The Housing Bubble

Sweetcakes, that’s the LIST PRICE. Isn’t that the “wishing price” where folks won’t “give it away” — you know, the price that HBB thinks is useless?

Honeypot, HBB is interested in SALES PRICE, what buyers actually pay.

Falls Church, VA Housing Prices UP 6.1% Year Over Year

http://www.trulia.com/real_estate/Falls_Church-Virginia/market-trends/

Jan. 17, 2014, 1:19 p.m. EST
Six ratios say this market is very overbought
Opinion: The time to build a larger cash position may be near
By Mark Hulbert, MarketWatch

The U.S. stock market is more overvalued than it was at the majority of the past century’s peaks, according to six well-known valuation ratios.

That doesn’t mean the bull market is coming to an end, of course, since some past bull markets were even more overvalued when they topped out. Furthermore, no two market peaks behave the same way.

Nevertheless, the evidence suggests that risks are high. You may want to consider selling some of your stock holdings and building up cash.

To compare current valuations to those that prevailed at past market tops, I relied on a comprehensive list of past bull-market tops compiled by Ned Davis Research. The list is based on a set of criteria focusing on the speed, magnitude and length of market movements.

According to the firm, there have been 35 bull-market tops since 1900. The Dow Jones Industrial Average lost an average of 31% in the bear markets that followed.
…

Be Careful in an Overvalued, Overbought Market
BY Richard Suttmeier | 01/17/14 - 09:58 AM EST
Find out if (BBY) is in Cramer’s Portfolio.

NEW YORK (TheStreet) — I debuted my themes for the 2014 stock market on Jan. 2 in, “Stocks Begin 2014 With Inflating Bubbles.” I explained that even if new intraday all-time or multiyear highs continued to occur, the downside risk exceeds the upside potential for the five major equity averages. Overly simplified, my market call for 2014 is that the major averages will test their 200-day simple moving averages at some point during the year.

I have been saying that stock picking would be extremely difficult in an overvalued, overbought stock market. (On Jan. 8, I wrote “Inflating Market Bubble Not Quite Ready to Pop.”) I maintain my long-term concerns about the stock market.

The Fundamentals — ValuEngine continues to show an extremely overvalued stock market. We show that 85.2% of all stocks are overvalued, with 53.3% overvalued by 20% or more. Only 14.8% are undervalued, and only 4.8% are undervalued by 20% or more. All 16 sectors are overvalued, with 12 overvalued by 23% to 38.2%. This is the reason why you see stocks plunge by 10%, 20% or more following disappointing earnings or other stock-specific negative news.
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Jan. 14, 2014, 1:07 p.m. EST
Monday selloff is a warning sign
Commentary: Market rout was typical of an overbought market
By Lawrence G. McMillan

Monday’s sharp selloff proved that the bears do have some life.

But is it enough to actually cause a noticeable stock market correction? The bulls have gotten a little too full of themselves, pushing the market into an overbought condition that is somewhat unusual. Now we will have to see if the bulls have enough firepower to halt the selling onslaught of Monday and to rescue the market once again.

The broad stock market had become overbought in an unusual way — by going sideways over the last couple of weeks. Usually, when the market goes sideways, that allows for overbought conditions to be alleviated. In fact, this particular bull market leg — stretching back to November 2012 — has done just that several times.

But this time, there was some internal buildup of overbought conditions. These included, but weren’t limited to: Unusually heavy option volume in speculative stocks, increased momentum in stocks that were already stretched by having risen too far, put-call ratios at extremely low levels, and various volatility measures at extremely low levels, too. We’ll enumerate some of these as we describe the current market conditions.

Even with the sell-off Monday, it’s noteworthy that no serious technical damage has yet taken place. The broad stock market, as measured by the Standard & Poor’s 500 Index (SPX -0.39%) held above support. For SPX, that support is at 1,810. It was a triple resistance area back in November and December (2013), and once it was broken on the upside (as a result of the positive Fed “tapering” announcement in December), it became support — and remains support until broken. There should now be resistance in the 1,830-1,840 area, now that the market has broken down from there, but the more important level is the 1,810 support.
…

The Reformed Broker
Chart o’ the Day: “Overbought”
Joshua M Brown
December 26th, 2013

It’s easy to poke fun at people who’ve been using valuation or some other fundamental indicator as a market timing signal. It’s demonstrably ridiculous and the results for the most stubborn among them have been disastrous.

Equally ridiculous is the idea that any one or two technical indicators can tell you when an uptrend or a downtrend is through running its course. We all have our favorite technical measures of price but, in the end, all of them are subservient to price itself.

Here’s the blogger at The Short Side of Long with a look at the “overbought” nature of the stock market all year, which clearly can persist in not mattering for quite a long time. The percentage of stocks trading above their 200-day moving averages rose into “overbought” territory around 80% last October and stayed there pretty much all year:

Just a quick update on one of my favourite indicators for the stock market – percentage of stocks within the S&P 500 trading above the 200 day moving average. The indicator continues to flash a warning signal, something I have discussed on my blog for the last few months. So far the market has turned a cold shoulder to on going bearish divergence as it continues to tear higher into record territory.

Chart 2: The stock market has been overbought for the whole of 2013

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A “Frothy”, “Overbullish”, “Overbought”, “Overmargined” Market With “Not Enough Bears” - In Charts
Submitted by Tyler Durden on 11/03/2013 16:55 -0500

Last week, Bank of America warned that “it’s getting frothy, man” based on the sheer surge of fund flows into equities. Here is the same firm with some other observations on what can simply be described as a “frothy”, “overbought”, “overmargined” market with “not enough bears.”

From Bank of America:

“Daily slow stochastic is generating an overbought sell signal.”
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Read This, Spike That | MONDAY, NOVEMBER 11, 2013
The Latest Measures of a Bid-Up Stock Market
By JOHN KIMELMAN | MORE ARTICLES BY AUTHOR
Various data points suggest that the broader indexes don’t have much more room to rise.

Want proof that the bull market that began in March 2009 is getting long in the tooth?

The financial press these days is filled with it, using data ranging from intensifying IPO activity to the climb in the value of the Wilshire 5000 relative to the economy to make the point.

For example, a piece in today’s Wall Street Journal cites the explosion in both initial public offerings and secondary stock offerings as proof that the smart-money is taking its money now before the market corrects or falls hard.

“So far this year, U.S. companies have put out $51 billion in first-time stock issues, known as initial public offerings or IPOs, based on data from Dealogic,” writes the Journal’s veteran stock-market writer E.S. Browning. “That is the most since $63 billion in the same period of 2000, the year bubbles in tech stocks and IPOs both popped.

“Follow-on offerings by already public companies have been even larger, surpassing $155 billion this year,” Browning adds. ” That is the most for the first 10-plus months of any year in Dealogic’s records, which start in 1995.”

As Browning writes, “issuers are grabbing current terms before markets fade. That makes experienced investors ask themselves a classic question: If the smart money is selling, should we be buying?”

A few days ago, the Street Authority’s David Sterman used a simply valuation metric watched by Warren Buffett as further proof that conditions are getting overvalued.

Sterman points out that the aggregate value of the largest 5,000 U.S. companies (as measured by the Wilshire 5000) is trading roughly at a 10% premium to the gross national product. When that value of the Wilshire 500 trades at a 20% to 30% discount to the GNP, Buffett sees value in the broader market.

“The Wilshire 5000 has risen 68% since the end of 2009,” writes Sterman. “Yet the economy has grown just 17%, throwing this key ratio out of whack.”

Sterman points out 2007 was the last year that the Wilshire 5000 exceeded the value of the economy, and we all know what happened in the following year.
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Overbought? No sweat, thanks to ‘Bernanke-care‘
Published: Thursday, 24 Oct 2013 | 1:52 PM ET
By: Jeff Cox | Finance Editor
More pundits say the markets are clearly overbought — but is that really the case? CNBC’s Jeff Cox weighs in.

With bullishness seemingly everywhere in sight, the stock market is as overbought as it’s ever been, and that doesn’t really seem to be bothering many people.

Earlier this week, Bespoke Investment Group labeled the S&P 500 as “extremely overbought,” while analysts at Strategas said that from a valuation standpoint the market “exhibited tendencies similar to that of a runaway freight train.”

No matter—the stock market went on its merry way Thursday, rallying modestly to threaten new highs.

Investors may be playing a dangerous hand, but there’s very little skepticism that things can’t keep going on the same track.
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Market Outlook: S&P 500 Is Finally Overbought, Should You Sell?
StreetAuthority Network
By Michael J. Carr
May 20, 2013 4:45 PM

After another big gain, the S&P 500 closed in overbought territory for the first time since October.

To define overbought, the 52-week rate of change (ROC) is a useful indicator. When the 52-week ROC is greater than 25%, I consider the stock market to be overbought. After gaining 2.16% last week, SPDR S&P 500 (SPY) moved into overbought territory. Previous overbought extremes in SPY are marked in blue on the chart below.
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Did Santa Bernanke Scare off The Grinch?
Thursday, December 19, 9:25 a.m.

The Fed’s decision to begin tapering QE stimulus was surprising since 70% of economists and analysts did not expect it at this meeting, and the market’s positive reaction to the announcement was perhaps just as surprising.

After all, it was just on and off again hints that it might begin tapering that created all the market downturns since May, which were only halted when the Fed rushed in with ‘no taper’ decisions and assurances. And the market spikes up almost 300 points when it does decide to act?

But in his press conference Chairman Bernanke did a masterful job of turning the news positive, by offering much more dovish forward guidance; a promise to keep interest rates extremely low by other means for several more years, probably into 2015; assurance that the reduction in QE purchases in January will not necessarily be the beginning of a continuing monthly basis, but further tapering steps will be determined each month based on the strength in the economy; that unemployment getting down to 6.5% which was its previous target for when it might consider raising rates, is out the window, that it will have to be well below 6.5%, and will also be conditional on inflation remaining below 2.5%, and so on.

It’s hard to know if it was a one-day wonder reaction, or is the beginning of another leg up.
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Kaeppel’s Corner: Beware the Market BLIP (Bernanke Linguistics Induced Panic)
By Jay Kaeppel, Optionetics.com | Mon July 15, 2013 4:15AM PT

It can’t be easy being Fed Chairman Ben Bernanke these days. I mean first you have to make sure that the printing presses are humming 24/7, no excuses. Secondly, you have got to choose your words very carefully. For every time he opens his mouth the entire financial world holds it collective breath. At this point I would guess that he breathes through his nose a lot and assiduously avoids opening his mouth to take big gulps of air, which would almost certainly create a panic in the financial markets.

And even something as minor as simple sentence structure has become a very important consideration for the Fed chairman. Picture Mr. Bernanke sitting down in front of a microphone and uttering the following sentence:

“The Fed has decided to stop printing so much money” (within a nanosecond thousands of high frequency trading computers panic and immediately disgorge hundreds of millions of shares, instantly driving the Dow down 1,000 with ease). A split second later and after just a brief gulp of air, Mr. Bernanke then completes his sentence, “eventually, but definitely not anytime soon.”

Oops.
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Bernanke’s Alice in Wonderland Stock Market
Wednesday, 5/08/2013 14:20

A.K.A. Young FrankenMarket…

IN FAILING to take a “healthy” correction, the stock market is now running on policy and momentum, writes Gary Tanashian in his Notes from the Rabbit Hole.

Hence we now dub thee Young FrankenMarket; Ben Bernanke’s creation, sustained by government and legacy MBA debt, following Alan Greenspan’s monster that was stitched together with artificially low interest rates that ultimately manifested in a huge commercial credit bubble.
…

Wall Street will miss its Market Whisperer.

Morning paper in PHX says Intel is laying off 5,000. Time to buy a home in Chandler. ;(

The most corrupt administration in US history.

LOVEINT!

You gotta love LOVEINT if you are a backer of the NSA - a booster of the NSA - because in you are one of those guys who are plugged into the NSA then you get to be plugged into LOVEINT, and if you are plugged into LOVEINT then you are plugged into the private lives of your political enemies - such enemies of yours personally and enemies of your darling NSA.

Has anyone in this country (other than maybe J. Edgar Hoover) had it so good?

Let me get this straight:

Unspecified changes are planned to make the top-secret program that records all private U.S. citizens’ phone conversations less intrusive. But since the program is top secret and the changes are unspecified, U.S. citizens won’t notice the difference.

That’s quite a relief!

The lying realtors are enraged.

just like last time they cant see it until it falls apart on its own.

“Angriest trolls”

You’re just jealous because Mr. Smithers has a crush on me.

Why has Europe’s economy done worse than the US?
The eurozone experience shows what can happen when people lose control over their government’s economic policies
Mark Weisbrot
theguardian.com, Thursday 16 January 2014 08.15 EST
Eurozone crisis
The eurozone has been subject to more brutal economic policy than the US. Photograph: Michael Probst/AP

If we compare the economic recovery of the United States since the Great Recession with that of Europe – or more specifically the eurozone countries – the differences are striking, and instructive. The US recession technically lasted about a year and a half – from December 2007 to June 2009. (Of course, for America’s 20.3 million unemployed and underemployed, and millions of others, the recession never ended – but more on that below.) The eurozone had a recession of similar length from around January 2008 to April 2009. But it then fell into a longer recession in the third quarter of 2011 that lasted for another two years, and may only be exiting that recession currently.

This makes a big difference in people’s lives. In the eurozone, unemployment is at near record levels of 12.1%; while in the US, it is currently 6.7%. Despite the incompleteness of these measures, these numbers are comparable. And, of course, in Spain and Greece unemployment is 26.7 and 27.8%, respectively, with youth unemployment at an intolerable 57.4 and 59.2%.

How are we to explain these differences? The United States was, after all, the epicenter of the world financial crisis and recession in 2008. But US policy-makers responded to the recession with different policies. Most important was monetary policy: the Federal Reserve lowered short-term interest rates to about zero in 2008 and has kept them there since. The Fed also signalled its intention to keep these interest rates at these levels for a long time. And venturing into uncharted territory, the Fed engaged in three rounds of “quantitative easing”, or more than $2tn of money creation. This enabled the Fed to stimulate the recovery by lowering long-term interest rates, including the crucial home mortgage interest rate, which helped recovery in the housing market. After some stimulus in both areas, the eurozone governments also engaged in more and earlier budget tightening than the United States did; and the International Monetary Fund (IMF) has shown a clear relationship (Figure 6) between this fiscal tightening and reduced GDP growth.

Now the question is why our European brothers and sisters have been so unfortunate as to be subjected to much more brutal economic policy than what we have experienced in the United States. While there are many nuances, there are also some simple but critically important reasons. Most vital is the accountability, or lack thereof, of the people and institutions making the decisions. In Europe you have the so-called “troika” – the European Central Bank (ECB), the European Commission, and (more recently recruited) the IMF. These are much less accountable to eurozone residents – especially but not limited to those of the most victimized countries (Spain, Greece, Portugal, Ireland, and Italy) – than even the relatively unaccountable Federal Reserve and US Congress and executive branch are to Americans.
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Greek Economic Rebound: The Bond Boom May Be Short-Term Exuberance That Will Lead To Long-Term Pain
By Michael Paterakis
on January 17 2014 12:36 PM
Greek prime minister’s office
An official closes the door of the office of Greece’s prime minister, Antonis Samaras, after government ministers arrived for a snap cabinet meeting in Athens, June 2013. REUTERS/John Kolesidis

There was a time, not so long ago, when Greek bonds were given up for dead, along with the rest of the Greek economy. At the height of Greece’s economic crisis, in October 2011, trading volume in the secondary securities market for the country’s state-issued debt was zero. Fast-forward two and a half years: Much of the new narrative takes for granted that Greece is over the crisis. “Success story” gets tossed around more than predictions of doom. The country, some officials say, is ready to return to the land of the living.

“The vicious cycle ends in 2014,” Greek Prime Minister Antonis Samaras said in his New Year’s address. “Greece will return to the markets, it will start to become a normal country again. The debt will be declared viable, without the need of loan agreements, without the need to borrow money.”

Although more-negative alternative views are generally being drowned out by the exuberance of investors piling into Greek bonds, the smart money may be taking the contrarian position. Examined closely, Greek finances are still fundamentally in trouble and European elections are coming up this May, which is typically a difficult time for stumbling economies on the continent. Given this backdrop, either the state of the Greek economy or euro zone politics, or both, are poised to propel an impending Greek bond crash.

Indeed, when you pare back some of the official language about Greece’s future, the downside becomes more evident. For example, the Greek parliament’s budget office conceded in a note last October: “For Greece’s debt to become viable with the country’s efforts alone, a combination of growth rates and primary surpluses for many years is required. It is not realistic to assume this will be achieved in 2014.”

Outsized successes of a small number of funds, which took a big risk in 2013 by investing in Greek debt, may turn out to be an expensive distraction from what is yet to come.
…

International Business
With China Awash in Money, Leaders Start to Weigh Raising the Floodgates
By KEITH BRADSHER
JAN. 15, 2014
A visitor viewing the model of a new apartment complex in Wuhan, in central China. Darley Shen/Reuters
Cranking Up the Printing Presses

The money supply in China now vastly exceeds that in the United States.

HONG KONG — Move over, Janet Yellen and Ben Bernanke. Step aside, Mario Draghi and Haruhiko Kuroda. When it comes to monetary stimulus, Zhou Xiaochuan, the longtime governor of the People’s Bank of China, has no rivals.

The latest data released by China on Wednesday show that the country’s rapid growth in money supply has continued. Mr. Zhou and his colleagues at the Chinese central bank have only begun the difficult and dangerous task of reining it in.

The amount of money sloshing around China’s economy, according to a broad measure that is closely watched here, has now tripled since the end of 2006. China’s tidal wave of money has powered the economy to new heights, but it has also helped drive asset prices through the roof. Housing prices have soared, feeding fears of a bubble while leaving many ordinary Chinese feeling poor and left out.

There are big differences, of course, between China and the major Western industrial powers. The Federal Reserve, the European Central Bank and the Bank of Japan are trying to prevent deflation and help their economies recover from the lingering consequences of the financial crisis and the Great Recession. They have little reason to fear inflation.

The mechanics of China’s monetary policy stimulus are also different from the Fed’s quantitative easing. The Fed has been effectively creating money by buying bonds and other securities. The People’s Bank of China has been creating money to a considerable extent by issuing more renminbi to bankroll its purchase of hundreds of billions of dollars a year in currency markets to minimize the appreciation of the renminbi against the dollar and keep Chinese exports inexpensive in foreign markets; the central bank disclosed on Wednesday that the country’s foreign reserves, mostly dollars, soared $508.4 billion last year, a record increase.

Moreover, the rapidly expanding money supply reflects a flood of loans from the banking system and the so-called shadow banking system that have kept afloat many inefficient state-owned enterprises and bankrolled the construction of huge overcapacity in the manufacturing sector.
…

harbor freight tools is busy as ever. when do you think they will go public and raise some capital?

Dollar stores full of their stuff are thriving.

walmart is full of chinese product.

even some of crastsman tools are made in china.

We need an affordable car from the chinese. Something under 10k good on fuel.

Barron’s Cover | SATURDAY, JANUARY 18, 2014
The Good, Bad, and Ugly: A Guide to 2014
By LAUREN R. RUBLIN | MORE ARTICLES BY AUTHOR
The year ahead presents challenges as well as investment opportunities, say our 10 Roundtable experts.

We wish we could share the official view of the Barron’s Roundtable regarding the economy and markets in 2014. But it was impossible to find much common ground this year among our passionate, principled, and occasionally pugilistic panelists, whether the discussion veered toward interest rates, stock prices, GDP, or lunch.

The schisms were apparent from the start of our annual confab, held on Monday at the Harvard Club of New York, and they are likely only to widen as QE3 — or is it QE4? — makes its way fitfully back to port. Therefore, we feel obliged to offer two competing outlooks for the new year, which seems a tad more challenging already than its bubblicious predecessor.

Table: 2013 Roundtable Report Card

The Roundtable’s optimists expect the global economy to pick up, bonds to tick up, and stocks to mosey higher, notwithstanding the errant hiccup. The pessimists, emboldened perhaps by the return after a one-year absence of Marc Faber (wearing a woolen wonder of a hat that put hipsters to shame), see crippled economies here and abroad, rotten government policies, and a selloff in stocks that could rekindle fears of, yes, systemic risk. Yet, somewhere between these poles, all say, lie plenty of investments worth a wager, on the long side and the short.

Barron’s: After a stupendous year for U.S. stocks, 2014 is looking rather different. Since the Federal Reserve and the bond market will be setting the tone, let’s start with our bond maven, Bill. What will everyone be “Yellen” about this year?

Gross: Moves in the U.S. and global bond market have been directed in recent years largely by central-bank asset purchasing, or quantitative easing. These policies have kept interest rates abnormally, if not historically, low. In the U.S., the Fed is beginning to pull back. Yields on 10-year Treasury bonds are 120 basis points, or 1.2 percentage points, higher than they were 12 to 15 months ago. We’ve had a bear-market run, so to speak.

At Pimco, we don’t expect yields to keep rising, even in the face of Fed tapering [the Fed has started curbing its bond-buying]. When its asset purchases end, likely in late 2014, government bond yields will be dependent on the policy rate [the Fed's target for the federal-funds rate, currently 0.25%]. That brings us to Janet Yellen, who becomes chair of the Fed on Feb. 1. She is dovish with a capital D, meaning she won’t increase the policy rate, which is key for two-, five- and 10-year bonds. That will allow levered borrowers, banks, investment banks, and hedge funds to have a reliable source of funding at a reliable price. Absent higher inflation and a policy-rate change, the U.S. bond market, and other bond markets, will be stable.

Is the market overly discounting a rise in the policy rate in 2015 or 2016?

Gross: Yes. Eurodollar futures indicate a policy rate of 3% to 4% in early 2018, but that is a long way off. It’s another way of saying that the market sees a rate hike in early 2015.

And what are the chances of that?

Gross: Slim to none. First, the Fed has to finish the taper. Then, as it has suggested, there will be a considerable amount of time before it raises rates.
…

bond prices are highly manipulated like other assets.caveat emptor!

Apparently Pimco isn’t the only big investing firm that got burned last year in bonds.

Bond trading stings Goldman, Citi in fourth quarter
By Lauren Tara LaCapra and David Henry
Thu Jan 16, 2014 7:44pm EST
A Citi sign is seen at the Citigroup stall on the floor of the New York Stock Exchange, October 16, 2012. REUTERS/Brendan McDermid

(Reuters) - Goldman Sachs Group Inc and Citigroup Inc suffered a steep drop in bond trading revenue in the fourth quarter, a stinging blow for two banks long seen as stalwarts of fixed income markets.

The two banks performed worse in fixed income than rivals JPMorgan Chase & Co and Bank of America Corp, showing that even as bond market trading volume suffers from falling prices, some banks will endure more pain than others.

“You have to be nimble to trade the debt markets these days. If you make a bad bet, it will show up in results, and profits will be harder to earn in 2014,” said Matt McCormick, a portfolio manager and banking analyst at Bahl & Gaynor Investment Counsel, which manages about $11 billion.

Goldman’s profit fell 21 percent, as revenue from bond trading dropped 11 percent after adjusting for an accounting charge, it reported on Thursday. The bank’s shares closed down 2 percent at $175.17.

Citigroup, which also reported on Thursday, said bond trading revenue slid 15 percent in the fourth quarter to $2.33 billion in what it called a “challenging trading environment.” Its shares fell 4.3 percent to $52.60.

Trading results for the two banks contrasted with JPMorgan Chase & Co’s, whose bond trading revenue rose 1 percent, and Bank of America Corp’s, where it jumped 16 percent.
…

“After 325 columns, what is left to be said? Two points, I think, are worth noting in closing. First, since the Marine Corps Gazette article that first laid out the framework of the Four Generations of Modern War was published in 1989, events have largely followed the course it predicted.”

“In particular, the theory’s definition of Fourth Generation war has proven prophetic. Since 1989, the world has witnessed a progressive weakening of the state and rise of alternative, non-state primary loyalties, for which a growing number of men are willing to fight. That is the heart of my definition of Fourth Generation war. As Martin van Creveld says, what changes is not how war is fought, but who fights and what they fight for.”

“Other definitions of 4GW, including defining it as just a new name for insurgency, miss the mark. Fourth Generation war is more than a buzzword. It is the biggest change in war since the Peace of Westphalia.”

“The second point I would close with is that the U.S. military doesn’t get it.”

http://original.antiwar.com/lind/2009/12/14/parting-thoughts-for-now/

they are experts.

A Hot Market Now ‘Normal’
Jennifer Harmon
DEC 1, 2004 2:00am ET

Prices in the Southern California housing market have finally cooled off due to lack of affordability and increased inventory, according to a cyclical study from First American Real Estate Solutions here.

The second quarter of 2004 was the very hottest part of the mortgage market, the study said, but the boom was unsustainable for a long-term basis. During the summer, the market suddenly lost steam.

The boom may be over but there’s no risk of the overall market crashing, said Christopher Cagan, director of research and analytics of FARES.

“The heartland of the country never had a surge in prices. In San Francisco, New York and Los Angeles where land is built out, the market reflected demand and prices started going up,” he said. “The fire is still burning. It’s a ‘normal’ market now and sellers and buyers, instead of overasking on price, are shopping around and discounting prices.”

When prices stopped rising, the market turn was much more pronounced in the affluent coastal areas, as the affordable inland regions continued to do well, the study said. “The study certainly applies nationally. The coasts, by which I mean Florida, California and New York … there’s a huge boom in New York City and Long Island. But the super-duper days are pretty much done. You can’t have 25% appreciation every year. The market can turn in a matter of months. In New York, all of a sudden the leaves of fall could come down,” Mr. Cagan said.

In Los Angeles County, only 17% of households could purchase a median-priced home. In Orange County, that number was only 11% for a home of $530,000. In the summer of 2004, this “normal” market, buyers could take their time instead of making a “panic purchase,” he said.

Some markets have moved slowly without a cycle. The Milwaukee real estate market has been essentially linear in character rather than cyclical, the study said. In Southern California, the attitude is slow growth, pro environment and builders are a great deal wiser than before, Mr. Cagan said. Hundreds of houses are not built at one time but in pulses and phases, many of which are presold - not like the Las Vegas market that went up 52% in one year regarding the issue of overbuilding.

As the market settles back to “normal,” Mr. Cagan’s advice to consumers is stay away from creative financing they can’t afford. “Interest rates are still at a relatively low level historically. It’s still a good time to buy, because mortgage rates will still be lower in 2005 than later years. But you can’t toss anything on the market and it’s gone the next day. Sellers don’t get instant offers. Buyers look around and make offers,” he said.

“This is not a time for panic. Get a fixed-rate mortgage. You can get still get a mortgage at low rates. Then sit back and laugh at the world. Real estate is still an excellent investment for those who want to buy and stay. Don’t force yourself into a situation where you won’t be able to make your payments three or four years from now.” Inflation is coming back, and the budget deficit is showing the dollar is going down against the euro and yen. “Real estate dips during slow periods, but it’s still an excellent hedge against inflation,” he said.
…

“He who pick bottoms have smelly finger” - ancient Chinese proverb

The truth is obscured and the professionally groomed propaganda narrative is overlaid for everyone to tap dance on.

They’re out of options. Make no mistake. Have no doubt.

was she fired? is she at fox now? cnbc only keeps the people that can speal BS with a straight face. ratings have fallen off a cliff.

they have been out of n ca for awhile.

They’re still insanely overpriced cr*pshacks, inflated beyond belief by the dirty money sloshing around. Prices are set at the margin. When the marginal buyer’s sole concern is “how do I drop this hot cash into something that looks legit”, asset prices will balloon. Nobody argues with a suitcase full of dirty money.

The three most pathetic words ever heard in a disaster-prone area: We will rebuild!

Demolished by an earthquake? We will rebuild!

Flattened by a tornado? We will rebuild!

Flooded out by hurricane? We will rebuild!

Destroyed by fire? We will rebuild!

Swallowed by a sinkhole? We will rebuild!

A million bucks, minimum! Buy now or be priced out forever!

I think I already shared my experience from a couple of months ago.

As recently as October, a realtwhore explained - with condescending patience - how a 25% deduction now (not a credit, mind you - a deduction) would leave me in cash-positive territory five years into the future. Despite debt ($200K) in excess of fundamental value. I had little appetite for the scenario. I became one of the great unwashed, subject to pity. I just didn’t get it.

I invited her to sign an affidavit attesting to the cash-positive benefit five years down the road, of buying now at $200K over fundamental value. She didn’t get it and went back to her script.

Realtwhores are liars.

Middle class people who are “building their dream home” are, almost without exception, debt donkeys at their cores. Obnoxious debt donkeys, really. It’s an act of vanity, self-importance, and overreliance on ones health, ones job, and future events. Dumb dumb dumb. I bet 2k sq ft would be unthinkably small for such people. Lol.

We are in 1,350 sq.ft. now. I think with Florida’s weather, we could probably pull this off until our kids go off to college.

I think if we had an indoor utility room, we’d be all set.

“White man build big fire, sit way back…Indian build little fire, sit up close.”

International super-rich target California real estate
By Sinead Cruise
LONDON Thu Jun 14, 2012 9:54am EDT
The kitchen of a for sale, $37 million dollar luxury home at One Pelican Hill Road North is seen in Newport Beach, California April 13, 2012. REUTERS/Lori Shepler

(Reuters) - The super-rich investors responsible for London’s prime real estate bubble are adding California to their wish lists, lured by bargains offering crisis-defying returns as an overdue churn in the United States property market finally gets under way.

Wealthy European and Asian investors who have dominated the market for addresses in London’s most fashionable neighbourhoods are frequently outbidding locals for assets in the Golden State, U.S. real estate brokers report - and banks, long shackled by the volume of distressed property on their books, are in the mood to cut deals.

“It is now London and Los Angeles, not Shanghai or Moscow, that interests the cash-rich international investor,” said Simon Lyons, managing director of global property group Enstar Capital, who is making regular trips to the U.S. in search of bargains.

As uncertainty stifles global financial markets, real estate with strong rental prospects in key cities across the United States is again becoming an asset of choice for the yield-hungry international investor.

Data released this week by the National Association of Realtors showed that international sales reached $82.4 billion in the year to March 31, up from $66.4 billion in 2011.

The Chinese are now the second-largest foreign buyers of U.S. homes (behind Canadians), accounting for 11 percent of sales in the year to March 2012, up from 9 percent in the previous year. Cash purchases accounted for 62 percent of international sales and the average price paid by international buyers was $400,000, against the overall U.S. average of $212,000.

As the U.S. jobs market expands, there are signs that the worst may be over for the property market that spawned the sub-prime mortgage maelstrom and the world’s deepest banking crisis since the Great Depression.

To capitalise on increasing confidence, Los Angeles-based asset manager TCW has unveiled plans to raise up to $250 million for a fund enabling wealthy investors to buy foreclosed homes from government agencies and lenders.

While lenders are still keen to avert foreclosures by extending loans, so-called distressed inventory is starting to sell because banks are now in a better position to absorb greater losses and free up capacity on their balance sheets.

David Parnes, a director at Bond Street Partners, a Los Angeles-based realtor specialising in high-end luxury and investment property, said that Los Angeles is enjoying its biggest influx of foreign capital for years.

“Investors are now snapping up foreclosures in greater numbers because comparatively low property prices mean they are able to achieve strong returns,” he said. “Prices in L.A. are showing to 60 to 70 percent discounts against their equivalent in Manhattan.”

Parnes points out many reasons to explain why the world’s super-rich are making a beeline for California. The state is the financial hub of the U.S. West Coast, with Los Angeles already home to the highest number of foreign-born billionaires and Fortune 500 company CEOs outside New York.

The 2011 Wealth-X World Ultra Wealth Report said that Asia Pacific has an estimated 42,525 ultra-high-net-worth individuals with a combined wealth of $6.2 trillion, and many are looking to park wealth in key Western cities to diversify their holdings.

European ultra-high-net-worth entrepreneurs active in Asia’s fast-growing economies are also acquiring bases on the U.S. West Coast to benefit from reduced travel times to the region and time zones better suited to those business interests.

In Silicon Valley, Russian billionaire and Facebook (FB.O) backer Yuri Milner shelled out $100 million in March 2011 on one of the most expensive single-family U.S. homes ever sold. Moscow-based Milner is expected to use the French Chateau-style mansion as his second home, Parnes said.
…

ft dot com
January 17, 2014 2:40 pm
Where (and why) the super-rich are investing in real estate
By Laura Battle
Key factor in this trend is the extraordinary wealth creation in Asia in recent years

Land ownership is, perhaps, the most ancient expression of wealth. Throughout history it has provoked conflict and inspired grandeur, from civic monuments and sacred spaces to egotistical towers and pleasure palaces. Today the relationship between land – or property – and wealth is more complex and more commercial than ever before. Since the economic crisis of 2008, real estate has attracted many of the world’s super-rich who have sought a safe haven, and a means of diversifying assets, and a very visual symbol of power and sophistication.

In 2008, $146bn of global private wealth was invested in the large-deal (above $10m) real estate market and by 2012 this had increased by 111 per cent to $308bn. Meanwhile, corporate investment in the same sector rose by only 43 per cent to $594bn over the same period. These figures, detailed in a new report by Savills in partnership with Wealth-X, a Singapore-based consultancy, reveal the increasing importance of private investment in the world of property.

“It’s a case of push and pull factors,” says Yolande Barnes, director of residential research at Savills. “I just saw a list of the top dealers [relating to deals made in 2013, compiled by Real Capital Analytics] on the buy side and the sell side. You look at the sellers and you’ve got JPMorgan, Lehman receivers, Deutsche, all the big bank names . . . and on the buyer side, the new big names are private Chinese companies and US Reits [real estate investment trusts].”

A key factor in this trend is the extraordinary wealth creation in Asia in recent years. According to Knight Frank, the number of high net worth individuals (HNWI, defined as those with net assets of at least $30m) increased by 35.6 per cent between 2007 and 2012, and they have demonstrated a keen interest in property.

The Savills report states that 28 per cent of wealth held by Asian ultra high net worth individuals (UHNWI, also defined as those with net assets of at least $30m) is in the real estate industry, compared with 8 per cent of wealth held by UHNW Europeans and 6 per cent of wealth held by UHNW North Americans. Consequently, a growing proportion of Asian wealth is now being channelled into direct property holdings and trophy homes.

The report divides Chinese overseas investors into three waves: the first, those buying homes in countries where they have business interests; the second, those buying for their offspring or to secure permanent residency; and a predicted third wave looking to buy property in an ever wider range of locations. It is certainly worth considering the huge potential for growth in the Chinese market, and Asian buyers more generally, but these expectations are based on an assumption that the spending power of Asian UHNWI will continue to increase, and that the tastes of these buyers will broaden as their wealth matures.

In recent years, Asian buyers have made an impact on cities around the world, with Hong Kong, Singapore, Mumbai and London among the top locations for residential investment.

Adam Challis, of Jones Lang LaSalle in London, says he is seeing high demand from Singapore and Kuala Lumpur, while interest from Hong Kong and China remains strong. “It’s fair to say that the demand is much bigger than this city, or any individual city in the world, can reasonably meet,” he says. “The anecdote I use is from [London mayor] Boris Johnson’s tour a few months ago when he launched London.cn [London’s official Chinese-language website]. We had one of our colleagues there as part of the trade mission and in her blog report she said that in the first 24 hours of the website going live there were 82m hits.”

Additional research by Savills into the buying habits of Asian UHNWI highlights the growth potential if they were to diversify their portfolios. Currently, 64 per cent of property owned by wealthy North Americans and Europeans is located in cities, 15 per cent in towns and suburbs and a combined 21 per cent in waterside, rural leisure and ski locations. Meanwhile, 95 per cent of property owned by wealthy Asians is located in cities, with just 2 per cent in towns and suburbs and a mere 4 per cent in waterside, rural leisure and ski locations. Savills suggests that if Asian buyers could be encouraged to acquire suburban and leisure properties in the same proportions as westerners it could create a market for about $804bn of residential real estate globally.

“All these things are heading in one direction, which is upwards, because it’s coming from a low base and the potential size of this market is enormous,” says Liam Bailey, head of Knight Frank residential research. “It may not be rapid growth, but it would be surprising if we didn’t see more Chinese owners of properties in rural France or rural Italy, or even outside the big cities in America.”
…

No, IMHO. It’s the dirty money looking to get laundered.

There’s a thriving market on Ebay for used women’s underwear.

I worked in the DON for eleven years. I saw this happen due to the Tailhook scandals of the 1980s. In the 1990s I did not particularly trust Clinton, but there was much needed downsizing happening on defense contractors and bases.

As government employees - if you kept your nose clean you would have retained your career path. It was not uncommon for your branch (Departments composed of Divisions and Divisions composed of Branches) to change its “core competencies” several times in four years just to keep the deck chairs shuffled.

Perhaps this is a pattern - high level heads getting guillotined, followed by massive downsizing.

This all could be a good thing.

He was already on Celebrity Rehab once where he never did really admit to having a problem. That was wasted time for him, but maybe now he’s ready.