The Housing Bubble

Flight to quality occurs when there is a major negative geopolitical event going on, what event is happening?

“Flight to quality occurs when there is a major negative geopolitical event going on,…”

Not necessarily. A stock market selloff for whatever reason normally precipitates a flight to quality.

If it is a major sell-off it could be considered a major negative geopolitical event. However, we have not had that and we still have two things that usually trade inverse to each other, I find that interesting.

We DID land on the moon. I explained it yesterday. The film set was just a cover-up so you wouldn’t know that NASA actually sent a highly trained team of women (not men) to do the walk. It was mainly because they wanted to do research on power-walking in space. The moon research gave us the knowledge that enabled us to develop modern exercise videos for ladies.

Jane Fonda was an astronaut? Cool.

“Yes, it’s all a big conspiracy.”

Betting on Bernanke
“Central banks have been supporting share prices”
http://www.economist.com/node/18178399

You’re right, they DID conspire to pump-up share prices.

From the article;

“But those low interest rates are a sign that central banks are still very worried about the fragility of the economy: in its 300-year history the Bank of England has never kept rates so low”

Unprecedented ?? Unchartered Territory ?? Unintended Consequences ??

Jane Fonda was an astronaut? Cool.

Apparently she has landed on a moon anyway…

Actually you should only use a FEE-ONLY advisor. Fee-based can accept both fees and commissions. A fee-only advisor cannot sell anything on commission and you know exactly how and what you are paying.

The slime at certain brokerages came up with “fee-based” to confuse people needing financial advice and sound moral while double dipping.

The slime at certain brokerages came up with “fee-based” to confuse people needing financial advice and sound moral while double dipping.

Wow, that’s evil—I hadn’t heard of that distinction before!

that’s evil—I hadn’t heard of that distinction before!
But wait! there’s even more we haven’t heard about!

LOL!

Orange County is so squeaky clean and HOAish.

LA is grimy but exciting. The libtard nutters make L.A. interesting. The cop chases - L.A. keystone cops shot up two ladies who were lucky to not have been killed - a mile or two from my place in L.A. when they were looking for Dorner last year.

Frankly I don’t know how you deal with it. Actually I do….

It’s the cha-ching.

Bill=WIN again.

Driving a Corolla with over a $1,000,000 in the bank = WIN

It’s more like $550k rather than $1M in the bank but the million would be nice.

Corollas rule!

Orange County is so squeaky clean and HOAish.

I’ve seen some areas in Anaheim, Santa Ana and Garden Grove that looked pretty shady to me.

I couldn’t imagine living in SoCal unless I could work at home. Rush hour traffic there is surreal now, far worse than when I lived there. Plus there is this depressing feel to the place. Sure, if you can afford to live in the nicer areas, it’s probably cool, but otherwise i’ts like living in an episode of “Cops”. Whenever we go back to visit (haven’t been back since 2008) we’re always wide eyed and thankful that we left.

So Ca-*East Ventura County is losing its quality of life as well. I guesstimate 10 years behind L A County, the sister area to Orange County.

* Thousand Oaks -major illegals invasion/sec 8, even in newer bldgs
* Simi Valley
*Westlake Village - illegals everywhere too
* Moorpark

Colorado- I hear ya.

You know better than that, Colorado. You always rent in Southern California. The apartment leases have a 1 month break lease penalty. You always move to where your new job. And make it less than 10 miles from work. renting in Southern California is cheaper than owning. And it’s a myth that you have no choice but to have long commute. The time I save by renting means more time to get a workout daily and stay in great shape.

Part of the WIN strategy.

My wife grew up in Orange County, Laguna Niguel. It’s one of the few areas that hasn’t been destroyed by illegals (yet). I like visiting that whole area…Laguna Beach, Dana Point.

My in-laws still live in the house they bought in the mid 90s and it’s all paid off. The house is worth 300% -350% more than what they paid for it. They’re also paying practically nothing in property tax thanks to Prop 13. Their property tax bill for a 2700 sq ft house overlooking the ocean is less than what most of you pay in rent for an apartment overlooking the parking lot next door.

What a couple of suckers!! They should have rented all these years instead.

My wife and I have talked about moving down there. I’m not too crazy about paying CA income tax, but at this time of the year when it’s 65 and sunny down there it does make it tempting.

“My wife grew up in Orange County, Laguna Niguel. It’s one of the few areas that hasn’t been destroyed by illegals (yet). I like visiting that whole area…Laguna Beach, Dana Point.”

There was a store there on Cabot Dr., EduCALC, that was heavily involved in the programmable HP calculator market. Man…it was fugg’n Toys-Я-Us. Sometimes drove 20-minutes out of my way if I was in the area.

“The house is worth 300% -350% more than what they paid for it.”

And worth about half of what they got into it….. if they could find a buyer.

Remember…. housing depreciates rapidly.

There was a store there on Cabot Dr., EduCALC, that was heavily involved in the programmable HP calculator market.

Wow…forgot I ordered my first HP48SX from them while I was in college. Back before you could be a phone snob you could be a calculator snob. And it was worth every penny.

http://www.mineweb.com/mineweb/content/en/mineweb-political-economy?oid=222934&sn=Detail

Gold and the Fed, in one article by a giant. Great stuff.

This is from mineweb, the link gets you to mineweb but not directly to the article. An excerpt:

Author: Alex Williams
Posted: Tuesday , 31 Dec 2013

LONDON (Mineweb) -

Gold has not bottomed and the US Federal Reserve will collapse in the next 10 years, says renowned investor Jim Rogers.

“100 years ago you could not have named the head of most central banks in the world,” Rogers told Mineweb. “Now they’re all rockstars.” Gold and equity markets have increasingly been locked in Fed-watch mode in 2013, obsessing over when or whether chairman Ben Bernanke would taper the bank’s vast bond buying scheme

He goes on to say:

For early 2014, Rogers is therefore long inflatable equities and neutral on gold, but longer term, he expects to short junk and government bonds and is ultra bullish on gold. “Gold will become one of the only refuges around,” he says. “That’s not this quarter.”

I am not sure if equities per se will go “parabolic” from here. Maybe Japanese equities have a lot more upside than U.S. equities. I’m also trying to slowly invest more worldwide and less in the USA.

It’s a good position to have - $10s of thousands of dollars worth of a cyclic stock to realize while gold is less than 2/3 its max price.

People who kept stacking in the 80s and 90s had a huge payout. I read a blogger who said some old timer advised on buying one ounce of gold periodically (I think it was once a month) during your entire career. Then when you retire you cash out one ounce of gold per month (and the remainder is given to beneficiaries). Great idea. Or instead of gold, 10 oz of silver per month or an ounce of platinum per month.

I dunno bro. I’m just not seeing the dumb money flow into the markets to any large degree. Not yet.

Let’s see…School Marm, Riotard, …and a fuzzy headed lieberal former colleague of mine who lives in Hermosa Beach, a former colleague in Tucson, my ex girlfriend on the Oregon coast, all LIEberals in favor of redistributing wealth from the producers to the lazy and in favor of grabbing guns - well maybe not the ex girlfriend, she owned a gun at one time at least, probably still does

Oh but it’s far more than that.

Zillow excludes defaulted property. How convenient eh?

There aren’t nearly as many REO as there used to be.

You’re going find out just how untrue that is.

How hard will it be for you when it happens?

“Alameda is a county.”

Alameda is also a city.

And mortgage interest rates were 7.5%, can you imagine what that would do to housing prices?

Rates on the 10-year treasury was not 10% + in 2006. That was around the last time that I was getting 5% on my savings account.

Good question, a-dan. Will the cash funds step in again and snap up the housing out from under J6P, who can’t afford the PITI? If the caash funds step in early, we’ll know they’re in it for the rental income stream. If the cash funds wait for much lower prices, we’ll know they’re in it for the appreciation.

Oxide:

If people with cash wait for low prices before purchasing real estate, then they might be hoping for high rental returns on their dollar. It seems that speculators (flippers), using cash, OPM, or borrowed money, are most likely to purchase a lot of real estate when the prices are high, not the other way around.

If the caash funds step in early, we’ll know they’re in it for the rental income stream. If the cash funds wait for much lower prices, we’ll know they’re in it for the appreciation.

I think that analysis is sound. The smart money will only buy when they either see much higher rents or appreciation. The dumb money can be ignored unless the lending standards are dropped back to subprime days, since they have the will but not the means to impact prices so you can ignore Uncle Fed.

The smart money is me, actually. I like to buy things when the prices are as low as possible, no matter what.

Well I think you screwed yourself. You signed up for some substantial losses.

HA:

I have already shared the situation with my RE investments on this blog, but you just accuse me of lying. You insist that as long as I am making a profit off the rent, then I must not have tenants. After all, they would just buy if it were cheaper, right?

That is not true. My tenants can’t buy the house for the same price I paid for two reasons. First, the market price has gone up since then. Second, they could not have gotten a mortgage to buy the house when it was for sale.

There is no housing demand at either price point so your assertion that “price has gone up” is meaningless.

And now legal, eh?

Was reading an article about that in the Denver Post. Apparently money does grow on trees, or at least on bushes. According to the article the stuff is super expensive and people are dropping hundreds of bucks for not a whole lot of weed. Someone is getting very rich.

It’s just another gold rush. I wouldn’t worry. Soon enough there will be competition from other suppliers, and likely from other states.

I wonder if legalization will legalize industrial hemp. IIRC from the new agers, hemp is a very useful fiber, but it’s illegal to grow because it’s too easy to hide mary jane plants in the hemp field. It will be much cheaper to grow domestically.

How can it be cheating when you have permission?

HA:

ru saying that rms gives his wife permission?

Maybe he gives his wife permission?

Francois Mitterand’s wife gave Francois Mitterand permission to have a mistress. At his funeral, both wife and mistress attended.

Not sure if his other girlfriends he had showed up.

http://iconicphotos.wordpress.com/2009/10/16/mitterands-funeral/

Also Francois’ illegitimate daughter attended. All were standing next to each other.

Francois, the lucky ol devil

Francois Mitterand likely supported all of them.

Prince Charles was in the same situation with Diana of Wales, who was perfect virgin candidate for producing royal children since it was obvious she didn’t sport much of a libido. Hence Charles had to also take up Camilla, a real woman, for satisfaction. A lucky stiff (pun intended), he was blessed with money.

“The news media need to report on cold weather because they are paid by the same people who profit from the causes of global warming, OK?”

So the news media are paid by Mother Nature or (gasp) God? Even if so, I don’t think either Mother Nature or (gasp) God actually profit from climate change.

Hi-Z:

“The same poeple who profit from the causes of global warming.”

First you tell me that those people are Mother Nature and God, but then you tell me that those people are not Mother Nature and God. Wassupwithat?

When do I get the check?

http://en.wikipedia.org/wiki/Koch_Industries

http://www.kochind.com/About_Koch/default.aspx

This is a prediction made last January and it is just another example how the computer models don’t work. There is no doubt in this article that 2013 would be the warmest globally on record. But it was not:

http://www.slate.com/articles/health_and_science/new_scientist/2012/09/will_2013_be_the_hottest_year_climate_change_and_el_ni_o_will_make_next_year_sweltering_.html

Actually, the prediction was made in September for the year beginning in January.

Breaking news from the WUWT, interesting they are getting closer and closer to my assertion that co2 is only 1/7 as powerful a warming agent as the original models suggested:

Unnoticed, the IPCC has slashed its global-warming predictions, implicitly rejecting the models on which it once so heavily and imprudently relied. In the second draft of the Fifth Assessment Report it had broadly agreed with the models that the world will warm by 0.4 to 1.0 Cº from 2016-2035 against 1986-2005. But in the final draft it quietly cut the 30-year projection to 0.3-0.7 Cº, saying the warming is more likely to be at the lower end of the range [equivalent to about 0.4 Cº over 30 years]. If that rate continued till 2100, global warming this century could be as little as 1.3 Cº.

Official projections of global warming have plummeted since Dr. James Hansen of the Goddard Institute for Space Studies told the U.S. Congress in June 1988 the world would warm by 1 Cº every 20 years till 2050 (Fig. 1), implying 6 Cº to 2100.

http://wattsupwiththat.com/2013/12/31/first-time-in-20-years-more-daily-record-lows-than-daily-highs-that-were-either-tied-or-set-in-2013/

In fact when I compare the Hansen prediction to the present prediction it works out to about .5 C per decade for Hansen, .13C present IPCC prediction and .07 C for me. However, all these prediction ignore the complete impact of sunspots or lack there of, which should dwarf the impact of co2 over the next few decades and probably result in cooling.

sunspots? nope.

Sunspots? nope.

That is the best you have. Apparently, you have not followed the CERN research.

Dan:

Sorry, but people just don’t have time to refute every crack-pot, pseudoscientific statement made by every person, every time it’s made. The sunspot thing has been explained many times. It’s wrong. In the meanwhile, climate-change scientists have actual work to do.

Ad hominem attacks. You know nothing about the CERN research and you know nothing about the subject matter. But that has never stopped you before. See I can do them too. if you looked at the period that the world was truly warming you would see that it was during a period of 70 years when the sun was most active in thousands of years. It was modified by the PDO cycles but it lines up much better with the observed temperature changes. When a lay person can make better predictions than the computer models it is time to junk the computer models. My predictions on the climate have been far better than the models.

Dan:

You have not been collecting data and making predictions for the last 50 years. You have just been trying to trick people into paying attention to irrelevant details for the past few years. Hence, you cannot claim higher accuracy than anything at all.

I have been making them for the last seven or eight years on this blog and I predicted a mesa followed by a decline after the solar maximum. That is far more accurate than any prediction made by the AGW crowd. Being wrong for 25 years is not irrelevant, the models have been pure fiction.

Why has Hansen been so wrong? Why are we cooling this year than we were in 1998 and co2 is the primary driver. I know that Hansen while he was at NASA and the people that he put in place love to spin the data but they cannot get past that fact. Moreover, if you use the satellite and the not the ground base data, you actually have a cooling trend over the last 17 years.

Dan:

You are trying to lambast a computer model for not correctly predicting the temperature on one day. There is no climate-change scientist who claims to have that ability.

Also, you are taking predictions based on certain methods of measurement, and then comparing those predictions to measurements taken by other methods. Different methods will yield different results, but the results also mean something different, due to the varying restrictions and caveats of the different methods. However, all of the validated methods show global warming, which is highly correlated with atmospheric CO2.

Lastly, the industrialized world has been on antipollution campaign for a while now. Not China, but everyone else. It’s not a bad thing if we have managed to reduce overall CO2 emissions over the past few years. I hope it’s true, and that it continues.

Since the dawn of the industrial age, CO2 has been the primary cause of global warming.

What garbage. We are putting ten times the co2 in air per year as we did 50 years ago but the warming occurred when we were putting far less co2 in the atmosphere and we have been on a mesa for twenty years. They correlation may have been there twenty years ago but it is not there now. They keep moving their models closer and closer to what I have always claimed. When I first mentioned the PDO no one the left side of this board even knew what is was.

Lastly, the industrialized world has been on antipollution campaign for a while now. Not China, but everyone else. It’s not a bad thing if we have managed to reduce overall CO2 emissions over the past few years. I hope it’s true, and that it continues.

Are you so arrogant that you think you can invent your own facts? The amount of co2 has been going up every year far beyond what the models even predicted since they thought the world was going to react. Show me any evidence that the models thought there was going to be more co2 ppm than we have right now? No, sorry we have far more than the models thought but the temperatures are far below what the models predicted. Maybe you should research prior to posting.

http://www.esrl.noaa.gov/gmd/ccgg/trends/

BTW, this mesa has been achieved by massive manipulation of data, which is much harder to do using satellite data, thus the reason NASA uses ground base data:

http://www.examiner.com/article/nasa-noaa-create-global-warming-trend-with-cooked-data

You need to stop telling me that I am arrogant for knowing more science than you, or that I am demonstrating hubris for disagreeing with the redneck theory of marrying girls at 15. You also need to stop arguing with things that I never said. I don’t know if humans are currently creating less CO2 or not. I said that I hope it’s true. The amount of CO2 in the atmosphere right now is not the same as the amount that we creating right now.

You definitely need to stop creating this false fissure between the “left” and the “right”. If “the right” wants to associate itself with antiscience, antiwoman, antigay, and antiminority ideals, then the right will be extinct in two years max.

PS: This is a blog about the housing bubble.

The right is better informed about science than the left. Joe, you clearly tried to suggest that we may have taken some actions that would explain the pause, like Obama when you were caught in the lie, you began to spin like a top.

http://www.nature.com/news/2011/110824/full/news.2011.504.html

My name ain’t Joe, and you should respect your uncle more.

My name ain’t Joe, and you should respect your uncle more.

Respect a crazy uncle that tries to say that I expect a model to be correct every day when I am showing that it has been wrong for more than 25 years, I do not think so. With the latest revisions of the model, I have already won. I said the models were wrong and now they admit that they were wrong and guess what the numbers are very close to what I predicted. When it comes to science you could never do anything close to that.

You need to stop telling me that I am arrogant for knowing more science than you, or that I am demonstrating hubris for disagreeing with the redneck theory of marrying girls at 15.
Joe, I know it is you because we cannot possibly have two people on this board that are as arrogant as you while being so ignorant. Hate on the duck brothers since they are far richer than you will ever be. BTW, if you know more science prove it. When you suggest that we have some how cut co2 emissions enough to slow down global warming you just show ignorance.. Finally, I did not accept his theory on marrying 15 years old just that he was entitled to state it and it had some biological backing and that we should be more worried about beliefs held by supreme court justices than reality show stars.

A duck brother’s link for you

http://tv.msn.com/tv/article.aspx?news=845648

Actually, there was one other that might be as arrogant and ignorant. Is Rio back in the house?

What it is about what it is always been about. Foreign aid to third world countries disguised as global warming money, billions each year:

http://cnsnews.com/news/article/patrick-goodenough/americans-spent-745b-3-years-helping-other-countries-deal-climate#sthash.6GzvUXtr.dpuf

Our little corner of the Military Industrial Complex is hiring, yes.

Raytheon and Lockheed, not so much.

“Govt contractors provide a service. Food stamp moochers….not so much.”

It is true but we need to define moochers. In the 1980’s meat packers might make $25 dollars an hour. Now, the job might pay $11 to $12 an hour. A worker in the 1980’s would not be eligible for food stamps and in fact would be paying income taxes. Due to open borders, a deliberate policy pushed then and now by the chamber of commerce, a person doing the same job now would be eligible for food stamps if he or she has a family. So is that person a moocher because the government has failed to perform a key function controlling the borders? Now, if you are talking about somebody that is just lazy and refusing to work, I could not agree with you more.

Dan:

Open borders didn’t come from the Chamber of Commerce. It came from the Business Roundtable. Republicrats love it, especially Slithers.

Whenever there is a lawsuit against any state trying to curb illegal immigration, you will find two organizations suing to get the limitations declared unconstitutional, the ACLU and the Chamber of Commerce, try to do a little research before you post.

http://immigrationreform.com/2013/11/14/u-s-chamber-of-commerces-falsehoods-on-immigration-part-10/

The Chamber of Commerce and the Koch brothers have almost the exact agenda. So I guess anyone that supports amnesty should be thought of as paid by them using the logic of some on this board. The Chamber of Commerce is attacking the Tea Party(ies) for one reason, their opposition to amnesty. Which is interesting since they do agree on many other issues. However, this demonstrates exactly what I have been saying it is the open borders which has created the present income inequality and anyone that is serious about addressing income inequality needs to support a closing of the border and severe employee sanctions to cause self-deportation. Of course, if we catch illegals for any other illegal acts even drunken driving, they should be deported.

Finally, illegal immigration is tried into globalization and a North American Union and the time to stop that is right now with strict limits on all immigration.

BTW, Colorado did you read what the commerce said about high tech workers?

http://www.slideshare.net/uschamber/10-immigration-facts-everyone-can-agree-on

In light of this blog, I particularly “like” the Chamber’s reply to the “myth” that the newcomers are not assimilating. One of key points is that they are buying homes. So I guess renters are less American than homebuyers.

So is that person a moocher because the government has failed to perform a key function controlling the borders?

Great point, Adan…

you will find two organizations suing to get the limitations declared unconstitutional, the ACLU and the Chamber of Commerce, try to do a little research before you post.

You forgot one organization that typically intercedes in legal proceedings in an attempt to maintain our open borders:

The Federal Government, in the form of the DOJ.

It represents itself. Median and median/sq ft are both falling.

Get over it.

It represents itself. Median and median/sq ft are both falling.

Yes, both are falling. And I for one am very glad that they are.

But you are still misrepresenting it—you said “Seattle WA Median Housing Prices Down 18%”, when that is the LIST price percentage, not the ACTUAL housing price decline.

Actual “Seattle WA Median Housing Prices” are down about 6%, not the 18% that you stated.

Why are you lying about it? You don’t have the misrepresent the data to make the housing-bear case—the data speaks for itself.

No. They’re both median lists.

Why are you lying about it?

No. They’re both median lists.

Huh, you might be right. I was under the impression that the $/sq-ft was the median for that month’s sales, but it could well be from the listing data. I looked on movoto.com, but couldn’t find a definition of what they mean by it or their data-source.

If so, thanks for the correction; it was an honest mistake.

If they are both list prices, then the fact that median price/sq-ft data is down only 6%, while median list price is down 18% suggests a mix-shift—e.g. more smaller houses are for sale at present.

We’re always “right”.

And still falling….

You have trouble telling the truth don’t you?
Could be a sign of a lack of integrity.

You are a LIAR, aren’t you? And probably a REALTOR(tm) to boot.

And the declines are accelerating in Seattle.

Enjoy.

And the declines are accelerating in Seattle. Enjoy.

I _absolutely_ will enjoy watching it!

And I will also benefiti from it quite directly, as I do rather hope to buy one day.

Uncle Fed doesn’t love you because you go around picking fights.

I hope you lose everything. Seriously.

Wow, that’s pretty hateful, BigV.

I may disagree with your rants with some regularity, but I wish no ills upon you or yours.

“Wow, that’s pretty hateful, BigV.”

It’s nothing really…just BigV venting some. The rms doll is likely getting the chit kicked out of it today.

The online marketplace thingie is just a way of making it easy for people to know whether or not they are buying a “sanctioned” plan, and there was some reasoning as to why/how the exchanges would cause cheapness, but I’m not sure what that reasoning was.

No, you would not. The free sh*t army was expecting the subsidies on the exchange to make the policies cheap. Between the massive taxpayers subsidies and the hidden subsidies by forcing people to buy insurance coverage they do not want or need, even I am surprised at what a rip-off the policies are.

That’s not true. Not all policies are on the exchange and not all policies on the exchange are available out of the exchange. The policy I have from Blue Cross is only available directly through Blue Cross. It’s a little more expensive that a comparable policy bought in the exchagne, but I don’t care. It’s worth the extra money to to have to a) give my personal info to a website that has no security and b) I know the insurance actually exists and c) the network is much better than Exchange policies.

I keep wondering if foreign companies will get into the insurance market here. There is nothing preventing me from buying a policy issued by say, a Dutch company. No networks, no O-Care BS. Just a straight up insurance policy that pays X% of my medical bills with a $Y deductible. Ad it doesn’t have to cover birth control or abortion or any of the other “free” items O-Care mandates.

Oh Slith:

You forgot about the individual mandate.

Why we don’t obey the Declaration Of Independence and throw all the bums out of office is beyond me.

The several dozen people paying attention would like to do just that.

Good luck selling the masses on that, though—hey, who’s on DWTS this week, anyway?

Same difference.