and Yale University professor of economics, discusses the decline in housing transactions. Shiller says we can’t trust momentum in the housing market anymore.

A striking surge in home prices this fall was not enough to convince one of the nation’s top housing economists that the recovery is on solid ground.

“We can’t trust momentum in the housing market anymore,” Nobel Prize-winning economist Robert Shiller said on CNBC’s “Squawk Box.”

Why not? Investors, specifically institutional investors, have vast sums of cash. They have bought about 100,000 homes, most of them previously foreclosed properties. They bought the homes in a limited number of markets, mostly in the West, pushing prices dramatically higher as competition for the properties increased. They are now renting them, and even selling bonds backed by the rental streams.

The trouble, according to Shiller, is that investors are a fickle bunch, and if they see lower-than-expected returns they won’t hesitate to dump the properties and move on to another trade.

They’ve learned that there is short-run momentum in housing,” said Shiller.

(Read more: Chinese buying up California housing)

Comment by Whac-A-Bubble™
2013-11-26 17:08:15

What spooked Mr Market at the end of the day today? Halloween was over almost a month ago.

Comment by Whac-A-Bubble™
2013-11-26 17:10:34

Momentum is sleighted to trump bubble pricing reversal next month.

Stock market’s holiday gifts come bubble-wrapped this year
November 26, 2013, 5:14 PM

Looks like the Santa Claus rally is coming to town.

U.S. stock investors typically have themselves a merry little December, even after market returns have been bright, according to research from S&P Capital IQ. Since 1945, whenever the Standard & Poor’s 500-stock index SPX +0.02% has gained 15% or more for the year through November, the index rose 2.1% on average in December better than 70% of the time, says Sam Stovall, the firm’s chief equity strategist.

If 2013 mirrors this pattern, money managers won’t move now to lock in those stunning S&P 500 year-to-date gains — currently topping 26%. Instead, they’ll dismiss the naysayers’ bubble concerns as blather and instead will let their winners ride, Stovall predicts.

“December ranks as the best performing month for the S&P 500, whether you look back to 1990, 1970, 1945, or 1900,” Stovall notes.

In fact, since World War II December has been the S&P 500′s best-performing month and its least volatile. The benchmark U.S. stock index rose in price during 78% of all Decembers since 1945, versus an average 59% for all months and just 45% for September, according to S&P.

As for years resembling this one, when the S&P 500 is up 20% or more in the first 11 months of the year, December’s average return was 1.8% with an increase 73% of the time.

The December Effect also applies to the 10 S&P 500 industry sectors. Since 1990, when a sector gained 15% or more, December’s performance was most often positive. The best result was for consumer stocks: Consumer staples have posted an average 5.2% advance in December, while consumer discretionary saw an average 3.2% advance in the year’s final month. The weakest sector was energy, which rose 1.3% on average.

This year so far, only telecom and utilities are up less than 15%.

If history plays out, Stovall says, “investors will not take the rest of the year off, and that the S&P 500 and eight of its sectors have a very good chance of adding to their already impressive results through the remainder of the year.”

Comment by Whac-A-Bubble™
2013-11-26 17:14:52

Bulletin Japan stocks extend loss, with financials a soft spot; Nikkei Average down 0.6% »

Nov. 26, 2013, 4:09 p.m. EST
Nasdaq closes over 4,000 for first time since 2000
By Victor Reklaitis

NEW YORK (MarketWatch) — U.S. stocks finished just slightly higher on Tuesday after erasing some gains in the final minutes of trading, but the Nasdaq Composite (COMP +0.58%) achieved its first close above 4,000 since September 2000, while the Dow Jones Industrial Average DJIA (+0.00%) eked out another record close. The S&P 500 (SPX +0.02%) edged up 0.27 point to end at 1,802.75, below its record close on Friday. The Dow rose 0.26 point to finish at 16,072.80 for its fourth straight record close. The Nasdaq tacked on 23.18 points, or 0.6%, to finish at 4,017.75. Encouraging data for the housing market offset a weaker-than-expected reading on consumer confidence.

Comment by Whac-A-Bubble™
2013-11-26 17:19:46

U.S. B-52s flew over China’s newly declared air zone, official says
By Barbara Starr, CNN Pentagon Correspondent
updated 6:23 PM EST, Tue November 26, 2013
U.S. defies China’s newly claimed airspace
* NEW: Chinese aircraft carrier group heads to the South China Sea
* 2 U.S. B-52 planes fly over China’s newly claimed air zone, U.S. official says
* They don’t tell China about their flight plans, as Beijing has said it wants
* The U.S. has sided with Japan; China calls the U.S. position “irresponsible”

(CNN) — Two U.S. military aircraft flew into China’s newly claimed and challenged air defense zone over the East China Sea, a U.S. official said, an action that could inflame tensions between the world powers.

The large U.S. Air Force B-52 planes — which were not armed because they were on a training mission — set off Monday from Guam and returned there without incident. The mission lasted for several hours, and the aircraft were in China’s newly declared air zone for about an hour, according to the U.S. official.

The planes’ pilots did not identify themselves upon entering the disputed airspace, as China would have wanted, according to the official.

The official declined to be named because of the sensitivity of the situation.

The flights came two days after China unilaterally announced the creation of a so-called “Air Defense Identification Zone” over several islands it and Japan have both claimed. The two countries have been sharply at odds over those isles, which are believed to be near large reserves of natural resources.

Washington responded negatively to what Secretary of State John Kerry characterized as an “escalatory action (that) will only increase tensions in the region and create risks of an incident.” And the U.S. government has rallied around its ally Japan, where thousands of its troops are stationed as part of a security treaty.

And specifically regarding China’s new air defense zone, the United States has said it won’t recognize it — nor China’s call that aircraft entering it identify themselves and file flight plans.

Beijing, though, has dismissed the American position as unjustified and urged Washington to butt out of the territorial dispute.

Chinese defense ministry spokesman Col. Yang Yujun on Sunday called such criticism “completely unreasonable,” “irresponsible” and “inappropriate,” telling the United States to stop taking sides and not send more “wrong signals” that could lead to a “risky move by Japan.”

Comment by Whac-A-Bubble™
2013-11-26 17:42:07

Asia-Pacific Markets
Asian stocks lower despite US gains; Political risks watched

Published: Tuesday, 26 Nov 2013 | 7:19 PM ET
By: Nyshka Chandran | News Assistant, CNBC Asia-Pacific

Asian shares were lower on Wednesday despite record highs on Wall Street overnight and as rising political tensions in the region weighed on sentiment.

U.S. stocks posted modest gains on Tuesday, with the Dow posting another new all-time peak and the Nasdaq finishing at a thirteen-year high thanks to better-than-expected housing reports.

Despite overall trading has been subdued this week ahead of Thursday’s Thanksgiving holiday and as market players unwind their bets as the month draws to an end.

In the latest episode of rising tensions in the East China Sea, the Pentagon confirmed that American aircraft have flown over disputed islands without informing Beijing. The move comes just a few days after Tokyo and Washington criticized Beijing for establishing an air defense zone in the territory.

Comment by Whac-A-Bubble™
2013-11-26 17:23:31

Translation: Less time in the bedroom => fewer kids => lower future housing demand => incipient housing price collapse.

26 November 2013 Last updated at 03:39 ET
Modern life ‘turning people off sex’
By Nick Triggle Health correspondent, BBC News
Couple kissing in bed
More than 15,000 people were polled about their sex lives

Money worries and the distractions of social media mean people are having sex less frequently, researchers say.

A once-a-decade poll of 15,000 Britons found those aged 16-44 were having sex fewer than five times a month.

The figure compared with more than six times a month on the last two occasions when the official National Survey of Sexual Attitudes and Lifestyles was carried out, in 1990-91 and 1999-2001.

The study’s authors say modern life may be having an impact on libidos.

Dr Cath Mercer, from University College London, said: “People are worried about their jobs, worried about money. They are not in the mood for sex.

Comment by inchbyinch
2013-11-26 18:33:39

“They are not in the mood for sex.”
Sorry to read this. Yankee Doddle-ing is dandy!
(I may not remember what it feels like, but I sure do remember what it looks like.) lol

Sounds like your dad still going strong.
Is he still working to keep stimulated?
Does he volunteer in a service organization for socialization and philanthropy?

Comment by Whac-A-Bubble™
2013-11-26 19:57:16

“Is he still working to keep stimulated?”

He has the only backyard garden in his suburban neighborhood — carrying on his mom’s tradition.

“Does he volunteer in a service organization for socialization and philanthropy?”

That too.

Comment by Whac-A-Bubble™
2013-11-26 17:39:48

Where are Treasurys going? Just watch gold
Published: Monday, 25 Nov 2013 | 3:47 AM ET
By: Matt Clinch | Assistant Producer

The spot gold price may have baffled investors since its move south last December, but analysts at Citi now see the precious metal being a leading indicator of U.S. Treasurys.

Gold is about to enter “phase two” of its bear market, according to the investment bank, after a brief rally and its downside target is now $1,111 per ounce from its current price of $1,231. As well as this bearish outlook, it now sees gold being a leading indicator of U.S. Treasury bills.

“Gold prices fell before and after (U.S. Federal Reserve Chairman Ben) Bernanke’s warning about tapering in May, they then stopped falling in July, well ahead of the September FOMC (Federal Open Market Committee) ‘no taper’. In fact, by the time of the September FOMC decision gold was falling again,” analysts at the bank said in a research note released on Monday.

Gold seems to anticipate monetary policy developments earlier than USTs. This is possibly because gold has, in the end, no intrinsic worth and no yield and is therefore hyper-sensitive to U.S. and global monetary policy.”

Citi’s research shows that gold now has a roughly 60-day lead over 10-year Treasury yields. This suggests yields will be 2.9 percent by late January, it said, or 3.25 percent if gold hits $1,111.

Often seen as a hedge against inflation, gold traditionally has had an inverse relationship to interest rates with demand for the precious metal increasing when rates are low.

Last December was seen as a key turning point for gold prices with the commodity losing its close relationship with Fed policy announcements.

In the 10 years up until last December, gold had surged around 400 percent, with the help of low interest rates, extra Fed liquidity and concerns over the global economy. Then on December 12 , the Fed announced that it would buy $45 billion in additional Treasurys every month, on top of the $40 billion of mortgage-backed securities it already purchases, taking the total size of its quantitative easing program to $85 billion a month.

Instead of this being bullish for gold, the precious metal actually posted a surprise fall of 1 percent. Michael Derks, chief strategist at FxPro who now no longer works for the company, said at the time that the rules surrounding the price of gold had suddenly changed.

For the gold bulls to remain in the ascendancy next year, a lot will depend on the much-feared inflation from global quantitative easing starting to show through. It’s proving to be a long wait though,” he said in a research note at the time. Sure enough, gold has since then fallen 27 percent.

(Read More: Goldman predicts steep losses for gold in 2014)

(Read More: Bargain hunters get ready to buy gold)

(Read more: Gold set for biggest weekly loss in 2 months)

Comment by Whac-A-Bubble™
2013-11-26 19:50:01

Don’t look now, but you may soon be able to buy an ounce of gold with one Bitcoin!

Comment by Whac-A-Bubble™
2013-11-26 19:52:24

Nov. 26, 2013, 2:49 p.m. EST
Bitcoin jumps to record of $947
By Saumya Vaishampayan

NEW YORK (MarketWatch) — The virtual currency bitcoin jumped to a record of $947 Tuesday on the trading exchange Mt. Gox. In recent trade, one bitcoin bought $939.99 on Mt. Gox, the second-biggest exchange by volume, and $879 on BitStamp, the third-biggest exchange. Bitcoin had briefly pushed above $900 on Mt. Gox last week in the wake of a Senate hearing on virtual currencies.

Comment by Whac-A-Bubble™
2013-11-26 21:09:13

Is price fixing legal, so long as banks do it?

Comment by Whac-A-Bubble™
2013-11-26 21:12:24

London Gold Fix under scrutiny
Gold bars are seen at the Czech Central Bank in Prague.
Interview by David Brancaccio
Marketplace Morning Report for Tuesday, November 26, 2013

Since 1919, bankers have come together every day to determine the price of gold around the world. But now the process — the London Gold Fix – is under scrutiny by British regulators. Bloomberg reporter Liam Vaughan worked on a piece examining the system.

[It’s] looking at whether it’s entirely fair for this certainly price sensitive — if not confidential — information to be in the hands of these banks before everyone else when these banks are also allowed to trade,” Vaughan says.

Comment by aNYCdj
2013-11-26 19:15:41

Contractor Killed 6 in Fatal Building Collapse: DA

The demolition contractor is second person charged in the collapse; the first to face murder charges.

The first murder charges have been handed down in a deadly building collapse that took the lives of six people, injured 13 and resulted in an overhaul of demolition practices in the city of Philadelphia.

Comment by Bill, just South of Irvine, CA
2013-11-26 19:38:27

Again, gold way down and S&P way up.

Government Sux is talking down the price so that it could behind the scenes buy up more mines and gold bullion.

GDXJ yields 9.33%. As good as a ten year note in the 1990s.

I have awesome gains in stocks from the last five years. I’ll put it this way: $400,000 worth in 2008, $1,1 million worth in 2013. And my gold is in a depression. Well I’m very worried about the stocks being so high and no one is saying it’s going to end. I heard people in the 1990s say “this is a new paradigm” and Lucent went from $100 down to $2.

Got Facebook? Got Twitter? I don’t. I’m selling off a big chunk in January, May, and September, putting a bit at a time in gold mining stocks and of course adding to my stack of physical bullion, and my T-bills.

Comment by Whac-A-Bubble™
2013-11-26 19:55:27

Good plan. Anyone who doesn’t stay extremely diversified in the current destabilized investing climate is courting financial disaster.

Comment by Whac-A-Bubble™
2013-11-26 20:07:39

Just heard a real estate industrial complex shill piece on NPR about the glorious virtues of America’s love affair with the 30-year mortgage.

‘Xcuse me while I head outside to hurl.

Comment by Whac-A-Bubble™
2013-11-26 20:08:53

Always bear in mind that NPR is supported by the National Association of Real Estate, and hence a biased news source which violates their nonprofit status by advertising for the NAR.

Comment by Whac-A-Bubble™
2013-11-26 20:19:21

National Association of Real Estate Realtwhores®

Comment by Strawberrypicker
2013-11-26 20:39:55

But Polly says it’s not advertising, just sponsorship. So it’s all good.

In other news, if you like your insurance, you can keep your insurance.

Comment by Bill, just South of Irvine, CA
2013-11-26 21:15:04

It’s gotta be good because it’s certified USDA “Progressive” - NAR and NPR.

(Comments wont nest below this level)
Comment by Whac-A-Bubble™
2013-11-26 20:48:48

Why we can’t let go of the fixed-rate mortgage
Pedestrians walk by a Wells Fargo home mortgage office on October 11, 2013 in San Francisco, California.
by Adriene Hill
Marketplace for Tuesday, November 26, 2013

Step back, take a look at the economy, and the 30-year fixed-rate mortgage stands out. Americans live in a fast, fast world. Jobs are temporary. Companies fetishize short-term profits. Every minute people are supposed to be optimizing opportunity, seizing the financial future.

“In some ways the 30-year mortgage is an anachronism for the go-go capitalism we live under today,” says Louis Hyman, a history professor at the ILR School at Cornell University.

Most of our financial lives are in flux, demanding constant attention, except our mortgages. Nearly 90 percent of the home loans issued during the first half of this year were 30-year fixed-rate loans.

Where you pay the same amount. Every single month. “It speaks to the way in which most American’s still want to have stability in their lives,” says Hyman, “so there’s this real disconnect between the larger movements of capitalism and how we would actually prefer to live our lives.”

The 30-year fixed-rate mortgage is remarkably pro-consumer and anti-go-go-capitalism. It stretches the payment out over a long period of time, protecting borrowers if interest rates go up. And it lets them refinance if interest rates go down.

It can be hard to understand, when so many other facets of our lives have been turned over to the market, why government policy favors (actually creates) this dependence on the 30-year fixed-rate mortgage.

Here’s President Barack Obama is August: “We should preserve access to safe and simple mortgage products like the 30-year fixed-rate mortgage. That’s something families should be able to rely on when they are making the most important purchase of their lives.”

The audience clapped. But why? Is this love a love for calm? For predictability in otherwise unpredictable lives? Or, something more?

The answer is both. And more.

“The stability, and the ability to build up savings without really thinking about it, which is really important, are the two biggest benefits to the individual,” says Ellen Seidman, a fellow at the Urban Institute.

There are also social benefits. Seidman says there is evidence that homeownership generates “a greater interest in maintenance of the home, in stability, and greater civic interest in the community.”

Comment by rms
2013-11-27 00:26:52

How about 3/2 houses that only require a 10-yr mortgage?

Comment by Whac-A-Bubble™
2013-11-26 21:04:33

It astonishes me how much pure, unsubstantiated bullshit you find these days in MSM financial stories. For example:

“One-sidedness comes, No. 1, from locking in that interest rate over an outrageously long period of time,” he says.

How many of our federal tax dollars go to manufacturing this never-ending flow of real estate propaganda drivel?

There is no reason that the free market couldn’t provide a locked-in interest rate over 30 years. However, the rate would be much higher than the federally-subsidized-and-guaranteed, and Fed-suppressed, mortgage rates available in the government-manipulated mortgage market, resulting in home owners being able to afford more modest, less expensive homes than the McMansion tract home monstruousities that everyone lives in today.

Who thought 30-year mortgages were a good thing?
The 30-year mortgage was largely a response to the Great Depression and an effort to make home loans more affordable.
by Adriene Hill
Marketplace for Monday, November 25, 2013

In the wake of the housing market collapse of a few years ago, lawmakers in Washington are debating the future of Fannie Mae, Freddie Mac, and government involvement in the housing market. One issue is the 30-year fixed-rate mortgage, a loan U.S. homebuyers take for granted, but is decidedly uncommon in other countries. In thinking about the role of the 30-year mortgage, it helps to know how it got started.

As late as the 1920’s, someone taking out a mortgage to buy a house in the U.S. would most likelyl get a short-term balloon mortgage. Typical terms: 50 percent down, and five years to pay off the other 50 percent. At the end of the five years, it was common to re-finance into another five-year loan.

Then came the Great Depression. Many banks failed, and surviving banks didn’t want to refinance these balloon mortgages. Banks foreclosed. Between 1931 and 1935, a quarter mllion people lost their homes each year.

President Franklin D. Roosevelt stepped in, explaining why the government shouldn’t just sit by: “Even before I was inaugurated, I came to the conclusion that such a policy was too much to ask the American people to bear. It involved not only a further loss of homes, farms, savings and wages, but also a loss of spiritual values — the loss of that sense of security for the present and the future so necessary to the peace and contentment of the individual and of his family.”

To stabilize the economy, Roosevelt created federal agencies that form the basis of the housing market the United States has today. They provided mortgage insurance, established a secondary market for mortgage loans, and converted 1 million loans into long-term mortgages.

Professor Susan Wachter, from the Wharton School, says the changes were transformational. “It made housing affordable and it made housing, homeownership, sustainable.”

More people could afford to buy, and keep, a home. Home costs were disconnected from the business cycle. Mortgages became safer.

“The loan will not come due until the loan is paid off,” Wachter said, “and it will do that over the long term, which makes the loan affordable. When you stretch out the payments, they become affordable.”

The maximum length of a mortgage was extended to 30 years in the 1940’s, making home ownership even more affordable — and stimulating the housing market. Today, Roosevelt’s economic fix not only is still with us, it’s the norm. In the first half of this year, the 30-year fixed-rate mortgage accounted for nearly 90 percent of new mortgages.

“It’s a protected species,” says Robert Bridges, a professor of economics at USC. “It stands out as a great thing if you can get it.”

That is, great for the borrower. The 30-year fixed-rate mortgage, Bridges says, has all sorts of protections — for one side.

“One-sidedness comes, No. 1, from locking in that interest rate over an outrageously long period of time,” he says.

By locking in the rate, borrowers are protected if interest rates go up — for 30 years. And, there’s no refinance penalty, so they can refinance and lower their costs if interest rates go down.

“It doesn’t make it an attractive investment for banks any longer,” Bridges says, “and that’s why we have the public so heavily involved in underwriting and backstopping domestic mortgagages.”

If the government ever decides to get out of the business of backstopping mortgages, to privatize the mortgage market, some economists think the 30-year fixed-rate mortgage — the mortgage Americans take for granted — could become a whole lot more expensive, or even disappear. The long-term mortgage is a bet a lot of lenders don’t want to take on their own.

Comment by rms
2013-11-27 00:29:03

Again, how about 3/2 houses that only require a 10-yr mortgage?

Comment by Whac-A-Bubble™
2013-11-26 20:18:20

“How big and expensive does a house have to get until it stops being a middle class house?”

$625,500 big and expensive in California, with a federal loan guarantee provided with financial assistance from Joe SixPack in Flyover Country. Thanks alot for helping California millionaires afford their homes, Joe!

The Simple Fix For Fannie and Freddie
A blog about business and economics.
Nov. 21 2013 9:10 AM
By Matthew Yglesias

Right now, Fannie Mae and Freddie Mac are in government hands. Everyone agrees they should be “wound down” and in some sense replaced with a new system. And everyone agrees on two things about this system. One is that it should somehow involve less big government, and the other is that it should somehow deliver the same amount of subsidy to home-buyers. This is a nutty consensus. The subsidy strikes me as undesirable, but insofar as the subsidy is going to be delivered the way to deliver it is through a direct big government provision of subsidies.

The first question to ask yourself is this: “Should there be a major government program whose purpose is to subsidize leveraged home-purchasing by middle class people, thus making the homeownership rate marginally higher and the average size of owner occupied houses marginally larger than it would otherwise be?” The correct answer to this question is obviously “no.” At the same time, it’s clear that all Democratic Party politicians and all Republican Party politicians agree that the answer is “yes.” So then the question becomes, what is an intelligent way to design such a program?

Start by asking: “what is the particular form of mortgage product you want to promote?” The answer, clearly, is the 30-year fixed rate self-amortizing loan.

Follow up by asking: “how cheap should these loans be?” Since the idea is to construct a subsidy the government can afford to offer, let’s say 1 percentage point above the government’s cost of funds for issuing a 30-year bond.

Another question: “What’s a reasonable amount of leverage for a middle class homeowner to have?” The conventional answer is 20 percent downpayment.

Another question: “How big and expensive does a house have to get until it stops being a middle class house?” According to the Census Bureau, the median owner-occupied house in the United States costs $186,200. Let’s say double that and we get $372,400.

So now we get to the shape of a reasonably designed program. Here’s how it works. If you want to buy a house with borrowed money, then the United States government will lend you up to $372,400 to do so at an interest rate that is 1 percentage point higher than the 30-year U.S. Treasury bond rate (today that would be 3.8% + 1% = 4.8%) as long as you make a downpayment of at least 20 percent. That doesn’t mean you couldn’t buy a house that cost more than $465,500 or that you couldn’t buy a house with less than a 20% downpayment, but it means that if you want a bigger or more leveraged loan you’ll need to get a bank to lend you the money. But as long as you stick within the lines, you’ll get a nice discounted loan from Uncle Sam. If you end up defaulting on your mortgage, then Uncle Sam takes the house, and you can’t get a new Uncle Sam loan unless you pay back your arrears.

In ordinary times this program would be “profitable” for the government (a somewhat meaningless concept, but it is what it is) and periodic episodes in which it generated large fiscal losses would coincide almost perfectly with severe economic downturns in which large budget deficits are prescribed.

Now is this program I’ve outlined a good idea? Not especially. There’s no good reason for the government to push marginally more people into borrowing money to buy houses, and many people into buying marginally larger houses.

Comment by rms
2013-11-27 00:31:57

A hat trick; how about 3/2 houses that only require a 10-yr mortgage?

Comment by AbsoluteBeginner
2013-11-26 20:50:25

Is this sort of what Ben does?

Comment by Bill, just South of Irvine, CA
2013-11-26 21:07:34


Many people from certain parts would not even comprehend the list and could not do the work. $9 per hour job, right?

Comment by Whac-A-Bubble™
2013-11-26 20:50:43

Belief in God is bad for your financial health.

Comment by Bill, just South of Irvine, CA
2013-11-26 21:05:17

That would get you in bad trouble if you tell that to a conservative (and you know I’m neither conservative nor leftist).

Comment by Whac-A-Bubble™
2013-11-26 21:24:45

I was just commenting on the evidence in the graph which shows the highest share of true believers are found among survey participants with under $9000 income.

Comment by Whac-A-Bubble™
2013-11-26 21:16:58

How are China’s ghost cities faring these days?

Comment by Whac-A-Bubble™
2013-11-26 21:20:40

Same old, same old…

Property in China
Haunted housing
Even big developers and state-owned newspapers are beginning to express fears of a property bubble

Nov 16th 2013 | SHANGHAI |From the print edition

IN CHINA, property prices can keep going up forever. At least, that is what optimists seem to think. They point out that the country is undergoing the largest urbanisation in history. The throngs of migrants from the countryside all need homes, the argument runs. China’s swelling middle classes, many of whom live in shoddy 1980s housing, are also eagerly moving to fancier flats or McMansions. The result has been a spectacular property boom over the past decade.

At first glance, it seems the good times are still rolling (see chart). During the first three quarters of this year residential sales shot up by 35% versus the same period a year ago. Prices for new homes rose year-on-year in September in 69 of the 70 biggest cities. In Shanghai, Shenzhen and Beijing prices jumped by more than 20%; in slightly smaller cities, such as Nanjing and Xiamen, they rose by around 15%.

Follow the money

Despite these signs of rude health, even some of China’s biggest property moguls appear to be growing uneasy. Wang Shi, the chairman of China Vanke, the country’s largest residential-property firm by volume, has called the market a bubble. Wang Jianlin, the country’s richest man and the chairman of Dalian Wanda, a property giant turned entertainment firm, acknowledges that parts of the country may be experiencing a property bubble, though he thinks it “controllable”. Li Ka-Shing, a Hong Kong tycoon who has long been bullish on China, has started to sell his mainland holdings.

The problem is not the wealthiest cities with the most vertiginous valuations. Indeed, in those markets prices may yet go higher. People from all over China buy trophy apartments in Shanghai and Beijing, making their markets as resilient as those of Manhattan and central London. In fact, policies aimed at squelching speculation may be artificially suppressing demand in those places.

Shanghai and Shenzhen recently followed Beijing’s lead by requiring that buyers of second homes put up 70% of the purchase price as a deposit. In Beijing, the sale of a second home incurs a 20% capital-gains tax. (This is supposedly a nationwide policy, but is not always enforced in other cities.) Couples with two homes are reportedly divorcing to avoid the tax, since once officially single they can each own a primary residence, and thus sell either one without penalty.

Demand does not look so robust, however, in places like Yingkou Coastal Industrial Base, in north-eastern China. This development was promoted by the local government as a future hub of economic activity, but the future has not yet arrived. There are rows of empty buildings and few people on the streets. Property salesmen claim that big companies ranging from Coca-Cola to PetroChina are building factories nearby. But even Xinhua, an official media outlet, is sceptical: except for street lamps and the occasional passing vehicle, it reported recently, “at night the base was completely dark.”

Many property developments outside the big cities appear to be ghost towns of this sort. Moody’s, a credit-rating agency, laments that a large and rising share of new supply has gone to smaller cities. People’s Daily, another official organ, recently fulminated against the “huge waste of resources” such construction represents. Nonetheless, by the government’s count, 144 cities in 12 provinces are planning 200 new towns.

Comment by Whac-A-Bubble™
2013-11-26 21:22:54

Any thoughts on how long from now it will be when the global property bubble collapses into a heap of rubble?

Comment by Whac-A-Bubble™
2013-11-26 22:18:18

It couldn’t happen to a nicer group of corporations!

ft dot com
November 27, 2013 12:27 am
S&P says banks may have to spend extra $104bn on mortgage cases
By Tracy Alloway and Camilla Hall in New York and Gina Chon in Washington

The biggest US banks may have to spend a further $104bn to resolve mortgage-related legal issues as they try to put the costs of the subprime crisis behind them.

Standard & Poor’s, the credit rating agency, estimates the banks, including JPMorgan Chase and Bank of America, may need to pay between $56.5bn and $104bn on legacy mortgage settlements with investors and counterparties.

Payments at the upper end of the estimates would wipe out about two-thirds of the $154.9bn litigation buffer estimated to be held by the banks but would not cut into their regulatory capital.

Large US banks have increased their reserves in the face of a new wave of lawsuits from investors who are clubbing together to argue they have lost money from buying mortgage-backed securities comprised of bad loans.

Banks originated and then bundled together billions of dollars worth of mortgages in the years leading up to the financial crisis. Investors are claiming that the companies broke the “reps and warranties” that promised certain underwriting standards on some of the deals.

JPMorgan this month inked a tentative $4.5bn settlement with investors over mortgage-related securities, while the fairness of a similar proposed $8.5bn settlement between BofA and its investors is still being evaluated in a New York district court.

“Mortgage-related litigation has recently gotten a second wind and has expanded beyond investor claims,” S&P analysts led by Stuart Plesser wrote in the report.

Falling revenues from mortgages remain a longer-term problem for banks.

Rising interest rates have reduced mortgage refinancings, lending and related activity. Income from the sale, securitisation and servicing of family mortgage loans fell by $4bn – a 45.2 per cent drop from the same period a year ago – the FDIC said.

Bank of America, Citigroup, Morgan Stanley, Wells Fargo, JPMorgan and Goldman Sachs declined to comment.

Comment by Whac-A-Bubble™
2013-11-26 23:06:00

Housing Bubble? Canada’s Top Banking Regulator Refuses To Say
The Huffington Post Canada | Posted: 11/26/2013 2:12 pm EST | Updated: 11/26/2013 2:20 pm EST

Canada’s housing market “bears very close watching” because of the risk it is becoming overheated, the country’s top banking regulator said Monday.

But Julie Dickson, head of the Office of the Superintendent of Financial Institutions (OSFI), refused to say whether she believes Canada is experiencing a housing bubble — because whatever she says could make things worse.

In a speech to a mortgage brokers’ association in Toronto, Dickson noted that both the OECD and the IMF have identified Canada’s residential real estate market as being overvalued.

She noted that home construction has outpaced “household formation,” or the creation of new households, for the past decade and a half, and that residential investment as a share of the economy is at a two-decade high.

“The continued strength of housing prices across many Canadian cities in the second half of 2013 is undeniable,” Dickson said.

Many market analysts say Canada’s housing market is well balanced, noting that, at current low interest rates, monthly payments are still affordable. Canadians’ credit ratings are good and the percentage of mortgage holders who fail to pay is low.

But Dickson poured some cold water on this, saying that credit ratings and loan delinquency rates are “lagging indicators” that can turn south fast if the housing market goes bad.

But does Canada actually have a housing bubble that’s set to burst, potentially pulling the economy down with it? Dickson won’t say.

As she explained to her audience, that’s because if she’s wrong, she could end up harming the economy by saying anything.

If there is no housing bubble, and she declares there is one, it would “create an unnecessary slowdown in lending by banks.” And if she says there isn’t a bubble, that could “provide positive reinforcement to banks to lend more, which could make a bubble bigger.”

Comment by Whac-A-Bubble™
2013-11-26 23:07:53

A blog about business and economics.
Nov. 21 2013 3:23 PM
Foreign Capital Inflated The Housing Bubble
By Matthew Yglesias
Thanks, China!

An interesting new paper from Alejandro Justiniano, Giorgio Primiceri, and Andrea Tambalotti finds that “foreign capital inflows” account for between a third and a quarter of the increase in U.S. house prices and household debt from before the financial crisis.

This is similar to a story we often here about, say, Spain. In that case, the adoption of the euro and the integration of Spain into the larger Germany-directed European economic sphere led to a surge of optimism about the Spanish economy. The surge of optimism led to a surge of foreign capital and Spanish housebuilding. German citizens put money in German bank accounts, German banks leant to Spanish banks, Spanish banks leant to Spanish homebuyers. Then eventually you had the crisis and the turnaround.

The interesting thing about the American case is that you didn’t really have the “surge of optimism” phase of the story. Instead you had a number of countries, led by China, who were trying to maintain a positive trade balance by having their central banks buy U.S.-issued, dollar-denominated bonds. Chinese companies were selling goods to the United States, and instead of spending the dollars they earned on American goods they were sending the money back as mortgage loans.

So Chinese industrial policy ended up inflating a housing bubble in the United States.

But that’s not to say no other option was available. Rather than channeling this capital into homebuilding, we could have gone on a massive debt-financed infrastructure binge. Or we could have sharply cut payroll taxes. Or done any number of other things. The foreign governments creating these capital flows had no particular preference for mortgage finance as the tool of choice. But that’s what ended up happening.

Comment by Whac-A-Bubble™
2013-11-26 23:09:59

Do Soaring Housing Prices Mean It’s Bubble Time?
Meghan Foley
November 26, 2013

“The second and third quarters of 2013 were very good for home prices,” said David M. Blitzer, chairman of the S&P Dow Jones Index Committee, which compiles the monthly reading of the S&P/Case-Shiller home price index of property prices in the 20 largest United States metropolitan regions.

At the time, August’s 12.8 percent increase in property values was the greatest percentage price gain since February 2006, the last heady days of the housing bubble. But September’s results surpassed the gains of the previous month. Property prices rose 13.3 percent in the 12 months through September, showing that the housing market was able to sustain progress despite the increases in borrowing costs.

In the housing market, growing demand is continuing to boost value. “Housing demand has clearly improved this year,” HSBC Securities economist Ryan Wang told Bloomberg Businessweek ahead of the housing report’s Tuesday release. “The housing market has benefited from fewer foreclosures over the last year, the share of distressed housing transactions is back to pre-crisis levels, and that has helped to boost home prices in many parts of the country.”

However, as in August, September’s housing price data contained evidence that the market’s rapid-fire gains have begun to cool. Home prices in those 20 metropolitan regions inched up only 0.7 percent from August, falling in line with a trend that began in April, when monthly home price increases peaked.

In typical fashion, the Western United States led the gains. Las Vegas experienced the largest annual increases, with home prices jumping 29.1 percent from the same month last year. In San Francisco, prices rose 25.7 percent, while prices increased 21.8 percent in Los Angeles and 20.9 percent in San Diego. As Blitzer noted, “the strong price gains in the West are sparking questions and concerns about the possibility of another bubble” in the housing market.

Comment by Whac-A-Bubble™
2013-11-26 23:13:21

November 22, 2013
The Bay Area’s Real-Estate Bubble, from Both Sides
Posted by Lauren Smiley

When Twitter went public, earlier this month, tenants’-rights activists gathered to picket the company’s headquarters in downtown San Francisco. They wielded signs reading “#gentrification” and a coffin that said “R.I.P. Affordable Housing.” Earlier this year, the backlash against a recent tech invasion of the city was even less subtle: activists beat a piñata in the shape of one of the buses Google uses to shuttle workers from San Francisco to its Mountain View headquarters.

The reason for the nativist rage is grounded in real estate: San Francisco and its immediate neighbors are in the midst of a real-estate boom, or a crisis, depending on whether you’re on the writing or receiving end of the rent check. Lured by tax breaks and the tech boom, Internet companies have been scooping up the city’s commercial space, and many of their generously compensated employees have flooded into the city’s limited apartment stock. As of October, San Francisco was the most expensive rental market in the country, with a median rent of three thousand two hundred and fifty dollars for a two-bedroom apartment. (New York was close behind.)

Tenant lawyers show a map with evicted residents relocating to New York, Florida, Hawaii, and even out of the country. Others have ventured across the Bay for the slightly cheaper—but also rising—rents of Oakland and Berkeley. “If I didn’t have this place, I couldn’t afford to stay here,” Sara Shortt, the director of a nonprofit that advocates for tenants’ rights in San Francisco, told me, echoing many other inhabitants of rent-controlled apartments.

Tell me about it. While I don’t need anyone’s sympathy—reserve it for the long-time San Franciscans who are losing their homes and the low-income families unable to find a stable place to live—I happen to be among the displaced. After I was asked to leave my sweet, five-hundred-dollar, rent-controlled room in San Francisco earlier this year by my married master tenants who (understandably) wanted to reclaim their garden-view bedroom, I struck out in the Craigslist cattle call for affordable pads in San Francisco. So I headed to Berkeley, reduced to a commuter in the city that I cover as a reporter and, for the past six years, have loved with all my gut.

But when my housemate in the new Berkeley apartment told me earlier this month that she was moving out on her own, my viewpoint shifted: the market morphed from foe to ally. I was suddenly the keeper of the keys to a nine-hundred-dollar Bay Area bedroom, albeit an unfurnished one with a wall composed largely of two bookshelves.

Apartment-seekers elsewhere would laugh me out of the apartment’s other small bedroom. My brother paid about as much for a faux-adobe three-bedroom house in Albuquerque. Instead, I’ve received forty-five replies to my Craigslist advertisements this month. One twenty-six-year-old promised Mini Cooper rides. A Ph.D. student tried to woo me with a couch, a rocking chair, and a KitchenAid mixer. An undergrad offered to help me with the garden (I don’t have one). One marijuana grower said he’d bring an undisclosed amount of “cash in hand”—“just to hold a spot.”

Comment by Whac-A-Bubble™
2013-11-26 23:18:58

Keep on a whistling as you enjoy your stroll past the graveyard.

Fears of housing bubble are overblown, new Nobel laureate says in Dallas visit
Award winning housing economist and Yale economics professor Dr. Robert Shiller was in Dallas on Friday.
Real Estate Editor
Published: 15 November 2013 01:35 PM
Updated: 15 November 2013 08:32 PM

With home prices soaring in many U.S. metropolitan areas, there’s already talk of another home price bubble.

Just last week, researchers at Trulia Inc. identified more than a dozen markets around the country where home prices are slightly ahead of fundamentals — including the Dallas area.

Most economists say that new worries about the recent rate of U.S. home price appreciation are overblown.

And that’s the view of probably the foremost expert on housing bubbles, Robert Shiller.

Shiller — co-creator of the closely followed S&P/Case-Shiller Home Price Index and a newly minted Nobel laureate in economics — attended a housing conference Friday at the Federal Reserve Bank of Dallas.

“Expectations have been gradually going up; they haven’t reached bubble-level expectations yet,” he told the group.

Shiller said price bubbles in housing and other commodities have more to do with psychology than economics.

“A speculative bubble is a kind of social epidemic of enthusiasm,” he said. “The contagion is spread by word of mouth and media-driven and also partly price-driven.

“In a speculative bubble, the price increases and the media stories generate attention.”

That’s certainly what happened starting a decade ago when the U.S. saw a record jump in housing prices.

“In 2004 and 2003, people thought they had a money machine” because of home price appreciation in many markets, Shiller said. “They were wrong about those expectations.”

Comment by Whac-A-Bubble™
2013-11-26 23:20:45

Housing bubble symptom Numero Uno:


Comment by Whac-A-Bubble™
2013-11-26 23:22:03

Does Australia Have a Housing Bubble?
Property prices have surged this year, but some analysts dispute the contention. Also, Kevin Rudd resigns.
By Anthony Fensom
November 15, 2013

Asian and local investors have been pouring money into Australian property, driving up house prices in Sydney and other major centers. With interest rates relatively low, is the land Down Under set for another housing bubble?

In a nation where housing accounts for around 60 percent of average household wealth compared to the global average of 45 percent, any surge in property prices akin to the gains of the previous decade would have a major influence on consumption.

Sydney house prices have risen by 11.4 percent over the year to date, with the nation’s second-largest city of Melbourne recording a rise of 6.8 percent. Resource-rich Perth has posted an 8.6 percent gain, although the third-largest city, Brisbane, has lagged with 4.1 percent growth, according to the latest Australian Bureau of Statistics (ABS) data.

Bubble-like conditions in the nation’s most populous city have pushed average Sydney house prices to a record A$718,122 ($666,858) compared to $806,000 in New York City and $536,237 in London, according to data compiled by Bloomberg News.

One in five Sydney suburbs now boast a median home price above A$1 million, up 31 percent from a year earlier, according to APM data.

While the United States and United Kingdom saw their housing markets sold off during the global financial crisis, Australian home prices have not fallen by more than 10 percent in any single year from more than 40 years.

On Wednesday, the impact of rising property values and the central bank’s decision to keep interest rates on hold again in its latest policy meeting was shown in the latest consumer confidence survey, which posted its highest level since late 2010. The index compiled by Westpac and the Melbourne Institute showed confidence concerning the property market was 23 percent higher than 13 months earlier.

Comment by Whac-A-Bubble™
2013-11-26 23:24:41

C.A.R. Applauds FHFA for Keeping Fannie Mae and Freddie Mac Conforming Loan Limits Unchanged
November 26, 2013 02:14 PM Eastern Standard Time

LOS ANGELES–(BUSINESS WIRE)–The CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) today issued the following statement in response to the Federal Housing Finance Agency’s (FHFA) announcement to keep the 2014 maximum conforming loan limits for mortgages acquired by Fannie Mae and Freddie Mac at $417,000 on one-unit properties in most areas and a cap of $625,500 in high-cost areas:

“C.A.R. applauds the FHFA for keeping with the law and retaining the existing Fannie Mae and Freddie Mac conforming loan limits,” said C.A.R. President Kevin Brown. “The FHFA recognizes that home prices have rebounded in California, especially in the high-cost areas, where lowering the loan limits would have reversed the housing recovery. Retaining the higher loan limits is critical to providing liquidity in today’s housing market and is essential to a full housing recovery.”

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